Phillips Edison & Company, Inc. ($PECO)

Welcome to PECO's ICSC recap webcast. We appreciate you taking the time to be with us today. I'm Kim Green, Head of Investor Relations at PECO. Joining me today are Vasili Lyhnakis, Senior Vice President of Leasing and Portfolio Management; Dave Wik, Senior Vice President, Head of Acquisitions and Dispositions, Marissa Visconsi, Vice President of Leasing; and Ashley Casey, Senior Director of National Accounts Leasing. As a reminder, today's discussion may contain forward-looking statements about the company's view of future business and financial performance including forward earnings guidance and future market conditions. These are based on management's current beliefs and expectations and are subject to various risks and uncertainties as described in our SEC filings, specifically in our most recent Form 10-K and 10-Q. ICSC is 1 of the most important weeks of the year for PECO. It brings together retailers, owners, brokers, developers and industry experts and it gives us a real-time read on leasing demand, retailer expansion plans and transaction activity across the industry. The PECO team has been attending ICSC Las Vegas for 35 years. This year, ICSC sold nearly 35,000 attendees, an increase over last year, and there are over 850 exhibitors and more than 5,000 retailers attended. The PICO team hosted over 400 meetings in 2 days. PECO utilizes ICSC to negotiate new deals and close pending deals, explore potential acquisition opportunities and build and strengthen relationships. ICC also offers valuable insights into current trends and emerging opportunities in the shopping center sector. What we want to share with you today is what ICSC reinforced for PECO. Over the next 45 minutes or so, you'll hear directly from our ops leaders. What they heard what surprised them and how those insights are shaping our outlook for the balance of the year and beyond. This is a high-energy group with incredible perspective. So we'll keep the conversation moving, share real examples from ICSC and leave time for your questions throughout the webcast. If you have a question, please submit it through the webcast portal at any time. We ask that you keep your questions focused on leasing and acquisitions.

With that, let's start the roundtable. Vasili, our first question is for you. Can you provide an overview of the current leasing environment? And also what stood out most to you this year at ICSC?

Yes. Thanks, Kim, and welcome everybody that's joined today. So ICSC for us is a valuable opportunity to connect with our existing our existing partners, our existing neighbors and potential new neighbors and so we believe that getting together throughout the year, this onetime, this is our Super Bowl event here for PECO. And so we send all these associates down with all this expertise -- and we're trying to get real-time feedback with what's going on in the marketplace. And so that's why we wanted to get together today to share with everybody what we learn from this event. I think what set out to me mostly was that PECO strategy is working and that the external environment is supporting it. So one, you've got high retail demand. These retailers, as we learn from the show, want to be in grocery-anchored shopping centers where PECO is located in suburban markets with the #1, #2 grocer. Secondly, we are benefiting from pricing power, and that is because of the limited supply out there and the very strong demand, we're able to really drive rents in our properties. And then third, I'd say that we got great visibility into -- going into ICSC, not just from the leasing front and hearing -- we'll hear from Ashley on new tenants that are emerging and growing but also from the acquisition front, which gives us confidence in both our operating platform and our external growth pipeline. I think despite some uncertainties out there within the marketplace, the 1 thing that I will say is that the tone overall was very, very positive. And we feel like we're very well positioned going forward.

Thank you. A follow-up for you. Can you share some insights that the PECO team saw heading into ICSC.

Yes. So as you mentioned, we had over, what, 400 meetings going into this. And there is so much work that goes into preparing for IC in 15 days time to have over 400 meetings. These meetings are very, very intentional Ashley Casey, Marissa Visconsi, they're working together, and they're trying to identify sites where we can continue to grow with these retailers. I'll tell you, it's never been more important than now is building upon these relationships because evident if you look at our portfolio today, we're at 97% occupancy our leasing rates are at all-time highs, and we have a very high retention rate. So there's really no signs of slowing down on these retailers are telling us that they want to be in grocery-anchored, necessity-based retail properties in the suburban markets. it's just evident with all the hard work that the leasing team and the national accounts team that does going into this, we're going to continue to find opportunities, but these relationships are more important than ever before.

And another follow-up question for you. The continued to be -- there continues to be headlines regarding the consumer backdrop, given higher energy prices, higher inflation and consumer credit, Vasili, what did you hear from PECO's retailers regarding the consumer?

So I really appreciate that question because there's a lot of information out there about consumer confidence right now on the decline. And lucky for us, we're in the grocery-anchored business. So grocers since 2019, we've seen our overall grocer sales per square foot have increased by over 46%. So we're driving traffic to our properties. Next, I'd say that where we like to play, our format is why we win. We're -- look, Marissa and Ashley, they're delivering us deals all the time. We're rightsized. The format being you got the grocer on one side, you might have a drugstore or fitness center on the other side. everything in between, we can merchandise to the environment. So despite that, there might be some declining noise out there, we can actually augment and focus away from discretionary categories and lean more into necessity-based goods and services where PECO actually does very well, whether it's food and beverage or health and beauty, all these retailers want to be located in these types of situations. And the last thing that I want to point out is 74% of our ABR comes from necessity-based goods and services. So when you look at PECO's demographics, and particularly our income levels, we're above the U.S. median income level. So we got a little bit more discretionary spending than some of our peers. And then because we're highly focused, Dave's team acquiring really attractive A+ sites. These retailers are not wanting to put capital investment into B centers or C centers, so they're wanting to hold out and wait for these opportunities to present itself, which is why, again, it's so important that we're working closely with the national accounts team and Marissa's team in leasing, so that we can curate a merchandising mix that's going to allow us to not just win in 26, but beyond into '27 and '28.

Thank you, Vasili. Dave, can you share the latest read on the transaction market? And what stood out most to you this year at ICSC?

Yes. Yes. Thanks, Kim. I think a lot like what facility says, I mean, just tons of positivity coming out of Vegas this year. What stood out the most to me is just how in favor retail is right now. There is so much smart capital trying to invest in a space that, frankly, we've loved for a long time. So even so, we continue to find attractive acquisition opportunities. We always have, and I think we always will. Our pipeline remains very strong, given what we've already bought coupled with what we have under contract, we recently affirmed our guidance of $400 million to $500 million in gross acquisitions this year. So yes, pricing is a challenge, and I think it will be for the foreseeable future. But our national platform allows us to find inefficiencies in the market. So for example, if Publix in Florida or King Supers in Denver get priced too efficiently, we can pivot and we can buy Sprouts in Palm Springs or Kroger in Dallas or Safeway in Seattle. So we're not tied to one single market and have to buy at whatever market pricing is. So we see this as a distinct advantage to PECO. Also, we primarily play in that kind of $20 million to $50 million deal size. And yes, this requires more manpower, but we're built for it, and our team thrives on deal velocity. We love to buy larger deals, and we look at every portfolio that hits the market. But we find our sweet spot in that kind of $20 million to $50 million range, just trades a little less efficient than those larger deals do. Also, I think, as you guys have heard, we've expanded our buy box into the everyday retail space. We're frankly in the first inning in this category, and we think there's a ton of opportunity here. There's a lot more inefficiency in everyday retail than there is in the grocery-anchored space, and we see a ton of potential here. In just 24 months, we've constructed over $220 million everyday retail portfolio and our pipeline is robust. We've also added veteran strength to our sourcing team as we continue to focus on and ramp up our everyday retail acquisitions over the next few years. So ultimately, ICSC left us feeling really good about the PECO team's ability to sustain our strong acquisitions momentum, not only for the rest of this year but into next year.

Thank you, Dave. Marissa, what most interested you from your conversations in Las Vegas.

What set out most from my conversations in Vegas was the continued flat to value and performance. Retailers are expanding, but with a much sharper focus on unit economics and site efficiency. High AUV QSR brands are the leading expansion. For example, Seven Brews rapid growth from roughly 100 to over 1,000 locations in just a few years. With about 2.7 million AUVs reinforce what we saw at ICSC, drive their focus, efficient formats are outperforming and driving significant demand. From a leasing perspective, 2025 was very productive for me. With over 60 new leases executed across fitness, QSR, service and medical users. This volume proves strong demand for grocery-anchored centers service-oriented concepts and continued rebound in fitness. While retailers are still expanding, growth is increasingly disciplined, which aligns directly with our strategy.

Thank you, Marissa. Ashley. Can you share a story coming out of Las Vegas as it relates to 1 of these growing categories? And what was most interesting to you this year?

Yes, I'm going to echo quite a bit of what Marissa just said. But 1 of the more interesting things I heard at the show was regarding fitness and the salon suite category. They're both really evolving the way that they're using space within our types of centers. On the fitness side, we see a lot of strong growth. Ally Fitness is targeting around 40 new deals in 2026. Planet Fitness is planning roughly 180 openings and other operators are actively seeking white space in the market. What's notable is that grocers are increasingly to fitness. They're now seeing them as part of the integral consumer journey. And so they really play well into driving repeat visits and increasing dwell time in our centers. And at the same time, we're seeing growth in the salon suite sector, which I find to be a really interesting model. There are essentially leases within leases. So you can have 15,000 square foot space and then you have 20 to 30 small individual beauty salon owners within that space, leasing stays within that 5,000 square foot space. Brands like solar salons and image studios that we met with in Vegas are continuing to expand, especially in the high-income suburban trade areas. And so what ties these both together is that there are service-based daily use concepts that fit extremely well alongside the grocer.

Thank you, Ashley. Vasili, a 2-part question. Can you speak to leasing negotiations for 2027 and 2028 -- did those come up in Vegas? And then second part, did you hear any retailers say that they're slowing down their store opening plans?

So I'll answer the question in reverse. So we did not hear any slowdown from the retail demand. As mentioned earlier, with demand being where it's at for flight to quality is what I think we're hearing from the retailers. They want to make sure that they're at the #1, #2 grocer in the suburban markets at the intersection of Main and Main. And so demand is -- look, I've been leasing here for over 20 years. I've never seen the demand this strong. And when you look at '27 and '28, 26 is going to be a strong year for us, but 1 of the deals that Marissa procured, she's got a shopping center that's, I believe, is 100% occupancy. And I'm not going to name the operator or the retailer. Their lease is up at the end of Q3. And we had to make the tough decision not to renew them. They were doing over $600,000 in revenue. However, Marissa was able to deliver same category. And so they're able to utilize the space with very little capital going into it. And their sales projections are $1.7 million. And when you have that kind of sales projections coming in, and what do you think PECO is going to do? PECO is going to be the beneficiary of pushing these rents at higher levels. So yes, we're not seeing any kind of slowdown. In fact, right now, as I mentioned earlier, Ashley, Marissa, these meetings are so valuable because the retailers are sitting down with this, even where we're at 100% occupancy saying, "Guys, how do we get into your shopping centers? " And so we like where we're at. I think PECO is in a good place.

Thank you. Vasili, another question for you. From our webcast. Can you share an update on our grocers, what did we hear at ICSC from PECO's grocers?

Yes. Great question. So the portfolio management team had over 30 meetings with grocers. So we met with Kroger. We met with Publix, Albertson Safeway, Harris Teeter, Whole Foods, Walmart, -- and believe it or not, Trader Joe's decided they weren't going to come down to recon this year, but I personally have flown out twice just in the last 6 months. along with Marissa and our other portfolio managers to have face-to-face meetings with these grocers and really try to understand what's going on. Look, we all know development right now. There's a few projects that are coming out of the ground, but development is really, really hard to execute right now. Land cost, cost of material and labor. It's very hard to pencil in. So these grocers have done a really good job in remerchandising their stores, doing upgrades to their stores. And look, grocery is at the core of our business. And I think even though we benefit from a variety of ways with these relationships, the one that's probably the most critical is when we're evaluating a shopping center that Dave is looking to acquire. And I'll do some storytelling here. But Dave and his team was able to secure a really strong site up in the northwest area. And as they were about to lock in the purchase and sale agreement, they're asking us to go out and make phone calls and say, "Hey, tell us about the performance of your store. " I mean it's the first phone call we make is let's talk to these grocers and find out what's happening at the property level. And on the phone, the guy was like, "have you guys gotten control of this and we're like, yes, we got control of the asset. " He goes, we haven't even announced this yet, but we're about to do a multimillion dollar upgrade to the shopping center. So that was a huge win for us. We ended up getting awarded the deal. We ended up purchasing the deal and I don't think that there's very many institutional players out there like PECO that this has been a priority of our business for the past 35 years. This is not something new where we're like, "Hey, let's just go meet these people. This is what PECO has been doing for 35 years. And look, another deal that Dave earlier touched on, there was a deal that we really wanted to own. It's got 1 of the strongest demographics inside the entire PECO portfolio. twice the deal had fallen out of contract with other buyers. Well, we learned while digging into the deal that there was a lot of hair on it from the grocer and so we realize that if we can somehow remove this one clause that we would unlock value right from the onset. So we actually met with the grocer in person sat across the table from them and said, "Hey, we really like what you guys are doing. " And they don't call us a landlord. They actually call us their partner they go, we really like what you guys are doing out there. So they go, we're going to work this out. And from the closing, Dave was able to secure millions of dollars in value creation, which we didn't really go out and tell everybody externally because that's just not the way we operate and play. But you know what, this is the business that we're in. This is the business that we're going to continue to be in. So overall, I'd say that the grocery meetings were very, very strong.

Marissa, a question for you. With grocery-anchored retail remaining resilient, what is PECO's current strategy to drive higher rent growth while maintaining in-line occupancy at or above 95%.

Our strategy is centered on driving rent growth through selective leasing and precise deal structuring, while maintaining best-in-class occupancy. We're focused on curating a tenant mix that drives daily traffic complements the anchor and supports higher rents. We're equally disciplined on renewals and backfills, marketing space to market, upgrading tenancy and capturing demand from necessity-based and service-oriented users. This approach allows us to push rents while consistently maintaining in-line occupancy at or above 95%. A clear example is that Arapahoe marketplace in Greenwood Village, Colorado, where we backfilled fleet feet choose with [ Kurasushi, ] an 80-plus unit growth-oriented national concept, upgrading the merchandising mix, increasing traffic and driving stronger rent across the center.

Thank you, Marissa. Ashley, a question for you. Can you just share an update on our restaurant neighbors specifically, what did the national accounts team here from your QSR meetings in Las Vegas.

The occupiers that we met with were very growth-oriented. And not only that, they're looking into multiyear expansion. So we're hearing the 2026 pipeline is full and now they're looking to 2027, 2028. For example, we met with Dave's top Chicken real estate decision-makers, they told us that they have 433 stores open right now. They're opening 43 more in 2026, and they're targeting 145 new store openings in 2027. Their average unit volumes are nearly $3 million. So it's 1 of the strongest productivity stories we're hearing in QSR today. But broadly, we came out of the show with a really encouraging mindset about the QSR pipeline at large. In our meetings, the brands that are performing best are moving ahead with site selection, especially in the urban trade areas or suburban trade areas with strong daily needs traffic drivers like grocers and strong traffic patterns. So this is important because it tells us that restaurants that remain healthy and growing are growing where the real estate works.

Thank you, Ashley. All right. We have quite a few questions about everyday retail. Vasili, can you speak to demand for everyday retail centers?

Yes, absolutely. So this is a new space for us, but I don't think it's anything that we're quite not familiar with. So the way we're thinking about everyday retail, we just call it more neighbors coming into our portfolio. So if you look at the orientation of a shopping center, again, I don't know, I get going the stuff. But when you look at the orientation of the shopping center and you look at like, okay, there might be some shop spaces to the left to the right of the grocer. And then you look at like the peripheral stuff, the stuff that sits on the outparcel. We call that like the jewelry of our shopping centers. That's where we actually can really maximize and push rents. And so if you think about everyday retail and PECO's format, look, Ashley, Marissa, they lease it to the small shop operators in that 2,500 square foot, 3,000, 5,000 square foot space. And these everyday retail shops are sitting right up on the road. So they've got great visibility, really strong access. The environment, which is situated near where we already currently own grocery-anchored shopping centers. We're able to realize mark-to-market rents, where some of these prior owners probably weren't comfortable pushing some of these rents. But because of the strong demand and the relationships that these 2 professionals here have built on over the years, we know that we can put our team to work and get incremental growth over the years. So while it's a kind of a new space for us, the way we're thinking about it, it's just more neighbors.

Thank you Vasili. Ashley, as a follow-up on everyday retail, what excites the national accounts leasing team when we acquire a center. -- what are some opportunities you see as it relates to leasing an everyday retail center.

Yes. So this is one of my favorite notices to get across my desk. Thanks to Dave and his team. What excites us most about everyday retail acquiring is the leasing outside embedded in the real estate. We purchased near strong daily needs, traffic drivers, and we immediately start looking for Zane that strengthen that ecosystem. One of the biggest advantages we have at [ illusatacin ] is that our leasing agents are constantly in the market. They know the brokers, they know the real estate community. They know us growing in that market. And maybe most importantly, they know how that trade area is shifting. So we heard from our retailer conversations that users want to be near the strong daily needs traffic drivers, the strongest grocers. We consistently heard this from our service, medical, wellness and restaurant users. That grocery is still the traffic driver and our everyday retail centers benefit from that halo.

Thank you, Ashley. Marissa, anything you want to add on everyday retail?

Yes. Thanks, Kim. In February of 2026, we acquired Plaza West Covina in West Covina, California that had 2 vacant spaces at closing. Within weeks, we advanced 1 space to lease with a leading Mexican QSR concept and finalized business terms with laser away at ICSC for the second vacancy, which is expected to go to lease shortly. As a result, we expect the asset to have full occupancy within just a few months of acquisition.

Thank you, Marissa. All right. Dave, a question for you. Given the strong activity in the acquisitions pipeline of PICO as well as the current interest rate environment, how is PECO responding? Are we buying more? And are we adjusting PECO's IRR targets?

Sweet. I thought you forgot about me. I get to. I love hearing updates from our leasing team and all the exciting new concepts, all the deals that we're doing. And frankly, they make us look good. I feel like we count on them as Vasili mentioned a number of times in our acquisition process. And I think it's a huge competitive advantage for us. We know that we've got a team that can create value. And it helps us underwrite more precisely and it helps us win deals. So I love hearing them and their updates. But as far as acquisitions go, yes, we've started out the year strong with $185 million acquired to date. But we also have a strong pipeline, as I referenced, and another $200 million plus under contract that makes us believe we can deliver something similar in the second quarter to what we did in the first quarter. So we certainly could be above the midpoint of our guidance, but it's still early. And as I mentioned a few minutes ago, we did recently affirm our guidance for $400 million to $500 million for the year. So despite the competitive buying environment, we're confident in our ability to acquire high-quality centers at attractive returns. As far as the IRR targets go, yes. I mean, certainly, my team would love to have targets lower than 9%, but we're finding those. And we've got conviction that we can continue to find those. So yes, we're committed to the 9% unlevered IRR that Jeff had some breaches. We've kind of always had a very thoughtful, disciplined approach to our acquisitions. So we're focused on growing our shopping center portfolio accretively at the right price, while achieving that 9% IRR for grocery and 10% unlevered IRRs for our everyday retail centers.

Thank you, Dave. And maybe a follow-up question for you. A few follow-up questions. How -- maybe speak to cap rates? How stable are cap rates? What is pushing them in one direction or the other. Can you speak to current pricing and what cap rate should we expect in the second half of 2026?

Yes. Yes, happy to. I think as I mentioned, I mean, there's a ton of institutional capital flooding the open-air retail space. So Cap rates have definitely compressed over the last 12 to 18 months, especially as it relates to high-quality grocery-anchored deals in growth markets. That said, I think it's hard to see cap rates compressing much further than where they are based on where interest rates are. I think they could compress maybe a little bit further on some of the larger deals and portfolio deals and recap transactions given that that's where most of the institutional capital is focused from an investment standpoint. But for us, cap rate compression isn't necessarily a major concern for us is we can buy in markets where pricing is less efficient and in the everyday retail space, where there's also a bit more inefficiency than in grocery-anchored centers. And frankly, cap rate compression helps us as it relates to dispositions.

That was my follow-up next follow-up question, Dave. So a question from the webcast participants. Does that make capital recycling more attractive in this environment?

Yes, I think the short answer is yes. I mean we've seen it in deals that we've taken to market in recent months, where maybe an asset that would have gotten 4 or 5 offers maybe 12 to 18 months ago. We're now seeing up to 10 offers. So -- as a result, we're able to push pricing to levels that we haven't really seen before. So yes, I think given the right opportunity, we're also getting a lot of inbound calls from from people that are just looking for off-market deals. And we're happy to talk to them. They're probably going to pay a little bit more than the market if we pick up the phone call and they want to do a deal. So yes, I think I've been with Phil Edison a long time, and we've always tried to capitalize on opportunity. And I think that's certainly one in today's environment.

Thank you Dave. A question on AI, artificial intelligence. Ashley, can you share how -- some more color on how AI and data are being used to better mine from a leasing standpoint and help inform leasing decisions today.

Sure. Yet AI is a tool that we use every day. It's making a strong leasing department even stronger. It's not replacing the judgment of our teams, however. The real value here is being able to process more information faster, so we can make better decisions around tenant targeting, avoid analysis, merchandising strategy, et cetera. It helps us move faster in the field. Our teams can absorb real estate strategy, real estate criteria, local debt demographics, traffic patterns and category trends much faster than they could years ago. This is a market where quality space is scarce and retailers want to move quickly, speed and precision matter. One example is when a space might look like it should go into 1 category based on the traditional leasing playbook, but the data shows a better opportunity. So we're using traffic and going analysis to see where the strongest unmet demand truly is.

Thank you, Ashley. Marissa, a question from the webcast for you. What was the most common request from retailers at ICSC this year regarding store footprint and format.

Great question. The most consistent theme we saw at ICSC was strong demand for neighborhood center space, particularly smaller shop formats. Retailers are increasingly focused on rightsizing their footprint. With the highest demand clustering around spaces in the 2,000 to 2,500 square foot range. This reflects a broader shift towards efficient service-oriented concepts that complement the grocer and drive daily traffic. We're seeing strong demand from boutique fitness fitness like Club Pilates and solid core, along health and wellness users like Milan laser and laser way. On the food side, concepts like nothing but cakes and other emerging brands are also targeting smaller footprints to maximize productivity while maintaining a strong physical presence.

Thank you, Marissa. A follow-up question for you. Are retailers more focused on speed to open or rent economics right now.

Yes. We're seeing a shift towards speed to open becoming a top priority. While right economics remain important. Many retailers are increasingly focused on opening and generating revenue quickly. with elevated construction costs and unpredictable time lines, tenants are getting more strategic. Concepts like sour Dono are bringing in construction support and permit expeditors upfront to accelerate delivery. Dave's Hot Chicken, Kaba and Shipley donuts are targeting second-generation restaurant spaces to minimize build-out and open faster. So overall speed to revenue is playing a much bigger role in the site selection and deal strategy.

Thank you, Marissa. Dave, a question for you again. How does PECO win deals today relative to private buyers and public peers?

Well, I don't want to give away any secrets. But the short answer is we've been doing this for a long time. We have a veteran team that has deep relationships in this business. And ultimately, this is a relationship business. sellers and brokers. They want to sell the people that they trust and people that they have some history of transacting with. So PECO's transactions team, I think, has as much history as any other firm in this business.

Thank you, Dave. Vasili, a question for you. Are there any signs of changes in the leasing process, including shifts and negotiation dynamics or lease durations?

Well, I kept hearing from both Ashley and Marissa speed is where we're winning right now. And if anything, 1 observation I've noticed is that -- the turnaround times are much shorter, meaning that when the legal team is drafting the lease to the time they're finishing it through, we're used to seeing leases being out 60 days. Now we're getting these leases signed in like 2 weeks or less. And I think, again, I keep harping on this, and I think Dave touched on this, -- as everyone's touched on this, but this is a relationship business. And so Marissa right now, she's working with a -- great Clips operator. And because of that relationship, they worked together before, they're committed, they're like, "Yes, we're going to get the store open. And I think the other part of that is that they recognize that there's scarcity out there and like good quality real estate. So they know because Marissa, if another deal presents itself, I mean, she does need to present it and see if there's a better opportunity for the company. So these retailers right now, as Marissa mentioned, they're bringing in their own construction teams, Expeditors. So the good news for PECO is that we're getting rent in the door a lot sooner.

Thank you, Vasili. Ashley, anything you want to add on that one?

Yes. As Vasili said, when a retailer is serious, they want to move faster. That's where our national accounts team can really add value -- we sit at the intersection of that retailer relationship and the field execution. So part of our job is to keep the process moving as efficiently as possible across markets, across regions. We help to streamline that communication and align expectations early so that the process becomes more efficient and more collaborative between retailer and Phillips Edison and their partner. So retailers value having a team at Phillips Edison that can help them navigate multiple regions and multiple deals while still pairing that natural relationship with the local expertise.

Thank you, Ashley. All right. I'd like to have some fun at the end here and with a rapid fire lightning round for our ops leaders. So let's start with the first question. One retail category or a retailer you're most excited about? Marissa?

QSRA.

Ashley?

[indiscernible].

Vasili?

I'm just going to pick a retailer. I love working with -- great Clips, I'm going to -- I know it's rapid fire, but I just got to tell you guys, 5 minutes from my house is a Kroger banner Smiths here in Utah, where I live. And they've got this app right now. And so they actually might be able to touch on this more, but they consider themselves a technology company that happens to cut hair. So I get on the app, and I can find my current location and it kind of geo code and says, "All right, el -- if you want to go to this exact location, you're 20 minutes out or you can drive another 10 minutes and go over here. So I'm a huge fan of these guys. -- they're continuing to evolve. And we're seeing a lot of retailers involved, but they're the one retail that I'm super hot on.

All right. And continuing the rapid fire. One thing investors misunderstood 1 thing investors misunderstand about grocery-anchored retail. Dave?

I mean so much for rapid fire I'm going to go with simplicity. I just think this business is more complex than a lot of investors assume it is. And I think that's an advantage for us.

Vasili?

Wow, I didn't think about that question, Kim. So there [indiscernible] misconception. I mean, look, these grocers work with very low margins. And so they're constantly figuring out ways to get more customers in their doors. I mean, I think there was a blurb last week about Kroger is going to even get way more competitive right now on pricing. I don't know if you guys read that, but that was the news article I read. So yes, I think consumers want convenience, and these grocers are near where the consumers shop and live. So it's a great recipe for where PECO likes to play.

Great. Marissa?

While some legacy retailers are closing, many new and innovative concepts are expanding to meet today's consumer demand driving the next wave of retail growth.

And Ashley.

Embedded graph.

RapidFire. All right. Last 1 for everyone. One thing that made you optimistic coming out of ICSC. Ashley?

Consistency.

Vasili?

All Yes. I would echo that, speaking with some of our peer group, everybody seemed very positive with the outlook that the retailers are not looking just in front of them, but they're looking into the future.

A similar answer, Marissa.

Mine energy is so positive. Retailers aren't sitting on the sidelines or talking about growth, relocations and opportunities.

And Dave.

Yes, I'll go with anticipated supply. I think there's so much demand in the market right now, almost unprecedented that I think based on the conversations that we had and the meetings we had in Vegas at the supply the supply will be there. The comment is pricing is just too hard to pass up. And I think there's going to be more on the market for us to buy.

All right. Well, this concludes our ICSC recap. Thank you, facility, Dave Marissa and Ashley for leading our conversation today. And thank you for everyone for joining us. If you have any additional questions or if we didn't get to your questions, please reach out to us, and we'll get back to you quickly. We look forward to seeing many of you next week in New York at REIT Week and this concludes our webcast today, and have a great rest of your day. Thank you.

All right. Thanks, everyone. Thanks for having us.

Thank you.