Brixmor Property Group Inc. [BRX] Filings

10-Q 1 brx-20240930.htm 10-Q brx-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_____ to_____

Commission File Number: 001-36160 (Brixmor Property Group Inc.)

Commission File Number: 333-256637-01 (Brixmor Operating Partnership LP)

Brixmor Property Group Inc.

Brixmor Operating Partnership LP

(Exact Name of Registrant as Specified in Its Charter)


Maryland	(Brixmor Property Group Inc.)	45-2433192
Delaware	(Brixmor Operating Partnership LP)	80-0831163
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

100 Park Avenue, New York, New York 10017

(Address of Principal Executive Offices) (Zip Code)

212-869-3000

(Registrant’s Telephone Number, Including Area Code)

450 Lexington Avenue, New York, New York 10017

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BRX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Brixmor Property Group Inc. Yes ☑ No ☐ Brixmor Operating Partnership LP Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Brixmor Property Group Inc. Yes ☑ No ☐ Brixmor Operating Partnership LP Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Brixmor Property Group Inc.

Brixmor Operating Partnership LP

Large accelerated filer

☑

Non-accelerated filer

☐

Large accelerated filer

☐

Non-accelerated filer

☑

Smaller reporting company

☐

Accelerated filer

☐

Smaller reporting company

☐

Accelerated filer

☐

Emerging growth company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Brixmor Property Group Inc. ☐ Brixmor Operating Partnership LP ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Brixmor Property Group Inc. Yes ☐ No ☑ Brixmor Operating Partnership LP Yes ☐ No ☑

(APPLICABLE ONLY TO CORPORATE ISSUERS)

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

As of October 1, 2024, Brixmor Property Group Inc. had 302,063,370 shares of common stock outstanding.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended September 30, 2024 of Brixmor Property Group Inc. and Brixmor Operating Partnership LP. Unless stated otherwise or the context otherwise requires, references to the "Parent Company" or "BPG" mean Brixmor Property Group Inc. and its consolidated subsidiaries, and references to the "Operating Partnership" mean Brixmor Operating Partnership LP and its consolidated subsidiaries. Unless the context otherwise requires, the terms "the Company," "Brixmor," "we," "our," and "us" mean the Parent Company and the Operating Partnership, collectively.

The Parent Company is a real estate investment trust ("REIT") that 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. As of September 30, 2024, the Parent Company beneficially owned, through its direct and indirect interest in BPG Sub and the General Partner, 100% of the outstanding partnership common units (the "OP Units") in the Operating Partnership.

The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report:

•Enhances investors’ understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole, in the same manner as management views and operates the business;

•Eliminates duplicative disclosure and provides a more streamlined and readable presentation; and

•Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

Management operates the Parent Company and the Operating Partnership as one business. Because the Operating Partnership is managed by the Parent Company, and the Parent Company conducts substantially all of its operations through the Operating Partnership, the Parent Company’s executive officers are the Operating Partnership’s executive officers, and although, as a partnership, the Operating Partnership does not have a board of directors, we refer to the Parent Company’s board of directors as the Operating Partnership’s board of directors.

We believe it is important to understand the few differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its indirect interest in the Operating Partnership. As a result, the Parent Company does not conduct business itself other than issuing public equity from time to time. The Parent Company does not incur any material indebtedness. The Operating Partnership holds substantially all of our assets. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for OP Units, the Operating Partnership generates all capital required by the Company’s business. Sources of this capital include the Operating Partnership’s operations and its direct or indirect incurrence of indebtedness.

Equity, capital, and non-controlling interests are the primary areas of difference between the unaudited Condensed Consolidated Financial Statements of the Parent Company and those of the Operating Partnership. The Operating Partnership’s capital currently includes OP Units owned by the Parent Company through BPG Sub and the General Partner and has in the past, and may in the future, include OP Units owned by third parties. OP Units owned by third parties, if any, are accounted for outside of equity in non-controlling interests in the Parent Company’s financial statements.

The Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have material assets other than its indirect interest in the Operating Partnership. Therefore, while equity, capital, and non-controlling interests may differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are materially the same on their respective financial statements.

In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections of this report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements (but combined footnotes), separate controls and procedures sections, separate certification of periodic report under Section 302 of the Sarbanes-Oxley Act of 2002, and separate certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company.

TABLE OF CONTENTS


Item No.		Page
Part I - FINANCIAL INFORMATION
1.	Financial Statements	1
	Brixmor Property Group Inc. (unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023	2
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2024 and 2023	3
	Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2024 and 2023	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023	5
	Brixmor Operating Partnership LP (unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	6
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023	7
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2024 and 2023	8
	Condensed Consolidated Statements of Changes in Capital for the Three and Nine Months Ended September 30, 2024 and 2023	9
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023	10
	Brixmor Property Group Inc. and Brixmor Operating Partnership LP (unaudited)
	Notes to Condensed Consolidated Financial Statements	11
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
3.	Quantitative and Qualitative Disclosures about Market Risk	43
4.	Controls and Procedures	43
Part II - OTHER INFORMATION
1.	Legal Proceedings	44
1A.	Risk Factors	44
2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
3.	Defaults Upon Senior Securities	44
4.	Mine Safety Disclosures	44
5.	Other Information	44
6.	Exhibits	45

Forward-Looking Statements

This report may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, and other non-historical statements. You can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the section entitled "Risk Factors" in our Form 10-K for the year ended December 31, 2023 and in this report, as such factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the "SEC"), which are accessible on the SEC’s website at https://www.sec.gov. These factors include (1) changes in national, regional, and local economies, due to global events such as international military conflicts, international trade disputes, a foreign debt crisis, foreign currency volatility, or due to domestic issues, such as government policies and regulations, tariffs, energy prices, market dynamics, general economic contractions, rising interest rates, inflation, unemployment, or limited growth in consumer income or spending; (2) local real estate market conditions, including an oversupply of space in, or a reduction in demand for, properties similar to those in our Portfolio (defined hereafter); (3) competition from other available properties and e-commerce; (4) disruption and/or consolidation in the retail sector, the financial stability of our tenants, and the overall financial condition of large retailing companies, including their ability to pay rent and/or expense reimbursements that are due to us; (5) in the case of percentage rents, the sales volumes of our tenants; (6) increases in property operating expenses, including common area expenses, utilities, insurance, and real estate taxes, which are relatively inflexible and generally do not decrease if revenue or occupancy decrease; (7) increases in the costs to repair, renovate, and re-lease space; (8) earthquakes, wildfires, tornadoes, hurricanes, damage from rising sea levels due to climate change, other natural disasters, epidemics and/or pandemics, civil unrest, terrorist acts, or acts of war, any of which may result in uninsured or underinsured losses; and (9) changes in laws and governmental regulations, including those governing usage, zoning, the environment, and taxes. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. The forward-looking statements speak only as of the date of this report, and we expressly disclaim any obligation or undertaking to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except to the extent otherwise required by law.

iii

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share information)
	September 30, 2024		December 31, 2023
Assets
Real estate
Land	$	1,791,843	$	1,794,011
Buildings and improvements	9,373,627		9,201,876
	11,165,470		10,995,887
Accumulated depreciation and amortization	(3,372,860)		(3,198,980)
Real estate, net	7,792,610		7,796,907

Cash and cash equivalents	451,326		866
Restricted cash	1,121		18,038
Marketable securities	21,205		19,914
Receivables, net	260,571		278,775
Deferred charges and prepaid expenses, net	172,947		164,061

Other assets	50,037		54,155
Total assets	$	8,749,817	$	8,332,716


Liabilities
Debt obligations, net	$	5,338,681	$	4,933,525
Accounts payable, accrued expenses and other liabilities	530,560		548,890
Total liabilities	5,869,241		5,482,415

Commitments and contingencies (Note 15)	—		—

Equity
Common stock, $0.01 par value; authorized 3,000,000,000 shares; 311,190,362 and 309,723,386 shares issued and 302,063,370 and 300,596,394 shares outstanding	3,020		3,006
Additional paid-in capital	3,331,941		3,310,590
Accumulated other comprehensive loss	(759)		(2,700)
Distributions in excess of net income	(453,626)		(460,595)
Total equity	2,880,576		2,850,301
Total liabilities and equity	$	8,749,817	$	8,332,716
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenues
Rental income	$	319,989	$	307,118	$	955,065	$	927,440
Other revenues	693		196		1,547		1,111
Total revenues	320,682		307,314		956,612		928,551

Operating expenses
Operating costs	36,442		35,058		110,518		106,658
Real estate taxes	42,902		42,156		120,659		130,556
Depreciation and amortization	94,829		96,254		278,065		272,807
Impairment of real estate assets	5,863		—		11,143		17,836
General and administrative	30,250		29,182		88,430		86,868
Total operating expenses	210,286		202,650		608,815		614,725

Other income (expense)
Dividends and interest	5,289		273		15,798		345
Interest expense	(55,410)		(47,364)		(160,553)		(143,529)
Gain on sale of real estate assets	37,018		6,712		53,974		59,037
Gain on extinguishment of debt, net	273		6		554		4,356
Other	(726)		(555)		(1,700)		(1,645)
Total other expense	(13,556)		(40,928)		(91,927)		(81,436)

Net income	$	96,840	$	63,736	$	255,870	$	232,390

Net income per common share:
Basic	$	0.32	$	0.21	$	0.84	$	0.77
Diluted	$	0.32	$	0.21	$	0.84	$	0.77
Weighted average shares:
Basic	302,676		301,007		302,518		300,955
Diluted	303,608		302,511		303,377		302,447
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, in thousands)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income	$	96,840	$	63,736	$	255,870	$	232,390
Other comprehensive income (loss)
Change in unrealized gain (loss) on interest rate swaps, net (Note 6)	(13,484)		962		1,549		3,019
Change in unrealized gain on marketable securities	348		127		392		322
Total other comprehensive income (loss)	(13,136)		1,089		1,941		3,341
Comprehensive income	$	83,704	$	64,825	$	257,811	$	235,731
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited, in thousands, except per share data)
	Common Stock
	Number	Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Distributions in Excess of Net Income		Total
Beginning balance, January 1, 2023	299,916	$	2,999	$	3,299,496	$	8,851	$	(446,336)	$	2,865,010
Common stock dividends ($0.2600 per common share)	—	—		—		—		(79,298)		(79,298)
Equity based compensation expense	—	—		4,518		—		—		4,518
Other comprehensive loss	—	—		—		(3,731)		—		(3,731)
Issuance of common stock	632	6		(6)		—		—		—
Repurchases of common shares in conjunction with equity award plans	—	—		(11,229)		—		—		(11,229)
Net income	—	—		—		—		112,246		112,246
Ending balance, March 31, 2023	300,548	3,005		3,292,779		5,120		(413,388)		2,887,516
Common stock dividends ($0.2600 per common share)	—	—		—		—		(78,755)		(78,755)
Equity based compensation expense	—	—		5,019		—		—		5,019
Other comprehensive income	—	—		—		5,983		—		5,983
Issuance of common stock	45	1		—		—		—		1

Net income	—	—		—		—		56,408		56,408
Ending balance, June 30, 2023	300,593	3,006		3,297,798		11,103		(435,735)		2,876,172
Common stock dividends ($0.2600 per common share)	—	—		—		—		(78,754)		(78,754)
Equity based compensation expense	—	—		6,139		—		—		6,139
Other comprehensive income	—	—		—		1,089		—		1,089
Issuance of common stock	3	—		—		—		—		—
Repurchases of common shares in conjunction with equity award plans	—	—		(2)		—		—		(2)
Net income	—	—		—		—		63,736		63,736
Ending balance, September 30, 2023	300,596	$	3,006	$	3,303,935	$	12,192	$	(450,753)	$	2,868,380

Beginning balance, January 1, 2024	300,596	$	3,006	$	3,310,590	$	(2,700)	$	(460,595)	$	2,850,301
Common stock dividends ($0.2725 per common share)	—	—		—		—		(83,277)		(83,277)
Equity based compensation expense	—	—		3,781		—		—		3,781
Other comprehensive income	—	—		—		12,226		—		12,226
Issuance of common stock	703	7		(7)		—		—		—
Repurchases of common shares in conjunction with equity award plans	—	—		(12,962)		—		—		(12,962)
Net income	—	—		—		—		88,905		88,905
Ending balance, March 31, 2024	301,299	3,013		3,301,402		9,526		(454,967)		2,858,974
Common stock dividends ($0.2725 per common share)	—	—		—		—		(82,719)		(82,719)
Equity based compensation expense	—	—		5,955		—		—		5,955
Other comprehensive income	—	—		—		2,851		—		2,851
Issuance of common stock	46	—		—		—		—		—

Net income	—	—		—		—		70,125		70,125
Ending balance, June 30, 2024	301,345	3,013		3,307,357		12,377		(467,561)		2,855,186
Common stock dividends ($0.2725 per common share)	—	—		—		—		(82,905)		(82,905)
Equity based compensation expense	—	—		5,375		—		—		5,375
Other comprehensive loss	—	—		—		(13,136)		—		(13,136)
Issuance of common stock	718	7		19,228		—		—		19,235
Repurchases of common shares in conjunction with equity award plans	—	—		(19)		—		—		(19)
Net income	—	—		—		—		96,840		96,840
Ending balance, September 30, 2024	302,063	$	3,020	$	3,331,941	$	(759)	$	(453,626)	$	2,880,576
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
	Nine Months Ended September 30,
	2024		2023
Operating activities:
Net income	$	255,870	$	232,390
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	278,065		272,807
Accretion of debt premium and discount, net	(2,148)		(2,198)
Deferred financing cost amortization	5,369		5,163
Accretion of above- and below-market leases, net	(7,271)		(9,361)
Tenant inducement amortization and other	1,937		3,205
Impairment of real estate assets	11,143		17,836
Gain on sale of real estate assets	(53,974)		(59,037)
Equity based compensation	13,855		14,559
Gain on extinguishment of debt, net	(554)		(4,356)
Changes in operating assets and liabilities:
Receivables, net	13,671		(937)
Deferred charges and prepaid expenses	(30,780)		(37,619)
Other assets	(642)		(760)
Accounts payable, accrued expenses and other liabilities	(15,027)		21,820
Net cash provided by operating activities	469,514		453,512

Investing activities:
Improvements to and investments in real estate assets	(255,423)		(254,426)
Acquisitions of real estate assets	(81,862)		(1,914)
Proceeds from sales of real estate assets	141,901		162,194
Purchase of marketable securities	(26,064)		(20,442)
Proceeds from sale of marketable securities	25,264		21,566
Net cash used in investing activities	(196,184)		(93,022)

Financing activities:

Repayment of borrowings under unsecured revolving credit facility	(98,500)		(480,000)
Proceeds from borrowings under unsecured revolving credit facility	80,000		360,000
Proceeds from unsecured notes and term loans	796,152		200,000
Repayment of borrowings under unsecured notes	(367,449)		(194,254)
Deferred financing and debt extinguishment costs	(7,714)		(700)
Proceeds from issuances of common shares	19,280		—
Distributions to common stockholders	(248,576)		(236,881)

Repurchases of common shares in conjunction with equity award plans	(12,980)		(11,231)
Net cash provided by (used in) financing activities	160,213		(363,066)

Net change in cash, cash equivalents and restricted cash	433,543		(2,576)
Cash, cash equivalents and restricted cash at beginning of period	18,904		21,259
Cash, cash equivalents and restricted cash at end of period	$	452,447	$	18,683

Reconciliation to consolidated balance sheets:
Cash and cash equivalents	$	451,326	$	861
Restricted cash	1,121		17,822
Cash, cash equivalents and restricted cash at end of period	$	452,447	$	18,683

Supplemental disclosure of cash flow information:
Cash paid for interest, net of amount capitalized of $2,887 and $2,987	$	151,862	$	144,271
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except unit information)
	September 30, 2024		December 31, 2023
Assets
Real estate
Land	$	1,791,843	$	1,794,011
Buildings and improvements	9,373,627		9,201,876
	11,165,470		10,995,887
Accumulated depreciation and amortization	(3,372,860)		(3,198,980)
Real estate, net	7,792,610		7,796,907

Cash and cash equivalents	450,666		866
Restricted cash	1,121		18,038
Marketable securities	21,205		19,914
Receivables, net	260,571		278,775
Deferred charges and prepaid expenses, net	172,947		164,061

Other assets	50,037		54,155
Total assets	$	8,749,157	$	8,332,716


Liabilities
Debt obligations, net	$	5,338,681	$	4,933,525
Accounts payable, accrued expenses and other liabilities	530,560		548,911
Total liabilities	5,869,241		5,482,436

Commitments and contingencies (Note 15)	—		—

Capital
Partnership common units; 311,190,362 and 309,723,386 units issued and 302,063,370 and 300,596,394 units outstanding	2,880,675		2,852,980
Accumulated other comprehensive loss	(759)		(2,700)
Total capital	2,879,916		2,850,280
Total liabilities and capital	$	8,749,157	$	8,332,716
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenues
Rental income	$	319,989	$	307,118	$	955,065	$	927,440
Other revenues	693		196		1,547		1,111
Total revenues	320,682		307,314		956,612		928,551

Operating expenses
Operating costs	36,442		35,058		110,518		106,658
Real estate taxes	42,902		42,156		120,659		130,556
Depreciation and amortization	94,829		96,254		278,065		272,807
Impairment of real estate assets	5,863		—		11,143		17,836
General and administrative	30,250		29,182		88,430		86,868
Total operating expenses	210,286		202,650		608,815		614,725

Other income (expense)
Dividends and interest	5,289		273		15,798		345
Interest expense	(55,410)		(47,364)		(160,553)		(143,529)
Gain on sale of real estate assets	37,018		6,712		53,974		59,037
Gain on extinguishment of debt, net	273		6		554		4,356
Other	(726)		(555)		(1,700)		(1,645)
Total other expense	(13,556)		(40,928)		(91,927)		(81,436)

Net income	$	96,840	$	63,736	$	255,870	$	232,390



Net income per common unit:
Basic	$	0.32	$	0.21	$	0.84	$	0.77
Diluted	$	0.32	$	0.21	$	0.84	$	0.77
Weighted average units:
Basic	302,676		301,007		302,518		300,955
Diluted	303,608		302,511		303,377		302,447
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, in thousands)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income	$	96,840	$	63,736	$	255,870	$	232,390
Other comprehensive income (loss)
Change in unrealized gain (loss) on interest rate swaps, net (Note 6)	(13,484)		962		1,549		3,019
Change in unrealized gain on marketable securities	348		127		392		322
Total other comprehensive income (loss)	(13,136)		1,089		1,941		3,341
Comprehensive income	$	83,704	$	64,825	$	257,811	$	235,731
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
(Unaudited, in thousands)

	Partnership Common Units		Accumulated Other Comprehensive Income (Loss)		Total
Beginning balance, January 1, 2023	$	2,855,232	$	8,851	$	2,864,083
Distributions to partners	(78,397)		—		(78,397)
Equity based compensation expense	4,518		—		4,518
Other comprehensive loss	—		(3,731)		(3,731)

Repurchases of OP Units in conjunction with equity award plans	(11,229)		—		(11,229)
Net income	112,246		—		112,246
Ending balance, March 31, 2023	2,882,370		5,120		2,887,490
Distributions to partners	(78,754)		—		(78,754)
Equity based compensation expense	5,019		—		5,019
Other comprehensive income	—		5,983		5,983
Issuance of OP Units	1		—		1

Net income	56,408		—		56,408
Ending balance, June 30, 2023	2,865,044		11,103		2,876,147
Distributions to partners	(78,752)		—		(78,752)
Equity based compensation expense	6,139		—		6,139
Other comprehensive income	—		1,089		1,089

Repurchases of OP Units in conjunction with equity award plans	(2)		—		(2)
Net income	63,736		—		63,736
Ending balance, September 30, 2023	$	2,856,165	$	12,192	$	2,868,357

Beginning balance, January 1, 2024	$	2,852,980	$	(2,700)	$	2,850,280
Distributions to partners	(83,851)		—		(83,851)
Equity based compensation expense	3,781		—		3,781
Other comprehensive income	—		12,226		12,226

Repurchases of OP Units in conjunction with equity award plans	(12,962)		—		(12,962)
Net income	88,905		—		88,905
Ending balance, March 31, 2024	2,848,853		9,526		2,858,379
Distributions to partners	(82,719)		—		(82,719)
Equity based compensation expense	5,955		—		5,955
Other comprehensive income	—		2,851		2,851


Net income	70,125		—		70,125
Ending balance, June 30, 2024	2,842,214		12,377		2,854,591
Distributions to partners	(82,970)		—		(82,970)
Equity based compensation expense	5,375		—		5,375
Other comprehensive loss	—		(13,136)		(13,136)
Issuance of OP Units	19,235		—		19,235
Repurchases of OP Units in conjunction with equity award plans	(19)		—		(19)
Net income	96,840		—		96,840
Ending balance, September 30, 2024	$	2,880,675	$	(759)	$	2,879,916
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
	Nine Months Ended September 30,
	2024		2023
Operating activities:
Net income	$	255,870	$	232,390
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	278,065		272,807
Accretion of debt premium and discount, net	(2,148)		(2,198)
Deferred financing cost amortization	5,369		5,163
Accretion of above- and below-market leases, net	(7,271)		(9,361)
Tenant inducement amortization and other	1,937		3,205
Impairment of real estate assets	11,143		17,836
Gain on sale of real estate assets	(53,974)		(59,037)
Equity based compensation	13,855		14,559
Gain on extinguishment of debt, net	(554)		(4,356)
Changes in operating assets and liabilities:
Receivables, net	13,671		(937)
Deferred charges and prepaid expenses	(30,780)		(37,619)
Other assets	(642)		(760)
Accounts payable, accrued expenses and other liabilities	(15,027)		21,820
Net cash provided by operating activities	469,514		453,512

Investing activities:
Improvements to and investments in real estate assets	(255,423)		(254,426)
Acquisitions of real estate assets	(81,862)		(1,914)
Proceeds from sales of real estate assets	141,901		162,194
Purchase of marketable securities	(26,064)		(20,442)
Proceeds from sale of marketable securities	25,264		21,566
Net cash provided by used in investing activities	(196,184)		(93,022)

Financing activities:

Repayment of borrowings under unsecured revolving credit facility	(98,500)		(480,000)
Proceeds from borrowings under unsecured revolving credit facility	80,000		360,000
Proceeds from unsecured notes and term loans	796,152		200,000
Repayment of borrowings under unsecured notes	(367,449)		(194,254)
Deferred financing and debt extinguishment costs	(7,714)		(700)
Proceeds from issuances of OP Units	19,280		—
Partner distributions and repurchases of OP Units	(262,216)		(247,185)
Net cash provided by (used in) financing activities	159,553		(362,139)

Net change in cash, cash equivalents and restricted cash	432,883		(1,649)
Cash, cash equivalents and restricted cash at beginning of period	18,904		20,332
Cash, cash equivalents and restricted cash at end of period	$	451,787	$	18,683

Reconciliation to consolidated balance sheets:
Cash and cash equivalents	$	450,666	$	861
Restricted cash	1,121		17,822
Cash, cash equivalents and restricted cash at end of period	$	451,787	$	18,683

Supplemental disclosure of cash flow information:
Cash paid for interest, net of amount capitalized of $2,887 and $2,987	$	151,862	$	144,271
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BRIXMOR PROPERTY GROUP INC. AND BRIXMOR OPERATING PARTNERSHIP LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, dollars in thousands, unless otherwise stated)

1. Nature of Business and Financial Statement Presentation

Description of Business

Brixmor Property Group Inc. and subsidiaries (collectively, the "Parent Company") 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 the Parent Company conducts substantially all of its operations and owns substantially all of its assets. The Parent Company 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. The Parent Company engages in the ownership, management, leasing, acquisition, disposition, and redevelopment of retail shopping centers through the Operating Partnership and has no other substantial assets or liabilities other than through its investment in the Operating Partnership. The Parent Company, the Operating Partnership, and their consolidated subsidiaries (collectively, the "Company" or "Brixmor") owns and operates one of the largest publicly traded open-air retail portfolios by gross leasable area ("GLA") in the United States ("U.S."), comprised primarily of community and neighborhood shopping centers. As of September 30, 2024, the Company’s portfolio was comprised of 360 shopping centers (the "Portfolio") totaling approximately 63 million square feet of GLA. The Company’s high-quality national Portfolio is primarily located within established trade areas in the top 50 Core-Based Statistical Areas in the U.S., and its shopping centers are primarily anchored by non-discretionary and value-oriented retailers, as well as consumer-oriented service providers.

The Company does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company has a single reportable segment for disclosure purposes in accordance with U.S. generally accepted accounting principles ("GAAP").

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for the fair presentation of the unaudited Condensed Consolidated Financial Statements for the periods presented have been included. The operating results for the periods presented are not necessarily indicative of the results that may be expected for a full fiscal year. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2023 and accompanying notes included in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 12, 2024.

Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Parent Company, the Operating Partnership, each of their wholly owned subsidiaries, and all other entities in which they have a controlling financial interest. All intercompany transactions have been eliminated.

Income Taxes

The Parent Company has elected to qualify as a REIT in accordance with the Internal Revenue Code of 1986, as amended (the "Code"). To qualify as a REIT, the Parent Company must meet several organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains. Management intends to continue to satisfy these requirements and maintain the Parent Company's REIT status. As a REIT, the Parent Company generally will not be subject to U.S. federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code.

The Parent Company conducts substantially all of its operations through the Operating Partnership, which is organized as a limited partnership and treated as a pass-through entity for U.S. federal tax purposes. Therefore, U.S. federal income taxes do not materially impact the unaudited Condensed Consolidated Financial Statements of the Company.

If the Parent Company fails to qualify as a REIT in any taxable year, it will be subject to U.S. federal taxes at regular corporate rates and may not be able to qualify as a REIT for the four subsequent taxable years. Even if the Parent Company qualifies for taxation as a REIT, the Parent Company is subject to certain state and local taxes on its income and property, and to U.S. federal income and excise taxes on its undistributed taxable income as well as other income items, as applicable.

The Parent Company has elected to treat certain of its subsidiaries as taxable REIT subsidiaries (each a "TRS"), and the Parent Company may in the future elect to treat newly formed and/or other existing subsidiaries as TRSs. A TRS may participate in non-real estate related activities and/or perform non-customary services for tenants and is subject to certain limitations under the Code. A TRS is subject to U.S. federal, state, and local income taxes at regular corporate rates. Income taxes related to the Parent Company’s TRSs do not materially impact the unaudited Condensed Consolidated Financial Statements of the Company.

The Company has considered the tax positions taken for the open tax years and has concluded that no provision for income taxes related to uncertain tax positions is required in the Company’s unaudited Condensed Consolidated Financial Statements as of September 30, 2024 and December 31, 2023. Open tax years generally range from 2021 through 2023 but may vary by jurisdiction and issue. The Company recognizes penalties and interest accrued related to unrecognized tax benefits as income tax expense, which is included in Other on the Company’s unaudited Condensed Consolidated Statements of Operations.

New Accounting Pronouncements

Any recently issued accounting standards or pronouncements have been excluded as they either are not relevant to the Company, or they are not expected to have a material impact on the unaudited Condensed Consolidated Financial Statements of the Company.

2. Acquisition of Real Estate

During the nine months ended September 30, 2024, the Company acquired the following assets, in separate transactions:

Description(1)

Location

Month Acquired

GLA

Aggregate Purchase Price(2)

West Center

East Setauket, NY

Apr-24

42,594

17,470

The Fresh Market Shoppes

Hilton Head Island, SC

Jul-24

86,398

23,848

Land at King's Market

Roswell, GA

Jul-24

N/A

2,337

Acton Plaza

Acton, MA

Aug-24

137,572

38,207

266,564

81,862

(1)No debt was assumed related to the listed acquisitions.

(2)Aggregate purchase price includes $0.7 million of transaction costs.

During the nine months ended September 30, 2023, the Company acquired the following asset:

Description(1)

Location

Month Acquired

GLA

Aggregate Purchase Price(2)

Land at Aurora Plaza(3)

Aurora, CO

Apr-23

N/A

1,914

—

1,914

(1)No debt was assumed related to the listed acquisition.

(2)Aggregate purchase price includes $0.1 million of transaction costs.

(3)The Company terminated a ground lease and acquired the associated land parcel.

The aggregate purchase price of the assets acquired during the nine months ended September 30, 2024 and 2023, respectively, has been allocated as follows:


	Nine Months Ended September 30,
Assets	2024		2023
Land	$	23,451	$	1,914
Buildings	42,039		—
Building and tenant improvements	4,312		—
Above-market leases(1)	169		—
In-place leases(2)	18,009		—
Total assets acquired	$	87,980	$	1,914

Liabilities
Below-market leases(3)	$	6,118	$	—

Total liabilities	6,118		—
Net assets acquired	$	81,862	$	1,914

(1)The weighted average amortization period at the time of acquisition for above-market leases related to assets acquired during the nine months ended September 30, 2024 was 5.3 years.

(2)The weighted average amortization period at the time of acquisition for in-place leases related to assets acquired during the nine months ended September 30, 2024 was 4.5 years.

(3)The weighted average amortization period at the time of acquisition for below-market leases related to assets acquired during the nine months ended September 30, 2024 was 14.4 years.

3. Dispositions and Assets Held for Sale

During the three months ended September 30, 2024, the Company disposed of two shopping centers, three partial shopping centers, and one land parcel for aggregate net proceeds of $72.6 million, resulting in aggregate gain of $37.0 million and aggregate impairment of $0.3 million. In addition, during the three months ended September 30, 2024, the Company resolved contingencies related to previously disposed assets, resulting in a net loss of less than $0.1 million. During the nine months ended September 30, 2024, the Company disposed of five shopping centers, four partial shopping centers, and two land parcels for aggregate net proceeds of $140.0 million, resulting in aggregate gain of $52.1 million and aggregate impairment of $0.5 million. In addition, during the nine months ended September 30, 2024, the Company received aggregate net proceeds of $1.9 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 $1.9 million.

During the three months ended September 30, 2023, the Company disposed of one shopping center and one partial shopping center for aggregate net proceeds of $16.6 million, resulting in aggregate gain of $6.8 million. In addition, during the three months ended September 30, 2023, the Company resolved contingencies related to previously disposed assets, resulting in a net loss of $0.1 million. During the nine months ended September 30, 2023, the Company disposed of nine shopping centers and eight partial shopping centers for aggregate net proceeds of $161.9 million, resulting in aggregate gain of $58.9 million and aggregate impairment of $6.1 million. In addition, during the nine months ended September 30, 2023, the Company received aggregate net proceeds of $0.3 million related to a non-operating asset and resolved contingencies related to a previously disposed asset, resulting in net gain of $0.1 million.

As of September 30, 2024 and December 31, 2023, the Company had no properties held for sale.

There were no discontinued operations for the three and nine months ended September 30, 2024 and 2023 as none of the dispositions represented a strategic shift in the Company’s business that would qualify as discontinued operations.

4. Real Estate

The Company’s components of Real estate, net consisted of the following:


	September 30, 2024		December 31, 2023
Land	$	1,791,843	$	1,794,011
Buildings and improvements:
Buildings and tenant improvements	8,872,234		8,696,881
Lease intangibles(1)	501,393		504,995
	11,165,470		10,995,887
Accumulated depreciation and amortization(2)	(3,372,860)		(3,198,980)
Total	$	7,792,610	$	7,796,907

(1)As of September 30, 2024 and December 31, 2023, Lease intangibles consisted of $454.9 million and $456.8 million, respectively, of in-place leases and $46.5 million and $48.2 million, respectively, of above-market leases. These intangible assets are amortized over the term of each related lease.

(2)As of September 30, 2024 and December 31, 2023, Accumulated depreciation and amortization included $440.9 million and $445.5 million, respectively, of accumulated amortization related to Lease intangibles.

In addition, as of September 30, 2024 and December 31, 2023, the Company had intangible liabilities relating to below-market leases of $329.6 million and $329.8 million, respectively, and accumulated accretion of $248.9 million and $247.2 million, respectively. These intangible liabilities are included in Accounts payable, accrued expenses and other liabilities on the Company’s unaudited Condensed Consolidated Balance Sheets.

Below-market lease accretion income, net of above-market lease amortization for the three months ended September 30, 2024 and 2023 was $2.4 million and $3.3 million, respectively. Below-market lease accretion income, net of above-market lease amortization for the nine months ended September 30, 2024 and 2023 was $7.3 million and $9.4 million, respectively. These amounts are included in Rental income on the Company’s unaudited Condensed Consolidated Statements of Operations. Amortization expense associated with in-place lease value for the three months ended September 30, 2024 and 2023 was $3.6 million and $4.5 million, respectively. Amortization expense associated with in-place lease value for the nine months ended September 30, 2024 and 2023 was $10.0 million and $12.9 million, respectively. These amounts are included in Depreciation and amortization on the Company’s unaudited Condensed Consolidated Statements of Operations. The Company’s estimated below-market lease accretion income, net of above-market lease amortization expense, and in-place lease amortization expense for the next five years are as follows:


Year ending December 31,	Below-market lease accretion (income), net of above-market lease amortization expense		In-place lease amortization expense
2024 (remaining three months)	$	(2,378)	$	3,503
2025	(8,518)		11,745
2026	(7,515)		8,718
2027	(6,388)		6,705
2028	(5,832)		4,696

5. Impairments

Management periodically assesses whether there are any indicators, including property operating performance, changes in anticipated hold period, and general market conditions, that the carrying value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired. If management determines that the carrying value of a real estate asset is impaired, an impairment charge is recognized to reflect the estimated fair value.

The Company recognized the following impairments during the three and nine months ended September 30, 2024:


Three Months Ended September 30, 2024
Property Name(1)	Location	GLA	Impairment Charge
Southland Shopping Center - multi-tenant outparcel	Middleburg Heights, OH	149,891	$	5,611
Land at Springdale(2)	Mobile, AL	—	252
		149,891	$	5,863

Nine Months Ended September 30, 2024
Property Name(1)	Location	GLA	Impairment Charge
Southland Shopping Center - multi-tenant outparcel	Middleburg Heights, OH	149,891	$	5,611
Seacoast Shopping Center	Seabrook, NH	89,634	5,062
Land at Springdale(2)	Mobile, AL	—	252
Victory Square - Bridgestone Outparcel(2)	Savannah, GA	6,702	218
		246,227	$	11,143

(1)The Company recognized an impairment charge based upon changes in the anticipated hold periods of these properties and/or offers from third-party buyers in connection with the Company’s capital recycling program.

(2)The Company disposed of this property during the nine months ended September 30, 2024.

The Company did not recognize any impairments during the three months ended September 30, 2023. The Company recognized the following impairments during the nine months ended September 30, 2023:











Nine Months Ended September 30, 2023
Property Name(1)	Location	GLA	Impairment Charge
The Quentin Collection	Kildeer, IL	171,530	$	11,705
Broadway Faire - Theater Box(2)	Fresno, CA	39,983	2,102
Elk Grove Town Center(2)	Elk Grove Village, IL	61,609	1,796
The Manchester Collection - Crossroads(2)	Manchester, CT	14,867	1,155
Spring Mall(2)	Greenfield, WI	45,920	1,078
		333,909	$	17,836

(1)The Company recognized impairment charges based upon changes in the anticipated hold periods of these properties and/or offers from third party buyers in connection with the Company’s capital recycling program.

(2)The Company disposed of this property during the year ended December 31, 2023

The Company can provide no assurance that material impairment charges with respect to its Portfolio will not occur in future periods. See Note 3 for additional information regarding impairment charges taken in connection with the Company’s dispositions. See Note 8 for additional information regarding the fair value of operating properties that have been impaired.

6. Financial Instruments – Derivatives and Hedging

The Company’s use of derivative instruments is intended to manage its exposure to interest rate movements and such instruments are not utilized for speculative purposes. In certain situations, the Company may enter into derivative financial instruments such as interest rate swap agreements and interest rate cap agreements that result in the receipt and/or payment of future known and uncertain cash amounts, the value of which are determined by market interest rates.

Cash Flow Hedges of Interest Rate Risk

Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchanging the underlying notional amount. The Company utilizes interest rate swaps to partially hedge the cash flows associated with variable-rate debt or future cash flows associated with forecasted fixed-rate debt issuances. During the nine months ended September 30, 2024, the Company did not enter into any new interest rate swap agreements,

terminated three outstanding interest rate swap agreements, and four interest rate swap agreements expired at maturity. During the year ended December 31, 2023, the Company entered into 10 interest rate swap agreements. The Company has elected to present its interest rate derivatives on its unaudited Consolidated Balance Sheets on a gross basis as interest rate swap assets and interest rate swap liabilities. The gross derivative assets are included in Other assets and the gross derivative liabilities are included in Accounts payable, accrued expenses and other liabilities on the Company’s unaudited Condensed Consolidated Balance Sheets.

In May 2024, the Company terminated three outstanding forward-starting interest rate swaps with an aggregate notional amount of $150.0 million for aggregate net proceeds of $7.3 million. The forward-starting swaps were designated as hedges against interest rate risk on the issuance of the 2034 Notes (defined hereafter) and the 2035 Notes (defined hereafter), and thus the Company ascribed gains of $1.5 million and $5.8 million, respectively, to the notes. The gains are included in Accumulated other comprehensive loss on the Company's unaudited Condensed Consolidated Balance Sheets and will be amortized over the earlier of the term of the respective derivative instruments, or the term of the underlying notes, as a reduction to Interest expense on the Company’s unaudited Condensed Consolidated Statements of Operations.

Detail on the terms and fair value of the Company’s interest rate derivatives designated as cash flow hedges outstanding as of September 30, 2024 is as follows:


							Fair Value
Effective Date	Maturity Date	Swapped Variable Rate	Fixed Rate		Notional Amount		Assets		Liabilities
5/1/2023	7/26/2027	1 Month SOFR	3.5890	%	$	100,000	$	—	$	(804)
5/1/2023	7/26/2027	1 Month SOFR	3.5950	%	75,000		—		(614)
5/1/2023	7/26/2027	1 Month SOFR	3.5930	%	25,000		—		(204)
7/26/2024	7/26/2027	1 Month SOFR	4.0767	%	100,000		—		(2,110)
7/26/2024	7/26/2027	1 Month SOFR	4.0770	%	100,000		—		(2,111)
7/26/2024	7/26/2027	1 Month SOFR	4.0767	%	50,000		—		(1,055)
7/26/2024	7/26/2027	1 Month SOFR	4.0770	%	50,000		—		(1,055)
					$	500,000	$	—	$	(7,953)

Detail on the terms and fair value of the Company’s interest rate derivatives designated as cash flow hedges outstanding as of December 31, 2023 is as follows:


							Fair Value
Effective Date	Maturity Date	Swapped Variable Rate	Fixed Rate		Notional Amount		Assets		Liabilities
6/1/2022	7/26/2024	1 Month SOFR(1)	2.5875	%	$	50,000	$	710	$	—
6/1/2022	7/26/2024	1 Month SOFR(1)	2.5960	%	50,000		707		—
6/1/2022	7/26/2024	1 Month SOFR(1)	2.5860	%	100,000		1,421		—
6/1/2022	7/26/2024	1 Month SOFR(1)	2.5850	%	100,000		1,421		—
5/1/2023	7/26/2027	1 Month SOFR(2)	3.5890	%	100,000		59		—
5/1/2023	7/26/2027	1 Month SOFR(2)	3.5950	%	75,000		34		—
5/1/2023	7/26/2027	1 Month SOFR(2)	3.5930	%	25,000		12		—
7/26/2024	7/26/2027	1 Month SOFR(3)	4.0767	%	100,000		—		(2,073)
7/26/2024	7/26/2027	1 Month SOFR(3)	4.0770	%	100,000		—		(2,077)
7/26/2024	7/26/2027	1 Month SOFR(3)	4.0767	%	50,000		—		(1,038)
7/26/2024	7/26/2027	1 Month SOFR(3)	4.0770	%	50,000		—		(1,039)
6/14/2024	6/14/2034	Compound SOFR(4)	3.4400	%	100,000		—		(437)
6/14/2024	6/14/2034	Compound SOFR(4)	3.4370	%	25,000		—		(104)
6/14/2024	6/14/2034	Compound SOFR(4)	3.4400	%	25,000		—		(109)
					$	950,000	$	4,364	$	(6,877)

(1)Swapped variable rate includes a SOFR adjustment of 10 basis points.

(2)In April 2023, the Company entered into three interest rate swap agreements with an aggregate notional amount of $200.0 million. The interest rate swap agreements were designated as cash flow hedges that effectively fix the SOFR component of the interest rate on a portion of the outstanding debt under the Term Loan Facility (defined hereafter) at 3.59%.

(3)In November 2023, the Company entered into four forward-starting interest rate swap agreements with an aggregate notional amount of $300.0 million. The forward-starting interest rate swap agreements were designated as cash flow hedges that effectively fix the SOFR component of the interest rate on a portion of the outstanding debt under the Term Loan Facility at 4.08% beginning on the effective date.

(4)In December 2023, the Company entered into three forward-starting interest rate swap agreements with an aggregate notional amount of $150.0 million to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance date of $150.0 million of long-term debt. The Company hedged its exposure to the variability in future cash flows for a forecasted issuance of long-term debt over a maximum period ending June 2026. The forward-starting interest rate swaps were designated as cash flow hedges.

All of the Company's outstanding interest rate swap agreements for the periods presented were designated as cash flow hedges of interest rate risk. The fair value of the Company’s interest rate derivatives is determined using market standard valuation techniques, including discounted cash flow analyses, on the expected cash flows of each derivative. These analyses reflect the contractual terms of the derivative, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatility. These inputs are classified as Level 2 of the fair value hierarchy. The effective portion of changes in the fair value of derivatives designated as cash flow hedges is recognized in Other comprehensive income (loss) on the Company's unaudited Condensed Consolidated Statements of Comprehensive Income and is reclassified into earnings as interest expense in the period that the hedged transaction affects earnings.

The effective portion of the Company’s interest rate swaps that was recognized on the Company’s unaudited Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023 is as follows:


Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps)	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Change in unrealized gain (loss) on interest rate swaps	$	(11,161)	$	3,932	$	10,062	$	9,906
Accretion of interest rate swaps to interest expense	(2,323)		(2,970)		(8,513)		(6,887)
Change in unrealized gain (loss) on interest rate swaps, net	$	(13,484)	$	962	$	1,549	$	3,019

The Company estimates that $0.2 million will be reclassified from Accumulated other comprehensive loss as a decrease to interest expense over the next twelve months. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on the Company’s cash flow hedges during the three and nine months ended September 30, 2024 and 2023.

Non-Designated (Mark-to-Market) Hedges of Interest Rate Risk

The Company does not use derivatives for trading or speculative purposes. As of September 30, 2024 and December 31, 2023, the Company did not have any non-designated hedges.

Credit-risk-related Contingent Features

The Company has agreements with its derivative counterparties that contain provisions whereby if the Company defaults on certain of its indebtedness and the indebtedness has been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. If the Company was to be declared in default on its derivative contracts, it would be required to settle its obligations under such agreements at their termination value, including accrued interest.

7. Debt Obligations

As of September 30, 2024 and December 31, 2023, the Company had the following indebtedness outstanding:


	Carrying Value as of
	September 30, 2024		December 31, 2023		Stated Interest Rate(1)	Scheduled Maturity Date
Notes payable
Unsecured notes(2)	$	4,850,765	$	4,418,805	2.25% – 7.97%	2025 – 2035
Net unamortized premium	14,980		20,974
Net unamortized debt issuance costs	(21,867)		(17,680)
Total notes payable, net	$	4,843,878	$	4,422,099

Unsecured Credit Facility
Revolving Facility(3)	$	—	$	18,500	5.89%	2026
Term Loan Facility(3)(4)(5)	500,000		500,000		6.23%	2027
Net unamortized debt issuance costs	(5,197)		(7,074)
Total Unsecured Credit Facility and term loans	$	494,803	$	511,426

Total debt obligations, net	$	5,338,681	$	4,933,525

(1)Stated interest rates as of September 30, 2024 do not include the impact of the Company’s interest rate swap agreements (described below).

(2)The weighted average stated interest rate on the Company’s unsecured notes was 4.01% as of September 30, 2024.

(3)The Company's Revolving Facility (defined hereafter) and Term Loan Facility include a sustainability metric incentive, which can reduce the applicable credit spread by up to two basis points.

(4)Effective July 26, 2024, the Company has in place four interest rate swap agreements that convert the variable interest rate on $300.0 million outstanding under the Term Loan Facility to a fixed, combined interest rate of 4.08% (plus a spread, currently 93 basis points and SOFR adjustment of 10 basis points) through the maturity of the Term Loan Facility on July 26, 2027.

(5)Effective May 1, 2023, the Company has in place three interest rate swap agreements that convert the variable interest rate on $200.0 million outstanding under the Term Loan Facility to a fixed, combined interest rate of 3.59% (plus a spread, currently 93 basis points and SOFR adjustment of 10 basis points) through the maturity of the Term Loan Facility on July 26, 2027.

2024 Debt Transactions

The Operating Partnership has an unsecured credit facility as amended and restated on April 28, 2022 (the "Unsecured Credit Facility"), which is comprised of a $1.25 billion revolving loan facility (the "Revolving Facility") and a $500.0 million term loan (the "Term Loan Facility"). During the nine months ended September 30, 2024, the Operating Partnership repaid $18.5 million, net of borrowings, under the Revolving Facility, with proceeds from dispositions and the issuance of the 2034 Notes.

During the nine months ended September 30, 2024, the Operating Partnership repaid $300.4 million principal amount of the 3.650% Senior Notes due 2024 (the "2024 Notes"), representing all of the outstanding 2024 Notes, and $67.7 million principal amount of the 3.850% Senior Notes due 2025 (the "2025 Notes"), with $632.3 million aggregate principal amount of the 2025 Notes remaining outstanding. The Operating Partnership funded the 2024 Notes and 2025 Notes repayments with proceeds from the issuance of the 2034 Notes and 2035 Notes and dispositions. In connection with the repayment of the 2025 Notes, the Company recognized a $0.6 million gain on extinguishment of debt during the nine months ended September 30, 2024.

On January 12, 2024, the Operating Partnership issued $400.0 million aggregate principal amount of Senior Notes due 2034 (the "2034 Notes") at 99.816% of par. The Operating Partnership intends to use the net proceeds for general corporate purposes, including the repayment of indebtedness. The 2034 Notes bear interest at a rate of 5.500% per annum, payable semi-annually on February 15 and August 15 of each year, commencing August 15, 2024. The 2034 Notes will mature on February 15, 2034.

On May 28, 2024, the Operating Partnership issued $400.0 million aggregate principal amount of Senior Notes due 2035 (the "2035 Notes") at 99.222% of par. The Operating Partnership intends to use the net proceeds for general corporate purposes, including the repayment of indebtedness. The 2035 Notes bear interest at a rate of 5.750% per annum, payable semi-annually on February 15 and August 15 of each year, commencing August 15, 2024. The 2035 Notes will mature on February 15, 2035.

Pursuant to the terms of the Company’s unsecured debt agreements, the Company, among other things, is subject to the maintenance of various financial covenants. The Company was in compliance with these covenants as of September 30, 2024.

Debt Maturities

As of September 30, 2024 and December 31, 2023, the Company had accrued interest of $45.6 million and $47.1 million outstanding, respectively. As of September 30, 2024, scheduled maturities of the Company’s outstanding debt obligations were as follows:


Year ending December 31,
2024 (remaining three months)	$	—
2025	632,312
2026	607,542
2027	900,000
2028