Brixmor Property Group Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto. Historical results and percentage relationships set forth in the unaudited Condensed Consolidated Financial Statements and accompanying notes, including trends which might appear, should not be taken as indicative of future operations. Executive Summary Our Company Brixmor Property Group Inc. and subsidiaries (collectively, "BPG") is an internally-managed corporation that has elected to be taxed as a real estate investment trust ("REIT"). Brixmor Operating Partnership LP and subsidiaries (collectively, the "Operating Partnership") is the entity through which BPG conducts substantially all of its operations and owns substantially all of its assets. BPG owns 100% of the limited liability company interests of BPG Subsidiary LLC ("BPG Sub"), which, in turn, is the sole member of Brixmor OP GP LLC (the "General Partner"), the sole general partner of the Operating Partnership. 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 grocery-anchored community and neighborhood shopping centers. As of June 30, 2026, our portfolio was comprised of 346 shopping centers (the "Portfolio") totaling approximately 63 million square feet of GLA. Our high-quality national Portfolio is primarily located within established trade areas in the top 50 Core-Based 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, 2026, our three largest tenants by annualized base rent ("ABR") were The TJX Companies, Inc. ("TJX"), The Kroger Co. ("Kroger"), and Burlington Stores, Inc. ("Burlington"). BPG has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under U.S. federal income tax laws, commencing with our taxable year ended December 31, 2011, has maintained such requirements through our taxable year ended December 31, 2025, and intends to satisfy such requirements for subsequent taxable years. Our primary objective is to maximize total returns to our stockholders through consistent, sustainable growth in cash flow. 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 Corporate Responsibility strategy. We believe the following set of competitive advantages positions us to successfully execute on our key strategies: • Expansive Retailer Relationships – We believe that the scale of our asset base and our nationwide footprint represent competitive advantages in supporting the growth objectives of the nation’s largest and most successful retailers. We believe that we are one of the largest landlords by GLA to TJX, Kroger, and Burlington, as well as a key landlord to most major grocers and retail category leaders. We believe that our strong relationships with leading retailers afford us unique insight into their strategies and priority access to their expansion plans. • 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 three regional offices in Atlanta, Philadelphia, and San Diego, as well as our 10 leasing and property management satellite offices throughout the country. We believe that this structure enables us to obtain critical national market intelligence, while also benefiting from the regional and local expertise of our leasing and operations teams. • Experienced Management – Senior members of our management team are seasoned real estate operators with extensive public company leadership experience. Our management team has deep industry knowledge and well-established relationships with retailers, brokers, and vendors through many years of operational and transactional experience, as well as significant capital markets capabilities and expertise in executing value-enhancing reinvestment opportunities. 31 Factors That May Influence Our Future Results We derive our rental income primarily from base rent and expense reimbursements paid by tenants to us under existing leases at each of our properties. Expense reimbursements primarily consist of payments made by tenants to us for a portion of property operating expenses, such as common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of our properties. Our ability to maintain or increase rental income is primarily dependent on our ability to maintain or increase rental rates, renew expiring leases, and/or lease available space. Increases in our property operating expenses, including repairs and maintenance, landscaping, snow removal, security, ground rent related to properties for which we are the lessee, utilities, insurance, real estate taxes, and various other costs, to the extent they are not reimbursed by tenants or offset by increases in rental income, will adversely impact our overall performance. See "Forward-Looking Statements" included elsewhere in this Quarterly Report on Form 10-Q for the factors that could affect our rental income and/or property operating expenses. Leasing Highlights As of June 30, 2026, billed and leased occupancy were 90.4% and 94.8%, respectively, as compared to 89.7% and 94.2%, respectively, as of June 30, 2025. The following table summarizes our executed leasing activity for the three months ended June 30, 2026 and 2025 (dollars in thousands, except for per square foot ("PSF") amounts): For the Three Months Ended June 30, 2026 Leases GLA New ABR PSF Tenant Improvements and Allowances PSF Third Party Leasing Commissions PSF Rent Spread (1) New, renewal and option leases 334 2,532,750 $ 19.88 $ 3.82 $ 2.12 13.6 % New and renewal leases 267 1,423,280 22.93 6.79 3.77 19.1 % New leases 112 633,541 23.65 14.55 8.16 31.3 % Renewal leases 155 789,739 22.36 0.56 0.25 15.5 % Option leases 67 1,109,470 15.96 — — 7.5 % For the Three Months Ended June 30, 2025 Leases GLA New ABR PSF Tenant Improvements and Allowances PSF Third Party Leasing Commissions PSF Rent Spread (1) New, renewal and option leases 459 2,465,322 $ 20.72 $ 3.65 $ 2.61 19.4 % New and renewal leases 400 1,708,956 23.80 5.27 3.77 24.2 % New leases 153 922,941 22.17 8.31 6.98 43.8 % Renewal leases 247 786,015 25.72 1.69 0.01 15.1 % Option leases 59 756,366 13.77 — — 6.8 % (1) Based on comparable leases only, which consist of new leases signed on units that were occupied within the prior 12 months and renewal or option leases signed with the same tenant in all or a portion of the same location or that include the expansion into space that was occupied within the prior 12 months. Excludes leases executed for terms of less than one year. ABR PSF includes the GLA of lessee-owned leasehold improvements. 32 The following table summarizes our executed leasing activity for the six months ended June 30, 2026 and 2025 (dollars in thousands, except for PSF amounts): For the Six Months Ended June 30, 2026 Leases GLA New ABR PSF Tenant Improvements and Allowances PSF Third Party Leasing Commissions PSF Rent Spread (1) New, renewal and option leases 619 4,527,693 $ 20.34 $ 3.95 $ 2.45 15.9 % New and renewal leases 500 2,694,392 23.19 6.63 4.11 22.6 % New leases 220 1,306,333 23.66 12.91 8.30 36.6 % Renewal leases 280 1,388,059 22.74 0.73 0.17 18.0 % Option leases 119 1,833,301 16.15 — — 7.7 % For the Six Months Ended June 30, 2025 Leases GLA New ABR PSF Tenant Improvements and Allowances PSF Third Party Leasing Commissions PSF Rent Spread (1) New, renewal and option leases 793 4,712,716 $ 19.88 $ 3.06 $ 2.18 17.3 % New and renewal leases 669 3,003,948 23.16 4.81 3.43 22.7 % New leases 257 1,458,327 22.38 8.79 7.04 45.0 % Renewal leases 412 1,545,621 23.89 1.04 0.01 14.6 % Option leases 124 1,708,768 14.12 — — 7.0 % (1) Based on comparable leases only, which consist of new leases signed on units that were occupied within the prior 12 months and renewal or option leases signed with the same tenant in all or a portion of the same location or that include the expansion into space that was occupied within the prior 12 months. Excludes leases executed for terms of less than one year. ABR PSF includes the GLA of lessee-owned leasehold improvements. Acquisition Activity • During the six months ended June 30, 2026, we acquired four shopping centers for an aggregate purchase price of $164.2 million, including transaction costs and closing credits. • During the six months ended June 30, 2025, we acquired one land parcel and acquired a lease and associated subleases at an existing shopping center for an aggregate purchase price of $7.5 million, including transaction costs and closing credits. Disposition Activity • During the six months ended June 30, 2026, we disposed of six shopping centers for aggregate net proceeds of $120.5 million, resulting in aggregate gain of $59.8 million. In addition, during the six months ended June 30, 2026, we received aggregate net proceeds of $2.3 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 $2.1 million. • During the six months ended June 30, 2025, we disposed of three shopping centers and four partial shopping centers for aggregate net proceeds of $43.7 million, resulting in aggregate gain of $18.8 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. 33 Comparison of the Three Months Ended June 30, 2026 to the Three Months Ended June 30, 2025 Revenues (in thousands) Three Months Ended June 30, 2026 2025 $ Change Revenues Rental income $ 353,892 $ 339,397 $ 14,495 Other revenues 307 95 212 Total revenues $ 354,199 $ 339,492 $ 14,707 Rental income The increase in rental income for the three months ended June 30, 2026 of $14.5 million, as compared to the corresponding period in 2025, was due to a $12.8 million increase for assets owned for the full period, in addition to a $1.7 million increase due to net transaction activity. The increase for assets owned for the full period was due to: (i) a $10.3 million increase in base rent; (ii) a $5.1 million increase in expense reimbursements; (iii) a $1.5 million increase in lease termination fees; (iv) a $1.3 million increase in ancillary and other rental income; and (v) a $0.7 million increase in rental income associated with revenues deemed uncollectible; partially offset by (vi) a $4.7 million decrease in straight-line rental income, net; (vii) a $1.4 million decrease in accretion of below-market leases, net of amortization of above-market leases and tenant inducements; and (viii) a less than $0.1 million decrease in percentage rents. The $10.3 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 15.9% during the six months ended June 30, 2026 and 16.4% during the year ended December 31, 2025, and an increase in weighted average billed occupancy. Other revenues The increase in other revenues of $0.2 million for the three months ended June 30, 2026, as compared to the corresponding period in 2025, was primarily due to an increase in tax increment financing income. Operating Expenses (in thousands) Three Months Ended June 30, 2026 2025 $ Change Operating expenses Operating costs $ 44,227 $ 39,877 $ 4,350 Real estate taxes 44,279 43,559 720 Depreciation and amortization 110,258 103,277 6,981 Impairment of real estate assets 5,974 — 5,974 General and administrative 27,858 29,093 (1,235) Total operating expenses $ 232,596 $ 215,806 $ 16,790 Operating costs The increase in operating costs for the three months ended June 30, 2026 of $4.4 million, as compared to the corresponding period in 2025, was due to a $3.7 million increase in operating costs for assets owned for the full period in addition to a $0.7 million increase due to net transaction activity. The $3.7 million increase for assets owned for the full period was primarily due to an increase in repairs and maintenance, utilities, and insurance. Real estate taxes The increase in real estate taxes for the three months ended June 30, 2026 of $0.7 million, as compared to the corresponding period in 2025, was due to a $0.6 million increase in real estate taxes for assets owned for the full period in addition to a $0.1 million increase due to net transaction activity. The $0.6 million increase for the assets owned for the full period was primarily due to changes in property assessments. Depreciation and amortization The increase in depreciation and amortization for the three months ended June 30, 2026 of $7.0 million, as compared to the corresponding period in 2025, was due to a $6.3 million increase due to net transaction activity in 34 addition to a $0.7 million increase for assets owned for the full period. The $0.7 million increase for assets owned for the full period was primarily due to an increase from capital expenditures. Impairment of real estate assets During the three months ended June 30, 2026, aggregate impairment of $6.0 million was recognized on one operating property. Impairments were recognized due to changes in anticipated hold periods primarily in connection with our capital recycling program. General and administrative The decrease in general and administrative costs for the three months ended June 30, 2026 of $1.2 million, as compared to the corresponding period in 2025, was primarily due to a decrease in net compensation costs. During the three months ended June 30, 2026 and 2025, construction compensation costs of $3.8 million and $4.1 million, respectively, were capitalized to building and improvements and leasing legal costs of $0.4 million and $0.6 million, respectively, and leasing commission costs of $1.6 million and $2.2 million, respectively, were capitalized to deferred charges and prepaid expenses, net. Other Income and Expenses (in thousands) Three Months Ended June 30, 2026 2025 $ Change Other income (expense) Dividends and interest $ 3,912 $ 1,190 $ 2,722 Interest expense (60,898) (54,409) (6,489) Gain on sale of real estate assets 9,820 15,755 (5,935) Loss on extinguishment of debt, net — (296) 296 Other (775) (780) 5 Total other expense $ (47,941) $ (38,540) $ (9,401) Dividends and interest The increase in dividends and interest for the three months ended June 30, 2026 of $2.7 million, as compared to the corresponding period in 2025, was primarily due to an increase in interest income associated with higher average cash and cash equivalent balances partially offset by a lower weighted average interest rate return. Interest expense The increase in interest expense for the three months ended June 30, 2026 of $6.5 million, as compared to the corresponding period in 2025, was primarily due to higher weighted average debt obligations and weighted average interest rate. Gain on sale of real estate assets During the three months ended June 30, 2026, two shopping centers were disposed of, resulting in aggregate gain of $7.4 million. In addition, during the three months ended June 30, 2026, we received aggregate net proceeds of $2.6 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 $2.4 million. During the three months ended June 30, 2025, one shopping center and two partial shopping centers were disposed of, resulting in aggregate gain of $15.8 million. Loss on extinguishment of debt, net During the three months ended June 30, 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. Other Other expense remained generally consistent for the three months ended June 30, 2026, as compared to the corresponding period in 2025. 35 Comparison of the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025 Revenues (in thousands) Six Months Ended June 30, 2026 2025 $ Change Revenues Rental income $ 708,229 $ 676,638 $ 31,591 Other revenues 789 366 423 Total revenues $ 709,018 $ 677,004 $ 32,014 Rental income The increase in rental income for the six months ended June 30, 2026 of $31.6 million, as compared to the corresponding period in 2025, was due to a $28.6 million increase for assets owned for the full period, in addition to a $3.0 million increase due to net transaction activity. The increase for assets owned for the full period was due to: (i) a $19.7 million increase in base rent; (ii) an $8.4 million increase in expense reimbursements; (iii) a $3.8 million increase in ancillary and other rental income; (iv) a $1.5 million increase in rental income associated with revenues deemed uncollectible; and (v) a $1.0 million increase in percentage rents; partially offset by (vi) a $4.8 million decrease in straight-line rental income, net; (vii) a $0.8 million decrease in accretion of below-market leases, net of amortization of above-market leases and tenant inducements; and (viii) a $0.2 million decrease in lease termination fees. The $19.7 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 15.9% during the six months ended June 30, 2026 and 16.4% during the year ended December 31, 2025, and an increase in weighted average billed occupancy. Other revenues The increase in other revenues of $0.4 million for the six months ended June 30, 2026, as compared to the corresponding period in 2025, was primarily due to an increase in tax increment financing income. Operating Expenses (in thousands) Six Months Ended June 30, 2026 2025 $ Change Operating expenses Operating costs $ 86,141 $ 79,088 $ 7,053 Real estate taxes 89,682 88,452 1,230 Depreciation and amortization 215,460 208,874 6,586 Impairment of real estate assets 5,974 — 5,974 General and administrative 56,050 57,266 (1,216) Total operating expenses $ 453,307 $ 433,680 $ 19,627 Operating costs The increase in operating costs for the six months ended June 30, 2026 of $7.1 million, as compared to the corresponding period in 2025, was due to a $5.9 million increase in operating costs for assets owned for the full period in addition to a $1.2 million increase due to net transaction activity. The $5.9 million increase for assets owned for the full period was primarily due to an increase in repairs and maintenance, utilities, and insurance. Real estate taxes The increase in real estate taxes for the six months ended June 30, 2026 of $1.2 million, as compared to the corresponding period in 2025, was due to a $1.0 million increase in real estate taxes for assets owned for the full period in addition to a $0.2 million increase due to net transaction activity. The $1.0 million increase for the assets owned for the full period was primarily due to changes in property assessments. Depreciation and amortization The increase in depreciation and amortization for the six months ended June 30, 2026 of $6.6 million, as compared to the corresponding period in 2025, was due to an $11.9 million increase due to net transaction activity partially 36 offset by a $5.3 million decrease for assets owned for the full period. The $5.3 million decrease for assets owned for the full period was primarily due to a decrease in accelerated depreciation and amortization due to higher tenant move outs in the prior period, partially offset by an increase from capital expenditures. Impairment of real estate assets During the six months ended June 30, 2026 aggregate impairment of $6.0 million was recognized on one operating property. Impairments were recognized due to changes in anticipated hold periods primarily in connection with our capital recycling program. General and administrative The decrease in general and administrative costs for the six months ended June 30, 2026 of $1.2 million, as compared to the corresponding period in 2025, was primarily due to a decrease in net compensation costs. During the six months ended June 30, 2026 and 2025, construction compensation costs of $7.9 million and $8.6 million, respectively, were capitalized to building and improvements and leasing legal costs of $0.8 million and $0.9 million, respectively, and leasing commission costs of $3.8 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, 2026 2025 $ Change Other income (expense) Dividends and interest $ 7,117 $ 2,896 $ 4,221 Interest expense (120,290) (108,493) (11,797) Gain on sale of real estate assets 61,917 18,825 43,092 Loss on extinguishment of debt, net — (296) 296 Other (3,036) (1,373) (1,663) Total other expense $ (54,292) $ (88,441) $ 34,149 Dividends and interest The increase in dividends and interest for the six months ended June 30, 2026 of $4.2 million, as compared to the corresponding period in 2025, was primarily due to an increase in interest income associated with higher average cash and cash equivalent balances partially offset by a lower weighted average interest rate return. Interest expense The increase in interest expense for the six months ended June 30, 2026 of $11.8 million, as compared to the corresponding period in 2025, was primarily due to higher weighted average debt obligations and weighted average interest rate. Gain on sale of real estate assets During the six months ended June 30, 2026, six shopping centers were disposed of, resulting in aggregate gain of $59.8 million. In addition, during the six months ended June 30, 2026, we received aggregate net proceeds of $2.3 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 $2.1 million. During the six months ended June 30, 2025, three shopping centers and four partial shopping centers were disposed of, resulting in aggregate gain of $18.8 million. Loss on extinguishment of debt, net During the six months ended June 30, 2025, we amended and restated our Unsecured Credit Facility, resulting in a $0.3 million loss on extinguishment of debt due to the acceleration of unamortized debt issuance costs. Other The increase in other expense for the six months ended June 30, 2026 of $1.7 million, as compared to the corresponding period in 2025, was primarily due to an increase in anticipated environmental remediation costs. 37 Liquidity and Capital Resources We anticipate that our cash flows from the sources listed below will provide adequate capital for the next 12 months and beyond for all anticipated uses, including all scheduled payments on our outstanding debt, current and anticipated tenant and other capital improvements, stockholder distributions to maintain our qualification as a REIT, and other obligations associated with conducting our business. Our primary expected sources and uses of capital are as follows: Sources • cash and cash equivalent balances; • operating cash flow; • available borrowings under the Unsecured Credit Facility; • issuance of long-term debt; • dispositions; and • issuance of equity securities, including any settlement of forward sale contracts. Uses • debt repayments; • maintenance capital expenditures; • leasing capital expenditures; • dividend/distribution payments; • value-enhancing reinvestment capital expenditures; • acquisitions; and • repurchases of equity securities. We believe our capital structure provides us with the financial flexibility and capacity to fund our current capital needs as well as future growth opportunities. We generate significant operating cash flow and have access to multiple forms of external capital, including secured property level debt, unsecured corporate level debt, preferred equity, and common equity, which will allow us to efficiently execute on our strategic and operational objectives. We have investment grade credit ratings from all three major credit rating agencies. Our Unsecured Credit Facility is comprised of a $1.25 billion revolving loan facility (the "Revolving Facility") and a $500.0 million term loan facility (the "Term Loan Facility"). As of June 30, 2026, we had $1.55 billion of available liquidity, including $1.25 billion available under our Revolving Facility, $186.1 million of cash, cash equivalents and restricted cash, and $114.8 million anticipated net proceeds available under unsettled forward equity contracts. We intend to continue to enhance our financial and operational flexibility through periodic extensions of the duration of our debt. Material Cash Requirements Our expected material cash requirements for the twelve months ending June 30, 2027 and thereafter are comprised of (i) contractually obligated expenditures; (ii) other essential expenditures; and (iii) opportunistic expenditures. 38 Contractually Obligated Expenditures The following table summarizes our debt maturities (excluding extension options), interest payment obligations, and obligations under non-cancelable operating leases (excluding renewal options), as of June 30, 2026 (in thousands): Contractually Obligated Expenditures Twelve Months Ending June 30, 2027 Thereafter Debt maturities (1) $ 407,542 $ 4,941,411 Interest payments (1)(2) 234,881 1,062,616 Operating leases 6,372 195,639 Total $ 648,795 $ 6,199,666 (1) Amounts presented do not assume the issuance of new debt upon maturity of existing debt. (2) Scheduled interest payments for variable rate loans are presented using rates (including the impact of interest rate swaps), as of June 30, 2026. See Item 7A. "Quantitative and Qualitative Disclosures about Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2025 for a further discussion of these and other factors that could impact interest payments. Other Essential Expenditures 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. We carry comprehensive insurance to protect our Portfolio against various losses. The amount of insurance expense that we incur depends on the assessed values of our properties, prevailing market rates, and the size and composition of our Portfolio. We incur real estate taxes in the various jurisdictions in which we operate. The amount of real estate taxes that we incur depends on the assessed values of our properties, the tax rates assessed by various jurisdictions, and the size and composition of our Portfolio. Leasing capital expenditures represent tenant specific costs incurred to lease or renew space, including tenant improvements, tenant allowances, and external leasing commissions. The amount of leasing capital expenditures that we incur depends on the volume and nature of leasing activity. We incur corporate level expenses such as employee compensation costs, professional fees, corporate office rents, and other platform expenses. The amount of corporate level expenses that we incur depends on the size and composition of our Portfolio and platform and prevailing market wages and rates. Leases typically provide for the reimbursement of property operating expenses such as common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of our properties. However, costs that we incur generally do not decrease if revenue or occupancy decrease, and certain costs that we incur, such as corporate level expenses, are not typically reimbursed. In order to continue to qualify as a REIT for federal income tax purposes, we must meet several organizational and operational requirements, including a requirement that we annually distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains. We intend to continue to satisfy these requirements and maintain our REIT status. Our board of directors evaluates our dividend on a quarterly basis, taking into account a variety of relevant factors, including REIT taxable income. The following table summarizes our common dividend activity for the second and third quarters of 2026: Second Quarter 2026 Third Quarter 2026 Distributions to common shareholders Dividend declared per common share $ 0.3075 $ 0.3075 Dividend declaration date April 22, 2026 July 22, 2026 Dividend record date July 2, 2026 October 2, 2026 Dividend payable date July 15, 2026 October 15, 2026 Additionally, the Operating Partnership's redeemable preferred units accrue cumulative distributions. Based on the units outstanding as of June 30, 2026, aggregate annual distributions to redeemable preferred unit holders is expected to be approximately $1.5 million. 39 Opportunistic Expenditures We also utilize cash for opportunistic expenditures such as value-enhancing reinvestment and acquisition activity. 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 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. Our acquisition strategy focuses on buying assets with strong growth potential that are located in our existing markets and will allow us to leverage our operational platform and expertise to create value. Our acquisition activity may include acquisitions of open-air shopping centers or non-owned anchor spaces, retail buildings, and/or outparcels at, or adjacent to, our existing shopping centers. Our cash flow activities are summarized as follows (in thousands): Brixmor Property Group Inc . Six Months Ended June 30, 2026 2025 $ Change Net cash provided by operating activities $ 344,860 $ 311,542 $ 33,318 Net cash used in investing activities (106,339) (148,980) 42,641 Net cash used in financing activities (413,932) (435,384) 21,452 Net change in cash, cash equivalents and restricted cash (175,411) (272,822) 97,411 Cash, cash equivalents and restricted cash at beginning of period 361,530 378,692 (17,162) Cash, cash equivalents and restricted cash at end of period $ 186,119 $ 105,870 $ 80,249 Brixmor Operating Partnership LP Six Months Ended June 30, 2026 2025 $ Change Net cash provided by operating activities $ 344,860 $ 311,542 $ 33,318 Net cash used in investing activities (106,339) (148,980) 42,641 Net cash used in financing activities (413,930) (435,808) 21,878 Net change in cash, cash equivalents and restricted cash (175,409) (273,246) 97,837 Cash, cash equivalents and restricted cash at beginning of period 360,996 378,032 (17,036) Cash, cash equivalents and restricted cash at end of period $ 185,587 $ 104,786 $ 80,801 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 costs, real estate taxes, general and administrative expenses, and interest expense. During the six months ended June 30, 2026, our net cash provided by operating activities increased $33.3 million as compared to the corresponding period in 2025. The increase was primarily due to (i) an increase in same property net operating income; (ii) an increase in cash inflows for dividends and interest income; (iii) an increase in cash from net working capital; and (iv) a decrease in cash outflows for interest expense; partially offset by (v) an increase in cash outflows for G&A expense; (vi) a decrease in net operating income due to net transaction activity and other non-same property net operating income; and (vii) 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. 40 During the six months ended June 30, 2026, our net cash used in investing activities decreased $42.6 million as compared to the corresponding period in 2025. The decrease was primarily due to (i) an increase of $79.1 million in net proceeds from sales of real estate assets; (ii) a decrease of $47.8 million in improvements to and investments in real estate assets; and (iii) a decrease of $15.0 million in deposits on acquisitions of real estate assets; partially offset by (iv) an increase of $95.8 million in acquisitions of real estate assets; and (v) an increase of $3.5 million in purchases of marketable securities, net of sales. Improvements to and investments in real estate assets During the six months ended June 30, 2026 and 2025, we expended $123.5 million and $171.3 million, respectively, on improvements to and investments in real estate assets. Included in these amounts are insurance proceeds of $1.7 million and $2.2 million, respectively, which were received during the six months ended June 30, 2026 and 2025. Maintenance capital expenditures represent costs to fund major replacements and betterments to our properties. 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. As of June 30, 2026, we had 44 in-process anchor space repositioning, redevelopment, and outparcel development projects with an aggregate anticipated cost of $347.8 million, of which $124.5 million had been incurred as of June 30, 2026. 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. Acquisitions of and proceeds from sales of real estate assets 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 six months ended June 30, 2026, we acquired four shopping centers for an aggregate purchase price of $164.2 million, including transaction costs, closing credits, assumption of secured mortgage debt, and issuance of redeemable preferred units. During the six months ended June 30, 2025, we acquired one land parcel and acquired a lease and associated subleases at an existing shopping center for an aggregate purchase price of $7.5 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 six months ended June 30, 2026, we disposed of six shopping centers for aggregate net proceeds of $120.5 million. In addition, during the six months ended June 30, 2026, we received aggregate net proceeds of $2.3 million related to land at one shopping center previously seized through eminent domain and resolved contingencies related to previously disposed assets. During the six months ended June 30, 2025, we disposed of three shopping centers and four partial shopping centers for aggregate net proceeds of $43.7 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 six months ended June 30, 2026, our net cash used in financing activities decreased $21.5 million as compared to the corresponding period in 2025. The decrease was primarily due to (i) a $31.5 million decrease in debt repayments, net of borrowings; and (ii) an $8.2 million decrease in deferred financing costs; partially offset by (iii) a $13.7 million increase in distributions to our common stockholders; (iv) a $4.2 million increase in repurchases of common stock in conjunction with equity award plans; and (v) a $0.3 million increase in issuance costs of redeemable non-controlling interests. 41 Non-GAAP Performance Measures 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 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. Funds From Operations 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. 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 (calculated in accordance with GAAP) to Nareit FFO for the three and six months ended June 30, 2026 and 2025 is as follows (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income attributable to Brixmor Property Group Inc. $ 73,511 $ 85,139 $ 201,261 $ 154,868 Depreciation and amortization related to real estate 108,890 102,091 212,809 206,539 Gain on sale of real estate assets (9,820) (15,755) (61,917) (18,825) Impairment of real estate assets 5,974 — 5,974 — Nareit FFO $ 178,555 $ 171,475 $ 358,127 $ 342,582 Nareit FFO per diluted share $ 0.58 $ 0.56 $ 1.16 $ 1.11 Weighted average diluted shares outstanding 307,920 307,609 307,695 307,547 Same Property Net Operating Income Same property net operating income ("NOI") is a supplemental, non-GAAP performance measure utilized to evaluate the operating performance of real estate companies. 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). 42 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 Three and Six Months Ended June 30, 2026 to the Three and Six Months Ended June 30, 2025 (dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 Change 2026 2025 Change Number of properties 337 337 — 337 337 — Percent billed 90.3 % 89.8 % 0.5 % 90.3 % 89.8 % 0.5 % Percent leased 94.7 % 94.4 % 0.3 % 94.7 % 94.4 % 0.3 % Revenues Rental income $ 329,717 $ 312,194 $ 17,523 $ 657,617 $ 623,005 $ 34,612 Other revenues 307 95 212 789 366 423 330,024 312,289 17,735 658,406 623,371 35,035 Operating expenses Operating costs (41,787) (38,177) (3,610) (81,351) (75,619) (5,732) Real estate taxes (42,813) (42,157) (656) (86,407) (85,429) (978) (84,600) (80,334) (4,266) (167,758) (161,048) (6,710) Same property NOI $ 245,424 $ 231,955 $ 13,469 $ 490,648 $ 462,323 $ 28,325 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, 2026 2025 2026 2025 Net income attributable to Brixmor Property Group Inc. $ 73,511 $ 85,139 $ 201,261 $ 154,868 Adjustments: Non-same property NOI (8,145) (8,935) (16,905) (18,002) Lease termination fees (2,742) (1,352) (4,372) (5,463) Straight-line rental income, net (5,854) (9,781) (13,793) (17,262) Accretion of below-market leases, net of amortization of above-market leases and tenant inducements (3,689) (4,174) (7,798) (6,689) Straight-line ground rent expense, net 161 141 321 275 Depreciation and amortization 110,258 103,277 215,460 208,874 Impairment of real estate assets 5,974 — 5,974 — General and administrative 27,858 29,093 56,050 57,266 Total other expense 47,941 38,540 54,292 88,441 Net income attributable to non-controlling interests 151 7 158 15 Same property NOI $ 245,424 $ 231,955 $ 490,648 $ 462,323 Inflation 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 43 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. 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. 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 and trade-related expense pressures. 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. 44 Item 3 . Quantitative and Qualitative Disclosures about Market Risk There have been no material changes from the quantitative and qualitative disclosures about market risk disclosed in Item 7A of Part II of our annual report on Form 10-K for the year ended December 31, 2025.