What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-05-03 compared with 2020-11-04 · 123 added, 239 removed, 198 unchanged (65% of the section changed)

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Brixmor Property Group Inc.

and subsidiaries (collectively, the “Parent Company” or “BPG”) is an internally-managed real estate investment trust (“REIT”).

Brixmor Operating Partnership LP and subsidiaries (collectively, the “Operating Partnership”) is the entity through which the Parent Company conducts substantially all of its operations and owns substantially all of its assets.

and subsidiaries (collectively, “BPG”) is an internally-managed real estate investment trust (“REIT”).

Brixmor Operating Partnership LP and subsidiaries (collectively, the “Operating Partnership”) is the entity through which BPG conducts substantially all of its operations and owns substantially all of its assets.

BPG owns 100% of the common stock of BPG Subsidiary Inc.

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We believe we own and operate one of the largest open-air retail portfolios by gross leasable area (“GLA”) in the United States (“U.S.”), comprised primarily of community and neighborhood shopping centers.

As of September 30, 2020, our portfolio was comprised of 395 shopping centers (the “Portfolio”) totaling approximately 69 million square feet of GLA.

As of March 31, 2021, our portfolio was comprised of 389 shopping centers (the “Portfolio”) totaling approximately 68 million square feet of GLA.

Our high-quality national Portfolio is primarily located within established trade areas in the top 50 Metropolitan Statistical Areas (“MSAs”) in the U.S., and our shopping centers are primarily anchored by non-discretionary and value-oriented retailers, as well as consumer-oriented service providers.

As of September 30, 2020, our three largest tenants by annualized base rent (“ABR”) were The TJX Companies, Inc.

As of March 31, 2021, our three largest tenants by annualized base rent (“ABR”) were The TJX Companies, Inc.

(“TJX”), The Kroger Co.

(“Kroger”), and Dollar Tree Stores, Inc.

The Parent Company has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under U.S.

BPG has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the U.S.

federal income tax laws, commencing with our taxable year ended December 31, 2011, has maintained such requirements through our taxable year ended December 31, 2020, and intends to satisfy such requirements for subsequent taxable years.

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Our key strategies to achieve this objective include proactively managing our Portfolio to drive internal growth, pursuing value-enhancing reinvestment opportunities and prudently executing on acquisition and disposition activity, while also maintaining a flexible capital structure positioned for growth.

In addition, as we execute on our key strategies, we do so guided by a commitment to be socially responsible as we realize our goal of owning and managing properties that are the centers of the communities we serve.

In addition, as we execute on our key strategies, we do so guided by a commitment to operate in a socially responsible manner that allows us to realize our purpose of owning and managing properties that are the centers of the communities we serve.

We believe the following set of competitive advantages positions us to successfully execute on our key strategies:

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We provide our tenants with dedicated service through both our national accounts leasing team based in New York and our network of four regional offices in Atlanta, Chicago, Philadelphia and San Diego, as well as our 10 leasing and property management satellite offices throughout the country.

We believe that this structure enables us to obtain critical national market intelligence, while also benefitting from the regional and local expertise of our leasing and operations team.

We believe that this structure enables us to obtain critical national market intelligence, while also benefitting from the regional and local expertise of our leasing and operations teams.

• Experienced Management – Senior members of our management team are seasoned real estate operators with extensive public company leadership experience.

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As discussed below and in “Part II - Item 1A.

Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q, the COVID-19 pandemic is significantly impacting many of these factors.

Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q, the COVID-19 pandemic has had, and is expected to continue to have, a significant impact on our business.

Impacts on Business from COVID-19

The global outbreak of a novel strain of coronavirus (“COVID-19”) and the public health measures that have been undertaken in response have had a significant adverse impact on our business, our tenants and the global economy.

The effects of COVID-19, including related government restrictions, border closings, quarantines, “shelter-in-place” orders and “social distancing” guidelines, have forced many of our tenants to close stores, reduce hours or significantly limit service, and have resulted in a dramatic increase in national unemployment and a significant economic contraction.

The global outbreak of the novel strain of coronavirus (“COVID-19”) and the public health measures that have been undertaken in response have had a significant adverse impact on our business, our tenants, the real estate market, the financial markets and the global economy.

The effects of COVID-19, including related government restrictions, border closings, quarantines, “shelter-in-place” orders and “social distancing” guidelines, have forced many of our tenants to close stores, reduce hours or significantly limit service, and resulted in a dramatic increase in national unemployment and a significant economic contraction in 2020.

Since we cannot estimate when the COVID-19 pandemic and the responsive measures to combat it will end, we cannot estimate the ultimate operational and financial impact of COVID-19 on our business.

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Grocery stores and other essential tenants have remained open throughout this time and many have experienced stable or increased sales, which we believe will help to partially mitigate the adverse impact of COVID-19 on our business.

COVID-19 has significantly impacted our operations during the second and third quarters of 2020, and the following operating trends, combined with macroeconomic trends such as significantly increased unemployment and changes in consumer spending, lead us to believe that our operating results for 2020 and 2021 will continue to be adversely affected by COVID-19.

In addition, we have encouraged our tenants whose businesses have been impacted by COVID-19 to explore their eligibility for benefits under government assistance programs intended to provide financial support to affected businesses.

COVID-19 significantly impacted our operations during 2020, and the following operating trends, combined with macroeconomic trends such as significantly increased unemployment and changes in consumer spending, lead us to believe that our operating results for the remainder of 2021 will continue to be adversely affected by COVID-19.

The following table presents information related to rent collection and store closures:

As of October 30, 2020

Second Quarter 2020

Rent Collected Third Quarter 2020

As of April 27, 2021

First Quarter 2021

Rent Collected Portfolio Composition By ABR Percent of ABR

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91 % 41 % 3 %

Weighted average 81 % 88 % 3 %

(1) Businesses deemed necessary for day-to-day living.

(2) Businesses deemed necessary for day-to-day living, but operating in a moderated capacity, and businesses deemed necessary for day-to-day living in many, but not all jurisdictions.

Total 94 % 2 %

(1) Businesses deemed essential for day-to-day living.

(2) Businesses deemed essential for day-to-day living, but operating in a moderated capacity, and businesses deemed essential for day-to-day living in many, but not all jurisdictions.

(3) Businesses deemed non-essential for day-to-day living.

• Timing of rental payments:

Certain tenants experiencing economic difficulties during this pandemic have sought rent relief, which has been provided on a case-by-case basis primarily in the form of rent deferrals, and in more limited cases in the form of rent abatements.

Certain tenants experiencing economic difficulties during the pandemic have sought rent relief, which has been provided on a case-by-case basis primarily in the form of rent deferrals, and in more limited cases in the form of rent abatements.

Rent deferrals have significantly increased our Receivables, net.

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While lease execution velocity notably slowed in the second quarter of 2020, it has since recovered to levels similar to those experienced in prior periods.

We have taken various steps to mitigate the impact of COVID-19 on our liquidity, including the deferral of approximately $100.0 million of capital expenditures originally anticipated in 2020 and the temporary suspension of our quarterly cash dividend for the second and third quarters of 2020.

In June 2020 and August 2020, we issued an aggregate of $800.0 million principal amount of 4.050% Senior Notes due 2030, the net proceeds of which were used to repurchase a portion of our 3.875% Senior Notes due 2022, repay outstanding indebtedness under our $1.25 billion revolving credit facility (the “Revolving Facility”), and for general corporate purposes.

As of October 30, 2020, we have approximately $660.0 million in cash, approximately $1.2 billion of remaining availability under the Revolving Facility, and no debt maturities until 2022.

the ultimate impact of such assistance on our tenants, however, is not yet clear.

We expect the significance of the COVID-19 crisis and the resulting economic slowdown on our financial and operational results to be dictated by, among other things, the scope, severity and duration of the pandemic, the speed and effectiveness of vaccine and treatment developments, the direct and indirect economic effects of the pandemic and containment measures, and potential changes in consumer behavior.

Adverse developments related to these conditions could increase the number of tenants that close their stores, that are unable to meet their lease obligations to us, and/or that file for bankruptcy protection, and could limit the demand for space from new tenants.

These uncertainties make it difficult to predict operating results for our Portfolio for the remainder of 2020 and 2021.

During 2020, we took various steps to mitigate the impact of COVID-19 on our liquidity, including the deferral of approximately $130.0 million of capital expenditures originally anticipated in 2020.

As of April 27, 2021, we have approximately $310.0 million in cash and cash equivalents and restricted cash, approximately $1.2 billion of remaining availability under the Revolving Facility, and no debt maturities until 2022.

We expect the significance of the COVID-19 pandemic and the resulting economic contraction on our financial and operational results to be dictated by, among other things, the scope, severity and duration of the pandemic, the speed and effectiveness of vaccine and treatment developments and their deployment, public adoption rates of COVID-19 vaccines, potential mutations of COVID-19, including SARS-CoV-2 and the response thereto, the direct and indirect economic effects of the pandemic and containment measures, and potential sustained changes in consumer behavior.

Adverse developments related to these conditions could increase the number of tenants that are unable to meet their lease obligations to us, close their stores, and/or file for bankruptcy protection, and could limit the demand for space from new tenants.

Therefore, there can be no assurances that we will not experience declines in revenues, net income or funds from operations, which could be material.

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Leasing Highlights

As of September 30, 2020, billed and leased occupancy were 88.0% and 91.2%, respectively, as compared to 88.6% and 91.9%, respectively, as of September 30, 2019.

The following table summarizes our executed leasing activity for the three months ended September 30, 2020 and 2019 (dollars in thousands, except for per square foot (“PSF”) amounts):

For the Three Months Ended September 30, 2020

Leases GLA New ABR PSF Tenant Improvements and Allowances PSF Third Party Leasing Commissions PSF Rent Spread (1)

New, renewal and option leases 418 3,155,433 $ 14.20 $ 2.55 $ 1.08 6.1 %

New and renewal leases 368 2,152,872 15.53 3.71 1.58 5.7 %

New leases 103 683,517 16.22 10.05 4.94 14.1 %

Renewal leases 265 1,469,355 15.21 0.76 0.01 4.5 %

Option leases 50 1,002,561 11.35 0.07 — 7.1 %

For the Three Months Ended September 30, 2019

Leases GLA New ABR PSF Tenant Improvements and Allowances PSF Third Party Leasing Commissions PSF Rent Spread (1)

New, renewal and option leases 509 3,623,347 $ 13.95 $ 6.92 $ 1.38 11.1 %

New and renewal leases 438 2,252,432 16.63 11.12 2.22 13.3 %

New leases 160 948,964 15.63 23.97 5.07 30.5 %

Renewal leases 278 1,303,468 17.36 1.77 0.15 9.4 %

Option leases 71 1,370,915 9.55 — — 6.5 %

(1) Based on comparable leases only, which consist of new leases signed on units that were occupied within the prior 12 months and renewal leases signed with the same tenant in all or a portion of the same location or that include the expansion into space that was occupied within the prior 12 months.

Excludes leases executed for terms of less than one year.

ABR PSF includes the GLA of lessee-owned leasehold improvements.

The following table summarizes our executed leasing activity for the nine months ended September 30, 2020 and 2019 (dollars in thousands, except for per square foot (“PSF”) amounts):

For the Nine Months Ended September 30, 2020

As of March 31, 2021, billed and leased occupancy were 87.8% and 90.8%, respectively, as compared to 89.1% and 92.2%, respectively, as of March 31, 2020.

The following table summarizes our executed leasing activity for the three months ended March 31, 2021 and 2020 (dollars in thousands, except for per square foot (“PSF”) amounts):

For the Three Months Ended March 31, 2021

Leases GLA New ABR PSF Tenant Improvements and Allowances PSF Third Party Leasing Commissions PSF Rent Spread (1)

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Option leases 37 720,478 12.63 — — 5.9 %

For the Nine Months Ended September 30, 2019

For the Three Months Ended March 31, 2020

Leases GLA New ABR PSF Tenant Improvements and Allowances PSF Third Party Leasing Commissions PSF Rent Spread (1)

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Acquisition Activity

• During the nine months ended September 30, 2020, we acquired two land parcels for $3.4 million, including transaction costs.

• During the nine months ended September 30, 2019, we acquired two shopping centers, two leases at an existing shopping center and one land parcel for an aggregate purchase price of $79.6 million, including transaction costs.

• During the three months ended March 31, 2021, we acquired one outparcel and two land parcels for an aggregate purchase price of $3.8 million, including transaction costs.

• During the three months ended March 31, 2020, we acquired one land parcel for $2.0 million, including transaction costs.

Disposition Activity

• During the nine months ended September 30, 2020, we disposed of eight shopping centers, three partial shopping centers and one land parcel for aggregate net proceeds of $81.9 million resulting in aggregate gain of $21.3 million and aggregate impairment of $6.0 million.

• During the nine months ended September 30, 2019, we disposed of 18 shopping centers and four partial shopping centers for aggregate net proceeds of $239.4 million resulting in aggregate gain of $46.0 million and aggregate impairment of $14.4 million.

In addition, during the nine months ended September 30, 2019, we received aggregate net proceeds of $0.4 million from previously disposed assets resulting in aggregate gain of $0.3 million.

• During the three months ended March 31, 2021, we disposed of four shopping centers and four partial shopping centers for aggregate net proceeds of $31.8 million resulting in aggregate gain of $5.8 million and aggregate impairment of $1.5 million.

• During the three months ended March 31, 2020, we disposed of three shopping centers and two partial shopping centers for aggregate net proceeds of $40.5 million resulting in aggregate gain of $7.5 million and aggregate impairment of less than $0.1 million.

In addition, during the three months ended March 31, 2020, we received aggregate net proceeds of $0.9 million and resolved contingencies of $0.5 million from previously disposed assets resulting in aggregate gain of $1.4 million.

Results of Operations

The results of operations discussion is combined for BPG and the Operating Partnership because there are no material differences in the results of operations between the two reporting entities.

Comparison of the Three Months Ended September 30, 2020 to the Three Months Ended September 30, 2019

Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020

Revenues (in thousands)

Three Months Ended September 30,

Three Months Ended March 31,

2021 2020 $ Change

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Rental income

The decrease in rental income for the three months ended September 30, 2020 of $38.9 million, as compared to the corresponding period in 2019, was due to a $7.3 million decrease in rental income due to net disposition activity and a $31.6 million decrease for the remaining portfolio.

The decrease for the remaining portfolio was due to (i) a $19.3 million increase in revenues deemed uncollectible;

(ii) a $9.8 million decrease in straight-line rental income, net;

The decrease in rental income for the three months ended March 31, 2021 of $3.9 million, as compared to the corresponding period in 2020, was due to a $3.2 million decrease in rental income due to net disposition activity and a $0.7 million decrease for the remaining portfolio.

The decrease for the remaining portfolio was due to (i) a $4.8 million decrease in base rent;

(ii) a $2.3 million decrease in accretion of below-market leases, net of amortization of above-market leases and tenant inducements;

(iii) a $0.5 million decrease in expense reimbursements;

(iv) a $1.2 million decrease in base rent;

(v) a $0.4 million decrease in percentage rents;

(vi) a $0.2 million decrease in ancillary and other rental income;

and (vii) a $0.2 million decrease in accretion of above- and below-market leases and tenant inducements, net;

partially offset by (viii) a $1.0 million increase in lease termination fees.

The increase in revenues deemed uncollectible and decrease in straight-line rental income, net were primarily attributable to COVID-19.

The $1.2 million decrease in base rent for the remaining portfolio was primarily due to COVID-19 rent deferrals accounted for as lease modifications and rent abatements, partially offset by contractual rent increases, an increase in weighted average billed occupancy, and positive rent spreads for new and renewal leases and option exercises of 7.2% during the nine months ended September 30, 2020 and 10.9% during the year ended December 31, 2019.

Other revenues

Other revenues remained generally consistent for the three months ended September 30, 2020 as compared to the corresponding period in 2019.

Operating Expenses (in thousands)

Three Months Ended September 30,

2020 2019 $ Change

Operating expenses

Operating costs $ 24,794 $ 29,573 $ (4,779)

Real estate taxes 42,124 43,688 (1,564)

Depreciation and amortization 87,488 82,837 4,651

Impairment of real estate assets 5,746 8,170 (2,424)

General and administrative 27,748 24,550 3,198

Total operating expenses $ 187,900 $ 188,818 $ (918)

Operating costs

The decrease in operating costs for the three months ended September 30, 2020 of $4.8 million, as compared to the corresponding period in 2019, was primarily due to a $1.0 million decrease in operating costs due to net disposition activity and a $3.8 million decrease for the remaining portfolio primarily due to proactive cost reductions taken in response to COVID-19 and favorable insurance captive adjustments.

Real estate taxes

The decrease in real estate taxes for the three months ended September 30, 2020 of $1.6 million, as compared to the corresponding period in 2019, was primarily due to a $1.0 million decrease in real estate taxes due to net disposition activity and a $0.6 million decrease for the remaining portfolio primarily due to decreases in assessments from several jurisdictions.

Depreciation and amortization

The increase in depreciation and amortization for the three months ended September 30, 2020 of $4.7 million, as compared to the corresponding period in 2019, was primarily due to a $2.2 million decrease in depreciation and amortization due to net disposition activity, offset by a $6.9 million increase for the remaining portfolio primarily

related to tenant write-offs and value-enhancing reinvestment capital expenditures, partially offset by a decrease in depreciation and amortization for the remaining portfolio related to acquired in-place lease intangibles.

Impairment of real estate assets

During the three months ended September 30, 2020, aggregate impairment of $5.7 million was recognized on one shopping center as a result of disposition activity and one operating property.

During the three months ended September 30, 2019, aggregate impairment of $8.2 million was recognized on three shopping centers and one partial shopping center as a result of disposition activity.

Impairments recognized were due to changes in anticipated hold periods in connection with our capital recycling program.

General and administrative

The increase in general and administrative costs for the three months ended September 30, 2020 of $3.2 million, as compared to the corresponding period in 2019, was primarily due to an increase in litigation and other non-routine legal expenses, partially offset by a decrease in professional and travel costs due to COVID-19.

During the three months ended September 30, 2020 and 2019, construction compensation costs of $3.8 million and $3.8 million, respectively, were capitalized to building and improvements and leasing legal costs of $0.1 million and $0.0 million, respectively and leasing commission costs of $1.4 million and $1.6 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

Other Income and Expenses (in thousands)

Three Months Ended September 30,

2020 2019 $ Change

Other income (expense)

Dividends and interest $ 109 $ 128 $ (19)

Interest expense (50,991) (47,698) (3,293)

Gain on sale of real estate assets 13,621 25,621 (12,000)

Loss on extinguishment of debt, net (50) (943) 893

Other (780) (401) (379)

Total other expense $ (38,091) $ (23,293) $ (14,798)

Dividends and interest

Dividends and interest remained generally consistent for the three months ended September 30, 2020 as compared to the corresponding period in 2019.

Interest expense

The increase in interest expense for the three months ended September 30, 2020 of $3.3 million, as compared to the corresponding period in 2019, was primarily due to higher overall debt obligations as we bolstered liquidity in response to COVID-19.

Gain on sale of real estate assets

During the three months ended September 30, 2020, two shopping centers, one partial shopping center and one land parcel were disposed resulting in aggregate gain of $13.1 million.

In addition, during the three months ended September 30, 2020, we received aggregate net proceeds of less than $0.1 million and resolved contingencies of $0.1 million from previously disposed assets resulting in aggregate gain of $0.1 million, and we received final insurance proceeds related to two shopping centers that were damaged by Hurricane Michael resulting in aggregate gain of $0.4 million.

During the three months ended September 30, 2019, nine shopping centers were disposed resulting in aggregate gain of $25.5 million.

In addition, during the three months ended September 30, 2019, we received aggregate net proceeds of $0.1 million from previously disposed assets resulting in aggregate gain of $0.1 million.

Loss on extinguishment of debt, net

During the three months ended September 30, 2020, we repurchased $0.7 million of our 3.875% Senior Notes due 2022 through a tender offer, resulting in a $0.1 million loss on extinguishment of debt, net.

Loss on extinguishment of debt, net includes less than $0.1 million of prepayment fees and less than $0.1 million of accelerated unamortized

debt issuance costs and debt discounts.

During the three months ended September 30, 2019, we repaid $300.0 million of an unsecured term loan under our senior unsecured credit facility agreement, as amended April 29, 2020 (the “Unsecured Credit Facility”), resulting in a $0.9 million loss on extinguishment of debt due to the acceleration of unamortized debt issuance costs.

The increase in other expense for the three months ended September 30, 2020 of $0.4 million, as compared to the corresponding period in 2019, was primarily due to favorable tax adjustments in the prior year.

Comparison of the Nine Months Ended September 30, 2020 to the Nine Months Ended September 30, 2019

Revenues (in thousands)

Nine Months Ended September 30,

2020 2019 $ Change

Rental income $ 781,635 $ 873,424 $ (91,789)

Other revenues 2,221 1,685 536

Total revenues $ 783,856 $ 875,109 $ (91,253)

Rental income

The decrease in rental income for the nine months ended September 30, 2020 of $91.8 million, as compared to the corresponding period in 2019, was due to a $23.7 million decrease in rental income due to net disposition activity and a $68.1 million decrease for the remaining portfolio.

The decrease for the remaining portfolio was due to (i) a $47.7 million increase in revenues deemed uncollectible;

(ii) a $29.4 million decrease in straight-line rental income, net;

(iii) a $2.4 million decrease in percentage rents;

(iv) a $1.3 million decrease in accretion of above- and below-market leases and tenant inducements, net;

(v) a $0.5 million decrease in ancillary and other rental income;

and (vi) a $0.1 million decrease in expense reimbursements;

partially offset by (vii) an $11.2 million increase in base rent;

and (viii) a $2.1 million increase in lease termination fees.

The increase in revenues deemed uncollectible and decrease in straight-line rental income, net were primarily attributable to COVID-19.

The $11.2 million increase in base rent for the remaining portfolio was primarily due to contractual rent increases, an increase in weighted average billed occupancy, and positive rent spreads for new and renewal leases and option exercises of 7.2% during the nine months ended September 30, 2020 and 10.9% during the year ended December 31, 2019, partially offset by COVID-19 rent deferrals accounted for as lease modifications and rent abatements.

and (iv) a $0.1 million decrease in lease termination fees;

partially offset by (v) a $4.5 million increase in straight-line rental income, net;

(vi) a $1.7 million decrease in revenues deemed uncollectible;

(vii) a $0.5 million increase in percentage rents;

and (viii) a $0.3 million increase in ancillary and other rental income.

The decrease in revenues deemed uncollectible and increase in straight-line rental income, net were primarily attributable to the impact of COVID-19 in 2020.

The $4.8 million decrease in base rent for the remaining portfolio was primarily due to COVID-19 rent deferrals accounted for as lease modifications and rent abatements and a decrease in weighted average billed occupancy, partially offset by contractual rent increases and positive rent spreads for new and renewal leases and option exercises of 6.7% during the three months ended March 31, 2021 and 7.2% during the year ended December 31, 2020.

Other revenues

The increase in other revenues for the nine months ended September 30, 2020 of $0.5 million, as compared to the corresponding period in 2019, was primarily due to an increase in tax increment financing income.

The increase in other revenues for the three months ended March 31, 2021 of $1.4 million, as compared to the corresponding period in 2020, was primarily due to an increase in tax increment financing income.

Operating Expenses (in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

2021 2020 $ Change

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Operating costs

The decrease in operating costs for the nine months ended September 30, 2020 of $9.9 million, as compared to the corresponding period in 2019, was primarily due to a $3.0 million decrease in operating costs due to net disposition activity and a $6.9 million decrease for the remaining portfolio primarily due to proactive cost reductions taken in response to COVID-19 and favorable insurance captive adjustments.

The increase in operating costs for the three months ended March 31, 2021 of $1.0 million, as compared to the corresponding period in 2020, was primarily due to a $1.4 million increase for assets owned for the full year primarily due to an increase in insurance and repair and maintenance costs, partially offset by a $0.4 million decrease in operating costs due to net disposition activity.

Real estate taxes

The decrease in real estate taxes for the nine months ended September 30, 2020 of $3.4 million, as compared to the corresponding period in 2019, was primarily due to a $3.2 million decrease in real estate taxes due to net disposition activity and a $0.2 million decrease for the remaining portfolio primarily due to an increase in capitalized real estate taxes.

Real estate taxes remained generally consistent for the three months ended March 31, 2021 as compared to the corresponding period in 2020.

Depreciation and amortization

The increase in depreciation and amortization for the nine months ended September 30, 2020 of $1.5 million, as compared to the corresponding period in 2019, was primarily due to a $6.5 million decrease in depreciation and amortization due to net disposition activity, offset by an $8.0 million increase for the remaining portfolio primarily related to tenant write-offs and value-enhancing reinvestment capital expenditures, partially offset by a decrease in depreciation and amortization for the remaining portfolio related to acquired in-place lease intangibles.

The increase in depreciation and amortization for the three months ended March 31, 2021 of $0.4 million, as compared to the corresponding period in 2020, was primarily due to a $1.7 million increase for assets owned for the full year primarily related to value-enhancing reinvestment capital expenditures and tenant write-offs, partially offset by a decrease in depreciation and amortization related to acquired in-place lease intangibles and a $1.3 million decrease in depreciation and amortization due to net disposition activity.

Impairment of real estate assets

During the nine months ended September 30, 2020, aggregate impairment of $16.3 million was recognized on two shopping centers and one partial shopping center as a result of disposition activity and two operating properties.

During the nine months ended September 30, 2019, aggregate impairment of $17.5 million was recognized on three shopping centers and one partial shopping center as a result of disposition activity and one operating property.

During the three months ended March 31, 2021, aggregate impairment of $1.5 million was recognized on one shopping center as a result of disposition activity.

During the three months ended March 31, 2020, aggregate impairment of $4.6 million was recognized on one partial shopping center as a result of disposition activity and one operating property.

Impairments recognized were due to changes in anticipated hold periods primarily in connection with our capital recycling program.

General and administrative

The decrease in general and administrative costs for the nine months ended September 30, 2020 of $0.4 million, as compared to the corresponding period in 2019, was primarily due to a decrease in marketing, professional and travel costs due to COVID-19 and a decrease in net compensation costs, partially offset by an increase in litigation and other non-routine legal expenses.

During the nine months ended September 30, 2020 and 2019, construction compensation costs of $10.9 million and $10.7 million, respectively, were capitalized to building and improvements and leasing legal costs of $0.2 million and $0.0 million, respectively and leasing commission costs of $4.0 million and $4.5 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

The increase in general and administrative costs for the three months ended March 31, 2021 of $2.0 million, as compared to the corresponding period in 2020, was primarily due to an increase in litigation and other non-routine legal expenses and an increase in net compensation costs.

During the three months ended March 31, 2021 and 2020, construction compensation costs of $3.8 million and $3.5 million, respectively, were capitalized to building and improvements and leasing legal costs of $0.4 million and less than $0.1 million, respectively and leasing commission costs of $1.1 million and $1.4 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

Other Income and Expenses (in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

2021 2020 $ Change

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Dividends and interest

The decrease in dividends and interest for the nine months ended September 30, 2020 of $0.2 million, as compared to the corresponding period in 2019, was primarily due to a $0.2 million decrease in investment income from marketable securities.

Dividends and interest remained generally consistent for the three months ended March 31, 2021 as compared to the corresponding period in 2020.

Interest expense

The increase in interest expense for the nine months ended September 30, 2020 of $5.4 million, as compared to the corresponding period in 2019, was primarily due to higher overall debt obligations as we bolstered liquidity in response to COVID-19.

The increase in interest expense for the three months ended March 31, 2021 of $1.6 million, as compared to the corresponding period in 2020, was primarily due to higher weighted average debt obligations as we bolstered liquidity in response to COVID-19.

Gain on sale of real estate assets

During the nine months ended September 30, 2020, six shopping centers, two partial shopping centers and one land parcel were disposed resulting in aggregate gain of $21.3 million.

In addition, during the nine months ended September 30, 2020, we received aggregate net proceeds of $1.0 million and resolved contingencies of $0.5 million from previously disposed assets resulting in aggregate gain of $1.5 million, and we received final insurance proceeds related to two shopping centers that were damaged by Hurricane Michael resulting in aggregate gain of $0.4 million.

During the nine months ended September 30, 2019, 15 shopping centers and three partial shopping centers were disposed resulting in aggregate gain of $46.0 million.

In addition, during the nine months ended September 30, 2019, we received aggregate net proceeds of $0.4 million from previously disposed assets resulting in aggregate gain of $0.3 million.

During the three months ended March 31, 2021, three shopping centers and four partial shopping centers were disposed of resulting in aggregate gain of $5.8 million.

During the three months ended March 31, 2020, three shopping centers and one partial shopping center were disposed of resulting in aggregate gain of $7.5 million.

Loss on extinguishment of debt, net

During the nine months ended September 30, 2020, we repurchased $183.2 million of our 3.875% Senior Notes due 2022 through a tender offer and repaid our $7.0 million secured loan, resulting in a $10.4 million loss on extinguishment of debt, net.

Loss on extinguishment of debt, net includes $9.7 million of prepayment fees and $0.7 million of accelerated unamortized debt issuance costs and debt discounts, net of premiums.

During the nine months ended September 30, 2019, we repaid $500.0 million of an unsecured term loan under the Unsecured Credit Facility, resulting in a $1.6 million loss on extinguishment of debt due to the acceleration of unamortized debt issuance costs.

The increase in other expense for the nine months ended September 30, 2020 of $0.5 million, as compared to the corresponding period in 2019, was primarily due to an increase in transaction expenses and favorable tax adjustments in the prior year.

During the three months ended March 31, 2021, we repaid $350.0 million of an unsecured term loan under our senior unsecured credit facility agreement, as amended April 29, 2020 (the “Unsecured Credit Facility”), resulting in a $1.2 million loss on extinguishment of debt due to the acceleration of unamortized debt issuance costs.

The increase in other income for the three months ended March 31, 2021 of $1.5 million, as compared to the corresponding period in 2020, was primarily due to favorable tax adjustments and legal settlements in the current year.

Liquidity and Capital Resources

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• repurchases of equity securities.

We believe our current capital structure provides us with the financial flexibility and capacity to fund our current capital needs as well as future growth opportunities.

We have access to multiple forms of capital, including secured

property level debt, unsecured corporate level debt, preferred equity, and common equity, which will allow us to efficiently execute on our strategic and operational objectives.

We believe our capital structure provides us with the financial flexibility and capacity to fund our current capital needs as well as future growth opportunities.

We have access to multiple forms of capital, including secured property level debt, unsecured corporate level debt, preferred equity, and common equity, which will allow us to efficiently execute on our strategic and operational objectives.

We currently have investment grade credit ratings from all three major credit rating agencies.

As of September 30, 2020, we had $1.2 billion of available liquidity under the Revolving Facility and $609.8 million in cash and cash equivalents.

As of March 31, 2021, we had $1.2 billion of available liquidity under our Revolving Facility and $372.7 million in cash and cash equivalents and restricted cash.

We intend to continue to enhance our financial and operational flexibility through the additional extension of the duration of our debt.

As of March 31, 2021, our contractually scheduled debt maturities (excluding extension options) and interest payment obligations (excluding debt premiums and discounts and deferred financing costs) amount to $250.0 million and $186.1 million, respectively, over the next 12 months and $4.9 billion and $933.3 million, respectively, thereafter.

As of March 31, 2021, the weighted average time to maturity is 5.7 years with respect to our $4.9 billion of remaining scheduled debt maturities.

These amounts do not assume the issuance of new debt upon maturity of existing debt.

Scheduled interest payments included in these amounts for variable rate loans are presented using rates (including the impact of interest rate swaps) as of March 31, 2021.

“Quantitative and Qualitative Disclosures” in our annual report on Form 10-K for the year ended December 31, 2020 for a further discussion of these and other factors that could impact interest payments.

As previously discussed under the header “Impacts on Business from COVID-19”, the COVID-19 pandemic has had, and we expect will continue to have, an adverse impact on our liquidity and capital resources.

Future decreases in cash flow from operations resulting from rent deferrals, tenant defaults, or decreases in rental rates or occupancy, would decrease the cash available for the capital uses described above, including payment of dividends.

The decline in our stock price since the onset of the pandemic has significantly decreased the likelihood of utilizing our at-the-market equity offering program in the near future.

In June 2020 and August 2020, we issued an aggregate of $800.0 million principal amount of 4.050% Senior Notes due 2030, the net proceeds of which were used to repurchase a portion of our 3.875% Senior Notes due 2022, repay outstanding indebtedness under the Revolving Facility, and for general corporate purposes.

However, the impacts of COVID-19 may increase risks related to the pricing and availability of future debt financing.

In addition, a significant decline in our operating performance in the future could result in us not satisfying the financial covenants applicable to our debt and/or defaulting on our debt, which could impact our ability to incur additional debt, including the remaining capacity on our Revolving Facility.

Future decreases in cash flow from operations resulting from rent deferrals or abatements, tenant defaults, or decreases in rental rates or occupancy, would decrease the cash available for the capital uses described above, including the payment of dividends.

During 2020 we took various steps to mitigate the impact of COVID-19 on our liquidity, including the deferral of approximately $130.0 million of capital expenditures originally anticipated in 2020.

In addition, we have no debt maturities until 2022.

However, since we do not know the ultimate severity, scope or duration of the pandemic, and thus cannot predict the impact it will ultimately have on our tenants and on the debt and equity capital markets, we cannot estimate the impact it will have on our liquidity and capital resources.

In order to continue to qualify as a REIT for federal income tax purposes, we must distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains.

However, since we do not know the ultimate severity, scope or duration of the pandemic and the response thereto, and thus cannot predict the impact it will ultimately have on our tenants and on the debt and equity capital markets, we cannot estimate the impact it will have on our liquidity and capital resources.

Specifically, the prolonged impacts of COVID-19 may increase risks related to the pricing and availability of future debt financing.

In addition, a significant decline in our operating performance in the future could impact our ability to incur additional debt, including the remaining capacity on our Revolving Facility, due to the financial covenants applicable to our debt.

In order to continue to qualify as a REIT for federal income tax purposes, we must distribute at least 90% of our REIT taxable income, determined before the deduction for dividends paid and excluding net capital gains, to our stockholders on an annual basis.

We intend to continue to satisfy this requirement and maintain our REIT status.

Cash dividends paid to common stockholders for the nine months ended September 30, 2020 and 2019 were $170.4 million and $251.3 million, respectively.

In response to COVID-19, our Board of Directors temporarily suspended the dividend for the second and third quarters of 2020.

In October 2020, our Board of Directors declared a quarterly cash dividend of $0.215 per common share for the fourth quarter of 2020.

The dividend is payable on January 15, 2021 to shareholders of record on January 6, 2021.

Cash dividends paid to common stockholders for the three months ended March 31, 2021 and 2020 were $65.0 million and $85.6 million, respectively.

In response to COVID-19, our Board of Directors temporarily suspended the dividend in the second and third quarters of 2020.

In February 2021, our Board of Directors declared a quarterly cash dividend of $0.215 per common share for the first quarter of 2021.

The dividend was paid on April 15, 2021 to shareholders of record on April 5, 2021.

In April 2021, our Board of Directors declared a quarterly cash dividend of $0.215 per common share for the second quarter of 2021.

The dividend is payable on July 15, 2021 to shareholders of record on July 6, 2021.

Our Board of Directors will reevaluate the dividend on a quarterly basis, taking into account a variety of relevant factors, including REIT taxable income.

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Brixmor Property Group Inc .

Nine Months Ended September 30,

Cash flows provided by operating activities $ 323,632 $ 399,933

Cash flows used in investing activities (140,254) (110,543)

Cash flows provided by (used in) financing activities 406,319 (308,674)

Three Months Ended March 31,

Net cash provided by operating activities $ 110,513 $ 95,070

Net cash used in investing activities (34,125) (46,614)

Net cash provided by (used in) financing activities (73,791) 517,112

Brixmor Operating Partnership LP

Nine Months Ended September 30,

Cash flows provided by operating activities $ 323,632 $ 399,933

Cash flows used in investing activities (140,254) (110,540)

Cash flows provided by (used in) financing activities 396,321 (308,569)

Cash and cash equivalents and restricted cash for BPG were $611.2 million and $31.5 million as of September 30, 2020 and 2019, respectively.

Cash and cash equivalents and restricted cash for the Operating Partnership were $601.2 million and $31.5 million as of September 30, 2020 and 2019, respectively.

Three Months Ended March 31,

Net cash provided by operating activities $ 110,513 $ 95,070

Net cash used in investing activities (34,125) (46,614)

Net cash provided by (used in) financing activities (73,791) 517,113

Cash and cash equivalents and restricted cash for BPG were $372.7 million and $587.1 million as of March 31, 2021 and 2020, respectively.

Cash and cash equivalents and restricted cash for the Operating Partnership were $362.7 million and $587.1 million as of March 31, 2021 and 2020, respectively.

Operating Activities

Net cash provided by operating activities primarily consists of cash inflows from tenant rental payments and expense reimbursements and cash outflows for property operating expenses, general and administrative expenses and interest expense.

During the nine months ended September 30, 2020, our net cash provided by operating activities decreased $76.3 million as compared to the corresponding period in 2019.

The decrease is primarily due to (i) a decrease from net working capital primarily due to decreased cash collection levels as a result of COVID-19;

(ii) a decrease in net operating income due to net disposition activity;

During the three months ended March 31, 2021, our net cash provided by operating activities increased $15.4 million as compared to the corresponding period in 2020.

The increase is primarily due to (i) an increase from net working capital;

partially offset by (ii) a decrease in net operating income due to net disposition activity;

(iii) an increase in cash outflows for interest expense;

and (iv) an increase in cash outflows for general and administrative expense.

partially offset by (v) an increase in lease termination fees.

Investing Activities

Net cash used in investing activities is impacted by the nature, timing and magnitude of acquisition and disposition activity and improvements to and investments in our shopping centers, including capital expenditures associated with our value-enhancing reinvestment efforts.

During the nine months ended September 30, 2020, our net cash used in investing activities increased $29.7 million as compared to the corresponding period in 2019.

The increase was primarily due to (i) a decrease of $156.9 million in net proceeds from sales of real estate assets;

and (ii) a $13.3 million decrease in net proceeds from sales of marketable securities, net of purchases;

partially offset by (iii) a decrease of $76.2 million in acquisitions of real estate assets;

and (iv) a decrease of $64.3 million in improvements to and investments in real estate assets.

During the three months ended March 31, 2021, our net cash used in investing activities decreased $12.5 million as compared to the corresponding period in 2020.

The decrease was primarily due to (i) a decrease of $23.9 million in improvements to and investments in real estate assets;

partially offset by (ii) a decrease of $9.6 million in net proceeds from sales of real estate assets;

and (iii) an increase of $1.8 million in acquisitions of real estate assets.

Improvements to and investments in real estate assets

During the nine months ended September 30, 2020 and 2019, we expended $217.9 million and $282.2 million, respectively, on improvements to and investments in real estate assets.

In addition, during the nine months ended September 30, 2020 and 2019, insurance proceeds of $7.3 million and $5.0 million, respectively, were received and included in improvements to and investments in real estate assets.

During the three months ended March 31, 2021 and 2020, we expended $62.8 million and $86.7 million, respectively, on improvements to and investments in real estate assets.

In addition, during the three months ended March 31, 2021 and 2020, insurance proceeds of $2.2 million and $3.6 million, respectively, were received and included in improvements to and investments in real estate assets.

Maintenance capital expenditures represent costs to fund major replacements and betterments to our properties.

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Such initiatives are tenant driven and focus on upgrading our centers with strong, best-in-class retailers and enhancing the overall merchandise mix and tenant quality of our Portfolio.

As of September 30, 2020, we had 54 in-process anchor space repositioning, redevelopment and outparcel development projects with an aggregate anticipated cost of $373.0 million, of which $198.1 million had been incurred as of September 30, 2020.

As of March 31, 2021, we had 57 in-process anchor space repositioning, redevelopment and outparcel development projects with an aggregate anticipated cost of $409.2 million, of which $225.1 million had been incurred as of March 31, 2021.

In addition, we have identified a pipeline of future reinvestment projects aggregating approximately $1.0 billion of potential capital investment which we expect to execute over the next several years.

We expect to fund these projects with cash and cash equivalents on hand, proceeds from sales of real estate assets, and/or available liquidity under our Revolving Facility.

Acquisitions of and proceeds from sales of real estate assets

We continue to evaluate the market for acquisition opportunities and we may acquire shopping centers when we believe strategic opportunities exist, particularly where we can further concentrate our Portfolio in attractive retail submarkets and optimize the quality and long-term growth rate of our asset base.

During the nine months ended September 30, 2020, we acquired two land parcels for $3.4 million, including transaction costs.

During the nine months ended September 30, 2019, we acquired two shopping centers, two leases at an existing shopping center and one land parcel for an aggregate purchase price of $79.6 million, including transaction costs.

During the three months ended March 31, 2021, we acquired one outparcel and two land parcels for an aggregate purchase price of $3.8 million, including transaction costs.

During the three months ended March 31, 2020, we acquired one land parcel for $2.0 million, including transaction costs.

We may also dispose of properties when we believe value has been maximized, where there is downside risk, or where we have limited ability or desire to build critical mass in a particular submarket.

During the nine months ended September 30, 2020, we disposed of eight shopping centers, three partial shopping centers and one land parcel for aggregate net proceeds of $81.9 million.

In addition, during the nine months ended September 30, 2020, we received aggregate net proceeds of $1.0 million from previously disposed assets.

During the nine months ended September 30, 2019, we disposed of 18 shopping centers and four partial shopping centers for aggregate net proceeds of $239.4 million.

In addition, during the nine months ended September 30, 2019, we received aggregate net proceeds of $0.4 million from previously disposed assets.

During the three months ended March 31, 2021, we disposed of four shopping centers and four partial shopping centers for aggregate net proceeds of $31.8 million.

During the three months ended March 31, 2020, we disposed of three shopping centers

and two partial shopping centers for aggregate net proceeds of $40.5 million.

In addition, during the three months ended March 31, 2020, we received aggregate net proceeds of $0.9 million from previously disposed assets.

Financing Activities

Net cash provided by (used in) financing activities is impacted by the nature, timing and magnitude of issuances and repurchases of debt and equity securities, as well as principal payments associated with our outstanding indebtedness and distributions made to our common stockholders.

During the nine months ended September 30, 2020, our net cash provided by financing activities increased $715.0 million as compared to the corresponding period in 2019.

The increase was primarily due to (i) a $657.7 million increase in debt borrowings, net of repayments;

and (ii) an $80.9 million decrease in distributions to common stockholders;

partially offset by (iii) a $12.3 million increase in repurchases of common stock;

and (iv) an $11.3 million increase in deferred financing and debt extinguishment costs.

The increase in debt borrowings is primarily related to net proceeds from the issuances of our 4.050% Senior Notes due 2030, net of the repurchases of a portion of our 3.875% Senior Notes due 2022.

Contractual Obligations

Our contractual obligations relate to our debt, including unsecured notes payable and unsecured credit facilities, with maturities ranging from one year to 10 years, in addition to non-cancelable operating leases pertaining to our ground leases and administrative office leases.

The following table summarizes our debt maturities (excluding extension options), interest payment obligations (excluding debt premiums and discounts and deferred financing costs) and obligations under non-cancelable operating leases (excluding renewal options) as of September 30, 2020:

Contractual Obligations

(in thousands) Payment due by period

2020 2021 2022 2023 2024 Thereafter

$ — $ — $ 566,849 $ 850,000 $ 800,000 $ 3,268,453 $ 5,485,302

Interest payments (2)

43,097 200,721 195,551 182,732 147,682 427,517 1,197,300

Operating leases 1,762 6,257 6,028 5,339 5,246 30,073 54,705

Total $ 44,859 $ 206,978 $ 768,428 $ 1,038,071 $ 952,928 $ 3,726,043 $ 6,737,307

(1) Debt includes scheduled maturities for unsecured notes payable and unsecured credit facilities.

(2) As of September 30, 2020, we incur variable rate interest on (i) a $350.0 million term loan;

(iii) a $300.0 million term loan;

and (iv) $250.0 million of Floating Rate Senior Notes due 2022.

We have in place seven interest rate swap agreements with an aggregate notional value of $800.0 million, which effectively convert variable interest payments to fixed interest payments.

“Quantitative and Qualitative Disclosures” in our annual report on Form 10-K for the year ended December 31, 2019 for a further discussion of these and other factors that could impact interest payments.

Interest payments for these variable rate loans are presented using rates (including the impact of interest rate swaps) as of September 30, 2020.

During the three months ended March 31, 2021, our net cash provided by (used in) financing activities decreased $590.9 million as compared to the corresponding period in 2020.

The decrease was primarily due to (i) a $632.1 million decrease in debt borrowings, net of repayments;

and (ii) a $2.7 million increase in deferred financing and debt extinguishment costs;

partially offset by (iii) a $23.3 million decrease in repurchases of common stock;

and (iv) a $20.6 million decrease in distributions to our common stockholders.

The decrease in debt borrowings is primarily related to amounts drawn on our Revolving Facility in the corresponding period in 2020 in order to bolster liquidity in response to COVID-19.

Non-GAAP Performance Measures

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NAREIT FFO (defined hereafter) is a supplemental, non-GAAP performance measure utilized to evaluate the operating and financial performance of real estate companies.

The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (“FFO”) as net income (loss), calculated in accordance with GAAP, excluding (i) depreciation and amortization related to real estate, (ii) gains and losses from the sale of certain real estate assets, (iii) gains and losses from change in control, (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of

depreciable real estate held by the entity and (v) after adjustments for unconsolidated joint ventures calculated to reflect FFO on the same basis.

Considering the nature of our business as a real estate owner and operator, we believe that NAREIT FFO is useful to investors in measuring our operating and financial performance because the definition excludes items included in net income that do not relate to or are not indicative of our operating and financial performance, such as depreciation and amortization related to real estate, and items which can make periodic and peer analyses of operating and financial performance more difficult, such as gains and losses from the sale of certain real estate assets and impairment write-downs of certain real estate assets.

Our reconciliation of net income to NAREIT FFO for the three and nine months ended September 30, 2020 and 2019 is as follows (in thousands, except per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Our reconciliation of net income to NAREIT FFO for the three months ended March 31, 2021 and 2020 is as follows (in thousands, except per share amounts):

Three Months Ended March 31,

Net income $ 52,371 $ 59,781

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Same property NOI is calculated (using properties owned for the entirety of both periods and excluding properties under development and completed new development properties which have been stabilized for less than one year) as total property revenues (base rent, expense reimbursements, adjustments for revenues deemed uncollectible, ancillary and other rental income, percentage rents and other revenues) less direct property operating expenses (operating costs and real estate taxes).

Same property NOI excludes (i) corporate level expenses (including general and administrative), (ii) lease termination fees, (iii) straight-line rental income, net, (iv) accretion of above- and below-market leases and tenant inducements, net, (v) straight-line ground rent expense, and (vi) income (expense) associated with our captive insurance company.

Same property NOI excludes (i) corporate level expenses (including general and administrative), (ii) lease termination fees, (iii) straight-line rental income, net, (iv) accretion of below-market leases, net of amortization of above-market leases and tenant inducements, (v) straight-line ground rent expense, and (vi) income (expense) associated with our captive insurance company.

Considering the nature of our business as a real estate owner and operator, we believe that same property NOI is useful to investors in measuring the operating performance of our property portfolio because the definition excludes various items included in net income that do not relate to, or are not indicative of, the operating performance of our properties, such as depreciation and amortization and corporate level expenses (including general and administrative), and because it eliminates disparities in NOI due to the acquisition or disposition of properties or the stabilization of completed new development properties during the period presented and therefore provides a more consistent metric for comparing the operating performance of our real estate between periods.

Comparison of the Three and Nine Months Ended September 30, 2020 to the Three and Nine Months Ended September 30, 2019

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 Change 2020 2019 Change

Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020

Three Months Ended March 31,

2021 2020 Change

Number of properties 380 380 —

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The following table provides a reconciliation of net income to same property NOI for the periods presented (in thousands):

Ended September 30, Nine Months

Ended September 30,

2020 2019 2020 2019

Three Months Ended March 31,

Net income $ 52,371 $ 59,781

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Straight-line rental income, net (2,272) 2,137

Accretion of above- and below-market leases and tenant inducements, net (3,281) (3,622) (9,802) (11,391)

Accretion of below-market leases, net of amortization of above-market leases and tenant inducements (984) (3,371)

Straight-line ground rent expense 46 35

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With respect to our outstanding indebtedness, we periodically evaluate our exposure to interest rate fluctuations, and may continue to enter into interest rate protection agreements which mitigate, but do not eliminate, the impact of changes in interest rates on our variable rate loans.

Off-Balance Sheet Arrangements

We had no material off-balance sheet arrangements as of September 30, 2020.

Quantitative and Qualitative Disclosures about Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis