Item 2. Properties
ITEM 2. PROPERTIES
REAL ESTATE INVESTMENTS —The following table details information for our wholly-owned properties and those owned through our unconsolidated joint venture as of December 31, 2023, which is the basis for determining the prorated information included in the subsequent tables (dollars and square feet in thousands):
Ownership Percentage Number of Properties ABR GLA
Wholly-owned properties 100% 281 $ 470,819 32,153
GRP I 14% 20 31,908 2,213
The following table presents information regarding the geographic location of our properties, including wholly-owned and the prorated portion of those owned through our unconsolidated joint venture, by ABR as of December 31, 2023. For additional portfolio information, refer to “Schedule III - Real Estate Assets and Accumulated Depreciation” (dollars and square feet in thousands):
State ABR (1)
% ABR ABR/Leased Square Foot GLA (2)
% GLA % Leased Number of Properties
Florida $ 58,036 12.2 % $ 14.57 4,088 12.6 % 97.4 % 51
California 51,936 10.9 % 21.52 2,504 7.7 % 96.4 % 26
Texas 43,072 9.1 % 18.21 2,474 7.6 % 95.6 % 20
Georgia 40,979 8.6 % 13.75 3,028 9.3 % 98.4 % 31
Illinois 28,540 6.0 % 16.71 1,804 5.6 % 94.6 % 16
Ohio 25,316 5.3 % 11.04 2,336 7.2 % 98.2 % 19
Colorado 24,850 5.2 % 18.41 1,408 4.3 % 95.9 % 12
Virginia 22,724 4.8 % 17.15 1,359 4.2 % 97.5 % 13
Minnesota 19,688 4.1 % 15.55 1,325 4.1 % 95.5 % 13
Massachusetts 16,944 3.6 % 15.22 1,146 3.5 % 97.1 % 9
Nevada 14,824 3.1 % 24.30 623 1.9 % 97.9 % 5
Pennsylvania 12,264 2.6 % 12.45 1,001 3.1 % 98.4 % 6
Wisconsin 11,990 2.5 % 11.47 1,057 3.3 % 98.9 % 9
Arizona 10,741 2.3 % 14.81 735 2.3 % 98.6 % 6
South Carolina 10,086 2.1 % 11.81 863 2.7 % 99.0 % 8
Maryland 9,568 2.0 % 21.01 463 1.4 % 98.4 % 4
North Carolina 8,409 1.8 % 12.91 658 2.0 % 99.0 % 10
Tennessee 8,132 1.7 % 10.20 802 2.5 % 99.4 % 5
Indiana 7,261 1.5 % 8.85 832 2.6 % 98.6 % 5
Kentucky 6,849 1.5 % 11.18 616 1.9 % 99.5 % 4
Michigan 6,772 1.4 % 9.59 724 2.2 % 97.6 % 5
New Mexico 6,044 1.3 % 15.02 404 1.2 % 99.6 % 3
Connecticut 5,982 1.3 % 14.35 421 1.3 % 99.0 % 4
Oregon 4,765 1.0 % 16.14 316 1.0 % 93.4 % 4
Kansas 4,684 1.0 % 12.53 374 1.2 % 100.0 % 3
New Jersey 4,245 0.9 % 25.05 169 0.5 % 100.0 % 1
Washington 2,886 0.6 % 16.69 173 0.5 % 100.0 % 2
Iowa 2,822 0.6 % 8.00 360 1.1 % 98.1 % 3
Missouri 2,589 0.5 % 11.89 222 0.7 % 98.2 % 2
New York 1,823 0.4 % 11.58 163 0.5 % 96.3 % 1
Utah 461 0.1 % 31.70 15 — % 100.0 % 1
Total $ 475,282 100.0 % $ 15.03 32,463 100.0 % 97.4 % 301
(1) We calculate ABR as monthly contractual base rent as of December 31, 2023 multiplied by twelve months.
(2) Gross leasable area (“GLA”) is defined as the total occupied and unoccupied square footage of a building that is available for Neighbors to lease.
PHILLIPS EDISON & COMPANY
DECEMBER 31, 2023 FORM 10-K
23
TOP TEN CITIES —The following table presents the top ten city markets by ABR of our wholly-owned properties as of December 31, 2023 (dollars in thousands):
City ABR (1)
% ABR
Atlanta $ 33,644 7.1 %
Chicago 26,067 5.5 %
Dallas 24,709 5.2 %
Sacramento 20,986 4.5 %
Minneapolis 18,439 3.9 %
Denver 17,731 3.8 %
Washington, D.C. 14,915 3.2 %
Las Vegas 14,824 3.1 %
Houston 14,609 3.1 %
Tampa 13,791 2.9 %
Total $ 199,715 42.3 %
(1) We calculate ABR as monthly contractual base rent as of December 31, 2023 multiplied by twelve months.
LEASE EXPIRATIONS —The following chart shows the aggregate scheduled lease expirations for our over 3,000 Neighbors, excluding our Neighbors who are occupying space on a temporary basis, after December 31, 2023 for each of the next ten years and thereafter for our wholly-owned properties and the prorated portion of those owned through our unconsolidated joint venture:
Our ability to create rental rate growth generally depends on our leverage during new and renewal lease negotiations with prospective and existing Neighbors, which typically occurs when occupancy at our centers is high or during periods of economic growth and recovery. Conversely, we may experience rental rate decline when occupancy at our centers is low or during periods of economic recession, as the leverage during new and renewal lease negotiations may shift to prospective and existing Neighbors.
PHILLIPS EDISON & COMPANY
DECEMBER 31, 2023 FORM 10-K
24
For our wholly-owned properties and those owned through our unconsolidated joint venture, during the 2024 fiscal year, we have a total of 670 leases expiring, representing 2.8 million square feet of GLA. For our wholly-owned properties, during the 2024 fiscal year, we have 635 leases expiring, representing 2.8 million square feet of GLA. For our wholly-owned properties, the expiring leases have an ABR of $15.07 per square foot. While we cannot predict what rental rates we will achieve in 2024 as we renew or replace these expiring leases, the comparable rent spread of new leases signed during 2023 was 25.2%, and the comparable rent spread for lease renewals executed in 2023 was 16.2%. Further, during the fiscal year 2023, our occupancy remained high, ending the year at 97.4%, indicating continued demand for leasing spaces at our centers.
See “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview - Leasing Activity” of this filing on Form 10-K for further discussion of leasing activity.
PORTFOLIO TENANCY —We define national Neighbors as those Neighbors that operate in at least three states. Regional Neighbors are defined as those Neighbors that have at least three locations in fewer than three states. The following charts present the composition of our portfolio, including our wholly-owned properties and the prorated portion of those owned through our unconsolidated joint venture, by Neighbor type as of December 31, 2023:
The following charts present the composition of our portfolio by Neighbor industry as of December 31, 2023:
PHILLIPS EDISON & COMPANY
DECEMBER 31, 2023 FORM 10-K
25
NECESSITY-BASED GOODS AND SERVICES —We define “necessity-based goods and services” as goods and services that are indispensable, necessary, or common for day-to-day living, or that tend to be inelastic (i.e., those for which the demand does not change based on a consumer’s income level). We estimate that approximately 70% of our ABR, including the pro rata portion attributable to properties owned through our unconsolidated joint venture, is generated from Neighbors providing necessity-based goods and services.
TOP TWENTY NEIGHBORS —The following table presents our top 20 Neighbors by ABR, including our wholly-owned properties and the prorated portion of those owned through our unconsolidated joint venture, as of December 31, 2023 (dollars and square feet in thousands):
Neighbor (1)
ABR % of ABR Leased
Square Feet % of Leased Square Feet Number of Locations (2)
Kroger $ 28,459 6.0 % 3,474 11.0 % 63
Publix 26,570 5.6 % 2,519 8.0 % 61
Albertsons 19,361 4.1 % 1,777 5.6 % 32
Ahold Delhaize 17,829 3.8 % 1,249 3.9 % 23
Walmart 8,971 1.9 % 1,770 5.6 % 13
Giant Eagle 7,384 1.6 % 759 2.4 % 10
Sprouts Farmers Market 6,663 1.4 % 421 1.3 % 14
TJX Companies 6,262 1.3 % 516 1.6 % 18
Raley's 4,599 1.0 % 288 0.9 % 5
Dollar Tree 3,859 0.7 % 369 1.2 % 37
UNFI (SuperValu) 3,476 0.7 % 336 1.1 % 5
Starbucks Corporation 2,983 0.5 % 64 0.2 % 35
Trader Joe's 2,727 0.5 % 122 0.4 % 9
H-E-B 2,492 0.5 % 164 0.5 % 2
Lowe's 2,469 0.5 % 369 1.2 % 4
Subway Group 2,448 0.5 % 88 0.3 % 61
Anytime Fitness, Inc. 2,430 0.5 % 140 0.4 % 29
Food 4 Less (PAQ) 2,305 0.5 % 118 0.4 % 2
United Parcel Service 2,304 0.5 % 82 0.3 % 65
H&R Block, Inc. 2,284 0.5 % 97 0.3 % 56
Total $ 155,875 32.6 % 14,722 46.6 % 544
(1) Neighbors are grouped by parent company and may represent multiple subsidiaries and banners.
(2) Number of locations excludes auxiliary leases with grocery anchors such as fuel stations, pharmacies, and liquor stores. Additionally, if a parent company has multiple subsidiaries or banners in a single shopping center, those subsidiaries are included as one location.