Phillips Edison & Co: Key Takeaways From Non Deal Roadshow

Research evidence excerpt

Phillips Edison & Co: Key Takeaways From Non Deal Roadshow

14 May 2026

Phillips Edison & Co

brands that are new to the market get through all the regulatory and

administrative hoops required to open their stores – the goal being that

faster time to store openings will help drive faster lease

commencements.

• Increasing Focus On Everyday Retail To Drive Future Earnings Growth:

While PECO currently owns just 12 non-grocery anchored (i.e. everyday

retail) assets, the long term goal is for this to represent 10% of the total

portfolio. Per management, cap rates on these assets are in the 7% range

vs mid 6’s (and even lower) for grocery anchored shopping centers.

Management is underwriting the acquisition of everyday retail assets at

an unlevered IRR of 10% vs. 9% for grocery anchored shopping centers.

Per management, the total addressable market for everyday retail is large

given it is highly fragmented across the country, and PECO has already

identified 50,000 such opportunities around its current portfolio

footprint. Management also believes these assets are often under-

managed and believe institutional ownership under the PECO platform

can generate stronger earnings growth from these assets via

remerchandising, asset management and pushing rent mark-to-market

opportunities. We generally believe that a more aggressive approach in

building this business would lead to better overall earnings growth at

PECO, which has historically been closely correlated with PECO’s

premium multiple versus its Shopping Center REIT peers (currently 14.5x

P/FFO vs. 14.0x P/FFO for the Shopping Center REIT sector). The case

for incremental earnings growth is especially true if acquisitions of

everyday retail assets (typically 7% cap rate) is funded by the sale of fully