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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
     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: 000-54691
https://cdn.kscope.io/963942eebc878a5ae4317d7702498d6e-cik0001476204-20210630_g1.jpg
PHILLIPS EDISON & COMPANY, INC.
(Exact name of registrant as specified in its charter)

Maryland27-1106076
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

11501 Northlake Drive, Cincinnati, Ohio
45249
(Address of principal executive offices)(Zip code)

(513) 554-1110
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 per sharePECONasdaq Global Select Market
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. YesNo  ☐ 
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)YesNo  ☐  
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.    
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging 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.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YesNo  ☑
There were 19.6 million shares of the registrant’s Common Stock, $0.01 par value per share, and 93.7 million shares of Class B stock, $0.01 par value per share, outstanding as of July 30, 2021.


Table of Contents
PHILLIPS EDISON & COMPANY, INC. FORM 10-Q
TABLE OF CONTENTS
OTHER INFORMATION











PHILLIPS EDISON & COMPANY
JUNE 30, 2021 FORM 10-Q
1

Table of Contents
w PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS


PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2021 AND DECEMBER 31, 2020
(Condensed and Unaudited)
(In thousands, except per share amounts)
  June 30, 2021December 31, 2020
ASSETS    
Investment in real estate:    
Land and improvements$1,529,803 $1,549,362 
Building and improvements3,184,601 3,237,986 
In-place lease assets434,499 441,683 
Above-market lease assets64,795 66,106 
Total investment in real estate assets5,213,698 5,295,137 
Accumulated depreciation and amortization(1,021,456)(941,413)
Net investment in real estate assets4,192,242 4,353,724 
Investment in unconsolidated joint ventures32,746 37,366 
Total investment in real estate assets, net4,224,988 4,391,090 
Cash and cash equivalents22,205 104,296 
Restricted cash89,196 27,641 
Goodwill29,066 29,066 
Other assets, net126,056 126,470 
Real estate investments and other assets held for sale14,261  
Total assets$4,505,772 $4,678,563 
LIABILITIES AND EQUITY    
Liabilities:    
Debt obligations, net$2,228,232 $2,292,605 
Below-market lease liabilities, net93,949 101,746 
Earn-out liability40,000 22,000 
Derivative liabilities39,929 54,759 
Deferred income18,978 14,581 
Accounts payable and other liabilities88,436 176,943 
Liabilities of real estate investments held for sale860  
Total liabilities2,510,384 2,662,634 
Commitments and contingencies (Note 8)
  
Equity:    
Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and
    
outstanding at June 30, 2021 and December 31, 2020
  
Common stock, $0.01 par value per share, 1,000,000 shares authorized, 93,640 and 93,279
    
shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively
2,808 2,798 
Additional paid-in capital (“APIC”)2,749,680 2,739,358 
Accumulated other comprehensive loss (“AOCI”)
(38,732)(52,306)
Accumulated deficit(1,041,617)(999,491)
Total stockholders’ equity1,672,139 1,690,359 
Noncontrolling interests323,249 325,570 
Total equity1,995,388 2,015,929 
Total liabilities and equity$4,505,772 $4,678,563 

See notes to consolidated financial statements.








PHILLIPS EDISON & COMPANY
JUNE 30, 2021 FORM 10-Q
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Table of Contents
PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(Condensed and Unaudited)
(In thousands, except per share amounts)
Three Months Ended June 30,Six Months Ended June 30,
  2021202020212020
Revenues:
Rental income$130,335 $115,654 $257,958 $244,120 
Fees and management income2,374 2,760 4,660 4,925 
Other property income361 626 833 1,518 
Total revenues133,070 119,040 263,451 250,563 
Operating Expenses:
Property operating21,974 19,629 44,176 41,391 
Real estate taxes16,814 16,453 33,387 33,565 
General and administrative11,937 9,806 21,278 20,546 
Depreciation and amortization56,587 56,370 111,928 112,597 
Impairment of real estate assets1,056  6,056  
Total operating expenses108,368 102,258 216,825 208,099 
Other:
Interest expense, net(19,132)(22,154)(39,195)(44,929)
Gain (loss) on disposal of property, net3,744 (541)17,585 (2,118)
Other (expense) income, net(2,924)(500)(18,509)9,369 
Net income (loss)6,390 (6,413)6,507 4,786 
Net (income) loss attributable to noncontrolling interests(796)825 (810)(605)
Net income (loss) attributable to stockholders$5,594 $(5,588)$5,697 $4,181 
Earnings per common share:
Net income (loss) per share attributable to stockholders - basic and
    diluted (Note 10)
$0.06 $(0.06)$0.06 $0.04 
Comprehensive income (loss):
Net income (loss)$6,390 $(6,413)$6,507 $4,786 
Other comprehensive income (loss):
Change in unrealized value on interest rate swaps3,373 (1,747)15,493 (45,111)
Comprehensive income (loss)9,763 (8,160)22,000 (40,325)
Net (income) loss attributable to noncontrolling interests(796)825 (810)(605)
Change in unrealized value on interest rate swaps attributable to
noncontrolling interests
(400)224 (1,909)5,798 
Reallocation of comprehensive loss upon conversion of noncontrolling
interests
(10) (10) 
Comprehensive income (loss) attributable to stockholders$8,557 $(7,111)$19,271 $(35,132)

See notes to consolidated financial statements.








PHILLIPS EDISON & COMPANY
JUNE 30, 2021 FORM 10-Q
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Table of Contents
PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 2021 AND 2020
(Condensed and Unaudited)
(In thousands, except per share amounts)
Three Months Ended June 30, 2021 and 2020
  Common StockAPICAOCIAccumulated DeficitTotal Stockholders’ EquityNoncontrolling InterestsTotal Equity
  SharesAmount
Balance at April 1, 202096,805 $2,903 $2,793,803 $(58,552)$(986,292)$1,751,862 $341,944 $2,093,806 
Change in unrealized value on interest
    rate swaps
— — — (1,523)— (1,523)(224)(1,747)
Share-based compensation2 1 1,332 — — 1,333 808 2,141 
Conversion of noncontrolling interests17 1 555 — — 556 (556)— 
Other(2)— (256)— (59)(315)(3)(318)
Net loss— — — — (5,588)(5,588)(825)(6,413)
Balance at June 30, 202096,822 $2,905 $2,795,434 $(60,075)$(991,939)$1,746,325 $341,144 $2,087,469 
Balance at April 1, 202193,582 $2,807 $2,746,891 $(41,695)$(1,023,155)$1,684,848 $324,558 $2,009,406 
Change in unrealized value on interest
    rate swaps
— — — 2,973 — 2,973 400 3,373 
Common distributions declared, $0.255
    per share
— — — — (24,056)(24,056)— (24,056)
Distributions to noncontrolling interests— — — — — — (3,460)(3,460)
Share-based compensation30 1 2,102 — — 2,103 1,632 3,735 
Conversion of noncontrolling interests28 — 743 — — 743 (743)— 
Reallocation of operating partnership
    interests
— — (56)(10)— (66)66 — 
Net income— — — — 5,594 5,594 796 6,390 
Balance at June 30, 202193,640 $2,808 $2,749,680 $(38,732)$(1,041,617)$1,672,139 $323,249 $1,995,388 









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JUNE 30, 2021 FORM 10-Q
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PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(Condensed and Unaudited)
(In thousands, except per share amounts)
Six Months Ended June 30, 2021 and 2020
  Common StockAPICAOCIAccumulated DeficitTotal Stockholders’ EquityNoncontrolling InterestsTotal Equity
  SharesAmount
Balance at January 1, 202096,349 $2,890 $2,779,130 $(20,762)$(947,252)$1,814,006 $354,788 $2,168,794 
Dividend Reinvestment Plan (“DRIP”)479 14 15,926 — — 15,940 — 15,940 
Share repurchases(96)(3)(2,697)— — (2,700)— (2,700)
Change in unrealized value on interest
    rate swaps
— — — (39,313)— (39,313)(5,798)(45,111)
Common distributions declared, $0.503
    per share
— — — — (48,809)(48,809)— (48,809)
Distributions to noncontrolling interests— — — — — — (7,105)(7,105)
Share-based compensation36 2 1,472 — — 1,474 518 1,992 
Conversion of noncontrolling interests56 2 1,859 — — 1,861 (1,861)— 
Other(2)— (256)(59)(315)(3)(318)
Net income— — — — 4,181 4,181 605 4,786 
Balance at June 30, 202096,822 $2,905 $2,795,434 $(60,075)$(991,939)$1,746,325 $341,144 $2,087,469 
Balance at January 1, 202193,279 $2,798 $2,739,358 $(52,306)$(999,491)$1,690,359 $325,570 $2,015,929 
DRIP280 8 7,360 — — 7,368 — 7,368 
Share repurchases (24) (123)— — (123)— (123)
Change in unrealized value on interest
    rate swaps
— — — 13,584 — 13,584 1,909 15,493 
Common distributions declared, $0.510
    per share
— — — — (47,823)(47,823)— (47,823)
Distributions to noncontrolling interests— — — — — — (6,779)(6,779)
Share-based compensation77 2 2,427 — — 2,429 2,416 4,845 
Conversion of noncontrolling interests28  743 — — 743 (743)— 
Reallocation of operating partnership
    interests
— — (56)(10)— (66)66 — 
Other — (29)—  (29) (29)
Net income— — — — 5,697 5,697 810 6,507 
Balance at June 30, 202193,640 $2,808 $2,749,680 $(38,732)$(1,041,617)$1,672,139 $323,249 $1,995,388 


See notes to consolidated financial statements.








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PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(Condensed and Unaudited)
(In thousands)
Six Months Ended June 30,
  20212020
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income$6,507 $4,786 
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization of real estate assets109,995 109,709 
Impairment of real estate assets6,056  
Depreciation and amortization of corporate assets1,933 2,888 
Net amortization of above- and below-market leases(1,725)(1,583)
Amortization of deferred financing expenses2,448 2,495 
Amortization of debt and derivative adjustments739 1,884 
(Gain) loss on disposal of property, net(17,585)2,118 
Change in fair value of earn-out liability18,000 (10,000)
Straight-line rent(4,400)(1,331)
Share-based compensation4,845 1,992 
Return on investment in unconsolidated joint ventures1,533 32 
Other(519)1,239 
Changes in operating assets and liabilities:    
Other assets, net900 (12,853)
Accounts payable and other liabilities1,170 (11,470)
Net cash provided by operating activities129,897 89,906 
CASH FLOWS FROM INVESTING ACTIVITIES:    
Real estate acquisitions(40,459)(4,343)
Capital expenditures(30,230)(28,540)
Proceeds from sale of real estate119,638 25,778 
Investment in third parties(3,000) 
Return of investment in unconsolidated joint ventures3,888 639 
Net cash provided by (used in) investing activities49,837 (6,466)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from revolving credit facility9,000 255,000 
Payments on revolving credit facility(9,000)(255,000)
Payments on mortgages and loans payable(66,237)(35,200)
Distributions paid, net of DRIP(48,308)(49,083)
Distributions to noncontrolling interests(7,931)(9,406)
Repurchases of common stock(77,765)(5,211)
Other(29)(318)
Net cash used in financing activities(200,270)(99,218)
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH(20,536)(15,778)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:    
Beginning of period131,937 95,108 
End of period$111,401 $79,330 
RECONCILIATION TO CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents$22,205 $53,262 
Restricted cash89,196 26,068 
Cash, cash equivalents, and restricted cash at end of period$111,401 $79,330 








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PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(Condensed and Unaudited)
(In thousands)
Six Months Ended June 30,
  20212020
SUPPLEMENTAL CASH FLOW DISCLOSURE, INCLUDING NON-CASH INVESTING AND FINANCING ACTIVITIES:
Cash paid for interest$36,845 $40,980 
Right-of-use (“ROU”) assets obtained in exchange for new lease liabilities239 551 
Accrued capital expenditures6,053 2,884 
Change in distributions payable(7,853)(16,214)
Change in distributions payable - noncontrolling interests(1,152)(2,301)
Change in accrued share repurchase obligation(77,642)(2,511)
Distributions reinvested7,368 15,940 

See notes to consolidated financial statements.








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Phillips Edison & Company, Inc.
Notes to Consolidated Financial Statements
(Condensed and Unaudited)
As of and for the period ended June 30, 2021

1. ORGANIZATION
Phillips Edison & Company, Inc. (“we,” the “Company,” “PECO,” “our,” or “us”) was formed as a Maryland corporation in October 2009. Substantially all of our business is conducted through Phillips Edison Grocery Center Operating Partnership I, L.P., (the “Operating Partnership”), a Delaware limited partnership formed in December 2009. We are a limited partner of the Operating Partnership, and our wholly-owned subsidiary, Phillips Edison Grocery Center OP GP I LLC, is the sole general partner of the Operating Partnership.
We are a real estate investment trust (“REIT”) that invests primarily in omni-channel grocery-anchored neighborhood and community shopping centers that have a mix of creditworthy national, regional, and local retailers that sell necessity-based goods and services in strong demographic markets throughout the United States. In addition to managing our own shopping centers, our third-party investment management business provides comprehensive real estate and asset management services to two unconsolidated institutional joint ventures, in which we have a partial ownership interest, and one private fund (collectively, the “Managed Funds”) as of June 30, 2021.
As of June 30, 2021, we wholly-owned 272 real estate properties. Additionally, we owned a 14% interest in Grocery Retail Partners I LLC (“GRP I”), a joint venture that owned 20 properties, and a 20% equity interest in Necessity Retail Partners (“NRP”), a joint venture that owned two properties.
On June 18, 2021, our stockholders approved an amendment to our charter (the “Articles of Amendment”) that effected a change of each share of our common stock outstanding at the time the amendment became effective into one share of a newly created class of Class B common stock (the “Recapitalization”). The Articles of Amendment became effective upon filing with, and acceptance by, the State Department of Assessments and Taxation of Maryland on July 2, 2021. Unless otherwise indicated, all information in this Form 10-Q disclosure gives effect to the Recapitalization and references to “shares” and per share metrics refer to our common stock and Class B common stock, collectively.
On July 2, 2021, our board of directors (the “Board”) approved an amendment to our articles of incorporation to effect a one-for-three reverse stock split. Concurrent with the reverse split, the Operating Partnership enacted a one-for-three reverse split of its outstanding Operating Partnership units (“OP units”). Unless otherwise indicated, the information in this Form 10-Q gives effect to the reverse stock and OP unit splits (Note 9).
On July 19, 2021, we closed our underwritten initial public offering (“underwritten IPO”), through which we offered 17.0 million shares of a new class of common stock, $0.01 par value per share, at an initial price of $28.00 per share, pursuant to a registration statement filed with the U.S. Securities and Exchange Commission (“SEC”) on Form S-11 (File No. 333-255846), as amended. These shares are listed on the Nasdaq Global Select Market under the trading symbol “PECO”. The underwriters have since exercised a 30-day option to purchase additional shares of common stock to cover overallotments, and, accordingly, on August 2, 2021 we settled the sale of an additional 2.55 million shares, with gross proceeds to us of $71.4 million.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Set forth below is a summary of the significant accounting estimates and policies that management believes are important to the preparation of our condensed consolidated interim financial statements. Certain of our accounting estimates are particularly important for an understanding of our financial position and results of operations and require the application of significant judgment by management. For example, significant estimates and assumptions have been made with respect to the useful lives of assets, remaining hold period of assets, recoverable amounts of receivables, and other fair value measurement assessments required for the preparation of the consolidated interim financial statements. As a result, these estimates are subject to a degree of uncertainty.
Beginning in 2020, the coronavirus (“COVID-19”) pandemic has caused significant disruption to our operations. All temporarily closed tenants have since been permitted to reopen; however, certain of our tenants have permanently closed. We have backfilled a number of these spaces, and continue to work on backfilling any remaining vacancies. The continuing economic impacts of the COVID-19 pandemic could result in increased permanent store closures, reduce the demand for leasing space in our shopping centers, and/or result in a decline in occupancy and rental revenues in our real estate portfolio. Because of the adverse economic conditions that have occurred as a result of the impacts of the COVID-19 pandemic and any remaining uncertainty related to the pandemic, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change significantly. All of this activity impacts our estimates around the collectibility of revenue and valuation of real estate assets, goodwill and other intangible assets, and certain liabilities, among others.








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There were no changes to our significant accounting policies during the six months ended June 30, 2021, except for those discussed below. For a full summary of our accounting policies, refer to our 2020 Annual Report on Form 10-K as originally filed with the SEC on March 12, 2021.
Basis of Presentation and Principles of Consolidation—The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Readers of this Quarterly Report on Form 10-Q should refer to our audited consolidated financial statements for the year ended December 31, 2020, which are included in our 2020 Annual Report on Form 10-K. In the opinion of management, all normal and recurring adjustments necessary for the fair presentation of the unaudited consolidated financial statements for the periods presented have been included in this Quarterly Report. Our results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the operating results expected for the full year.
The accompanying consolidated financial statements include our accounts and those of our majority-owned subsidiaries. All intercompany balances and transactions are eliminated upon consolidation.
Underwritten IPO Costs—Deferred underwritten IPO costs are currently recorded as Other Assets, Net on our consolidated balance sheets as of June 30, 2021, and will be offset against underwritten IPO proceeds and reclassified as a component of APIC on the consolidated balance sheets upon the consummation of the offering. Costs incurred that were related to our underwritten IPO activities but were not directly related to our equity raise were not capitalized and are included as transaction costs, currently in Other (Expense) Income, Net on our consolidated statements of operations and comprehensive income (loss) (“consolidated statements of operations”).
Income Taxes—Our consolidated financial statements include the operations of wholly-owned subsidiaries that have jointly elected to be treated as Taxable REIT Subsidiaries and are subject to U.S. federal, state, and local income taxes at regular corporate tax rates. We recognized an insignificant amount of federal, state, and local income tax expense for the three and six months ended June 30, 2021 and 2020, and we retain a full valuation allowance for our deferred tax asset. All income tax amounts are included in Other (Expense) Income, Net on our consolidated statements of operations.
Recently Issued Accounting Pronouncements—On January 7, 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-01 to amend the scope of the guidance in ASU 2020-04 on facilitation of the effects of reference rate reform on financial reporting. Specifically, the amendments in ASU 2021-01 clarify that certain optional expedients and exceptions in Accounting Standards Codification (“ASC”) Topic 848, Reference Rate Reform for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. We adopted ASU 2021-01 upon its issuance and the adoption of this standard did not have a material impact on our consolidated financial statements.
Reclassifications—The following line items on our consolidated statement of cash flows for the six months ended June 30, 2020 were reclassified to conform to current year presentation:
Return on Investment in Unconsolidated Joint Ventures was listed on a separate line from Other Assets, Net; and
Net Change in Credit Facility was separated into two lines, Proceeds from Revolving Credit Facility and Payments on Revolving Credit Facility.









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3. LEASES
LessorThe majority of our leases are largely similar in that the leased asset is retail space within our properties, and the lease agreements generally contain similar provisions and features, without substantial variations. All of our leases are currently classified as operating leases. Lease income related to our operating leases was as follows for the three and six months ended June 30, 2021 and 2020 (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Rental income related to fixed lease
    payments(1)
$94,485 $95,036 $189,451 $191,063 
Rental income related to variable
    lease payments(1)(2)
27,454 30,659 58,855 62,497 
Straight-line rent amortization(3)
2,893 (978)4,262 1,331 
Amortization of lease assets877 786 1,704 1,565 
Lease buyout income1,781 214 2,578 308 
Adjustments for collectibility(4)
2,845 (10,063)1,108 (12,644)
Total rental income$130,335 $115,654 $257,958 $244,120 
(1)Includes rental income related to lease payments before assessing for collectibility.
(2)Variable payments are primarily related to tenant recovery income.
(3)Includes favorable revenue adjustments to straight-line rent for tenants previously considered non-creditworthy during the three months ended June 30, 2021 of $0.4 million, and unfavorable adjustments for non-creditworthy tenants during the six months ended June 30, 2021 of $0.4 million. Includes unfavorable adjustments for the three and six months ended June 30, 2020 of $3.2 million, and $3.1 million, respectively.
(4)Includes general reserves as well as adjustments for tenants not considered creditworthy and thus for which we are recording revenue on a cash basis, per ASC Topic 842, Leases (“ASC 842”).
For the three and six months ended June 30, 2021, we had net favorable changes to general reserves of $1.9 million and $4.1 million, respectively. Additionally, we had $1.0 million in net collections on receivables that were previously deemed unlikely to be collected for tenants not considered creditworthy for the three months ended June 30, 2021, and $3.0 million in net unfavorable revenue adjustments for non-creditworthy tenants for the six months ended June 30, 2021.
For the three and six months ended June 30, 2020, we had net general reserve increases of $1.3 million and $0.9 million, respectively. Additionally, we had net unfavorable adjustments of $8.8 million and $11.7 million, respectively, related to monthly revenue for tenants that we deemed non-creditworthy and for which we were recording revenue on a cash basis.
Approximate future fixed contractual lease payments to be received under non-cancelable operating leases in effect as of June 30, 2021, assuming no new or renegotiated leases or option extensions on lease agreements, and including the impact of rent abatements, payment plans, and tenants who have been moved to the cash basis of accounting for revenue recognition purposes are as follows (in thousands):
YearAmount
Remaining 2021$191,000 
2022363,187 
2023317,301 
2024263,155 
2025209,307 
Thereafter514,528 
Total$1,858,478 
In response to the COVID-19 pandemic, we executed payment plans with our tenants. As of June 30, 2021, we had $5.4 million of outstanding payment plans with our tenants, which represented approximately 2.1% of rental income during the six months ended June 30, 2021. During the three months ended June 30, 2021, we had recorded an immaterial amount of rent abatements related to 2021 missed charges. During the six months ended June 30, 2021, we recorded approximately $0.5 million of rent abatements related to missed 2021 charges, which represented less than 1% of rental income for the six months ended June 30, 2021.
No single tenant comprised 7% or more of our aggregate annualized base rent (“ABR”) as of June 30, 2021. As of June 30, 2021, our wholly-owned real estate investments in Florida and California represented 12.6% and 10.1% of our ABR, respectively. As a result, the geographic concentration of our portfolio makes it particularly susceptible to adverse weather or economic events, including the impact of the COVID-19 pandemic, in the Florida and California real estate markets.








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LesseeLease assets and liabilities, grouped by balance sheet line where they are recorded, consisted of the following as of June 30, 2021 and December 31, 2020 (in thousands):
Balance Sheet InformationBalance Sheet LocationJune 30, 2021December 31, 2020
ROU assets, net - operating leasesInvestment in Real Estate$4,003 $3,867 
ROU assets, net - operating and finance leasesOther Assets, Net1,190 1,438 
Operating lease liabilityAccounts Payable and Other Liabilities5,619 5,731 
Finance lease liabilityDebt Obligations, Net127 164 

4. REAL ESTATE ACTIVITY
Property SalesThe following table summarizes our real estate disposition activity (dollars in thousands):
Six Months Ended June 30,
20212020
Number of properties sold(1)
13 4 
Number of outparcels sold(2)(3)
1  
Proceeds from sale of real estate$119,638 $25,778 
Gain (loss) on sale of properties, net(4)
18,713 (1,436)
(1)We retained an outparcel for one property sold during the six months ended June 30, 2021, and therefore the sale did not result in a reduction in our total property count.
(2)One outparcel sold during the six months ended June 30, 2021 was the only remaining portion of one of our properties, and therefore the sale resulted in a reduction in our total property count.
(3)In addition to the one outparcel sold during the six months ended June 30, 2021, a tenant at one of our properties exercised a bargain purchase option to acquire a parcel of land that we previously owned. This generated minimal proceeds for us.
(4)The gain (loss) on sale of properties, net does not include miscellaneous write-off activity, which is also recorded in Gain (Loss) on Disposal of Property, Net on the consolidated statements of operations.
Subsequent to June 30, 2021, we sold two properties for $16.0 million.
AcquisitionsThe following table summarizes our real estate acquisition activity (dollars in thousands):
Six Months Ended June 30,
20212020
Number of properties acquired2  
Number of outparcels acquired(1)
3 2
Total acquisition price$40,459 $4,343 
(1)Outparcels acquired are adjacent to shopping centers that we own.
The fair value and weighted-average useful life at acquisition for lease intangibles acquired are as follows (dollars in thousands, weighted-average useful life in years):
Six Months Ended June 30, 2021
Fair ValueWeighted-Average Useful Life
In-place leases$4,155 7
Above-market leases52 5
Below-market leases(1,652)6








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Property Held for Sale—As of June 30, 2021, two properties were classified as held for sale. As of December 31, 2020, no properties were classified as held for sale. Properties classified as held for sale as of June 30, 2021 were under contract to sell, with no substantive contingencies, and the prospective buyers had significant funds at risk as of the reporting date. Subsequent to June 30, 2021, both of our held for sale properties were sold. A summary of assets and liabilities for the properties held for sale as of June 30, 2021 is below (in thousands):
June 30, 2021
ASSETS
Total investment in real estate assets, net $13,807 
Other assets, net 454 
Total assets $14,261 
LIABILITIES
Below-market lease liabilities, net $379 
Accounts payable and other liabilities 481 
Total liabilities $860 

5. OTHER ASSETS, NET
The following is a summary of Other Assets, Net outstanding as of June 30, 2021 and December 31, 2020, excluding amounts related to assets held for sale (in thousands):
June 30, 2021December 31, 2020
Other assets, net:
Deferred leasing commissions and costs$44,428 $41,664 
Deferred financing expenses(1)
13,971 13,971 
Office equipment, ROU assets, and other22,699 21,578 
Corporate intangible assets6,804 6,804 
Total depreciable and amortizable assets87,902 84,017 
Accumulated depreciation and amortization(50,014)(45,975)
Net depreciable and amortizable assets37,888 38,042 
Accounts receivable, net(2)
37,151 46,893 
Accounts receivable - affiliates 522 543 
Deferred rent receivable, net(3)
35,760 32,298 
Prepaid expenses and other11,735 8,694 
Investment in third parties3,000  
Total other assets, net$126,056 $126,470 
(1)Deferred financing expenses per the above table are related to our revolving line of credit and as such we have elected to classify them as an asset rather than as a contra-liability.
(2)Net of $7.4 million and $8.9 million of general reserves for uncollectible amounts as of June 30, 2021 and December 31, 2020, respectively. Receivables that were removed for tenants considered to be non-creditworthy were $16.2 million and $22.8 million as of June 30, 2021 and December 31, 2020, respectively.
(3)Net of $4.7 million and $4.4 million of adjustments as of June 30, 2021 and December 31, 2020, respectively, related to straight-line rent for tenants previously or currently considered to be non-creditworthy.









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6. DEBT OBLIGATIONS
The following is a summary of the outstanding principal balances and interest rates, which include the effect of derivative financial instruments, for our debt obligations as of June 30, 2021 and December 31, 2020 (dollars in thousands):
   
Interest Rate(1)
June 30, 2021December 31, 2020
Revolving credit facility
LIBOR + 1.4%
$ $ 
Term loans(2)
1.3% - 4.6%
1,622,500 1,622,500 
Secured loan facilities
3.4% - 3.5%
395,000 395,000 
Mortgages
3.5% - 7.2%
223,868 290,022 
Finance lease liability127 164 
Assumed market debt adjustments, net(1,553)(1,543)
Deferred financing expenses, net(11,710)(13,538)
Total  $2,228,232 $2,292,605 
Weighted-average interest rate2.9 %3.1 %
(1)Interest rates are as of June 30, 2021.
(2)Our term loans carry an interest rate of LIBOR plus a spread. While most of the rates are fixed through the use of swaps, there is a portion of these loans that are not subject to a swap, and thus are still indexed to LIBOR.
Debt Activity—On July 2, 2021, we entered into a new $980 million credit facility comprised of a $500 million senior unsecured revolving credit facility and two $240 million senior unsecured term loan tranches (the “Refinancing”). In connection with the Refinancing, we paid off the $472.5 million term loan due in 2025. The revolving credit facility will mature in January 2026, and the two senior unsecured term loan tranches will mature in November 2025 and July 2026, respectively.
On July 20, 2021, we used proceeds from the underwritten IPO to retire our $375 million term loan maturing in 2022.
Debt AllocationThe allocation of total debt between fixed-rate and variable-rate as well as between secured and unsecured, excluding market debt adjustments and deferred financing expenses, net, and including the effects of derivative financial instruments (see Notes 7 and 12) as of June 30, 2021 and December 31, 2020 is summarized below (in thousands):
   June 30, 2021December 31, 2020
As to interest rate:
Fixed-rate debt$1,548,995 $1,727,186
Variable-rate debt692,500 580,500
Total$2,241,495 $2,307,686
As to collateralization:
Unsecured debt$1,622,500 $1,622,500
Secured debt618,995 685,186
Total  $2,241,495 $2,307,686

7. DERIVATIVES AND HEDGING ACTIVITIES
Risk Management Objective of Using Derivatives—We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposure to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our debt funding, and through the use of derivative financial instruments. Specifically, we enter into interest rate swaps to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our investments and borrowings.
Cash Flow Hedges of Interest Rate Risk—Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
The changes in the fair value of derivatives designated, and that qualify, as cash flow hedges are recorded in AOCI and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the six months ended June 30, 2021 and 2020, such derivatives were used to hedge the variable cash flows associated with certain variable-rate debt. Amounts reported in AOCI related to these derivatives will be reclassified to Interest Expense, Net as interest payments are made on the variable-rate debt. During the next twelve months, we estimate that an additional $18.2 million will be reclassified from AOCI as an increase to Interest Expense, Net.








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The following is a summary of our interest rate swaps that were designated as cash flow hedges of interest rate risk as of June 30, 2021 and December 31, 2020 (dollars in thousands):
June 30, 2021December 31, 2020
Count5 6 
Notional amount$930,000 $1,042,000 
Fixed LIBOR
1.3% - 2.9%
1.3% - 2.9%
Maturity date2022 - 20252021 - 2025
We assumed five hedges with a notional amount of $570 million as a part of a merger. The fair value of the five hedges assumed was $14.7 million and is amortized over the remaining lives of the respective hedges and recorded in Interest Expense, Net in the consolidated statements of operations. The net unamortized amount remaining as of June 30, 2021 and December 31, 2020 was $4.3 million and $5.0 million, respectively.
The table below details the nature of the gain and loss recognized on interest rate derivatives designated as cash flow hedges in the consolidated statements of operations (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
  2021202020212020