What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-09 compared with 2025-02-10 · 63 added, 59 removed, 305 unchanged (29% of the section changed)

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Unless stated otherwise or the context otherwise requires, "we," "our," and "us" mean BPG and the Operating Partnership, collectively.

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

We own and operate one of the largest publicly traded open-air retail portfolios by gross leasable area ("GLA") in the United States ("U.S."), comprised primarily of grocery-anchored community and neighborhood shopping centers.

As of December 31, 2025, our portfolio was comprised of 348 shopping centers (the "Portfolio") totaling approximately 63 million square feet of GLA.

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Acquisition Activity

• During the year ended December 31, 2025, we acquired three shopping centers, two land parcels, and acquired a lease and associated subleases at an existing shopping center for an aggregate purchase price of $420.6 million, including transaction costs and closing credits.

• 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.

Disposition Activity

• During the year ended December 31, 2025, we disposed of 18 shopping centers, five partial shopping centers, and one land parcel for aggregate net proceeds of $289.2 million, resulting in aggregate gain of $123.3 million and aggregate impairment of $18.8 million.

• 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 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, 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 in rental income for the year ended December 31, 2025 of $86.0 million, compared to the corresponding period in 2024, was due to a $60.2 million increase for assets owned for the full period, in addition to a $25.8 million increase due to net transaction activity.

The increase for assets owned for the full period was due to (i) a $26.9 million increase in base rent;

(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;

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

(ii) a $15.7 million increase in expense reimbursements;

(iii) a $10.4 million increase in lease termination fees;

(iv) a $9.1 million increase in ancillary and other rental income;

and (v) a $1.2 million increase in straight-line rental income, net;

partially offset by (vi) a $2.4 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.

(vii) a $0.6 million decrease in percentage rents;

and (viii) a $0.1 million decrease in accretion of below-market leases, net of amortization of above-market leases and tenant inducements.

The $26.9 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 16.4% during the year ended December 31, 2025 and 16.5% during the year ended December 31, 2024.

Other revenues

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Operating costs

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.

The increase in operating costs for the year ended December 31, 2025 of $9.5 million, compared to the corresponding period in 2024, was due to a $5.9 million increase in operating costs for assets owned for the full period, primarily due to an increase in repairs and maintenance, utilities, and insurance, in addition to a $3.6 million increase due to net transaction activity.

Real estate taxes

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.

The increase in real estate taxes for the year ended December 31, 2025 of $13.9 million, compared to the corresponding period in 2024, was due to a $10.4 million increase in real estate taxes for assets owned for the full period and a $3.5 million increase due to net transaction activity.

The $10.4 million increase for assets owned for the full period is primarily due to a decrease in favorable adjustments related to prior year assessments recognized in 2024 and an increase in current year assessments, partially offset by an increase in real estate tax refunds.

Depreciation and amortization

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.

The increase in depreciation and amortization for the year ended December 31, 2025 of $33.5 million, compared to the corresponding period in 2024, was due to a $25.2 million increase due to net transaction activity, in addition to an $8.3 million increase for assets owned for the full period.

The $8.3 million increase for assets owned for the full period is primarily due to an increase in capital expenditures and an increase in accelerated depreciation and amortization related to tenant move-outs.

Impairment of real estate assets

During the year ended December 31, 2025, aggregate impairment of $20.5 million was recognized on one shopping center as a result of disposition activity, and one operating property.

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.

General and administrative

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.

The decrease in general and administrative costs of $3.7 million for the year ended December 31, 2025, compared to the corresponding period in 2024, was primarily due to a decrease in net compensation costs, partially offset by an increase in office rent expense.

During the years ended December 31, 2025 and 2024, construction compensation costs of $16.3 million and $18.9 million, respectively, were capitalized to building and improvements and leasing legal costs of $2.2 million and $3.2 million, respectively, and leasing commission costs of $7.5 million and $7.6 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

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Gain on sale of real estate assets 123,339 78,064 45,275

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

Gain (loss) on extinguishment of debt, net (296) 554 (850)

Other (2,856) (3,160) 304

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Dividends and interest

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.

The decrease in dividends and interest for the year ended December 31, 2025 of $13.0 million, compared to the corresponding period in 2024, was primarily due to a decrease in interest income associated with lower average cash and cash equivalent balances and a lower weighted average interest rate return.

Interest expense

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.

The increase in interest expense for the year ended December 31, 2025 of $8.7 million, compared to the corresponding period in 2024, was primarily due to a higher weighted average interest rate, partially offset by lower weighted average debt obligations.

Gain on sale of real estate assets

During the year ended December 31, 2025, 17 shopping centers, five partial shopping centers, and one land parcel were disposed of resulting in aggregate gain of $123.3 million.

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 gain of $0.1 million.

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.

Gain (loss) on extinguishment of debt, net

During the year ended December 31, 2025, we amended and restated our unsecured credit facility agreements (the "Unsecured Credit Facility"), resulting in a $0.3 million loss on extinguishment of debt due to the acceleration of unamortized debt issuance costs.

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.

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.

The decrease in other expense for the year ended December 31, 2025 of $0.3 million, as compared to the corresponding period in 2024, was primarily due to a decrease in transaction expenses, net.

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

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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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During the year ended December 31, 2025, our net cash provided by operating activities increased $27.3 million, compared to the corresponding period in 2024.

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

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.

The increase was primarily due to (i) an increase in same property

net operating income;

(ii) an increase in cash from net working capital;

(iii) an increase in lease termination fees;

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

and (v) a decrease in cash outflows for general and administrative expense;

partially offset by (vi) an increase in cash outflows for interest expense;

and (vii) a decrease in cash inflows for dividends and interest income.

Investing Activities

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The increase was primarily due to (i) an increase of $126.8 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.

and (ii) a decrease of $0.7 million in sales of marketable securities, net of purchases;

partially offset by (iii) an increase of $79.0 million in net proceeds from sales of real estate assets;

and (iii) a decrease of $33.3 million in improvements to and investments in 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.

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, 2025, we had 33 in-process anchor space repositioning, redevelopment, and outparcel development projects with an aggregate anticipated cost of $336.4 million, of which $153.0 million had been incurred as of December 31, 2025.

In addition, we have identified a pipeline of future reinvestment projects, which we expect to execute over the next several years.

In addition, we have identified a pipeline of future redevelopment projects, which we expect to execute over the coming 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.

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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, 2025, we acquired three shopping centers, two land parcels, and acquired a lease and associated subleases at an existing shopping center for an aggregate purchase price of $420.6 million, including transaction costs and closing credits.

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.

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, 2025, we disposed of 18 shopping centers, five partial shopping centers, and one land parcel for aggregate net proceeds of $289.2 million.

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.

Financing Activities

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.

During the year ended December 31, 2025, our net cash provided by (used in) financing activities decreased $389.1 million, compared to the corresponding period in 2024.

The decrease was primarily due to (i) a $243.8 million increase in debt repayments, net of borrowings;

(ii) a $115.1 million decrease in issuances of common stock;

(iii) a $23.0 million increase in distributions to our common stockholders;

(iv) an $8.6 million increase in deferred financing costs;

(v) a $0.2 million decrease in contributions from non-controlling interests;

and (vi) a $0.1 million increase in distributions to non-controlling interests;

partially offset by (vii) a $1.7 million decrease in repurchases of common stock.

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.

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.

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.

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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 that 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) lease termination fees, (ii) straight-line rental income, net, (iii) accretion of below-market leases, net of amortization of above-market leases and tenant inducements, (iv) straight-line ground rent expense, net, (v) income or expense associated with our captive insurance company, (vi) depreciation and amortization, (vii) impairment of real estate assets, (viii) general and administrative expense, and (ix) other income and expense (including interest expense and gain on sale of real estate assets).

Same property

NOI excludes (i) lease termination fees, (ii) straight-line rental income, net, (iii) accretion of below-market leases, net of amortization of above-market leases and tenant inducements, (iv) straight-line ground rent expense, net, (v) income or expense associated with our captive insurance company, (vi) depreciation and amortization, (vii) impairment of real estate assets, (viii) general and administrative expense, and (ix) other income and expense (including interest expense and gain on sale of real estate assets).

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).

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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.

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.

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

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 expense 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.

In addition, tariffs may contribute to rising construction and redevelopment costs and tariffs on imported goods may impact many of our tenants, particularly those who rely on international supply chains, by increasing their cost of goods sold or delaying inventory deliveries.

If tenants are unable to pass these increased costs on to customers, it could adversely affect their financial performance and ability to meet lease obligations.

With respect to our outstanding indebtedness, we periodically evaluate our exposure to interest rate fluctuations and have entered, 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.

With respect to general and administrative costs, we continually seek opportunities to offset inflationary cost pressures through routine evaluations of our spending levels and through ongoing efforts to utilize technology to enhance our operational efficiency.

Recent Tax Legislation

Effective July 4, 2025, certain changes to U.S.

tax law were approved that impact us and our stockholders.

Among other changes, this legislation (i) permanently extended the 20% deduction for "qualified REIT dividends" for individuals and other non-corporate taxpayers under Section 199A of the Internal Revenue Code (the "Code"), (ii) increased the percentage limit under the REIT asset test applicable to taxable REIT subsidiaries ("TRSs") from 20% to 25% for taxable years beginning after December 31, 2025, and (iii) increases the base on which the 30% interest deduction limit under Section 163(j) of the Code applies by excluding depreciation, amortization and depletion from the definition of "adjusted taxable income" (i.e.

based on EBITDA rather than EBIT) for taxable years beginning after December 31, 2024.

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