Phillips Edison sets higher 2025 targets, aims for $350M-$450M in acquisitions due to strong leasing and portfolio expansion
Phillips Edison & Company, a leading real estate investment trust (REIT), has announced its Q2 2025 results, showcasing a shift in management's tone from cautious affirmation to confident guidance. The company has also raised its full-year 2025 earnings guidance.
Strong Operational Performance
The company's operational performance in Q2 2025 was impressive, with a 4.2% year-over-year increase in same-center NOI, surpassing the full-year midpoint guidance level. This growth was underpinned by an increase in in-line occupancy from 94.6% to 94.8% and anchor occupancy from 98.4% to 98.9% for the quarter.
Financial Highlights
Phillips Edison declared a dividend of $0.1025 for the current quarter, maintaining its commitment to shareholders. The company also announced the pricing of an offering of $350M aggregate principal amount of 5.250% senior unsecured notes due 2032, further bolstering its financial position.
For the Q2 2025 reported results, NAREIT FFO was $86.0 million, or $0.62 per diluted share. Core FFO, a more accurate measure of the company's operational performance, was $88.2 million, or $0.64 per diluted share.
Guidance and Outlook
Phillips Edison & Company has increased its guidance for same-center NOI growth from a range of 3%-3.5% last quarter to 3.1%-3.6% for the current quarter. The company's core FFO per share is expected to be in the range of $2.55 to $2.60 for the full-year 2025, with NAREIT FFO per share expected between $2.50 and $2.54.
Despite concerns about potential deceleration in NOI growth, acquisition market competitiveness, and cap rate spreads, management maintains that discipline and strong fundamentals will mitigate these risks. The company highlights its disciplined acquisition strategy, robust balance sheet, and confidence in delivering mid- to high single-digit core FFO per share growth for the future.
Tariff Risks
Management acknowledges tariff risks but estimates limited impact, with approximately 85% of their neighbours based on ABR expected to experience limited impact from tariffs.
The company's acquisition volume accelerated in Q2 2025, with $287 million year-to-date compared to $146 million for Q1, indicating a strong momentum in the company's growth strategy.
In conclusion, Phillips Edison & Company's strong operational performance in Q2 2025, coupled with its increased guidance and robust financial position, positions the company well for future growth. The company's disciplined approach and confidence in delivering mid- to high single-digit core FFO per share growth for the future bodes well for its shareholders.
Investing in Phillips Edison & Company, a leading real estate business, presents an opportunity with their strong Q2 2025 operational performance, which includes a 4.2% year-over-year increase in same-center NOI. Furthermore, the company's financial position has been bolstered by the offering of $350M senior unsecured notes due 2032, allowing for potential growth in the business.
