Phillips Edison & Company, Inc. (NASDAQ: PECO)

Phillips Edison & Company, Inc. is a real estate investment trust specializing in the ownership and operation of grocery-anchored shopping centers. The company focuses on omni-channel grocery-anchored neighborhood shopping centers, providing a mix of national, regional, and local retailers that offer necessity-based goods and services. Founded 35 years ago, Phillips Edison has established itself as one of the largest owners and operators in this sector, with a portfolio that spans 31 states. The company's strategy revolves around acquiring, operating, and managing well-occupied grocery-anchored shopping centers to deliver long-term growth and value creation for stakeholders.

The primary revenue stream for Phillips Edison comes from lease revenues derived from its real estate investments. As of December 31, 2025, the company's portfolio was 97.3% leased, indicating a high occupancy rate that contributes to stable income. The company's tenants, referred to as "Neighbors," include a diverse mix of retailers that cater to essential needs, thereby reducing exposure to distressed retailers and enhancing resiliency during economic downturns. The portfolio primarily consists of neighborhood centers anchored by the top two grocers by sales within their respective trade areas, ensuring strong foot traffic and high demand for leasing neighbor spaces.

• Grocery-Anchored Shopping Centers: Phillips Edison's core business segment involves the ownership and operation of grocery-anchored shopping centers. These centers are typically anchored by the #1 or #2 grocer by sales within their trade areas, ensuring strong foot traffic and high demand for leasing neighbor spaces. The company's portfolio includes 297 wholly-owned shopping centers and additional interests in unconsolidated joint ventures, comprising approximately 36.7 million square feet of space. The centers are located in fundamentally strong demographic markets throughout the United States, catering to a customer base that values convenience and necessity-based goods and services.

• Third-Party Investment Management: In addition to its core real estate business, Phillips Edison operates a third-party investment management business. This segment provides property management and advisory services to three unconsolidated institutional joint ventures and one private fund, collectively referred to as the "Managed Funds." The company has partial ownership interests in these entities, which own additional shopping centers. This segment generates fee revenue and allows Phillips Edison to leverage its expertise in managing grocery-anchored shopping centers for external clients.

Phillips Edison maintains a competitive position in the grocery-anchored shopping center industry due to its focused strategy and high-quality portfolio. The company's differentiated strategy, known as SOAR, emphasizes Spreads, Occupancy, Advantages of the Market, and Retention. This approach allows Phillips Edison to achieve strong new and renewal leasing spreads, high occupancy levels, and advantageous market positions. The company's portfolio is based on right-sized centers averaging 112,000 square feet, which provide higher growth potential and lower capital expenditures compared to larger centers. Additionally, Phillips Edison's investment grade balance sheet and access to multiple forms of capital enable it to pursue external growth opportunities in a disciplined manner.

The company's customer base consists of a mix of national, regional, and local retailers that provide necessity-based goods and services. These retailers benefit from the strong foot traffic generated by the grocery anchors and the convenient locations of Phillips Edison's shopping centers. The centers serve local communities by supporting entrepreneurs, connecting residents to essential goods and services, and enhancing the economic impact of the surrounding areas. As of December 31, 2025, approximately 70% of the company's annualized base rent was generated from shopping centers anchored by the top two grocers by sales within their trade areas, highlighting the strength of its tenant mix and the resilience of its revenue streams.