Phillips Edison at Nareit REITweek: Strategic Growth Amid Market Volatility

On Tuesday, 03 June 2025, Phillips Edison & Co Inc (NASDAQ:PECO) presented at the Nareit REITweek: 2025 Investor Conference. The company highlighted its robust leasing environment and strategic focus on grocery-anchored shopping centers, while acknowledging market volatility due to tariff announcements. Despite challenges, the management expressed confidence in their long-term strategy and the resilience of the US consumer.

Key Takeaways

• Phillips Edison focuses on necessity-based retail, driving strong leasing demand.
• The company aims for a 9% unlevered IRR on acquisitions, with a disciplined approach.
• Second quarter leasing activity increased by 40% compared to the first quarter.
• Management is optimistic about meeting acquisition and leverage targets.
• The company plans significant investments in redevelopment projects.

Financial Results

Phillips Edison reaffirmed its financial guidance for 2025, emphasizing steady growth:

• Bad Debt: Guidance is 60 to 120 basis points, with the first quarter at 75 basis points.
• Same Store Growth: Expected to be between 3% and 3.5% for the full year.
• Leasing Spreads: First quarter new leasing spreads were 28.1%, with renewals at 20%.
• Acquisition Guidance: Target range is $350 million to $450 million, with $267 million closed to date.
• Leverage Target: Maintaining a mid-5 times debt to EBITDA ratio.

Operational Updates

Operational metrics indicate strong performance and tenant health:

• Occupancy: Achieved highest levels to date, with anchor occupancy at 98.4%.
• Tenant Health: Average tenant sales to rent ratio is 10%, with long-term tenant stability.
• Foot Traffic: Increased by 6% in April compared to the previous year.
• Large Box Exposure: Limited, with strong demand for spaces over 10,000 square feet.

Future Outlook

The company remains focused on strategic growth and redevelopment:

• Acquisition Strategy: Continues to target grocery-anchored centers with top grocers.
• Redevelopment Pipeline: Plans to invest $40 million to $50 million annually.
• Funding Strategy: Aims to maintain flexibility in accessing debt and equity markets.
• NOI Growth: Targets 3% to 4% same center NOI growth over the coming years.

Q&A Highlights

During the Q&A session, management addressed market conditions and future plans:

• Market Volatility: Too early to see full impact, but optimistic about opportunities.
• Acquisition Guidance: Confident in reaching the high end of guidance.
• Watch List: Monitoring 1.5% to 2% of tenants, with focus on non-grocery goods.

In conclusion, Phillips Edison remains committed to its long-term strategy, leveraging its necessity-based retail model to navigate market volatility and deliver strong returns. For more detailed insights, refer to the full transcript below.

Full transcript - Nareit REITweek: 2025 Investor Conference:

Caitlin Burrows, REITs Analyst, Goldman Sachs: Hi everyone.

Good morning and thanks for joining us. I’m Caitlin Burrows and I cover REITs at Goldman Sachs. This is the Phillips Edison presentation. Today we have Jeff Edison, Chairman and CEO, Bob Myers, President and I actually only wrote President but I think it’s also COO, and John Caulfield, Executive Vice President and Chief Financial Officer. So I have a bunch of questions that I’ll go through, but if anybody else has any, feel free to raise your hand so that I get engaged and we’ll try to get to those too.

Maybe with that, starting big picture, the market has been very volatile. For the last two months in particular, heavily impacted by tariff updates. Maybe Jeff, starting with you, could you give an update or overview of the PICO portfolio and some brief commentary on to what extent certain aspects of your business have changed or not since the April?

Jeff Edison, Chairman and CEO, Phillips Edison: It has actually been an awful lot of change over the last couple months. And we I sort of stepped back and we were at investor conference the week of the tariff announcements. I was then at ICSC just a couple of weeks ago and now we’re here and the transformation and conversation has been pretty amazing. I mean, it’s like the world was coming to an end. World might come to an end, but isn’t necessarily gonna come to an end.

And today, we’re we’re seeing a lot more of this is sort of what the environment we’re gonna be in. It’s gonna have an impact, but we’ll deal with it and we’re gonna move from there. And I think the ICIC was probably one of the best backgrounds because there we were talking to retailers, talking to our neighbors and what are we gonna do, where are we going? And they have a very similar philosophy to what PECO has, which is we’re in this business on a long term basis. We’re not in this business quarter to quarter.

We’re not in this business week to week. We’re not in this business tariff announcement to tariff announcement. We’ve got to build our businesses on a long term basis. And you’re seeing that emerge, and it certainly wasn’t there the first week when we were talking about tariffs. Today, I think we’re in an environment where you know, we know there are to be shocks, we know there are going be announcements, we know there are going be changes, but what we’re confident in is on a long term basis, U.

S. Customer is one of the strongest, healthiest buying group in all of retail. And we being in the necessity based side of that business, we’re in a really good position for that. We will see ups and downs, but we won’t see the ups and downs that you’ll see discretionary retail. And when you’re when you need to be when you need something, when you need to buy groceries, when you need to get your hair done, need to get your nails done, we’re we’re we’re where in America you’re going to get that done because when you wake up on Saturday morning, you want to get that stuff done.

We’re the most convenient. We have the best retailers in in that space, and that’s what PECO delivers. And so, yes, it’s volatile, but we’re very happy to be in the necessity based side of the business where it’s a lot less volatile and we’re, you know, we really do have, you know, as very long term approach to our business and as do our retailers.

Caitlin Burrows, REITs Analyst, Goldman Sachs: Great. Maybe moving over to ICSE. You just mentioned that conference. So it seems to me like it’s a time when the REITs and the retailers get together to talk about store plans. So I was wondering if you guys could just go through maybe some of your goals, what they were going into the event, how the event has changed over the past five to ten years about the conference itself and the purpose for PICO.

Jeff Edison, Chairman and CEO, Phillips Edison: Yeah. So we had over 400 meetings with at at ICSC. So for those of you who don’t know, ICSC is our national convention of everyone who’s associated with the retail real estate business, from our neighbors to lenders to investors to brokers selling properties to brokers leasing space. Across the board, we have a it is the ultimate you know, I think there were 30,000 people there in Vegas this year. Our team had over 400 meetings in two days, actually less than two days.

So it would and and that doesn’t include all of the casual meetings that that that go on during during ICSC. So it was a very valuable tool for us, and it’s it’s one of the times during the year where we have the most contact with retailers in a real short period of time. So it gives us that pulse of what’s going on. And as I said earlier, the general sentiment was it did depend retailer by retailer because the retailers who were had the highest exposure to tariff issues, they were a little bit more conservative. But fortunately, you know, when we look at our business, 85% of our retailers are in that category of having low to minimal impact from the tariffs.

About 15% of us is in that moderate to high range of impact. So our guys were generally positive and they were looking at increasing their plans. So we saw ICSC as really helpful and generally very positive.

Bob Myers, President and COO, Phillips Edison: I think the other thing I would add about ICSC, and I’ve been attending ICSC for over thirty years, is it sets the stage for our team. So as Jeff touched on, we had over 400 meetings over the course of a couple days, but we send a team out of 40 individuals. So we send out our transactions acquisition folks, our leasing agents, our portfolio managers. But the most important aspect is the relationships that you build over those thirty years, especially in the brokerage community with retailers and the transactions market. We learned so much over the course of those two days about what we expect to see in the transactions market going forward for the remainder of the year.

We had several meetings with retailers that were looking for our locations. And one thing I do want to reiterate about Phillips Edison, as long as we’ve been doing this over thirty five years, we’re focused on buying the number one or number two grocer in our markets. That drives foot traffic. And then we complement it with the right format of about 112,000 square feet and necessity based retailers. So you’ll hear us today speak to fast casual, health and beauty, med tail.

These are examples of the types of retailers that we meet in Vegas. And then we look for locations. They want to go through our rent rolls for 2026, ’20 ’7 and even ’28. Retailers in the sentiment coming out of Vegas was still very, very positive. And as I have visibility, as I see out what our pipeline looks like from a leasing, retention, renewal spreads, new leasing spreads, it’s very favorable.

And if anything, it’s getting stronger for the remainder of the year. Which is very positive.

Caitlin Burrows, REITs Analyst, Goldman Sachs: Great. Yes. So maybe just following up a bit on that leasing discussion. I guess tenant demand for space seems to be have been strong for a while now. Occupancy and rent spreads, like you mentioned, are high.

So how would you compare the leasing environment today versus a year ago, including those negotiations and discussions you’re having for ’twenty six and ’twenty seven?

Bob Myers, President and COO, Phillips Edison: Sure. Yes, I’ll take a crack at that. So as an example, in the first quarter, our new leasing spreads as an organization was around 28.1%, renewal spreads were 20% and retention was around 90%. Second quarter will be stronger than those numbers. In terms of how it compared to last year, it’s consistently strong.

And again, I’m feeling more encouraged about what we’re seeing in our pipeline on the leasing front regarding renewal spreads, demand for our space, the retailers that we’re aligning with, has been not only very critical, but we’re aligned with the necessity based retailers that are looking to be tied to the number one, number two grocer. So I’m very encouraged and optimistic about where occupancy will continue to move between now and the end of the year. Backfill scenarios with receiving spaces back that we can release, retention staying very, very high. And our retailers are profitable. They’re very healthy.

They have positive health ratios. And we want to partner with our retailers.

Jeff Edison, Chairman and CEO, Phillips Edison: I’d just add that, you know, we are at the highest level of occupancy that we’ve been at, and we’ve stabilized and are continuing to actually improve on that in today’s environment. It’s a lot of this is driven by the nature of our business, which is being a necessity based retail. But a big part is also being driven by the fact that there has been no new construction in our space for a long time. And that lack of new supply with the retailer’s strong demand is what’s really driving our results. And what we’re lucky to have is properties where they can come into a community and they can get that they can tie up with that number one or two grocer and they know that that will drive the sales of their stores and will make them successful.

And that is what is at the core of our retailer demand for the space and why we are at the occupancy levels that we’re at.

Bob Myers, President and COO, Phillips Edison: The only thing I’ll add to, Caitlin, is I’m always looking at metrics and I’m looking at the opportunities in the portfolio. Our leasing activity in the second quarter is about 40% higher than where it was in the first quarter. Feeling very good first had a very good first quarter.

Jeff Edison, Chairman and CEO, Phillips Edison: So that’s a good place to be.

Caitlin Burrows, REITs Analyst, Goldman Sachs: I guess as you think about that, is there some normal seasonality to leasing that 2Q is normally stronger? Or what do you think is driving that? Or who knows, but that’s where we are.

Jeff Edison, Chairman and CEO, Phillips Edison: The difference between first and second quarter is we tend to talk in quarters and most of the retail stuff happens over years because they have to be planning over a longer period of time. But I think what the difference from our perspective is that there was the anticipation of, you know, sort of the chaos that’s come we’re hearing from DC going on. While we’re hearing that, we were expecting a drawback. And what we’re seeing is that the retailers are saying, need more necessity based number one or two grocer locations as I expand and I’m not going to stop my expansion. And that’s what I think is driving it.

Quarter to quarter, things happen that it’s hard to be totally on why it’s changing. But it’s a very encouraging sign that we’re continuing to see not stabilized growth, but accelerating growth on a quarter to quarter basis. That feels like we are in a really good spot. And when you overlay that with the economic uncertainty, somewhat surprising.

Caitlin Burrows, REITs Analyst, Goldman Sachs: And Bob, I think you made a comment in there about how your tenants and neighbors are profitable. Can you go through what that means for your ability to push rents and also, I guess, their willingness to absorb those increases?

Bob Myers, President and COO, Phillips Edison: Well, again, just with a focus on having the number one or two grocer, health ratios are very important. They want to be profitable, and we want to make sure they’re going to be there long term. Our average in line space, as an example, is 2,500 square feet. They’ve been in our shopping centers an average of about ten years. So it’s critical that they’re important.

The main thing is we have a solid consumer that’s shopping at the grocery store and foot traffic, April of this year compared to April of last year is up 6%. Grocer sales are up. So we’re bringing in over 37,000 people a week to these types of shopping centers. And the biggest metric is I’m looking at retention, I’m looking at renewal spreads. And look, renewal spreads at 20% are as high as they get.

Those are incredible spreads, especially when you compare it to our peers, and we’re going to see even an improvement on those numbers. When you see new leasing spreads of 28%, the demand that we’re seeing for our space when we re tenant a space is going to be well in the 30s. So we’re seeing continued demand. Now, how do we get the retailers to pay for it? Well, they need to be profitable.

So they’re getting the benefit from the grocer foot traffic, but then again, they’re looking at what we call health ratio, their sales to rent ratio, which is roughly around 10%. So if you look at that 10 and you look at our average ABR on in line spaces around $27.28 dollars a foot, there’s room to grow that over a long period of time to upwards of 12%, thirteen %, fifteen %. It all depends on who the retailer is and the particular use. Every retailer can pay a different health ratio, but across the board, we’re at around 10% and puts us in a very, very good spot to continue to drive rents well into the 30s over a long period of time. We’ll see those health ratios move up strategically tenant by tenant to 11%, twelve thirteen % over the next few years.

Caitlin Burrows, REITs Analyst, Goldman Sachs: Great. So one thing about the PICO portfolio is that you don’t have a lot of these large boxes that some of the other shopping center companies out there, but you do have a few. So I guess in 2025, Party City, Big Lots and Joann’s are headwinds to some extent for the industry, also opportunities. But can you go through kind of the exposure that you had, I guess 60 basis points of rents, the status of the retailers in your portfolio, and then the replacement and reopening plans?

Jeff Edison, Chairman and CEO, Phillips Edison: Before we jump into just directly addressing those, Bob will address the three. When you’re in the necessity based retail business, which we are, your target is to have the number one or two grocer and then to have enough small store space that that grocer’s traffic will support and allow them to thrive and grow. That’s the core of our business. Because of that, it’s very intentional. We have limited exposure to big boxes.

We kind of see the power center business as a very different business than what we’re in. When you think about our business, it’s at the corner of Maine and Maine in every suburban community around the country. And that what we have found is that that brings a really nice assortment of national as well as local merchants who have a long term commitment to growing their retail business at our location. That’s what we see as like what is the core part of our business, and it’s what drives those retailer

Bob Myers, President and COO, Phillips Edison: results. Yes. Think the only other thing I would add to that is our current anchor occupancy in the portfolio is around 98.4. And we ended up having four party cities and three big lots. And think when I looked at the portfolio at the end of the first quarter, we only had 15 spaces in our portfolio that were over 10,000 square feet.

We’ve seen very strong demand in that category as well. And currently, we have letters of intent or leases out for signature on 80% of those opportunities. So we have a vision here where we think that we can see anchor occupancy back up to the 99%, ninety nine point two or three range by the end of the year with the demand we’re seeing. So again, as Jeff touched on moving occupancy in our portfolio, even though we’re at 97.1% or 2% today, we feel like there’s a path to get another 100, one hundred and 50 basis points on our inline occupancy, which is currently around 94.6%. So I think we’ll be well into, hopefully, 95.5%, ninety six % potentially.

And then if we can be at 99%, ninety nine point two that’s the type of not only retention, but retailer demand that we’re seeing in both categories of small spaces and spaces over 10,000 square feet. The key to our format and the key to our success, which is why we’re reporting really, really good spreads is our format of 112,000 feet. We don’t have 50 party cities. We had four, you know, we didn’t have 25 big lots, you know, we had three. So I think we have five Joann fabrics and we already have retailers focused on those.

If you looked at the retailers that are focused on backfilling those spaces, you know, it’s the TJX brands. They’re very, very active. They want to open up 150 new locations this year. So TJ Maxx, you think about Marshall, Sierra, Ulta, to name a few. You know, there’s a lot of retailers that are very active looking to grow.

Planet Fitness, Crunch Fitness, Dollar Tree is an example, Daiso, you know, there’s a list of retailers that are very active. And the other part that’s encouraging about, you know, none of the landlords love getting this space back, but what they do love is the mark to market opportunities because a lot of these spaces were paying mid to high single digit rents in that $6 to say $10.5 range. And when you look at the lack of supply that’s out there, which we don’t see coming back, any new development for the next eight to ten years, it’s an opportunity for us to really have some aggressive mark to market opportunities. I know in our portfolio with the spaces that we’re backfilling in this example, we’re seeing market to market opportunities anywhere between 50% up to 350% case by case, center by center. So there’s real opportunity.

Caitlin Burrows, REITs Analyst, Goldman Sachs: Just to clarify that 50 to three fifty, those are on the larger boxes that you’re turning over?

Bob Myers, President and COO, Phillips Edison: Yeah, that’s an example on the backfill scenarios to the big lots, Joanne, Party City Noise.

Jeff Edison, Chairman and CEO, Phillips Edison: Got it. But we do have good potential on our small store as well. I mean, that’s how we’re getting 30 plus percent rent growth in those mark to market situation.

Caitlin Burrows, REITs Analyst, Goldman Sachs: Just moving over to the bad debt side. So guidance for this year is 60 to 120 basis points. Can you go through, I guess, your confidence in that metric? Also how the watch list has evolved year to date, maybe how it compares to last year?

John Caulfield, Executive Vice President and Chief Financial Officer, Phillips Edison: Caitlin, Bob gets to talk about new retailers coming in and I get bad debt. So yes, I would say that we do have a wide range for this year. But ultimately I would say in the first quarter, year over year our bad debt went down. Ultimately, we believe in the strength of our retailers and we were very positive to reaffirm both that range and our 3% to 3.5% same store range for the full year. Ultimately, we believe that these retailers are very successful in our centers with the foot traffic that he’s talking about.

There will be some pieces like we just talked about the party cities and the big lots and what have you, but ultimately the overall strength of our shopping centers is still driving over 3% same store growth. And we’ll see how bad debt is for the year. Ultimately it was 75 basis points in the first quarter and think that’s the same mark as it was in 2024. And so we don’t see anything really changing for 2025.

Caitlin Burrows, REITs Analyst, Goldman Sachs: I guess when you look at the watch list today, though, that might inform the coming quarters in 2026. So when you think of the size of the watch list tenants that might be concerning you and your exposure to them, is there any other comparison you’d make versus history or the past recent past?

John Caulfield, Executive Vice President and Chief Financial Officer, Phillips Edison: Yes. So our watch list, because of the format that Bob was highlighting in our reduced footprint relative to some of those larger names that are plaguing some of the other landlords, we don’t have any Rite Aid’s. We don’t have any at homes. Ultimately, our watch list still remained between 1.52%. It’s gonna be consistent names that you think about where you’re looking at perhaps some Michaels, but even then, again, it’s limited locations.

I think we have five. It’s gonna be we’re monitoring PET formats. We think that they continue to be strong, especially those that have services and elements. Our pet locations are very strong, but that is a name that or a category, I would say, that people are watching for. But ultimately, those that are most troubled are not in the necessity based goods and services or near the grocer with our at our centers.

Caitlin Burrows, REITs Analyst, Goldman Sachs: Maybe switching gears to the acquisition transaction side. So that’s an active, I don’t know, pursuit strategy for Phillips Edison. Back to that market volatility that we were talking about in the beginning, Can you go through how that’s impacted transactions in April and May?

Jeff Edison, Chairman and CEO, Phillips Edison: So first, it’s early and it does take time. The life process of selling a property is you usually decide you’re gonna sell, you select a broker, the broker puts together an OM, you take it out to market. As in the market, you then whittle it down and then there’s a forty five to sixty day due diligence period. So when we’re talking about feedback, we’re not really gonna be able to get good feedback on what’s happened in the last sixty days for some period of time. And so a lot of what we’ll say is what we think is gonna be the outcome of the environment we’re in as opposed to like we’ve seen that dramatic change.

We haven’t seen deals fall out because of the disruption. Coming out of ICSC, a little surprisingly there was a very high volume. Mean if we were to guess where the total volume of product coming out, it’s over 7,500,000,000.0 of new product coming out that is in our is in the Open Air Shopping Center business at ICSC, which is a near record kind of amount. So really big amount of supply coming onto the market to sell, which is we love. Because that we think will give us the ability to find some select opportunities that meet our goals, which is on traditional grocery anchored shopping centers, we are looking for a 9% unlevered IRR.

And if we can find that with the number one or two grocer, we’re that is product that we have been the largest buyer of for probably fifteen years. And so yeah, we’re seeing a market that we think is gonna be generally positive. The only issue for us, I mean, since supply is gonna be good, the demand side is also accelerated a lot more institutional investors are coming into our space. We don’t like it when they come into space, but they can do that. And we’re but we think that the supply will be bigger than the impact of this increasing demand, which will give us some pretty good buying opportunities.

Caitlin Burrows, REITs Analyst, Goldman Sachs: And I guess just specifically on your guidance for this year, so it’s $350,000,000 to $450,000,000 of acquisitions. Obviously with that 9% IRR that you guys target, I guess what’s your confidence in meeting that range and what would lead you to be below or above it? We

Jeff Edison, Chairman and CEO, Phillips Edison: believe we’ll be at the high end of it given what’s here. If it opens up, have a balance sheet that allows us to go well beyond our guidance we can find those opportunities. It’s going to be we’re very disciplined buyers. We have been for thirty years. We will continue to be.

But if we can find our product at a larger scale that is something that we’d be very interested in doing.

Bob Myers, President and COO, Phillips Edison: So the only other thing I would add is with our guidance of $350,000,000 to $450,000,000 we’ve closed on right around $267,000,000 So we’re in a very good spot. And to Jeff’s point, we can be very selective between what we want to buy between now and the end of the year, certainly assets that would be accretive in nature. And then as Jeff mentioned, we are solving for above a 9% unlevered return. So we continue to look for assets that are anchored by the number one, number two grocer that’s providing good CAGR growth, good NOI growth between 35%. As I look at we bought 11 properties this year.

So some of those are 87% occupied, some are 90%. But if you look at what we acquired in 2023, there were 14 assets about 87% occupied by Publix, HEBs. The leasing demand that I spoke to earlier, that 87% occupancy is now at 98% with that retailer demand. If you look at the 14 assets we acquired last year, they were around I’m sorry, 93.1% occupied. Those assets are now around 95% occupied.

So you’re going to see us run a parallel path with our acquisition strategy to buy good quality grocery anchored projects that provide us more occupancy growth and NOI growth in addition to working our leasing spreads, renewal spreads and retention to get good organic growth in the portfolio. And I think if we do that well, we’ll be able to drive 3% to 4% same center NOI growth and hopefully more than that over the next few years. So we’re in a very, very good spot.

Caitlin Burrows, REITs Analyst, Goldman Sachs: Maybe John moving to you as you think about funding the acquisitions of the business generally, I think you have used equity in the past. I know you want to access the unsecured bond market. So, what’s your current thinking on those two funding sources?

John Caulfield, Executive Vice President and Chief Financial Officer, Phillips Edison: Sure. So, ultimately, we think it’s really important that we maintain our flexibility in terms of accessing both the debt equity markets. As we’ve talked about our guidance, we did raise equity in 2024. And as we look to 2025, our current guidance does not contemplate equity. So, we have the ability to buy three fifty to four fifty while maintaining our long term leverage target of mid five times on a debt to EBITDA basis.

We did increase our revolver in January to $1,000,000,000 to give us that flexibility. And so ultimately, we want to be able to access the debt and equity opportunistically. And so, we would look to extend our history of issuing in the unsecured bond market. We are BBB flat rated with both agencies. And ultimately, we would look to the equity markets opportunistically based on the continued strength of the acquisition environment.

But the key thing that we’re focused on is we buy assets that are going to meet or exceed our 9% unlevered IRR target, and we’re looking to grow our FFO and AFFO per share. And if we can do those things, then I think the opportunities in front of us are great.

Caitlin Burrows, REITs Analyst, Goldman Sachs: Does anybody in the audience have a question? No? Okay. Maybe we’ll just talk about redevelopment for a little bit. So in addition to the acquisition and the same store activity, you guys have a 40,000,000 to $50,000,000 investments of redevelopment each year.

Can you go through these opportunities and to what extent they’re in the existing portfolio versus in the acquisition properties and how deep that opportunity is?

Bob Myers, President and COO, Phillips Edison: Yeah, thanks for the question. So for the last few years we’ve been targeting between 40,000,000 and $50,000,000 of additional ground up development. And our development pipeline looks a little different than some of our peers. What we typically do is we build smaller, I’ll say five ten thousand square foot buildings in the parking lots of our shopping centers. So we’ve done this successfully for several years.

And by doing that, we’re leveraging our national account footprint with the Chipotle, Starbucks, Chick fil A’s, Pacific dentals of the world with a nice national lineup to occupy those spaces. We’re finding that rents can be anywhere between $45 and $70 a foot. And we’ve developed over 45 of those in our 300 shopping centers, as I mentioned over the last five years. In addition to that, one thing that makes us unique in this business is our relationship with Publix. We’re Publix’s second largest landlord with about 60 locations.

And they have a concept called a teardown rebuild. Whenever they have a store that’s about 30 to 35 years old, they use us, they want our locations and we partner together with them to give them a brand new store. So they actually do a teardown and they close the store for about a year and then rebuild it and reopen. So that is also part of what we do. We’ve done about five or six of those and have a wonderful relationship with Publix and we’ll probably continue to do those in the future as well.

John Caulfield, Executive Vice President and Chief Financial Officer, Phillips Edison: I think the one thing to add, which is that our returns on these projects are generally between 912% on a cash on cash basis. So we get great returns in this. It does come from both our existing portfolio as well as the acquisitions we’re looking for. I think that’s a way that we know that we can execute and deliver. So we’re looking for adjacent parcels.

We’re looking for particularly on the new acquisitions opportunities to continue to do that. So I would say we have probably a good two, three years’ worth of projects in terms of our upcoming. And two years ago I would have told you it was two to three years, and so here we’re two to three years. And so it’s something that we’re going to continue to push forward.

Jeff Edison, Chairman and CEO, Phillips Edison: Just in ending, we thank everybody for being here. Caitlin, thank you for moderating. And we think PECO is in a unique position today that we think is very advantageous given the uncertainty that’s going on. When you have a business that has a really strong offense where we can grow and have good growth, but we also have a great defense. And when you look at 30% of our income coming from our grocers, you look at our low leverage, you look at our necessity based nature of our retail, you look at the diversity of the neighbors that we have, you look at the team that’s been together for thirty years, you realize that what we’re acquiring is below replacement cost, so they can’t beat us on price.

And then you look at the fact that we provide the customer what they want. We provide price selection, convenience and safety to them close to their home. That is what PECO delivers and think that that opportunity of really strong offense where we can grow through our leasing and our acquisitions and our development. At the same time, you’ve got protection. That in this environment is a really good place to be and that’s why we hope that you guys will continue to support PECO.

So thank you.

Caitlin Burrows, REITs Analyst, Goldman Sachs: Thanks everybody.

Jeff Edison, Chairman and CEO, Phillips Edison: Yes. Thanks

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