INVESTOR PRESENTATION

Transcription

1 INVESTOR PRESENTATION As of March 31, 2016

2 Investment Opportunity Second largest open air retail landlord in the US and 9 th largest in the world 1 PORTFOLIO QUICK FACTS Number of shopping centers 518 Geographically diversified portfolio supported by highly productive retailers GLA Average shopping center size 87M SF 167K SF Grocers, value-oriented retailers and irreplaceable service and entertainment users Average grocer sales of $557 PSF 41% higher than the national average 2 Percent leased 92.4% Percent billed 90.4% Average ABR/SF $12.85 % of ABR in top 50 US MSAs 65% Embedded internal growth through marking rents to market, occupancy gains and repositioning / redevelopment Rent spreads averaged approximately 14% over last two years 39 in process anchor space repositioning, redevelopment, outparcel development and new development projects Focused on balance sheet strength and capital allocation to drive long-term sustainable growth % of ABR 6.6% 5.8% 5.0% 4.7% Top Markets by ABR 4.4% 3.8% 3.0% 2.9% 2.2% 2.1% New York Philadelphia Houston Chicago Dallas Atlanta Los Angeles Tampa Cincinnati Miami 2

3 Investment Priorities Facilitate strategic capital allocation with a simple, flexible balance sheet Maximize asset value through prudent capital reinvestment Focus on leveraging market dominant locations Realize operational benefits of a fully integrated national platform Capitalize on supply constrained environment Partner with retailers to achieve their growth strategies Continue to invest in talent to sustain platform strength FOCUS ON LONG-TERM NAV GROWTH 3

4 Strong Tenant Base Non-discretionary and value-oriented retail mix with strong service component Well-suited for today s consumer environment Strong tenant credit profile with limited concentration 10 largest retailers account for only 18.1% of ABR Largest tenant, Kroger, accounts for only 3.3% of ABR Proactive Tenant Management DECREASED ABR EXPOSURE TOP RETAILERS BY ABR Retailer Stores % of GLA % of ABR Credit Ratings (S&P / Moody s) % 3.3% BBB / Baa % 3.2% A+ / A % 2.0% BB+ / Ba % 1.8% AA / Aa % 1.8% NR % 1.5% BBB / Baa % 1.4% NR % 1.1% BB- / % 1.0% BBB+ / Baa % 1.0% B+ / - TOP % 18.1% % 1.0% A- / A % 0.9% BB+ / Baa1 INCREASED ABR EXPOSURE National retailers account for 65% of portfolio ABR % 0.9% CCC+ / Caa % 0.9% BBB / % 0.9% B- / % 0.8% BBB / Baa % 0.8% B / % 0.8% NR 65% National 16% Regional % 0.8% BBB- / Baa % 0.7% NR TOP % 26.6% 19% Local 4

5 Market Leading Grocery-Anchored Portfolio Largest grocery-anchored shopping center portfolio in the US 1 72% of shopping centers are grocery-anchored 80% of grocers ranked #1, #2 or specialty in their markets 6 74% of grocery-anchored centers have an additional anchor Highly productive grocers drive consumer traffic #1 35% Other 20% Average grocer sales of $557 PSF 41% higher than the national average 2 90% of grocers have occupancy cost ratios below 3% 3 #2 17% Specialty 28% Food is the retail category least disrupted by e-commerce less than 1% of food sales currently occur online Number of Grocery Anchored Centers BRX KIM REG WRI KRG EQY RPAI FRT 5

6 National Platform, Local Knowledge Comprehensive platform leverages national breadth and commitment to regional and local presence Key landlord with ~5,500 national, regional and local tenants Top landlord by GLA to Kroger and TJX 2015 new lease productivity exceeded that of shopping center peers 1 Operating model provides streamlined access for retailers National Accounts team + network of offices with regional and local expertise ~80 leasing deal makers focused on execution BRX TTM New Lease Volume (K SF) 2 3,069 Benefits of National Accounts team structure DDR 2,749 Centralized, single point of contact KIM REG 748 2,143 Efficiently lease space by executing multiple deals KRG 700 High-level retailer relationships WRI 672 Portfolio breadth offers broad opportunity set for capital recycling FRT EQY RPAI 311 6

7 Benefits of a National Platform Retailers with 60+ stores in BRX portfolio Executing leases for multiple locations Expanding retailers into new markets Developing new retailer relationships 7

8 Growth Opportunity Mark-to-Market Historical underinvestment in portfolio created significant rent mark-to-market opportunity within portfolio Near-term opportunity to drive NOI growth through leasing Rent spreads have averaged approximately 35% for new leases or 13% on a blended basis (new and renewal) since IPO Lease Expiration Schedule Capitalizing On Below-Market Expiring Leases 60.0% % of Leased GLA Expiring Avg. ABR/SF Expiring New Lease ABR/SF $14.60 Since IPO $ % 40.0% $12.41 $11.88 $12.55 $11.69 $ % $ % 45% of leased GLA expires $ % % 6.2% 13.4% 12.6% 13.1% 52.7% Expiring Lease ABR/SF Expiring Lease ABR/SF New Lease ABR/SF Since IPO 8

9 Growth Opportunity Occupancy Significant occupancy growth potential remaining in portfolio, with largest opportunity in higher ABR small shop space Focusing additional efforts on upgrading merchandise mix in order to drive customer traffic and sales Steady Occupancy with Box Recapture 92.3% 92.4% 92.4% Occupancy drag resulting from proactive recapture of space from A&P and Kmart 91.2% Totaling ~586K SF of leased GLA in nine locations Mar-13 Mar-14 Mar-15 Mar-16 Leases Signed but Not Yet Commenced 90.4% 92.4% Represents 292 leases and ~$31M of annual contractual rent Occupancy by Unit Size Anchor ( 10K SF) Small Shop (< 10K SF) # Units GLA (K SF) % of GLA % of ABR ABR/SF % Leased at 3/31/16 1,892 60,980 70% 56% $ % 9,850 25,690 30% 44% % TOTAL 11,742 86, % 100% $ % % Billed % Leased 9

10 Growth Opportunity Capital Reinvestment Reinvestment in tenant driven projects is currently a very attractive risk adjusted opportunity Total pipeline of 39 projects totaling $157M Anchor Space Repositioning Key In Process Projects Stony Brook I & II (Louisville, KY): Reconfigure approximately 15K of small shop space to accommodate expansion of existing Kroger to 116K SF Kroger Marketplace Embedded value creation with minimal risk Average cost of $2.9M Average NOI yield of 15% Minimal downtime of ~12 months Outparcel / New Development Densification with minimal disruption Average cost of $2.7M Average NOI yield of 12% Minimal downtime of ~8 months Redevelopment Larger scale projects and tenant driven Average cost of $8.5M Average NOI yield of 12% Minimal downtime of ~2 years Project Summary ($M) # Projects Costs NOI Yield Pipeline 27 $ % In service % Completed since IPO % Project Summary ($M) # Projects Costs NOI Yield Pipeline 11 $ % In service % Completed since IPO % Project Summary ($M) # Projects Costs NOI Yield Pipeline 1 $ % In service Completed since IPO % Preston Ridge (Dallas, TX): Remerchandise former Gatti-Town Pizza with a 29K SF Saks OFF Fifth Maple Village (Ann Arbor, MI): Remerchandise former Kmart with a 34K SF Stein Mart, a 22K SF Sierra Trading Post, a 20K SF HomeGoods and a 21K SF junior anchor 42 (Minneapolis, MN): Remerchandise former Rainbow Foods with a 32K SF Fresh Thyme Farmers Market and a 21K SF Marshalls Highridge Plaza (New York, NY): Remerchandise former A&P with a 42K SF H-Mart grocer 10

11 Unsecured Strategy, Flexible Balance Sheet Capitalization ($M) 3/31/16 Equity Market Capitalization 1 $7,804 Interest Rate Unsecured Revolving Line of Credit $ % Unsecured Term Loan 2 $2, % Corporate Bonds (BRX LLC) $1, % Debt Maturities (Contractual; $M) Near-term opportunity to significantly term out balance sheet at lower rates $2,000 Secured Unsecured Mortgage Debt 3 $2, % Total Debt $5, % Less: Cash and Cash Equivalents (106) Less: Restricted Cash (44) Net Debt $5,846 Total Enterprise Value (TEV) $13,650 Net Debt / TEV 43% Gross Debt by Origin Secured Mortgages 37.1% Unsecured Notes 20.3% Term Loans 35.0% Unsecured Revolving Line of Credit 7.6% $1,500 $1,000 $500 $0 Weighted Avg. Interest Rate Secured Avg. Interest Rate $1,519 $873 $806 $767 $700 $620 $500 $186 $0 $7 $ % 3.79% 2.24% 1.90% 6.17% 6.24% 3.88% % 3.85% 7.32% 5.57% 6.43% % 6.24% %

12 Unsecured Strategy, Flexible Balance Sheet Committed to a strong balance sheet foundation of the Company Areas of Focus Debt Statistics Maturity profile Weighted avg. maturity 3.5 years Increase weighted average maturity, while also focusing on creating a balanced, well-laddered maturity schedule Unencumbered asset base Continue to replace secured debt with unsecured financing alternatives Capital structure composition Reduce reliance on bank debt market Leverage Continue to reduce leverage with operating cash flow and disciplined capital recycling program Unencumbered ABR 61.8% Weighted avg. interest rate 3.87% Fixed / Floating 82% / 18% Leverage and Coverage Ratios Net principal debt to adjusted EBITDA (GAAP) 6.6x Net principal debt to adjusted EBITDA (cash) 7.1x Fixed charge coverage 3.5x 12

13 FOOTNOTES & SOURCES

14 Footnotes and Sources Page 2 (Investment Opportunity) 1. Source; Company filings and SNL Financial. 2. Based on a combination of most recent tenant reported information and management estimates. Page 5 (Market Leading Grocery-Anchored Portfolio) 1. Based on company filings. 2. Based on a combination of most recent tenant reported information and management estimates. 3. Excludes ground leases. 4. Source: Smith, Cooper. How E-Commerce Is Finally Disrupting The $600 Billion-A-Year Grocery Industry. Business Insider, January 20, BRX data as of March 31, Peer number of grocers based on December 31, 2015 property lists and major tenant disclosure, except for KRG which is based on grocery-anchored center disclosure in fourth quarter 2015 investor presentation, and RPAI which is based on grocery-anchored center disclosure in fourth quarter 2015 investor presentation. Figures represent the number of total grocery-anchored centers of each peer s US retail portfolio, excluding Puerto Rico unless otherwise noted. Includes unconsolidated retail properties. Assumes Walmart and Target are not grocer anchors for peer companies. 6. References to grocer anchors that are #1 or #2 are based on a combination of industry sources and management estimates of market share in these grocers respective markets and include all grocers identified by management as specialty grocers. Grocers that operate within a market under a shared banner but are owned by different parent companies and grocers that operate within a market under different banners but share a parent company are grouped as a single grocer. Page 6 (National Platform, Local Knowledge) 1. Peer group includes DDR, EQY, FRT, KIM, KRG, REG, RPAI and WRI. Data based on company filings as of December 31, Data based on company filings as of March 31, Page 10 (Growth Opportunity Capital Reinvestment) 1. Includes all projects completed in calendar year Page 11 (Unsecured Strategy, Flexible Balance Sheet) 1. Equity market capitalization based on March 31, 2016 closing price of $ $1.5B Term loan facility has been swapped from 1 month Libor to fixed at a combined rate of 0.844% (spread remains 140bps); $600M new term loan closed on March 18, 2014 with interest rate of L+140bps. 3. Excludes pro rata share of joint venture debt of $2.9M. 14

15 Disclaimer Safe Harbor Language This document may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of These statements include, but are not limited to, statements related to the Company s expectations regarding the performance of its business, its financial results, its liquidity and capital resources and other non-historical statements. You can identify these forward-looking statements by the use of words such as outlook, believes, expects, potential, continues, may, will, should, seeks, approximately, projects, predicts, intends, plans, estimates, anticipates or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled Risk Factors in the Company s Annual Report on Form 10-K for the year ended December 31, 2015, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC s website at Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the Company s filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. 15