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Item 7. Management’s Discussion and Analysis

2025-02-10 compared with 2024-02-12 · 80 added, 78 removed, 284 unchanged (36% of the section changed)

19 unchanged sentences

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 our purpose-driven Corporate Responsibility strategy.

In addition, as we execute on our key strategies, we do so guided by our Corporate Responsibility strategy.

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

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• Fully-Integrated Operating Platform – We manage a fully-integrated operating platform, leveraging our national scope and demonstrating our commitment to operating with a strong regional and local presence.

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 12 leasing and property management satellite offices throughout the country.

We provide our tenants with dedicated service through both our national accounts leasing team based in New York and our network of three regional offices in Atlanta, Philadelphia and San Diego, as well as our 11 leasing and property management satellite offices throughout the country.

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

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Acquisition Activity

• During the year ended December 31, 2024, we acquired seven shopping centers and two land parcels for an aggregate purchase price of $293.8 million, including transaction costs and closing credits.

• During the year ended December 31, 2023, we acquired two land parcels for an aggregate purchase price of $2.3 million, including transaction costs and closing credits.

• During the year ended December 31, 2022, we acquired seven shopping centers, one outparcel, and one land parcel and paid less than $0.1 million related to previously acquired assets for an aggregate purchase price of $409.7 million, including transaction costs and closing credits.

Disposition Activity

• During the year ended December 31, 2024, we disposed of six shopping centers, six partial shopping centers, and two land parcels for aggregate net proceeds of $208.2 million, resulting in aggregate gain of $76.2 million and aggregate impairment of $0.5 million.

In addition, during the year ended December 31, 2024, we received aggregate net proceeds of $1.9 million related to land at one shopping center previously seized through eminent domain and resolved contingencies related to previously disposed assets, resulting in aggregate gain of $1.9 million.

• During the year ended December 31, 2023, we disposed of 11 shopping centers and nine partial shopping centers for aggregate net proceeds of $182.0 million, resulting in aggregate gain of $65.3 million and aggregate impairment of $6.1 million.

In addition, during the year ended December 31, 2023, we disposed of a non-operating asset and resolved contingencies related to a previously disposed asset for aggregate net proceeds of $0.3 million, resulting in aggregate net gain of $0.1 million.

• During the year ended December 31, 2022, we disposed of 16 shopping centers and 10 partial shopping centers for aggregate net proceeds of $277.0 million, resulting in aggregate gain of $109.2 million and aggregate impairment of $5.7 million.

In addition, during the year ended December 31, 2022, we resolved contingencies related to previously disposed assets and had land at one shopping center seized through eminent domain for aggregate net proceeds of $2.8 million, resulting in aggregate net gain of $2.4 million.

In addition, during the year ended December 31, 2023, we disposed of a non-operating asset and resolved contingencies related to previously disposed assets for aggregate net proceeds of $0.3 million, resulting in aggregate gain of $0.1 million.

Results of Operations

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Rental income

The increase in rental income for the year ended December 31, 2023 of $26.5 million, compared to the corresponding period in 2022, was due to a $40.3 million increase for assets owned for the full period, partially offset by a $13.8 million decrease due to net transaction activity.

The increase in rental income for the year ended December 31, 2024 of $39.6 million, compared to the corresponding period in 2023, was due to a $47.6 million increase for assets owned for the full period, partially offset by an $8.0 million decrease due to net transaction activity.

The increase for assets owned for the full period was due to (i) a $38.8 million increase in base rent;

(ii) a $15.0 million increase in expense reimbursements;

(iii) a $1.5 million increase in lease termination fees;

(ii) a $7.2 million increase in straight-line rental income, net;

(iii) a $7.1 million increase in expense reimbursements;

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

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

and (vi) a $0.1 million increase in straight-line rental income, net;

partially offset by (vii) a $9.2 million decrease in rental income associated with revenues deemed uncollectible;

and (viii) a $0.2 million decrease in ancillary and other rental income.

and (v) a $0.3 million increase in ancillary and other rental income;

partially offset by (vi) a $4.1 million decrease in rental income associated with revenues deemed uncollectible;

(vii) a $1.2 million decrease in accretion of below-market leases, net of amortization of above-market leases and tenant inducements;

and (viii) a $1.0 million decrease in lease termination fees.

The $38.8 million increase in base rent for assets owned for the full period was primarily due to contractual rent increases, positive rent spreads for new and renewal leases and option exercises of 16.5% during the year ended December 31, 2024 and 15.3% during the year ended December 31, 2023, and an increase in weighted average billed occupancy.

The $15.0 million increase in expense reimbursements was primarily attributable to increases in weighted average billed occupancy, reimbursable operating costs, and real estate taxes.

The $9.2 million decrease in rental income associated with revenues deemed uncollectible was primarily attributable to reduced cash collections associated with amounts previously reserved.

Other revenues

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Operating costs

The increase in operating costs for the year ended December 31, 2023 of $5.1 million, compared to the corresponding period in 2022, was due to a $7.2 million increase in operating costs for assets owned for the full period, primarily due to increases in repairs and maintenance, utilities, and insurance, partially offset by a $2.1 million decrease due to net transaction activity.

The increase in operating costs for the year ended December 31, 2024 of $6.4 million, compared to the corresponding period in 2023, was due to a $9.1 million increase in operating costs for assets owned for the full period, primarily due to an increase in repairs and maintenance and insurance, partially offset by a $2.7 million decrease due to net transaction activity.

Real estate taxes

The increase in real estate taxes for the year ended December 31, 2023 of $3.1 million, compared to the corresponding period in 2022, was primarily due to a $2.5 million increase in real estate taxes due to net transaction activity, in addition to a $0.6 million increase in real estate taxes for assets owned for the full period, primarily due to an increase in current year assessments, partially offset by an increase in favorable adjustments related to prior year assessments and an increase in real estate tax refunds.

The decrease in real estate taxes for the year ended December 31, 2024 of $9.2 million, compared to the corresponding period in 2023, was due to a $6.8 million decrease in real estate taxes for assets owned for the full period, primarily due to an increase in favorable adjustments related to prior year assessments and a decrease in current year assessments, in addition to a $2.4 million decrease due to net transaction activity, partially offset by a decrease in real estate tax refunds.

Depreciation and amortization

The increase in depreciation and amortization for the year ended December 31, 2023 of $17.5 million, compared to the corresponding period in 2022, was primarily due to a $20.5 million increase for assets owned for the full period, due to capital expenditures and an increase in accelerated depreciation and amortization related to tenant move-outs, partially offset by a $3.0 million decrease due to net transaction activity.

The increase in depreciation and amortization for the year ended December 31, 2024 of $19.1 million, compared to the corresponding period in 2023, was due to an $18.1 million increase for assets owned for the full period, primarily due to an increase in capital expenditures and an increase in accelerated depreciation and amortization related to tenant move-outs, in addition to a $1.0 million increase due to net transaction activity.

Impairment of real estate assets

During the year ended December 31, 2024, aggregate impairment of $11.1 million was recognized on one partial shopping center and one land parcel as a result of disposition activity, and two operating properties.

During the year ended December 31, 2023, aggregate impairment of $17.8 million was recognized on two shopping centers and two partial shopping centers as a result of disposition activity, and one operating property.

During the year ended December 31, 2022, aggregate impairment of $5.7 million was recognized on two shopping centers and one partial shopping center as a result of disposition activity.

General and administrative

General and administrative costs remained generally consistent for the year ended December 31, 2023 as compared to the corresponding period in 2022.

The decrease in general and administrative costs of $0.8 million for the year ended December 31, 2024, compared to the corresponding period in 2023, was primarily due to a decrease in office rent expense, partially offset by an increase in net compensation costs.

During the years ended December 31, 2024 and 2023, construction compensation costs of $18.9 million and $18.5 million, respectively, were capitalized to building and improvements and leasing legal costs of $3.2 million and $4.6 million, respectively, and leasing commission costs of $7.6 million and $7.9 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

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Gain on sale of real estate assets 78,064 65,439 12,625

Gain (loss) on extinguishment of debt, net 4,356 (221) 4,577

Gain on extinguishment of debt, net 554 4,356 (3,802)

Other (3,160) (2,446) (714)

1 unchanged sentence

Dividends and interest

The increase in dividends and interest for the year ended December 31, 2023 of $0.4 million, compared to the corresponding period in 2022, was primarily due to an increase in interest income.

The increase in dividends and interest for the year ended December 31, 2024 of $20.1 million, compared to the corresponding period in 2023, was primarily due to an increase in interest income associated with higher cash and cash equivalent balances and a higher weighted average interest rate return.

Interest expense

The decrease in interest expense for the year ended December 31, 2023 of $1.7 million, compared to the corresponding period in 2022, was primarily due to a lower overall debt obligations, partially offset by a higher weighted average interest rate.

In addition, capitalized interest increased as a result of higher weighted average interest rates along with higher construction in process balances.

The increase in interest expense for the year ended December 31, 2024 of $25.3 million, compared to the corresponding period in 2023, was primarily due to higher overall debt obligations, in addition to a higher weighted average interest rate.

Gain on sale of real estate assets

During the year ended December 31, 2024, six shopping centers, five partial shopping centers, and one land parcel were disposed of resulting in aggregate gain of $76.2 million.

In addition, during the year ended December 31, 2024, we received aggregate net proceeds of $1.9 million related to land at one shopping center previously seized through eminent domain and resolved contingencies relating to previously disposed assets, resulting in aggregate gain of $1.9 million.

During the year ended December 31, 2023, nine shopping centers and seven partial shopping centers were disposed of resulting in aggregate gain of $65.3 million.

In addition, during the year ended December 31, 2023, we disposed of a non-operating asset and resolved contingencies relating to a previously disposed asset, resulting in aggregate net gain of $0.1 million.

During the year ended December 31, 2022, 14 shopping centers and nine partial shopping centers were disposed of resulting in aggregate gain of $109.2 million.

Gain (loss) on extinguishment of debt, net

During the year ended December 31, 2023, we repurchased $199.6 million of our outstanding 3.650% 2024 Notes pursuant to the Tender Offer, with $300.4 million aggregate principal amount of the 2024 Notes remaining outstanding.

We funded the Tender Offer with proceeds from our $200.0 million delayed draw term loan.

In connection with the Tender Offer, we recognized a $4.4 million gain on extinguishment of debt during the year ended December 31, 2023.

During the year ended December 31, 2022, we amended and restated our Unsecured Credit Facility, which is comprised of the Revolving Facility and the Term Loan Facility, resulting in a $0.2 million loss on extinguishment of debt due to the acceleration of unamortized debt issuance costs.

The decrease in other expense for the year ended December 31, 2023 of $1.2 million, compared to the corresponding period in 2022, was primarily due to a decrease in transaction costs.

Gain on extinguishment of debt, net

During the year ended December 31, 2024, we repurchased $67.7 million of the $700.0 million 2025 Notes then outstanding, resulting in a $0.6 million gain on extinguishment of debt.

During the year ended December 31, 2023, we repurchased $199.6 million of the $500.0 million 2024 Notes then outstanding, resulting in a $4.4 million gain on extinguishment of debt.

The increase in other expense for the year ended December 31, 2024 of $0.7 million, as compared to the corresponding period in 2023, was primarily due to an increase in transaction expenses, net.

Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022

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

As of December 31, 2023, we had $1.25 billion of available liquidity, including $1.23 billion under our Revolving Facility and $18.9 million of cash and cash equivalents and restricted cash.

As of December 31, 2024, we had $1.63 billion of available liquidity, including $1.25 billion available under our Revolving Facility and $378.7 million of cash and cash equivalents and restricted cash.

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

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We incur certain essential expenditures in the ordinary course of business, such as common area expenses, utilities, insurance, real estate taxes, capital expenditures related to the maintenance of our properties, leasing capital expenditures, and corporate level expenses.

The amount of common area expenses, utilities, and capital expenditures related to the maintenance of our properties that we incur depends on the scope of services that we provide, prevailing market rates, and the size and composition of our Portfolio.

The amount of common area expenses, utilities, and capital expenditures

related to the maintenance of our properties that we incur depends on the scope of services that we provide, prevailing market rates, and the size and composition of our Portfolio.

We carry comprehensive insurance to protect our Portfolio against various losses.

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Dividend declared per common share $ 0.2875 $ 0.2875

Dividend declaration date October 24, 2023 January 31, 2024

Dividend declaration date October 23, 2024 February 5, 2025

Dividend record date January 3, 2025 April 2, 2025

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The amount of value-enhancing reinvestment capital expenditures that we incur depends on a variety of factors that may change from period to period, such as the number, total expected cost, and nature of value-enhancing reinvestment projects that are underway.

See “Improvements to and investments in real estate assets” below for further information regarding our in-process reinvestment projects and our pipeline of future redevelopment

See “Improvements to and investments in real estate assets” below for further information regarding our in-process reinvestment projects and our pipeline of future redevelopment projects.

The amount of future acquisition expenditures depends on the availability of opportunities that further concentrate our Portfolio in attractive retail submarkets and optimize the quality and long-term growth rate of our asset base.

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Net cash used in investing activities (437,021) (163,080) (273,941)

Net cash used in financing activities (428,069) (380,413) (47,656)

Net cash provided by (used in) financing activities 172,122 (428,069) 600,191

Net change in cash, cash equivalents and restricted cash 359,788 (2,355) 362,143

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Net cash used in investing activities (437,021) (163,080) (273,941)

Net cash used in financing activities (427,142) (366,182) (60,960)

Net cash provided by (used in) financing activities 171,462 (427,142) 598,604

Net change in cash, cash equivalents and restricted cash 359,128 (1,428) 360,556

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

During the year ended December 31, 2023, our net cash provided by operating activities increased $22.4 million, as compared to the corresponding period in 2022.

During the year ended December 31, 2024, our net cash provided by operating activities increased $35.9 million, compared to the corresponding period in 2023.

The increase was primarily due to (i) an increase in same property net operating income;

(ii) an increase from net working capital;

(iii) an increase in lease termination fees;

and (iv) a decrease in cash outflows for interest expense;

partially offset by (v) a decrease in net operating income due to net transaction activity and other non-same property net operating income;

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

and (ii) an increase in cash inflows for dividends and interest income;

partially offset by (iii) a decrease in cash from net working capital;

(iv) a decrease in net operating income due to net transaction activity and other non-same property net operating income;

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

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

and (vi) a decrease in lease termination fees.

Investing Activities

Net cash used in investing activities is primarily 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 activity.

During the year ended December 31, 2023, our net cash used in investing activities decreased $299.4 million, as compared to the corresponding period in 2022.

The decrease was primarily due to (i) a decrease of $407.4 million in acquisitions of real estate assets and (ii) a decrease of $4.3 million in purchases of marketable securities, net of sales;

partially offset by (iii) a decrease of $97.5 million in net proceeds from sales of real estate assets;

and (iv) an increase of $14.8 million in improvements to and investments in real estate assets.

During the year ended December 31, 2024, our net cash used in investing activities increased $273.9 million, compared to the corresponding period in 2023.

The increase was primarily due to (i) an increase of $291.5 million in acquisitions of real estate assets;

(ii) an increase of $8.2 million in improvements to and investments in real estate assets;

and (iii) an increase of $2.1 million in purchases of marketable securities, net of sales;

partially offset by (iv) an increase of $27.9 million in net proceeds from sales of real estate assets.

Improvements to and investments in real estate assets

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Leasing related capital expenditures represent tenant specific costs incurred to lease or renew space, including tenant improvements, tenant allowances, and external leasing commissions.

In addition, we evaluate our Portfolio on an ongoing basis to identify value-enhancing reinvestment opportunities.

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.

In addition, we evaluate our Portfolio on an

ongoing basis to identify value-enhancing reinvestment opportunities.

Such initiatives are tenant driven and focus on upgrading our centers with strong, best-in-class retailers.

As of December 31, 2024, we had 36 in-process anchor space repositioning, redevelopment, and outparcel development projects with an aggregate anticipated cost of $389.6 million, of which $181.8 million had been incurred as of December 31, 2024.

In addition, we have identified a pipeline of future redevelopment projects aggregating approximately $900 million of potential capital investment, which we expect to execute over the coming years.

In addition, we have identified a pipeline of future reinvestment projects, 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 proceeds from capital markets transactions.

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, to further concentrate our Portfolio in attractive retail submarkets and optimize the quality and long-term growth rate of our asset base.

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

During the year ended December 31, 2024, we acquired seven shopping centers and two land parcels for an aggregate purchase price of $293.8 million, including transaction costs and closing credits.

During the year ended December 31, 2023, we acquired two land parcels for an aggregate purchase price of $2.3 million, including transaction costs and closing credits.

During the year ended December 31, 2022, we acquired seven shopping centers, one outparcel, and one land parcel for an aggregate purchase price of $409.7 million, including transaction costs and closing credits.

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 year ended December 31, 2024, we disposed of six shopping centers, six partial shopping centers, and two land parcels for aggregate net proceeds of $208.2 million.

During the year ended December 31, 2023, we disposed of 11 shopping centers and nine partial shopping centers for aggregate net proceeds of $182.0 million.

In addition, during the year ended December 31, 2023, we received aggregate net proceeds of $0.3 million related to a non-operating asset.

During the year ended December 31, 2022, we disposed of 16 shopping centers and 10 partial shopping centers for aggregate net proceeds of $277.0 million.

Financing Activities

Net cash used in financing activities is primarily impacted by the nature, timing, and magnitude of issuances and repurchases of debt and equity securities, as well as borrowings or principal payments associated with our outstanding indebtedness, including our Unsecured Credit Facility, and distributions made to our common stockholders.

During the year ended December 31, 2023, our net cash used in financing activities increased $47.7 million, as compared to the corresponding period in 2022.

The increase was primarily due to (i) a $53.1 million decrease in issuances of common stock;

(ii) a $25.7 million increase in distributions to our common stockholders;

and (iii) a $0.7 million increase in repurchases of common stock;

partially offset by (iv) a $24.2 million decrease in debt borrowings, net of repayments;

and (v) a $7.6 million decrease in deferred financing and debt extinguishment costs.

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

During the year ended December 31, 2024, our net cash provided by (used in) financing activities increased $600.2 million, compared to the corresponding period in 2023.

The increase was primarily due to (i) a $510.9 million increase in debt borrowings, net of repayments;

(ii) a $114.7 million increase in issuances of common stock;

and (iii) a $0.2 million increase in contributions from non-controlling interests;

partially offset by (iv) a $15.9 million increase in distributions to our common stockholders;

(v) a $6.9 million increase in deferred financing costs;

and (vi) a $2.8 million increase in repurchases of common stock.

Non-GAAP Performance Measures

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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 GAAP.

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.

Investors are cautioned that items excluded from these non-GAAP performance measures are relevant to understanding and addressing financial performance.

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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.

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.

Nareit defines funds from operations ("FFO") as net income (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 years ended December 31, 2023 and 2022 is as follows (in thousands, except per share amounts):

Our reconciliation of net income (calculated in accordance with GAAP) to Nareit FFO for the years ended December 31, 2024 and 2023 is as follows (in thousands, except per share amounts):

Year Ended December 31,

Net income $ 305,087 $ 354,193

Net income attributable to Brixmor Property Group Inc.

$ 339,274 $ 305,087

Depreciation and amortization related to real estate 375,511 358,088

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Considering the nature of our business as a real estate owner and operator, we believe that NOI is useful to investors in measuring the operating performance of our 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 lease termination fees, straight-line rental income, net, accretion of below-market leases, net of amortization of above-market leases and tenant inducements, straight-line ground rent expense, net, income or expense associated with our captive insurance company, depreciation and amortization, impairment of real estate assets, general and administrative expense, and other income and expense (including interest expense and gain on sale of real estate assets).

We believe that same property NOI is also useful to investors because it further eliminates disparities in NOI by only including NOI of properties owned for the entirety of both periods presented and excluding properties under development and completed new development properties that have been stabilized for less than one year and

therefore provides a more consistent metric for comparing the operating performance of our real estate between periods.

Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023

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Same property NOI $ 896,358 $ 853,730 $ 42,628

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

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

Year Ended December 31,

Net income $ 305,087 $ 354,193

Net income attributable to Brixmor Property Group Inc.

$ 339,274 $ 305,087

Non-same property NOI (28,611) (34,012)

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Total other expense 119,760 122,718

Net income attributable to non-controlling interests 2 —

Same property NOI $ 896,358 $ 853,730

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Rental revenue is recognized on a straight-line basis over the terms of the related leases.

The cumulative difference between rental revenue recognized on our Consolidated Statements of Operations and contractual payment terms is recognized as deferred rent and included in Receivables,

net on our Consolidated Balance Sheets.

The cumulative difference between rental revenue recognized on our Consolidated Statements of Operations and contractual payment terms is recognized as deferred rent and included in Receivables, net on our Consolidated Balance Sheets.

We commence recognizing rental revenue based on the date we make the underlying asset available for use by the tenant.

Leases also typically provide for the reimbursement 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, by the lessee and are recognized in the period the applicable expenditures are incurred and/or contractually required to be reimbursed.

Leases also typically provide for the reimbursement 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, by the lessee and are recognized in the period the applicable expenditures are incurred and/or contractually required to be reimbursed.

We periodically evaluate the collectability of our receivables related to rental revenue, straight-line rent, expense reimbursements, and those attributable to other revenue generating activities.

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If the estimated net sales price of an asset is less than its net carrying value, an impairment charge is recognized to reflect the estimated fair value of the asset.

Prior to 2021, inflation was low and had a minimal impact on our operating and financial performance;

however, inflation has significantly increased over the last three years and may continue to be elevated or increase further.

We continue to monitor the impacts of inflation on our operating and financial performance.

Although recent inflationary pressures have begun to abate, inflation may increase in the future.

With respect to our shopping centers, our long-term leases generally contain provisions designed to mitigate the adverse impact of inflation, including contractual rent escalations and requirements for tenants to pay a portion 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 operating expenses resulting from inflation;

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

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, which may also offset certain non-reimbursed inflationary cost pressures.

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

1 unchanged sentence

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-K

Item 7. Management’s Discussion and Analysis