What changed in this filing

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Item 1A. Risk Factors

2025-02-11 compared with 2024-02-12 · 68 added, 50 removed, 575 unchanged (17% of the section changed)

16 unchanged sentences

• Pandemics, epidemics, or other health crises may have a negative effect on our and our Neighbors’ businesses, financial condition, results of operations, cash flows, and liquidity.

• We use artificial intelligence technologies in our business, and the use of these technologies involve technological and legal risk.

Risks Related to Our Indebtedness and Liquidity

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(iv) our inability to control the legal entities that have title to the real estate associated with the joint ventures;

(v) our lenders may not be easily able to sell our joint venture assets and investments or may view them less favorably as collateral, which could negatively affect our liquidity and capital resources;

(vi) our institutional joint venture partners can take actions that we may not be able to anticipate or prevent, which could result in negative impacts on our debt and equity;

and (vii) our institutional joint venture partners’ business decisions or other actions or omissions may result in harm to our reputation or adversely affect the value of our investments.

(v) our institutional joint venture partners can take actions that we may not be able to anticipate or prevent, which could result in negative impacts on our investment in the joint venture;

and (vi) our institutional joint venture partners’ business decisions or other actions or omissions may result in harm to our reputation or adversely affect the value of our investments.

Our real estate assets may decline in value and be subject to significant impairment losses, which may reduce our net income.

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These key assumptions are subjective in nature and may differ materially from actual results.

Changes in our disposition strategy or changes in the marketplace may

Changes in our disposition strategy or changes in the marketplace may alter the holding period of an asset or asset group, which may result in an impairment loss and such loss may be material to

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alter the holding period of an asset or asset group, which may result in an impairment loss and such loss may be material to our financial condition or operating performance.

our financial condition or operating performance.

To the extent that the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over fair value.

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Adverse economic, regulatory, market, and real estate conditions may adversely affect our financial condition, cash flows, and results of operations.

Our portfolio is predominantly comprised of omni-channel neighborhood grocery-anchored shopping centers, and during the year ended December 31, 2023, our holdings in Florida and California accounted for 12.2% and 10.9%, respectively, of our ABR (including our wholly-owned portfolio as well as the prorated portion of shopping centers owned through our joint ventures).

Our portfolio is predominantly comprised of omni-channel neighborhood grocery-anchored shopping centers, and during the year ended December 31, 2024, our holdings in Florida, California, and Texas accounted for 12.2%, 10.6%, and 10.1%, respectively, of our ABR (including our wholly-owned portfolio as well as the prorated portion of shopping centers owned through our joint ventures).

Therefore, our performance is subject to risks associated with owning and operating neighborhood omni-channel grocery-anchored shopping centers, and may be further subject to additional risk as a result of the geographic concentration noted above.

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Pandemics, epidemics, or other health crises may have a negative effect on our and our Neighbors’ businesses, financial condition, results of operations, cash flows, and liquidity.

Our business, and the businesses of our Neighbors, could be materially and adversely affected by the risks, or the public perception of the risks, related to a pandemic, epidemic, or other health crisis, like the COVID-19 pandemic, especially if there is a negative impact to customers’ willingness or ability to frequent our Neighbors’ businesses.

Our business, and the businesses of our Neighbors, could be materially and adversely affected by the risks, or the public perception of the risks, related to a pandemic, epidemic, or other health crisis, especially if there is a negative impact to customers’ willingness or ability to frequent our Neighbors’ businesses.

As was experienced during the COVID-19 pandemic, such crises could cause significant disruptions to the United States and global economy and contribute to significant volatility and negative pressure in financial markets.

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A worsening of the economic, political, and social environment as a result presents material risks and uncertainties with respect to our and our Neighbors’ business, financial condition, results of operations, cash flows, liquidity, and ability to satisfy debt service obligations.

An increased focus on metrics and reporting related to ESG factors may impose additional costs and expose us to new risks.

Investors and other stakeholders have become more focused on understanding how companies address a variety of ESG factors.

When evaluating investment decisions, many investors and shareholders look not only at company ESG disclosures, but also to ESG rating systems that have been developed by third-party groups to allow comparisons between companies.

Increased scrutiny on metrics and reporting related to Environmental, Social and Governance factors may impose additional costs and expose us to new risks.

Investors and other stakeholders are often focused on understanding how companies address a variety of Corporate Responsibility factors.

When evaluating investment decisions, many investors and shareholders look not only at company Corporate Responsibility disclosures, but also to rating systems that have been developed by third-party groups to allow comparisons between companies.

Although we participate in a number of these ratings systems, and generally score relatively well in those in which we do participate, we do not participate in, and would not necessarily score as well in, all of the available rating systems.

Further, the criteria used in these ratings systems may change frequently, and we cannot guarantee that we will be able to score well as criteria change.

We supplement our participation in ratings systems with corporate disclosure of our ESG activities, but many investors and other stakeholders may look for disclosures that we do not provide.

In addition, the SEC is currently evaluating rulemaking that is likely to impose additional ESG disclosure and other requirements on us.

Failure to participate in certain of the third-party ratings systems, failure to score well in those ratings systems, failure to provide certain ESG disclosures, or unfavorable comparisons in these areas to other companies, could result in reputational harm when investors or others compare us against similar companies in our industry, could result in investor engagement on our ESG initiatives and

We supplement our participation in ratings systems with corporate disclosure of our Corporate Responsibility activities, but many investors and other stakeholders may look for disclosures that we do not provide.

Additionally, the regulatory environment may create conflicting pressures as policymakers in some jurisdictions advocate for laws to constrain consideration of Corporate Responsibility matters in certain circumstances.

Additional actions may be taken by both proponents and opponents of Corporate Responsibility matters.

Failure to participate in certain of the third-party ratings systems, failure to score well in those ratings systems, failure to provide certain Corporate Responsibility disclosures, failure to successfully navigate competing policymaker and stakeholder expectations on Corporate

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disclosures or increased costs relating to ESG initiatives, and could cause certain investors to be unwilling to invest in our stock, which could adversely impact our ability to raise capital.

Responsibility, or unfavorable comparisons in these areas to other companies, could result in reputational harm when investors or others compare us against similar companies in our industry, could result in investor engagement on our Corporate Responsibility initiatives and disclosures or increased costs relating to Corporate Responsibility initiatives, and could cause certain investors to be unwilling to invest in our stock, which could adversely impact our ability to raise capital.

We use artificial intelligence technologies in our business, and the use of these technologies involve technological and legal risk.

We currently use artificial intelligence (“AI”) and automated decision-making technologies (collectively, “AI Technologies”), including generative AI Technologies (i.e., AI Technologies that can produce and output new content, software code, data and information) in certain internal business practices.

Technological advances in AI are rapidly evolving, and along with this rapid evolution comes risks and challenges that could negatively impact our business.

AI Technologies may create incomplete, inaccurate, or misleading outputs or other discriminatory or unexpected results or behaviors, such as hallucinatory behavior that can generate irrelevant, nonsensical, or factually incorrect results.

While we take measures designed to ensure the accuracy of such AI-generated content, those measures may not always be successful.

Accordingly, reliance on these models could lead us to make impaired decisions that could result in adverse consequences to us, including legal liability, reputational and competitive harm, and Neighbor loss.

Additionally, sensitive or otherwise confidential information could be leaked, disclosed, or revealed in connection with the use of AI Technologies by our employees, vendors, contractors, and where an AI model processes personal information and makes connections with that data, it may disclose sensitive, proprietary, or confidential information generated by the model.

Furthermore, bad actors may utilize AI Technologies to obtain sensitive or confidential information of our business.

Uncertainty in the regulatory environment relating to AI Technologies may hinder our ability to use such technologies in our business or require us to change our business practices, which could decrease any benefits from using AI Technologies and negatively impact our business.

Additionally, we may need to expend additional resources to modify and maintain our use of AI Technologies to comply with applicable law, and failure to do so may lead to regulatory fines or penalties.

Risks Related to Our Indebtedness and Liquidity

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When we give a guaranty on behalf of an entity that owns one of our shopping centers, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity.

Currently, we are a limited guarantor on a mortgage loan for our unconsolidated joint venture.

Currently, we are a limited guarantor on mortgage loans for certain of our unconsolidated joint ventures.

Our guarantee is limited to being the non-recourse carveout guarantor and the environmental indemnitor.

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This could subject us to more recourse indebtedness and the risk that debt service on less efficient forms of financing would require a larger portion of our cash flows, thereby reducing cash available for distribution to our stockholders and funds available for operations as well as for future business opportunities.

Additionally, changes to our credit ratings could affect our ability to access debt capital, as well as the terms of certain existing and future debt financing we may obtain.

As we depend, in part, on debt financing to fund the growth of our business and to execute our strategy, an adverse change in our credit rating, including changes in our credit outlook, or the initiation of a

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review of our credit rating that could result in an adverse change, could have a material adverse effect on us.

Our creditworthiness is rated by nationally recognized credit rating agencies.

The credit ratings assigned are based on our operating performance, liquidity and leverage ratios, financial condition and prospects, and other factors viewed by the credit rating agencies as relevant to our industry and the general economic outlook.

Furthermore, our unsecured credit facilities are priced, in part, on our credit rating.

A downgrade of our credit rating could lead to a higher credit spread component within the applicable interest rate for those debt agreements and result in higher interest expense.

Covenants in our loan agreements may restrict our operations and adversely affect our financial condition and ability to make distributions to our stockholders.

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Sales proceeds are then used to fund the construction of developments, redevelopments, expansions, and acquisitions, and to repay debt.

An increase in market capitalization rates or a decline in NOI may cause a reduction in the value of shopping centers identified for sale, which would have an adverse effect on the

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amount of cash generated.

An increase in market capitalization rates or a decline in NOI may cause a reduction in the value of shopping centers identified for sale, which would have an adverse effect on the amount of cash generated.

Additionally, the sale of shopping centers resulting in significant tax gains may require higher distributions to our stockholders in order to maintain our REIT status or payment of additional income taxes.

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As of December 31, 2024, we would have directly or indirectly controlled approximately 90.6% of the OP units.

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Furthermore, as of December 31, 2024, Mr.

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As of December 31, 2024, 28 of our 294 wholly-owned shopping centers, four outparcels, and the land under which one of our properties is located, comprising approximately 10.2% of our ABR, are subject to the protection described in clause (i) above, and the potential “make-whole amount” on the estimated aggregate amount of built-in gain subject to such protection is approximately $117.9 million.

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We and the Operating Partnership entered into an additional tax protection agreement (the “2021 TPA”) on July 19, 2021 with Mr.

Edison, Devin I.

Murphy, and Mr.

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In addition, the MGCL permits our Board to implement certain takeover defenses without stockholder approval.

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These and other provisions of our charter, bylaws, and Maryland law could have the effect of delaying, deferring, or preventing a change in control, including an extraordinary transaction (such as a merger, tender offer, or sale of all or substantially all of our assets) that might provide a premium price to holders of our common stock.

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federal income tax purposes commencing with our taxable year ended December 31, 2010.

We believe that our organization and method of operation has enabled and will continue to enable us to meet the

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requirements for qualification and taxation as a REIT for U.S.

We believe that our organization and method of operation has enabled and will continue to enable us to meet the requirements for qualification and taxation as a REIT for U.S.

federal income tax purposes.

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Such lower depreciation deductions and increased gains on sales allocated to us generally will increase the amount of our required distribution under the REIT rules, and will decrease the portion of any distribution that otherwise would have been treated as a “return of capital” distribution.

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Our property taxes could increase due to property tax rate changes or reassessment, which could impact our cash flow.

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Such dividend income should qualify under the 95%, but not the 75%, gross income test.

We will monitor the amount of the

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dividend and other income from our TRS entities and will take actions intended to keep this income, and any other non-qualifying income, within the limitations of the REIT income tests.

We will monitor the amount of the dividend and other income from our TRS entities and will take actions intended to keep this income, and any other non-qualifying income, within the limitations of the REIT income tests.

While we expect these actions will prevent a violation of the REIT income tests, we cannot guarantee that such actions will in all cases prevent such a violation.

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We must also ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, U.S.

government securities, and qualified real estate assets, including certain mortgage loans and mortgage-backed securities.

government securities, and qualified real estate assets, including certain mortgage loans and mortgage-backed

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The remainder of our investment in securities (other than U.S.

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It may be possible to reduce the impact of the prohibited transaction tax by conducting certain activities through a TRS.

However, to the extent that we engage in such activities through a TRS, the income associated with such activities will be

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subject to a corporate income tax.

However, to the extent that we engage in such activities through a TRS, the income associated with such activities will be subject to a corporate income tax.

In addition, the IRS may attempt to ignore or otherwise recast such activities in order to impose a prohibited transaction tax on us, and there can be no assurance that such recast will not be successful.

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federal income tax law, regulation, or administrative interpretation.

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If our assets are deemed to be plan assets, we may be exposed to liabilities under Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”) and the IRC.

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There are some types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution, or environmental matters, that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or sublimits.

Terrorist activities or violence occurring at our properties also

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may directly affect their value through damage, destruction, or loss.

Terrorist activities or violence occurring at our properties also may directly affect their value through damage, destruction, or loss.

Insurance for such acts may be unavailable or cost more, which could result in an increase to our operating expenses and adversely affect our results of operations.

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The presence of hazardous or toxic substances, or the failure to remediate the related contamination, may also adversely affect our ability to sell, lease, or redevelop a property or to borrow money using a property as collateral.

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Although we believe that our portfolio is in substantial compliance with U.S.

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Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations and, in some cases, may be critical to the operations of certain of our Neighbors.

In addition to our own IT

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systems, we also depend on third parties to provide IT services relating to several key business functions, such as administration, accounting, communications, document management and storage, human resources, payroll, tax, investor relations, and certain finance functions.

In addition to our own IT systems, we also depend on third parties to provide IT services relating to several key business functions, such as administration, accounting, communications, document management and storage, human resources, payroll, tax, investor relations, and certain finance functions.

Our IT systems and those provided by third parties may contain personal, financial, or other information that is entrusted to us by our Neighbors and associates, as well as proprietary PECO information and other confidential information related to our business.

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Compliance with the ADA’s requirements could require the removal of access barriers and noncompliance may result in the imposition of injunctive relief, monetary penalties, or in some cases, an award of damages.

While we attempt to acquire shopping centers that are already in compliance with the ADA or place the burden of compliance on the seller or other third party, such as a Neighbor, we cannot assure stockholders that we will be able to acquire shopping centers or allocate responsibilities in this manner.

While we attempt to acquire shopping centers that are already in compliance with the ADA or place the burden of compliance on the seller or other third party, such as a Neighbor, we cannot

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assure stockholders that we will be able to acquire shopping centers or allocate responsibilities in this manner.

In addition, we are required to operate the shopping centers in compliance with fire and safety regulations, building codes, and other land use regulations, as they may be adopted by governmental entities and become applicable to the shopping centers.

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• the annual yield from distributions on shares of our common stock as compared to yields on other financial instruments;

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• equity issuances by us, or future sales of substantial amounts of shares of our common stock by our existing or future stockholders, or the perception that such issuances or future sales may occur;

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We cannot predict whether future issuances or sales of shares of our common stock or the availability of shares of our common stock for resale in the open market will decrease the market price of our common stock.

The issuance of a substantial number of shares of our common stock in the public market, or upon exchange of common units of limited partnership interest in our OP units, or the perception that such issuances might occur, could adversely affect the market price of our common stock.

The issuance of a substantial number of shares of our common stock in the public market, or upon exchange of common units of limited partnership interest

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in our OP units, or the perception that such issuances might occur, could adversely affect the market price of our common stock.

The exchange of OP units for common stock, including OP units granted to certain directors, executive officers, and other employees under our equity incentive plan, or the issuance of our common stock or OP units in connection with future property, portfolio, or business acquisitions could have an adverse effect on the market price of our common stock.

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Future offerings of debt securities, which would be senior to our common stock upon liquidation, and/or preferred equity securities, which may be senior to our common stock for purposes of dividend distributions or upon liquidation, may adversely affect the market price of our common stock.

In October 2021, we issued $350 million aggregate principal amount of 2.625% senior notes, and in the future, we may attempt to increase our capital resources by offering additional debt or equity securities (or causing our operating partnership to issue debt or equity securities), including medium term notes, senior or subordinated notes, and additional classes of preferred or common stock.

In the future, we may attempt to increase our capital resources by offering additional debt or equity securities (or causing our operating partnership to issue debt or equity securities), including medium term notes, senior or subordinated notes, and additional classes of preferred or common stock.

Holders of debt securities or shares of preferred stock, as well as lenders with respect to other borrowings, will generally be entitled to receive interest payments or distributions, both current and in connection with any liquidation or sale, prior to the holders of our common stock.

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Because we may generally issue any such debt or equity securities in the future without obtaining the consent of our stockholders, you will bear the risk of our future offerings reducing the market price of our common stock and diluting your proportionate ownership.

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If we pay distributions from sources other than our cash flows from operations, we may not be able to sustain our distribution rate, we may have fewer funds available for investment in shopping centers and other assets, and our stockholders’ overall returns may be reduced.

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If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed.

We are required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, and are required to have our independent registered public accounting firm attest to the same, as required by Section 404 of the Sarbanes-Oxley Act of 2002.

We are required to perform system and

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process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, and are required to have our independent registered public accounting firm attest to the same, as required by Section 404 of the Sarbanes-Oxley Act of 2002.

If a material weakness or significant deficiency was to be identified in our internal control over financial reporting, we may also identify deficiencies in some of our disclosure controls and procedures that we believe require remediation.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors