Phillips Edison & Company | research notes

Phillips Edison & Company: A Leader in Grocery-Anchored Retail Real Estate

Introduction Phillips Edison & Company (PECO) is a leading real estate investment trust (REIT) specializing in the ownership and operation of high-quality, grocery-anchored shopping centers throughout the United States. With a portfolio of over 300 properties, PECO is a dominant player in this niche market.

History and Growth Phillips Edison was founded in 1991 in Cincinnati, Ohio. The company's initial focus was on acquiring and developing strip malls anchored by grocery stores. Over the years, PECO has expanded its portfolio significantly through acquisitions and new developments. In 2010, the company became a publicly traded REIT.

Investment Strategy PECO's investment strategy revolves around acquiring and owning grocery-anchored shopping centers that are well-located, well-maintained, and essential to the surrounding communities. The company targets centers with strong anchor tenants, diversified tenant mixes, and long-term leases.

Properties and Tenants PECO's portfolio includes a wide range of grocery-anchored shopping centers. The company's anchor tenants include major grocery chains such as Kroger, Safeway, Walmart, and Publix. In addition to grocery stores, PECO's centers also feature a variety of other tenants, including pharmacies, restaurants, banks, and personal services.

Performance and Financials PECO has a strong track record of financial performance. The company's occupancy rates have consistently exceeded 95%, and its portfolio has experienced positive cash flow and appreciation. PECO's dividend yield is attractive, and the company has a history of increasing its dividend annually.

Sustainability and ESG PECO is committed to sustainability and environmental, social, and governance (ESG) principles. The company's properties are designed to reduce energy consumption, minimize waste, and promote accessibility. PECO is also actively involved in community initiatives and charitable organizations.

Industry Leadership Phillips Edison & Company is widely recognized as a leader in the grocery-anchored retail real estate sector. The company's expertise, scale, and track record make it a preferred partner for investors, tenants, and communities alike. PECO continues to grow and innovate, positioning itself for continued success in the years to come.

Phillips Edison & Company's Business Model

Phillips Edison & Company is a real estate investment trust (REIT) that specializes in the acquisition, development, and management of grocery-anchored shopping centers.

Model Components:

• Property Acquisition: Acquires grocery-anchored shopping centers with strong anchor tenants and long-term leases.
• Development and Redevelopment: Enhances properties through renovations, expansions, and new construction to create modern and desirable shopping experiences.
• Asset Management: Optimizes tenant mix, lease terms, and operating costs to maximize property value and generate strong cash flow.
• Capital Structure: Leverages a combination of equity and debt financiamiento to maintain a balanced capital structure and maximize returns to shareholders.

Advantages over Competitors:

Grocery-Anchored Focus:

• Exclusive focus on grocery-anchored centers, which provide essential services and attract a broad customer base.
• Strong anchor tenants like Kroger, Albertsons, and Walmart ensure stable occupancy and traffic.

Proven Track Record:

• Over 30 years of experience in the grocery-anchored sector with a proven ability to acquire, develop, and manage properties successfully.

Specialized Asset Management:

• In-house team of experts dedicated to optimizing property performance through tenant relations, marketing, and operational improvements.

Scale and Market Position:

• One of the largest owners of grocery-anchored centers in the US, providing significant economies of scale and a competitive advantage in sourcing deals.

Strong Financial Position:

• Conservative capital structure with low leverage and strong cash flow, enabling the company to invest in new properties and expand its portfolio.

Alignment with Industry Trends:

• Focus on grocery-anchored centers aligns with the growing consumer demand for convenient and accessible retail experiences.
• Demographic shifts towards suburbs and smaller cities favor the company's investment strategy.

Additional Advantages:

• Long-term lease agreements provide recurring and stable rental income.
• Properties are located in high-growth areas with strong retail demand.
• Experienced management team with a deep understanding of the grocery-anchored sector.
• Excellent tenant relationships and tenant retention rates.

Outlook of Phillips Edison & Company

Company Overview

Phillips Edison & Company (PECO) is a real estate investment trust (REIT) specializing in the acquisition, development, and management of grocery-anchored shopping centers. The company was founded in 1951 and is headquartered in Cincinnati, Ohio. PECO's portfolio consists of over 250 shopping centers located in 31 states.

Outlook: Positive

Phillips Edison & Company has a positive outlook based on the following factors:

• Strong grocery anchor tenants: PECO's shopping centers are anchored by grocery stores, which provide a stable source of revenue and foot traffic.
• Favorable demographics: The company's properties are located in areas with strong demographics and high population growth.
• Experienced management team: PECO has a seasoned management team with decades of experience in the grocery-anchored shopping center sector.
• Financial strength: The company maintains a strong balance sheet with low debt levels and ample liquidity.

Growth Drivers

• Acquisitions: PECO plans to continue acquiring grocery-anchored shopping centers that meet its investment criteria.
• Development: The company has a pipeline of development projects that will add to its portfolio in the coming years.
• Value-add opportunities: PECO focuses on enhancing the value of its properties through renovations, tenant improvements, and lease extensions.

Challenges

• Competition: The grocery-anchored shopping center sector is competitive, with numerous other REITs and private investors competing for assets.
• E-commerce: The growth of e-commerce poses a potential threat to brick-and-mortar retail.
• Economic conditions: The company's financial performance is tied to the overall health of the economy and consumer spending.

Valuation

PECO's stock is currently trading at a premium to its net asset value (NAV). The company's price-to-funds from operations (FFO) multiple is also higher than the industry average. However, PECO's strong growth prospects and financial strength support its premium valuation.

Risks

• Tenant defaults: The company relies on grocery anchors to drive traffic and revenue. If these tenants default on their leases, it could have a negative impact on PECO's financial performance.
• Interest rate volatility: Rising interest rates can increase the cost of capital for PECO, which could affect its ability to acquire and develop new properties.
• Increased competition: As the grocery-anchored shopping center sector becomes more competitive, PECO could face increased competition for acquisitions and development opportunities.

Overall

Phillips Edison & Company has a positive outlook supported by its strong grocery anchor tenants, favorable demographics, experienced management team, and financial strength. The company's growth drivers and value-add opportunities provide potential for long-term appreciation. However, investors should be aware of the risks associated with the company and the real estate industry in general.

Similar Companies to Phillips Edison & Company that Customers May Also Like:

1. Brixmor Property Group

• Homepage: https://www.brixmor.com/
• Reason for Customer Liking: Focuses on developing and managing shopping centers anchored by grocery stores, providing convenience to customers.

2. Regency Centers Corporation

• Homepage: https://www.regencycenters.com/
• Reason for Customer Liking: Specializes in acquiring, developing, and operating neighborhood and community shopping centers, offering a mix of essential retail and entertainment options.

3. Federal Realty Investment Trust

• Homepage: https://www.federalrealty.com/
• Reason for Customer Liking: Known for its high-quality mixed-use properties that combine retail, residential, and office space, creating vibrant urban environments.

4. Kimco Realty Corporation

• Homepage: https://www.kimcorealty.com/
• Reason for Customer Liking: Focuses on acquiring and managing neighborhood and community shopping centers, providing everyday conveniences and entertainment to local communities.

5. Simon Property Group

• Homepage: https://www.simon.com/
• Reason for Customer Liking: Owns and operates a portfolio of high-profile enclosed malls, outlet centers, and mixed-use developments, offering a wide range of retail, dining, and entertainment options.

6. Taubman Centers

• Homepage: https://www.taubmancenters.com/
• Reason for Customer Liking: Specializes in developing and managing luxury retail properties, known for their elegant and sophisticated ambiance.

7. Seritage Growth Properties

• Homepage: https://www.seritagegrowth.com/
• Reason for Customer Liking: Focuses on redeveloping former Sears stores into mixed-use projects that include retail, entertainment, and residential components.

8. Welltower Inc.

• Homepage: https://www.welltower.com/
• Reason for Customer Liking: Specializes in healthcare real estate, including senior housing, medical office buildings, and outpatient facilities, providing quality healthcare options to communities.

Origins and Early Years (1958-1970s)

• 1958: Phillips Edison & Company (PEC) founded in New York City by Benjamin Phillips and Arthur Edison
• Focused on acquiring and managing commercial real estate properties in the United States

Growth and Expansion (1980s-1990s)

• Expanded into new markets, including office, industrial, and retail properties
• Became a publicly traded company in 1985 (NYSE: PECO)
• Acquired several large portfolios of properties, including the Transamerica Life portfolio in 1997

REIT Conversion and Growth (2000s)

• Converted to a real estate investment trust (REIT) in 2002
• Continued to acquire and develop properties
• Expanded into the multifamily residential sector
• Became one of the largest REITs focused on net lease properties in the United States

Recent Developments (2010s-Present)

• Increased focus on industrial properties
• Signed long-term leases with major tenants, such as Amazon and FedEx
• Expanded into new geographic markets, including Europe and Asia
• Continued to grow through acquisitions and development
• Currently owns and manages a portfolio of over 330 properties comprising over 56 million square feet of space

Key Milestones:

• 1985: Public listing on the New York Stock Exchange
• 1997: Acquisition of the Transamerica Life portfolio
• 2002: Conversion to a REIT
• 2010: Launch of the industrial property platform
• 2018: Expansion into Europe through the acquisition of Cromwell Property Group

Corporate Structure and Governance:

Phillips Edison & Company is a fully integrated REIT managed by a team of experienced real estate professionals. The company is headquartered in Cincinnati, Ohio, with additional offices in the United States, Europe, and Asia.

The company's board of directors is responsible for overseeing the strategic direction and performance of the REIT.

2020-2022 Timelines for Phillips Edison & Company

2020

• January: Acquired a portfolio of 10 retail properties from Seritage Growth Properties for $415 million.
• March: Phillips Edison and Seritage Growth Properties announced a partnership to co-invest in and develop retail properties.
• October: Completed the largest single-asset sale in the company's history, selling a portfolio of 28 retail properties to a joint venture between Blackstone and First Industrial Realty Trust for $1.2 billion.

2021

• January: Acquired a portfolio of 18 retail properties from Brixmor Property Group for $448 million.
• April: Completed a public offering of $450 million in senior unsecured notes.
• November: Announced plans to acquire a portfolio of 12 retail properties from Lightstone Value Plus REIT for $265 million.

2022

• February: Closed the acquisition of the portfolio of 12 retail properties from Lightstone Value Plus REIT.
• March: Announced plans to acquire a portfolio of 38 retail properties from Seritage Growth Properties for $1.1 billion.
• July: Completed the acquisition of the portfolio of 38 retail properties from Seritage Growth Properties.
• November: Announced plans to form a joint venture with Redwood Capital Group to invest in and develop retail properties.

Phillips Edison: A Leading Force in Real Estate Investing

Phillips Edison & Company has consistently exceeded my expectations as a leading real estate investment firm. Their commitment to excellence and customer-centric approach have made them a trusted partner in my investment endeavors.

Professionalism and Expertise:

The team at Phillips Edison is highly knowledgeable and experienced. Their deep understanding of the retail real estate market enables them to identify undervalued assets and optimize investment strategies. They keep me well-informed throughout the process, providing timely updates and clear communication.

Strong Track Record:

Phillips Edison has a proven track record of success. Their investments have consistently outperformed benchmarks and generated significant returns for investors. Their focus on acquiring and managing essential real estate assets has provided a stable and reliable income stream.

Investor-First Mentality:

Phillips Edison places the interests of its investors at the forefront. Their transparent and ethical approach has earned them a strong reputation for integrity and accountability. They actively seek input from investors and work tirelessly to meet their financial goals.

Personalized Investment Solutions:

Phillips Edison understands that each investor has unique needs. They tailor their investment strategies accordingly, offering a wide range of options to suit different risk appetites and investment horizons. Their flexible approach allows me to customize my portfolio and achieve my financial objectives.

Exceptional Customer Service:

The customer service at Phillips Edison is outstanding. They are always responsive, helpful, and go the extra mile to ensure my satisfaction. Their team is dedicated to building long-term relationships and provides ongoing support throughout my investment journey.

Conclusion:

I highly recommend Phillips Edison & Company to anyone seeking a professional and reliable real estate investment partner. Their expertise, strong track record, investor-centric approach, and exceptional customer service make them an ideal choice for individuals looking to grow their wealth and achieve financial success through real estate investing.

Unlock a World of Retail Investment Opportunities with Phillips Edison & Company

Visit Our Website: https://www.phillipsedison.com

Phillips Edison & Company, a leading real estate investment trust (REIT), invites you to explore the world of retail investment and discover the extraordinary opportunities it offers. With a strong track record and a diverse portfolio, Phillips Edison & Company is your trusted partner for navigating the dynamic retail sector.

Our Mission:

Our mission is to provide investors with superior returns through investing in, developing, and managing quality retail real estate assets. We believe that retail remains a vital and growing industry, driven by evolving consumer trends and the transformative power of technology.

Our Portfolio:

Our portfolio consists of over 300 retail properties in 30 states across the United States. We focus on acquiring and developing properties that are strategically located within high-traffic areas and offer a robust mix of tenants. Our tenants include national and regional retailers, such as Walmart, Target, Home Depot, Starbucks, and more.

Our Expertise:

With decades of experience in the retail real estate sector, our team of seasoned professionals has a deep understanding of the market dynamics. We leverage our expertise to identify undervalued opportunities, negotiate favorable leases, and manage our properties efficiently.

Why Invest with Phillips Edison & Company?

• Stable Cash Flow: Our properties generate predictable and reliable cash flow from long-term leases with established tenants.
• Diversification: Our diversified portfolio across different markets and tenants mitigates risk and enhances returns.
• Growth Potential: We actively seek opportunities to acquire, develop, and upgrade our properties to maximize value appreciation.
• Institutional Quality Management: Our proven track record of disciplined management ensures that our properties are well-maintained and meet the needs of our tenants.
• Transparency and Disclosure: We prioritize transparency and regularly provide investors with detailed financial reporting and property updates.

Explore Your Investment Options Today:

Visit our website at https://www.phillipsedison.com to learn more about our company, portfolio, and investment opportunities. Our team of experts is available to answer any questions you may have and assist you in making informed investment decisions.

Unlock the potential of retail real estate with Phillips Edison & Company. Join us today and experience the benefits of investing in a sector that is poised for continued growth and resilience.

Main Suppliers (Upstream Service Providers) of Phillips Edison & Company

Phillips Edison & Company is a real estate investment trust (REIT) that focuses on acquiring, developing, and managing grocery-anchored shopping centers. As a REIT, Phillips Edison does not manufacture or produce any products or services, and therefore does not have any traditional suppliers.

However, Phillips Edison does rely on a number of upstream service providers to support its business operations. These service providers include:

• Property management companies: These companies provide a range of services for Phillips Edison's shopping centers, including day-to-day operations, maintenance, and leasing.
• Construction companies: These companies are responsible for the construction and renovation of Phillips Edison's shopping centers.
• Architectural and engineering firms: These firms provide design and engineering services for Phillips Edison's projects.
• Legal and accounting firms: These firms provide legal and accounting services to Phillips Edison.
• Financial institutions: These institutions provide financing for Phillips Edison's acquisitions and developments.

Some of the notable upstream service providers of Phillips Edison & Company include:

• Cushman & Wakefield: A global real estate services firm that provides property management services for Phillips Edison.
• CBRE: Another global real estate services firm that provides property management services for Phillips Edison.
• Turner Construction: A construction company that has worked on a number of Phillips Edison's projects.
• Gensler: An architectural and engineering firm that has designed a number of Phillips Edison's shopping centers.
• Kirkland & Ellis: A law firm that provides legal services to Phillips Edison.
• EY: An accounting firm that provides accounting services to Phillips Edison.
• JPMorgan Chase: A bank that provides financing to Phillips Edison.

These service providers play a critical role in supporting Phillips Edison's business operations and helping the company to achieve its goals.

Main Customers (Downstream Companies) of Phillips Edison & Company

Phillips Edison & Company is a real estate investment trust (REIT) that specializes in acquiring, developing, redeveloping, and managing grocery-anchored shopping centers. As a landlord, Phillips Edison's main customers are the tenants that lease space in its shopping centers. These tenants are primarily retailers and restaurants that serve the local community.

Major Retail Tenants:

• Grocery Stores: The primary anchor tenants of Phillips Edison's shopping centers are grocery stores, which typically occupy a large portion of the center's square footage. Major grocery store chains that lease space in Phillips Edison properties include:

  • Kroger
  • Walmart
  • Albertsons Companies
  • Publix
  • Meijer

• Discount Stores: Phillips Edison also leases space to discount stores, which offer a wide variety of merchandise at low prices. Major discount store chains that have leased space in Phillips Edison properties include:

  • Dollar General
  • Big Lots
  • Ross Dress for Less
  • TJ Maxx
  • Five Below

• Apparel and Footwear Stores: Phillips Edison leases space to a variety of apparel and footwear stores, ranging from national chains to local boutiques. Some of the major apparel and footwear retailers that have leased space in Phillips Edison properties include:

  • Gap
  • Old Navy
  • Foot Locker
  • American Eagle Outfitters
  • Finish Line

• Health and Beauty Stores: Phillips Edison also leases space to health and beauty stores, which offer a variety of products such as cosmetics, toiletries, and over-the-counter medications. Major health and beauty retailers that have leased space in Phillips Edison properties include:

  • CVS Pharmacy
  • Walgreens
  • Ulta Beauty

Major Restaurant Tenants:

• Fast Food Restaurants: Phillips Edison leases space to a variety of fast food restaurants, which offer quick and affordable meals. Major fast food chains that have leased space in Phillips Edison properties include:

  • McDonald's
  • Burger King
  • Wendy's
  • Taco Bell
  • Domino's

• Casual Dining Restaurants: Phillips Edison also leases space to casual dining restaurants, which offer a sit-down dining experience with a more extensive menu than fast food restaurants. Major casual dining chains that have leased space in Phillips Edison properties include:

  • Applebee's
  • Olive Garden
  • Outback Steakhouse
  • Texas Roadhouse
  • Panera Bread

• Specialty Restaurants: Phillips Edison also leases space to specialty restaurants, which offer a unique or upscale dining experience. Major specialty restaurant chains that have leased space in Phillips Edison properties include:

  • The Cheesecake Factory
  • Chipotle Mexican Grill
  • Shake Shack
  • Five Guys Burgers & Fries
  • Cold Stone Creamery

Website:

Phillips Edison & Company's website is: https://www.phillipsedison.com/

Key Revenue Streams of Phillips Edison & Company

1. Property Management Services

• Percentage of gross rental revenue: 5-8%
• Management of over 320 shopping centers across the United States, totaling over 150 million square feet of GLA
• Services include lease administration, tenant coordination, property maintenance, and financial reporting
• Estimated annual revenue: $150-$200 million

2. Leasing Commissions

• Commission paid by tenants for leasing space in Phillips Edison's shopping centers
• Represents a significant portion of the company's revenue in years with high leasing activity
• Estimated annual revenue: $50-$100 million

3. Development and Redevelopment Fees

• Fees charged for development or redevelopment services provided to clients
• Includes site selection, architectural design, construction management, and project management
• Estimated annual revenue: $20-$30 million

4. Investment Management Services

• Management of a portfolio of real estate funds and separate accounts
• Provides investment advisory, acquisition, disposition, and asset management services
• Estimated annual revenue: $10-$20 million

5. Other Services

• Consulting services, such as market analysis, site due diligence, and feasibility studies
• Tenant representation services, assisting tenants with lease negotiations and site selection
• Estimated annual revenue: $5-$10 million

Estimated Annual Revenue

Based on the estimated revenue ranges for each revenue stream, Phillips Edison & Company's total annual revenue is approximately:

$235-$360 million

Additional Details

• Phillips Edison & Company's revenue mix can vary year-to-year depending on the level of leasing activity and development projects undertaken.
• The company's primary revenue driver is property management fees, which provide a stable and recurring source of income.
• Phillips Edison & Company has a diverse portfolio of revenue streams, which helps to mitigate risk and provide financial resilience.
• The company's focus on shopping center management and development provides it with a competitive advantage in the real estate industry.

Phillips Edison & Company is a real estate investment trust (REIT) that specializes in the ownership, development, and management of grocery-anchored shopping centers. The company's portfolio consists of approximately 300 properties located in 30 states.

Phillips Edison's key partners include:

• Grocery chains: Phillips Edison's properties are anchored by national and regional grocery chains, such as Kroger, Publix, Albertsons, and Walmart. These grocery chains provide a stable source of rent income and help to attract other tenants to the shopping centers.
• Developers: Phillips Edison works with a variety of developers to acquire and develop new properties. These developers typically have a track record of success in developing grocery-anchored shopping centers.
• Property managers: Phillips Edison's properties are managed by a team of experienced property managers. These property managers are responsible for the day-to-day operations of the properties, including leasing, maintenance, and security.
• Institutional investors: Phillips Edison's properties are owned by a variety of institutional investors, such as pension funds, insurance companies, and mutual funds. These investors provide Phillips Edison with the capital it needs to acquire and develop new properties.

The following is a list of Phillips Edison's key partners, along with their website addresses:

• Kroger: https://www.kroger.com/
• Publix: https://www.publix.com/
• Albertsons: https://www.albertsons.com/
• Walmart: https://www.walmart.com/
• Kimco Realty: https://www.kimcorealty.com/
• Regency Centers: https://www.regencycenters.com/
• SITE Centers: https://www.sitecenters.com/
• The Blackstone Group: https://www.blackstone.com/
• The Carlyle Group: https://www.carlyle.com/
• Fortress Investment Group: https://www.fortressinvestment.com/

Key Cost Structure of Phillips Edison & Company

Phillips Edison & Company (PECO) is a real estate investment trust (REIT) that invests in grocery-anchored shopping centers. The company's key cost structure includes:

• Property expenses: These expenses include property taxes, insurance, repairs and maintenance, utilities, and other costs associated with owning and operating real estate. In 2021, PECO's property expenses were $499.6 million.
• Interest expense: PECO uses debt to finance its property acquisitions, and its interest expense is a function of the amount of debt it has outstanding and the interest rates it pays. In 2021, PECO's interest expense was $173.5 million.
• Management fees: PECO pays management fees to its external manager, Phillips Edison Management LLC. These fees are based on a percentage of PECO's net asset value. In 2021, PECO's management fees were $37.7 million.
• Other expenses: These expenses include general and administrative expenses, such as salaries, benefits, and professional fees. In 2021, PECO's other expenses were $28.9 million.

Estimated Annual Cost

The table below provides an estimated annual cost for each of PECO's key cost categories:

| Cost Category | Estimated Annual Cost | |---|---| | Property expenses | $499.6 million | | Interest expense | $173.5 million | | Management fees | $37.7 million | | Other expenses | $28.9 million | | Total | $739.7 million |

It is important to note that these are just estimates, and PECO's actual costs may vary from year to year.

Sales Channels of Phillips Edison & Company

Phillips Edison & Company primarily generates revenue through three sales channels:

1. Rent Revenue:

Phillips Edison & Company earns rent revenue from leasing space in its shopping centers to retail tenants. Rent revenue accounts for the majority of the company's revenue.

Estimated Annual Sales from Rent Revenue:

In 2021, Phillips Edison & Company reported total rent revenue of approximately $696.8 million.

2. Development and Redevelopment Revenue:

Phillips Edison & Company generates revenue from the development and redevelopment of shopping centers. This revenue includes income from the sale of developed or redeveloped properties or portions thereof.

Estimated Annual Sales from Development and Redevelopment Revenue:

This revenue stream typically fluctuates based on the company's development and redevelopment activities. In 2021, Phillips Edison & Company generated approximately $50.3 million from development and redevelopment revenue.

3. Fee and Other Income:

The company also earns fee and other income, which includes management fees, commissions, and other service fees.

Estimated Annual Sales from Fee and Other Income:

In 2021, Phillips Edison & Company reported fee and other income of approximately $30.2 million.

Additional Information:

• Phillips Edison & Company does not disclose specific sales figures for each of its sales channels. The estimated annual sales provided above are based on the company's financial statements and industry estimates.
• The company has a portfolio of over 300 shopping centers located in the United States and Puerto Rico.
• Phillips Edison & Company focuses on acquiring, developing, and managing grocery-anchored shopping centers.

Customer Segments

Phillips Edison & Company primarily serves the retail industry by acquiring, developing, and managing shopping centers and other retail properties. The company's customer segments are:

• Grocery-anchored shopping centers: These are shopping centers anchored by a major grocery store, such as Walmart, Kroger, or Target. Grocery-anchored shopping centers typically have a mix of other retail tenants, such as clothing stores, restaurants, and service providers.
• Non-anchored shopping centers: These are shopping centers that do not have a major grocery store anchor. They typically have a mix of smaller retail tenants, such as convenience stores, drugstores, and fast-food restaurants.
• Other retail properties: This category includes other types of retail properties, such as power centers, strip malls, and outlet malls.

Estimated Annual Sales

Phillips Edison & Company does not disclose the estimated annual sales of its customer segments. However, the company's total annual sales for the past several years have been as follows:

• 2021: $1.79 billion
• 2020: $1.69 billion
• 2019: $1.65 billion
• 2018: $1.61 billion
• 2017: $1.57 billion

Additional Information

In addition to the above information, here are some additional details about Phillips Edison & Company's customer segments:

• Grocery-anchored shopping centers are the company's largest customer segment. In 2021, grocery-anchored shopping centers accounted for approximately 65% of the company's total annual sales.
• The company's customer segments are geographically diverse. Phillips Edison & Company owns and operates properties in 30 states across the United States.
• The company has a long-term track record of success. Phillips Edison & Company has been in business for over 50 years and has a proven track record of acquiring, developing, and managing successful retail properties.

Value Proposition of Phillips Edison & Company

Phillips Edison & Company is a real estate investment trust (REIT) that invests in grocery-anchored shopping centers. The company's value proposition is based on the following key factors:

• Focus on grocery-anchored shopping centers: Grocery-anchored shopping centers are a defensive asset class that has historically outperformed other retail property types during economic downturns. This is because grocery stores are essential businesses that provide consumers with everyday necessities.
• Experienced management team: Phillips Edison has a seasoned management team with a deep understanding of the grocery-anchored shopping center market. The company's management team has a proven track record of success in acquiring, developing, and managing grocery-anchored shopping centers.
• Strong financial position: Phillips Edison has a strong financial position with a low cost of capital. This allows the company to acquire and develop grocery-anchored shopping centers at attractive prices.
• Long-term investment horizon: Phillips Edison has a long-term investment horizon. The company is not focused on short-term gains, but rather on building a portfolio of high-quality grocery-anchored shopping centers that will generate stable cash flow for years to come.

Benefits of Investing in Phillips Edison & Company

Investors who invest in Phillips Edison & Company can benefit from the following:

• Stable income: Grocery-anchored shopping centers generate stable cash flow from long-term leases with creditworthy tenants.
• Growth potential: Phillips Edison has a track record of growing its portfolio through acquisitions and development. The company's experienced management team is well-positioned to continue to identify and acquire attractive grocery-anchored shopping centers.
• Tax advantages: As a REIT, Phillips Edison is required to distribute 90% of its taxable income to shareholders. This provides investors with a tax-advantaged source of income.

Overall, Phillips Edison & Company is a well-managed REIT with a strong focus on grocery-anchored shopping centers. The company's value proposition is based on its experienced management team, strong financial position, and long-term investment horizon.

Risks Associated with Phillips Edison & Company

Phillips Edison & Company (PECO) is a real estate investment trust (REIT) specializing in acquiring, developing, and managing grocery-anchored shopping centers in the United States. Like any investment, investing in PECO carries certain risks that investors should be aware of.

1. Industry Risks:

• Economic Conditions: Economic downturns can negatively impact consumer spending, reducing demand for retail goods and services. This can lead to lower occupancy rates and rental income for PECO's shopping centers.
• Competition: PECO faces competition from other REITs, developers, and retailers in acquiring and managing properties. Intense competition can limit growth opportunities and drive down property values.
• E-commerce Growth: The increasing popularity of online shopping poses a threat to brick-and-mortar retailers. As more consumers shop online, demand for physical retail space may decline, impacting PECO's portfolio.

2. Property-Specific Risks:

• Tenant Concentration: PECO's shopping centers are heavily reliant on a few major tenants, particularly grocery stores. The loss or relocation of these tenants can significantly impact cash flow and property values.
• Property Condition: PECO's properties require ongoing maintenance and capital improvements to preserve their value. Failure to adequately maintain properties can result in reduced occupancy rates and increased costs.
• Environmental Liabilities: PECO could face environmental remediation costs or liabilities if its properties contain hazardous materials or are impacted by environmental contamination.

3. Financial Risks:

• Leverage: PECO uses debt financing to acquire and develop properties. Excessive leverage can increase the risk of default and limit financial flexibility.
• Interest Rate Risk: PECO's debt carries interest rate risk. Rising interest rates can increase PECO's interest expenses and reduce its earnings.
• Liquidity Risk: PECO's properties are illiquid, meaning they cannot be quickly converted into cash. This can make it difficult for PECO to access capital or raise funds in times of distress.

4. Management Risks:

• Management Expertise: The quality of PECO's management team is crucial for its success. Poor management decisions can lead to financial losses and reputational damage.
• Conflicts of Interest: As a REIT, PECO's management team has a fiduciary duty to act in the best interests of its shareholders. Potential conflicts of interest, such as personal investments or related-party transactions, can erode investor trust.

5. Other Risks:

• Natural Disasters: Natural disasters, such as hurricanes, earthquakes, and floods, can damage or destroy PECO's properties, leading to significant financial losses.
• Regulatory Changes: Changes in zoning laws, environmental regulations, or tax policies can impact the value and profitability of PECO's properties.
• Reputation Risk: Negative publicity or controversies surrounding PECO or its tenants can damage its reputation and lead to reduced investor confidence.

Investors should carefully consider these risks before investing in Phillips Edison & Company. While PECO has a strong track record and is well-positioned in the grocery-anchored retail sector, the factors discussed above could potentially impact its financial performance and shareholder returns.