PECO Reports Strong Q2 Growth
Phillips Edison Reports Robust Q2 2026 Results, Elevating Full-Year Guidance
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Key Points
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Q2 total revenue was $189.6 million, up from $177.8 million in Q2 2025.
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The company raised its full-year 2026 guidance with the Nareit FFO per diluted share midpoint up 6.3% year over year and Core FFO per diluted share midpoint up 6.2% year over year.
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Leased portfolio occupancy was 97.3% and same-center leased occupancy was 97.5%, underscoring the strength of PECO’s grocery-anchored portfolio.
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Rent spreads remained robust: 33.7% for comparable portfolio new leases, 32.2% for comparable inline new leases, and 21.2% for comparable portfolio and inline renewals.
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Chief Executive Officer Jeff Edison said: "Our second quarter results demonstrate the strength of PECO’s high-quality portfolio and our ability to convert strong operating fundamentals into long-term earnings growth."
Phillips Edison & Company (PECO) posted net income of $41.1 million for Q2 2026, up sharply from the same period a year ago, as its grocery-anchored shopping centers kept nearly full occupancy and rents climbed. Total revenue hit $189.6 million, up from $177.8 million in Q2 2025, according to TipRanks.
The company also raised its full-year 2026 guidance. The midpoint for Nareit FFO — a standard real estate earnings measure — rose 6.3% year over year. CEO Jeff Edison said the results "demonstrate the strength of PECO's high-quality portfolio and our ability to convert strong operating fundamentals into long-term earnings growth."
Occupancy Near Full as Grocery Anchors Drive Demand
PECO's leased portfolio occupancy reached 97.3% in Q2 2026. Same-center leased occupancy came in slightly higher at 97.5%. Those numbers reflect the steady draw of grocery-anchored centers, where shoppers visit regularly regardless of broader economic conditions, as reported by MarketScreener.
Same-center net operating income — the cash a property earns after direct costs — grew 3.8% year over year. PECO operates 302 properties across 31 states, totaling about 33.9 million square feet. That scale gives the company pricing power with tenants and steady deal flow for new leases.
Rent Spreads Surge as New Leases Jump Over 33%
New lease deals came at a big premium to old ones. Comparable portfolio new leases showed rent spreads of 33.7%, meaning new tenants are paying 33.7% more per square foot than the prior tenant. Comparable inline new leases posted a 32.2% spread, according to MarketScreener.
Renewals were also strong, with comparable portfolio and inline renewals showing a 21.2% spread. High spreads signal that landlords hold the upper hand in lease talks. For PECO, that means growing cash flow as older, lower-rent leases roll over into new, higher-rent deals.
Six Acquisitions and $152 Million Deployed in the Quarter
PECO was busy buying in Q2. The company completed six shopping center acquisitions plus one outparcel for a combined $152.4 million. At the same time, it sold $64.6 million in assets, trimming properties that no longer fit its core strategy, per TipRanks.
To fund growth, PECO raised $85.3 million in net proceeds by issuing 2.0 million common shares through its at-the-market, or ATM, program — a tool that lets companies sell stock directly into the market. Another $6.4 million came in after the quarter ended, as noted by GuruFocus.
Raised Guidance Points to ~6% FFO Growth for Full Year
PECO lifted its full-year 2026 outlook after the strong quarter. The Nareit FFO per diluted share midpoint rose 6.3% year over year, while Core FFO per diluted share midpoint climbed 6.2%. Q2 Nareit FFO came in at $0.67 per diluted share and Core FFO at $0.69, according to GuruFocus.
For context, FFO adds back real estate depreciation to net income, giving investors a cleaner view of a REIT's cash earnings. PECO's first-half 2026 net income totaled $71.5 million. With occupancy near record highs and rent spreads well above 20%, the company is entering the second half of the year from a position of strength.
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