Jeff Edison, chairman and CEO of Phillips Edison & Company, Inc. (Nasdaq: PECO), sat down for a video interview during Nareit’s REITworld: 2024 Annual Conference in Las Vegas, Nevada on Nov. 18-21.
Edison noted that the market for acquisitions has been volatile over the past three years, largely due to fluctuating interest rates, particularly with the 10-year rate. While there has been pent-up demand to sell, sellers have been hesitant due to uncertain interest rates. Edison anticipates that as interest rates stabilize, more properties will become available for purchase in the early part of 2025, presenting potential buying opportunities.
Edison also addressed the impact of supply constraints on leasing demand. The lack of new supply, driven by rising construction costs and inflation, has made it difficult to justify large-scale developments. This scarcity of space, combined with strong consumer demand, has given Phillips Edison increased pricing power and the ability to attract high-quality retailers, ultimately enhancing the value of their properties.
Looking ahead to 2025, Edison emphasized that the company will continue focusing on internal growth from its existing portfolio while seeking external growth through acquisitions. He expressed optimism for a strong year, anticipating positive developments in both acquisitions and leasing, with the potential for record-level performance in rents, occupancy, and leasing spreads.