Retail REIT Weekly Rundown

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Retail REITs

Retail REIT Weekly Rundown

Price Objective Change

Retail REIT earnings recap: 4 beat, 2 met on 2Q FFO

6 of 11 retail REITs we cover have reported 2Q26 results. 4 of 6 beat 2Q FFO street

estimates while 2 met. 5 raised and 1 maintained FFO/sh guidance. 5 REITs raised FY SS

NOI growth guidance. 2Q so far has largely been in-line with our expectations, another

quarter of strong results driven by leasing momentum and favorable tenant credit. Our

latest watch list analysis (see report) suggests exposure to risk tenants remains

manageable, evidenced by 4 of 6 REITs lowering bad debt assumptions this quarter with

YTD credit loss toward the low end of FY expectations. Our positive thesis on strip

center REITs remains intact driven by record leasing plus accretive acquisitions to drive

growth despite increasing institutional competition for the retail real estate.

Leasing demand stays resilient through macro noise

Macro noise and consumer health concerns have not dented leasing velocity, which sits

at or near record levels. Demand is broad based across grocers, restaurants,

health/wellness and services, outpacing constrained supply with no indications of

pullback or slowdown. FRT, BRX, REG and PECO reported record or near-record

occupancy with durable spreads, while sizable SNO pipelines position REITs for healthy,

multi-year NOI growth even as portfolios approach peak occupancy.

Minimal bad debt YTD, several FY outlooks lowered

Bad debt trended ahead of expectations with AKR, BRX, KRG and PECO lowering their

full-year assumptions. Rejected big box leases in 2025 presented opportunity to backfill

below-market spaces at outsized spreads, the majority of which we expect to see

commence in the back half of 2026. See inside for details on credit loss assumptions.

SNO pipelines represent ~4.7% of existing ABR on avg.

4 of 6 REITs saw their SNO spreads grow sequentially. On average, SNO pipelines

represent about 4.7% of existing total ABR, representing meaningful upside with clear

visibility. Leasing demand is replenishing the pipeline which remains robust.

5 of 6 REITs reported higher occupancy levels Y/Y

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