What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-01 compared with 2021-08-02 · 120 added, 116 removed, 272 unchanged (46% of the section changed)

9 unchanged sentences

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 June 30, 2021, our portfolio was comprised of 389 shopping centers (the “Portfolio”) totaling approximately 68 million square feet of GLA.

As of September 30, 2021, our portfolio was comprised of 386 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 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 June 30, 2021, our three largest tenants by annualized base rent (“ABR”) were The TJX Companies, Inc.

As of September 30, 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.

(“Kroger”), and Burlington Stores, Inc.

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

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

As of July 27, 2021, we have collected 93% of second, third and fourth quarter 2020 base rent, 95% of first quarter 2021 base rent, and 97% of second quarter 2021 base rent.

As of October 26, 2021, we have collected 94% of base rent for the nine months ended December 31, 2020, 96% of first quarter 2021 base rent, 97% of second quarter 2021 base rent, and 97% of third quarter 2021 base rent.

Certain tenants experiencing economic difficulties during the pandemic have sought rent relief from us, 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.

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Leasing Highlights

As of June 30, 2021, billed and leased occupancy were 88.1% and 91.1%, respectively, as compared to 88.9% and 92.1%, respectively, as of June 30, 2020.

The following table summarizes our executed leasing activity for the three months ended June 30, 2021 and 2020 (dollars in thousands, except for per square foot (“PSF”) amounts):

For the Three Months Ended June 30, 2021

As of September 30, 2021, billed and leased occupancy were 88.2% and 91.5%, respectively, as compared to 88.0% and 91.2%, respectively, as of September 30, 2020.

The following table summarizes our executed leasing activity for the three months ended September 30, 2021 and 2020 (dollars in thousands, except for per square foot (“PSF”) amounts):

For the Three Months Ended September 30, 2021

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

4 unchanged sentences

Option leases 54 1,050,510 11.14 — — 7.6 %

For the Three Months Ended June 30, 2020

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)

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

The following table summarizes our executed leasing activity for the six months ended June 30, 2021 and 2020 (dollars in thousands, except for per PSF amounts):

For the Six Months Ended June 30, 2021

The following table summarizes our executed leasing activity for the nine months ended September 30, 2021 and 2020 (dollars in thousands, except for per PSF amounts):

For the Nine Months Ended September 30, 2021

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

4 unchanged sentences

Option leases 126 2,480,182 11.36 — — 7.1 %

For the Six Months Ended June 30, 2020

For the Nine Months Ended September 30, 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 six months ended June 30, 2021, we acquired two shopping centers, one outparcel and two land parcels for an aggregate purchase price of $66.7 million, including transaction costs and closing credits.

• During the six months ended June 30, 2020, we acquired one land parcel for $2.0 million, including transaction costs.

• During the nine months ended September 30, 2021, we acquired two shopping centers, one outparcel and two land parcels for an aggregate purchase price of $66.7 million, including transaction costs and closing credits.

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

Disposition Activity

• During the six months ended June 30, 2021, we disposed of six shopping centers and nine partial shopping centers for aggregate net proceeds of $99.7 million resulting in aggregate gain of $38.3 million and aggregate impairment of $1.5 million.

In addition, during the six months ended June 30, 2021, we received aggregate net proceeds of less than $0.1 million from previously disposed assets resulting in aggregate gain of less than $0.1 million.

• During the six months ended June 30, 2020, we disposed of five shopping centers and two partial shopping centers for aggregate net proceeds of $45.7 million resulting in aggregate gain of $8.2 million and aggregate impairment of less than $0.1 million.

In addition, during the six months ended June 30, 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.

• During the nine months ended September 30, 2021, we disposed of nine shopping centers, 14 partial shopping centers and one land parcel for aggregate net proceeds of $124.4 million resulting in aggregate gain of $49.5 million and aggregate impairment of $1.5 million.

In addition, during the nine months ended September 30, 2021, we received aggregate net proceeds of less than $0.1 million from previously disposed assets resulting in aggregate gain of less than $0.1 million.

• 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.

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 June 30, 2021 to the Three Months Ended June 30, 2020

Comparison of the Three Months Ended September 30, 2021 to the Three Months Ended September 30, 2020

Revenues (in thousands)

Three Months Ended June 30,

Three Months Ended September 30,

2021 2020 $ Change

3 unchanged sentences

Rental income

The increase in rental income for the three months ended June 30, 2021 of $39.5 million, as compared to the corresponding period in 2020, was due to a $41.9 million increase for assets owned for the full period, partially offset by a $2.4 million decrease in rental income due to net disposition activity.

The increase in rental income for the three months ended September 30, 2021 of $36.2 million, as compared to the corresponding period in 2020, was due to a $38.6 million increase for assets owned for the full period, partially offset by a $2.4 million decrease in rental income due to net disposition activity.

The increase for assets owned for the full period was due to (i) a $25.7 million decrease in revenues deemed uncollectible;

(ii) a $7.8 million increase in straight-line rental income, net;

(iii) a $2.3 million increase in lease termination fees;

(iii) a $3.0 million increase in base rent;

(iv) a $1.5 million increase in expense reimbursements;

(v) a $1.0 million increase in ancillary and other rental income;

(vi) a $0.4 million increase in percentage rents;

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

partially offset by (viii) a $2.2 million decrease in base rent.

(vi) a $0.6 million increase in lease termination fees;

and (vii) a $0.3 million increase in percentage rents;

partially offset by (viii) a $1.3 million decrease in accretion of below-market leases, net of amortization of above-market leases and tenant inducements.

The decrease in revenues deemed uncollectible was primarily attributable to the impact of COVID-19 reserves in 2020 and recoveries of previously reserved amounts in 2021.

The increase in straight-line rental income, net was primarily attributable to the impact of COVID-19 reserves in 2020.

The $2.2 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 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 8.3% during the six months ended June 30, 2021 and 7.2% during the year ended December 31, 2020.

The $3.0 million increase in base rent for the remaining portfolio was primarily due to a decrease in COVID-19 rent deferrals accounted for as lease modifications and rent abatements, in addition to contractual rent increases and positive rent spreads for new and renewal leases and option exercises of 9.1% during the nine months ended September 30, 2021 and 7.2% during the year ended December 31, 2020, partially offset by a decrease in weighted average billed occupancy.

Other revenues

The decrease in other revenues for the three months ended June 30, 2021 of $0.1 million, as compared to the corresponding period in 2020, was primarily due to a decrease in energy-efficient lighting rebate income.

Other revenues remained generally consistent for the three months ended September 30, 2021 as compared to the corresponding period in 2020.

Operating Expenses (in thousands)

Three Months Ended June 30,

Three Months Ended September 30,

2021 2020 $ Change

7 unchanged sentences

Operating costs

The increase in operating costs for the three months ended June 30, 2021 of $3.6 million, as compared to the corresponding period in 2020, was primarily due to a $3.8 million increase for assets owned for the full period, primarily due to an increase in repair and maintenance, insurance and utility costs, partially offset by a $0.2 million decrease in operating costs due to net disposition activity.

The increase in operating costs for the three months ended September 30, 2021 of $8.0 million, as compared to the corresponding period in 2020, was primarily due to an $8.1 million increase for assets owned for the full period primarily due to an increase in repair and maintenance costs and a decrease in favorable insurance captive adjustments, partially offset by a $0.1 million decrease in operating costs due to net disposition activity.

Real estate taxes

The increase in real estate taxes for the three months ended June 30, 2021 of $0.4 million, as compared to the corresponding period in 2020, was primarily due to a $1.4 million increase for assets owned for the full period, primarily due to a decrease in favorable adjustments of prior year assessments, partially offset by a $1.0 million decrease in real estate taxes due to net disposition activity.

The decrease in real estate taxes for the three months ended September 30, 2021 of $2.4 million, as compared to the corresponding period in 2020, was primarily due to a $1.8 million decrease for assets owned for the full period, primarily due to an increase in favorable adjustments related to prior year assessments, and a $0.6 million decrease in real estate taxes due to net disposition activity.

Depreciation and amortization

The increase in depreciation and amortization for the three months ended June 30, 2021 of $0.4 million, as compared to the corresponding period in 2020, was primarily due to a $0.9 million increase for assets owned for the full period, primarily related to value-enhancing reinvestment capital expenditures and accelerated depreciation and amortization due to tenant write-offs, partially offset by a decrease in depreciation and amortization related to acquired in-place lease intangibles and a $0.5 million decrease in depreciation and amortization due to net disposition activity.

The decrease in depreciation and amortization for the three months ended September 30, 2021 of $5.8 million, as compared to the corresponding period in 2020, was primarily due to a $5.6 million decrease for assets owned for the full period, primarily related to a decrease in accelerated depreciation and amortization related to tenant move-outs, and a $0.2 million decrease in depreciation and amortization due to net disposition activity.

Impairment of real estate assets

During the three months ended June 30, 2021, aggregate impairment of $0.4 million was recognized on one operating property.

During the three months ended June 30, 2020, aggregate impairment of $6.0 million was recognized on two operating properties.

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.

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

General and administrative

The increase in general and administrative costs for the three months ended June 30, 2021 of $2.0 million, as compared to the corresponding period in 2020, was primarily due to an increase in net compensation costs, partially offset by a decrease in litigation and other non-routine legal expenses.

During the three months ended June 30, 2021 and 2020, construction compensation costs of $4.2 million and $3.6 million, respectively, were capitalized to building and improvements and leasing legal costs of $0.3 million and $0.1 million, respectively and leasing commission costs of $1.6 million and $1.2 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

The decrease in general and administrative costs for the three months ended September 30, 2021 of $2.4 million, as compared to the corresponding period in 2020, was primarily due to a decrease in litigation and other non-routine legal expenses, partially offset by an increase in net compensation costs.

During the three months ended September 30, 2021 and 2020, construction compensation costs of $4.2 million and $3.8 million, respectively, were capitalized to building and improvements and leasing legal costs of $0.7 million and $0.1 million, respectively and leasing commission costs of $2.0 million and $1.4 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

Other Income and Expenses (in thousands)

Three Months Ended June 30,

Three Months Ended September 30,

2021 2020 $ Change

7 unchanged sentences

Dividends and interest

Dividends and interest remained generally consistent for the three months ended June 30, 2021 as compared to the corresponding period in 2020.

Dividends and interest remained generally consistent for the three months ended September 30, 2021 as compared to the corresponding period in 2020.

Interest expense

Interest expense remained generally consistent for the three months ended June 30, 2021 as compared to the corresponding period in 2020.

The decrease in interest expense for the three months ended September 30, 2021 of $2.1 million, as compared to the corresponding period in 2020, was primarily due to lower overall debt obligations.

Gain on sale of real estate assets

During the three months ended June 30, 2021, two shopping centers and five partial shopping centers were disposed of resulting in aggregate gain of $32.6 million.

In addition, during the three months ended June 30, 2021, we received aggregate net proceeds of less than $0.1 million from previously disposed assets resulting in aggregate gain of less than $0.1 million.

During the three months ended June 30, 2020, two shopping centers were disposed of resulting in aggregate gain of $0.7 million.

During the three months ended September 30, 2021, three shopping centers, five partial shopping centers and one land parcel were disposed of resulting in aggregate gain of $11.1 million.

During the three months ended September 30, 2020, two shopping centers, one partial shopping center and one land parcel were disposed of 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.

Loss on extinguishment of debt, net

During the three months ended June 30, 2020, we repurchased $182.5 million of our 3.875% Senior Notes due 2022 through a tender offer, resulting in a $10.4 million loss on extinguishment of debt, net.

Loss on extinguishment of debt, net includes $9.5 million of prepayment fees and $0.9 million of accelerated unamortized debt issuance costs and debt discounts.

The decrease in other expense for the three months ended June 30, 2021 of $0.5 million, as compared to the corresponding period in 2020, was primarily due to a decrease in transaction expenses.

Comparison of the Six Months Ended June 30, 2021 to the Six Months Ended June 30, 2020

During the three months ended September 30, 2021, we redeemed all $500.0 million of our 3.250% Senior Notes due 2023, resulting in a $27.1 million loss on extinguishment of debt.

Loss on extinguishment of debt includes $25.5 million of prepayment fees and $1.6 million of accelerated unamortized debt issuance costs and debt discounts.

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.

Loss on extinguishment of debt includes less than $0.1 million of prepayment fees and less than $0.1 million of accelerated unamortized debt issuance costs and debt discounts.

The increase in other income for the three months ended September 30, 2021 of $1.2 million, as compared to the corresponding period in 2020, was primarily due to favorable tax adjustments in the current year.

Comparison of the Nine Months Ended September 30, 2021 to the Nine Months Ended September 30, 2020

Revenues (in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

2021 2020 $ Change

3 unchanged sentences

Rental income

The increase in rental income for the six months ended June 30, 2021 of $35.6 million, as compared to the corresponding period in 2020, was due to a $41.1 million increase for assets owned for the full period, partially offset by a $5.5 million decrease in rental income due to net disposition activity.

The increase in rental income for the nine months ended September 30, 2021 of $71.8 million, as compared to the corresponding period in 2020, was due to an $80.1 million increase for assets owned for the full period, partially

offset by an $8.3 million decrease in rental income due to net disposition activity.

The increase for assets owned for the full period was due to (i) a $56.6 million decrease in revenues deemed uncollectible;

2 unchanged sentences

(iv) a $2.2 million increase in ancillary and other rental income;

(v) a $0.8 million increase in percentage rents;

and (vi) a $0.7 million increase in expense reimbursements;

(v) a $2.2 million increase in expense reimbursements;

and (vi) a $1.1 million increase in percentage rents;

partially offset by (vii) a $3.4 million decrease in base rent;

and (viii) a $2.0 million

decrease in accretion of below-market leases, net of amortization of above-market leases and tenant inducements.

and (viii) a $3.3 million decrease in accretion of below-market leases, net of amortization of above-market leases and tenant inducements.

The decrease in revenues deemed uncollectible was primarily attributable to the impact of COVID-19 reserves in 2020 and recoveries of previously reserved amounts in 2021.

The increase in straight-line rental income, net was primarily attributable to the impact of COVID-19 reserves in 2020.

The $7.0 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 8.3% during the six months ended June 30, 2021 and 7.2% during the year ended December 31, 2020.

The $3.4 million decrease in base rent for the remaining portfolio was primarily due to a decrease in weighted average billed occupancy, partially offset by a decrease in COVID-19 rent deferrals accounted for as lease modifications and rent abatements, in addition to contractual rent increases and positive rent spreads for new and renewal leases and option exercises of 9.1% during the nine months ended September 30, 2021 and 7.2% during the year ended December 31, 2020.

Other revenues

The increase in other revenues for the six months ended June 30, 2021 of $1.3 million, as compared to the corresponding period in 2020, was primarily due to an increase in tax increment financing income.

The increase in other revenues for the nine months ended September 30, 2021 of $1.3 million, as compared to the corresponding period in 2020, was primarily due to an increase in tax increment financing income.

Operating Expenses (in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

2021 2020 $ Change

7 unchanged sentences

Operating costs

The increase in operating costs for the six months ended June 30, 2021 of $4.6 million, as compared to the corresponding period in 2020, was primarily due to a $5.2 million increase for assets owned for the full period, primarily due to an increase in repair and maintenance, insurance and utility costs, partially offset by a $0.6 million decrease in operating costs due to net disposition activity.

The increase in operating costs for the nine months ended September 30, 2021 of $12.6 million, as compared to the corresponding period in 2020, was primarily due to a $13.3 million increase for assets owned for the full period, primarily due to an increase in repair and maintenance, insurance and utility costs and a decrease in favorable insurance captive adjustments, partially offset by a $0.7 million decrease in operating costs due to net disposition activity.

Real estate taxes

The increase in real estate taxes for the six months ended June 30, 2021 of $0.5 million, as compared to the corresponding period in 2020, was primarily due to a $2.0 million increase for assets owned for the full period, primarily due to a decrease in favorable adjustments of prior year assessments, partially offset by a $1.5 million decrease in real estate taxes due to net disposition activity.

The decrease in real estate taxes for the nine months ended September 30, 2021 of $1.9 million, as compared to the corresponding period in 2020, was primarily due to a $2.1 million decrease in real estate taxes due to net disposition activity, partially offset by a $0.2 million increase for assets owned for the full period.

Depreciation and amortization

The increase in depreciation and amortization for the six months ended June 30, 2021 of $0.8 million, as compared to the corresponding period in 2020, was primarily due to a $2.6 million increase for assets owned for the full period, primarily related to value-enhancing reinvestment capital expenditures and accelerated depreciation and amortization due to tenant write-offs, partially offset by a decrease in depreciation and amortization related to acquired in-place lease intangibles and a $1.8 million decrease in depreciation and amortization due to net disposition activity.

The decrease in depreciation and amortization for the nine months ended September 30, 2021 of $5.0 million, as compared to the corresponding period in 2020, was primarily due to a $2.0 million decrease in depreciation and amortization due to net disposition activity and a $3.0 million decrease for assets owned for the full period, primarily related to a decrease in amortization of acquired in-place lease intangibles and accelerated depreciation and amortization related to tenant move-outs, partially offset by an increase in depreciation and amortization related to value-enhancing reinvestment capital expenditures.

Impairment of real estate assets

During the six months ended June 30, 2021, aggregate impairment of $1.9 million was recognized on one shopping center as a result of disposition activity and one operating property.

During the six months ended June 30, 2020, aggregate impairment of $10.6 million was recognized on one partial shopping center as a result of disposition activity and three operating properties.

During the nine months ended September 30, 2021, aggregate impairment of $1.9 million was recognized on one shopping center as a result of disposition activity and one operating property.

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.

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

General and administrative

The increase in general and administrative costs for the six months ended June 30, 2021 of $4.1 million, as compared to the corresponding period in 2020, was primarily due to an increase in net compensation costs and legal expenses.

During the six months ended June 30, 2021 and 2020, construction compensation costs of $7.9 million and $7.1 million, respectively, were capitalized to building and improvements and leasing legal costs of $0.8 million and $0.1 million, respectively and leasing commission costs of $2.8 million and $2.6 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

The increase in general and administrative costs for the nine months ended September 30, 2021 of $1.6 million, as compared to the corresponding period in 2020, was primarily due to an increase in net compensation costs and routine legal expenses, partially offset by a decrease in litigation and other non-routine legal expenses.

During the nine months ended September 30, 2021 and 2020, construction compensation costs of $12.1 million and $10.9 million, respectively, were capitalized to building and improvements and leasing legal costs of $1.5 million and $0.2 million, respectively and leasing commission costs of $4.8 million and $4.0 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

Other Income and Expenses (in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

2021 2020 $ Change

7 unchanged sentences

Dividends and interest

Dividends and interest remained generally consistent for the six months ended June 30, 2021 as compared to the corresponding period in 2020.

Dividends and interest remained generally consistent for the nine months ended September 30, 2021 as compared to the corresponding period in 2020.

Interest expense

The increase in interest expense for the six months ended June 30, 2021 of $1.5 million, as compared to the corresponding period in 2020, was primarily due to a higher weighted average interest rate due to the refinancing of variable rate debt with fixed rate debt in 2020 and the termination of $250.0 million of interest rate swaps in 2021.

The decrease in interest expense for the nine months ended September 30, 2021 of $0.6 million, as compared to the corresponding period in 2020, was primarily due to lower overall debt obligations.

Gain on sale of real estate assets

During the six months ended June 30, 2021, five shopping centers and nine partial shopping centers were disposed of resulting in aggregate gain of $38.3 million.

During the six months ended June 30, 2020, five shopping centers and one partial shopping center were disposed of resulting in aggregate gain of $8.2 million.

During the nine months ended September 30, 2021, eight shopping centers, 14 partial shopping centers and one land parcel were disposed of resulting in aggregate gain of $49.5 million.

During the nine months ended September 30, 2020, six shopping centers, two partial shopping centers and one land parcel were disposed of 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.

Loss on extinguishment of debt, net

During the six months ended June 30, 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.

During the six months ended June 30, 2020, we repurchased $182.5 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.

During the nine months ended September 30, 2021, we redeemed all $500.0 million of our 3.250% Senior Notes due 2023 and 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 $28.3 million loss on extinguishment of debt.

Loss on extinguishment of debt includes $25.5 million of prepayment fees and $2.8 million of accelerated unamortized debt issuance costs and debt discounts.

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.

The increase in other income for the six months ended June 30, 2021 of $2.0 million, as compared to the corresponding period in 2020, was primarily due to favorable tax adjustments and legal settlements in the current year and a decrease in transaction expenses.

The increase in other income for the nine months ended September 30, 2021 of $3.2 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

17 unchanged sentences

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

As of June 30, 2021, we had $1.2 billion of available liquidity under the Revolving Facility and $405.4 million in cash and cash equivalents and restricted cash.

As of September 30, 2021, we had $1.2 billion of available liquidity under the Revolving Facility and $404.4 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 June 30, 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 $188.6 million, respectively, over the next 12 months and $4.9 billion and $889.5 million, respectively, thereafter.

As of June 30, 2021, the weighted average time to maturity is 5.2 years with respect to our scheduled debt maturities.

As of September 30, 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 $182.4 million, respectively, over the next 12 months and $4.9 billion and $938.0 million, respectively, thereafter.

As of September 30, 2021, the weighted average time to maturity is 5.7 years with respect to our 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 June 30, 2021.

Scheduled interest payments included in these amounts for variable rate loans are presented using rates (including the impact of interest rate swaps) as of September 30, 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 may continue to have, an adverse impact on our liquidity and capital resources.

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.

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.

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 six months ended June 30, 2021 and 2020 were $129.1 million and $170.3 million, respectively.

Cash dividends paid to common stockholders for the nine months ended September 30, 2021 and 2020 were $193.2 million and $170.4 million, respectively.

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

In the fourth quarter of 2020, our Board of Directors resumed the dividend at a rate of $0.215 per common share.

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 was paid on July 15, 2021 to shareholders of record on July 6, 2021.

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

The dividend is payable on October 15, 2021 to shareholders of record on October 5, 2021.

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

In October 2021, our Board of Directors declared a quarterly cash dividend of $0.240 per common share for the fourth quarter of 2021.

The dividend is payable on January 18, 2022 to shareholders of record on January 5, 2022.

Our Board of Directors will evaluate 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 .

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash provided by operating activities $ 424,880 $ 323,632

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Brixmor Operating Partnership LP

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash provided by operating activities $ 424,880 $ 323,632

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Net cash provided by (used in) financing activities (234,489) 396,321

Cash and cash equivalents and restricted cash for BPG were $405.4 million and $320.0 million as of June 30, 2021 and 2020, respectively.

Cash and cash equivalents and restricted cash for the Operating Partnership were $395.4 million and $310.0 million as of June 30, 2021 and 2020, respectively.

Cash and cash equivalents and restricted cash for BPG were $404.4 million and $611.2 million as of September 30, 2021 and 2020, respectively.

Cash and cash equivalents and restricted cash for the Operating Partnership were $394.4 million and $601.2 million as of September 30, 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 six months ended June 30, 2021, our net cash provided by operating activities increased $95.3 million as compared to the corresponding period in 2020.

During the nine months ended September 30, 2021, our net cash provided by operating activities increased $101.2 million as compared to the corresponding period in 2020.

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

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

(v) an increase in cash outflows for general and administrative expense;

and (vi) an increase in cash outflows for interest expense.

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

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

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 six months ended June 30, 2021, our net cash used in investing activities decreased $15.0 million as compared to the corresponding period in 2020.

The decrease was primarily due to (i) an increase of $53.1 million in net proceeds from sales of real estate assets;

(ii) a decrease of $22.9 million in improvements to and investments in real estate assets;

and (iii) a $3.7 million decrease in purchases of marketable securities, net of proceeds from sales;

partially offset by (iv) an increase of $64.7 million in acquisitions of real estate assets.

During the nine months ended September 30, 2021, our net cash used in investing activities increased $15.9 million as compared to the corresponding period in 2020.

The increase was primarily due to (i) an increase of $63.3 million

in acquisitions of real estate assets;

partially offset by (ii) an increase of $41.5 million in net proceeds from sales of real estate assets;

(iii) a decrease of $5.6 million in improvements to and investments in real estate assets;

and (iv) a $0.3 million decrease in purchases of marketable securities, net of proceeds from sales.

Improvements to and investments in real estate assets

During the six months ended June 30, 2021 and 2020, we expended $135.3 million and $158.1 million, respectively, on improvements to and investments in real estate assets.

In addition, during the six months ended June 30, 2021 and 2020, insurance proceeds of $2.8 million and $3.6 million, respectively, were received and included in improvements to and investments in real estate assets.

During the nine months ended September 30, 2021 and 2020, we expended $212.4 million and $217.9 million, respectively, on improvements to and investments in real estate assets.

In addition, during the nine months ended September 30, 2021 and 2020, insurance proceeds of $2.9 million and $7.3 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 June 30, 2021, we had 56 in-process anchor space repositioning, redevelopment and outparcel development projects with an aggregate anticipated cost of $432.9 million, of which $258.0 million had been incurred as of June 30, 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, proceeds from sales of real estate assets, and/or available liquidity under the Revolving Facility.

As of September 30, 2021, we had 49 in-process anchor space repositioning, redevelopment and outparcel development projects with an aggregate anticipated cost of $396.3 million, of which $245.0 million had been incurred as of September 30, 2021.

In addition, we have identified a pipeline of future reinvestment projects aggregating approximately $900.0 million 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, net cash provided by operating activities, proceeds from sales of real estate assets, and/or available liquidity under the 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 six months ended June 30, 2021, we acquired two shopping centers, one outparcel and two land parcels for an aggregate purchase price of $66.7 million, including transaction costs and closing credits.

During the six months ended June 30, 2020, we acquired one land parcel for $2.0 million, including transaction costs.

During the nine months ended September 30, 2021, we acquired two shopping centers, one outparcel and two land parcels for an aggregate purchase price of $66.7 million, including transaction costs and closing credits.

During the nine months ended September 30, 2020, we acquired two land parcels for $3.4 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 six months ended June 30, 2021, we disposed of six shopping centers and nine partial shopping centers for aggregate net proceeds of $99.7 million.

In addition, during the six months ended June 30, 2021, we received aggregate net proceeds of less than $0.1 million from previously disposed assets.

During the six months ended June 30, 2020, we disposed of five shopping centers and two partial shopping centers for aggregate net proceeds of $45.7 million.

In addition, during the six months ended June 30, 2020, we received aggregate net proceeds of $0.9 million from previously disposed assets.

During the nine months ended September 30, 2021, we disposed of nine shopping centers, 14 partial shopping centers and one land parcel for aggregate net proceeds of $124.4 million.

In addition, during the nine months ended September 30, 2021, we received aggregate net proceeds of less than $0.1 million from previously disposed assets.

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.

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 six months ended June 30, 2021, our net cash provided by (used in) financing activities decreased $373.5 million as compared to the corresponding period in 2020.

During the nine months ended September 30, 2021, our net cash provided by (used in) financing activities decreased $640.8 million as compared to the corresponding period in 2020.

The decrease was primarily due to (i) a $625.5 million decrease in debt borrowings, net of repayments;

partially offset by (ii) a $41.3 million decrease in distributions to our common stockholders;

(iii) a $23.1 million decrease in repurchases of common stock;

and (iv) a $10.6 million decrease in deferred financing and debt extinguishment costs.

(ii) a $22.8 million increase in distributions to our common stockholders;

and (iii) a $15.6 million increase in deferred financing and debt extinguishment costs;

partially offset by (iv) a $23.1 million decrease in repurchases of common stock.

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

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We present the non-GAAP performance measures set forth below.

These measures should not be considered as alternatives to, or more meaningful than, net income (calculated in accordance with GAAP) or other GAAP financial measures, as an indicator of financial performance and are not alternatives to, or more meaningful than, cash flow from operating activities (calculated in accordance with GAAP) as a measure of liquidity.

Non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results to those calculated in accordance with

from operating activities (calculated in accordance with GAAP) as a measure of liquidity.

Our computation of these non-GAAP performance measures may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs.

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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 six months ended June 30, 2021 and 2020 is as follows (in thousands, except per share amounts):

Three Months Ended June 30, Six Months Ended June 30,

Our reconciliation of net income to NAREIT FFO for the three and nine months ended September 30, 2021 and 2020 is as follows (in thousands, except per share amounts):

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

2021 2020 2021 2020

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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 Six Months Ended June 30, 2021 to the Three and Six Months Ended June 30, 2020

Three Months Ended June 30, Six Months Ended June 30,

Comparison of the Three and Nine Months Ended September 30, 2021 to the Three and Nine Months Ended September 30, 2020

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

2021 2020 Change 2021 2020 Change

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

Three Months Ended June 30, Six Months Ended June 30,

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

2021 2020 2021 2020

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however, inflation has increased in 2021 and may continue to be elevated in the future.

Most of our long-term leases contain provisions designed to mitigate the adverse impact of inflation, including contractual rent escalations and requirements for tenants to pay their proportionate share of property operating expenses, including common area expenses, utilities, insurance and real estate taxes, and certain capital expenditures related to the maintenance of our properties, thereby reducing our exposure to increases in property-level costs resulting from inflation.

however, we have exposure to increases in non-reimbursable property operating expenses, including expenses incurred on vacant units.

In addition, we believe that many of our existing rental rates are below current market rates for comparable space and that upon renewal or re-leasing, such rates may be increased to be consistent with, or closer to, current market rates.

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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