Good day. And welcome to the Brixmor Property Group Incorporated First Quarter 2016 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference call over to Ms. Stacy Slater, Senior Vice President, Investor Relations. Please go ahead. Ms. Slater, the floor is your ma'am.

Thank you, operator. And thank you all for joining Brixmor’s first quarter conference call. With me on the call today are Dan Hurwitz, Interim Chief Executive Officer and President; and Barry Lefkowitz, Interim Chief Financial Officer as well as Brian Finnegan, Executive Vice President Leasing who will be available for Q&A. Before we begin, let me remind everyone that some of our comments today may contain forward-looking statements that are based on certain assumptions and are subject to inherent risks and uncertainties as described in our SEC filings and actual future results may differ materially. We assume no obligation to update any forward-looking statements. Also we will refer today to certain non-GAAP financial measures. Further information regarding our use of these measures and reconciliations of these measures to our GAAP results are available in the earnings release and supplemental disclosure on the Investor Relations portion of our website. Lastly, we ask that you please be mindful of your fellow call participants and limit your questions to one per person. If you have additional questions regarding today’s earnings, please re-queue. At this time, it’s my pleasure to introduce Dan Hurwitz.

Thank you, Stacy. Good morning, everyone. And thank you for joining us today. As you may recall on our Q4 earnings call following my first 21 days as Interim CEO of Brixmor, I indicated how impressed I was with the caliber of the organization at the time. I can now say after spending more than 10 weeks working alongside various departments to stabilize operations, empower our people and working with the Board to select future leadership of the organization, I've only grown more impressed and optimistic about the direction this enterprise is headed. And it's ability to further enhance its position within the industry. With the selection of Jim as CEO, Angela as CFO and the various talented individuals already running day to day operations, this company now has the leadership, integrity and confidence required to effectively engage with the public markets and strengthened its reputation among the tenant community in order to maximize value for its shareholders. Before addressing our quarterly results I'd like to take a moment to thank the Board of Directors for their support and cooperation throughout the search process. We were extremely fortunate and flattered by the pool of candidates. And to say we were pleased with the end result would be an understatement. Management transition can be difficult but this Board made itself available 24x7 for committee meetings, interviews, contract review or just advisory conversations. The process was extraordinary and the timing and results have clearly validated the effort and highlight this Board's true sense of obligation to all shareholders. I'd also like to take a moment to thank my friend Don Wood for the way he handled the situation with Jim. It is never easy to part ways with the most trusted partner and close friend. And yet the excitement and genuine support…

Thank you and good morning. Our first quarter results highlighted by leasing spreads of 11% and year-over-year ADR per square foot growth of 5% again demonstrate the internal growth profile our portfolio derived by the low market in place rents and continued favorable supply conditions and tenant demand. NAREIT FFO per share for the quarter increased 15% to $0.53 versus $0.46 in 2015. With higher NOI and lower interest rate, interest expense generating the improved earnings as well as lower year-over-year G&A due to a $0.03 per share of pre IPO compensation recognized in 2015. NOI for the 2016 quarter includes $6.4 million or $0.02 a share of income from Circuit City related to their bankruptcy in 2008. $5.6 million of the settlement was attributable to lease rejection claims and is included in lease termination fees. And as such is not included in same property NOI. During the quarter we incurred $3.65 million of $0.01 a share of additional cost related to the previously disclosed review conducted by the company's audit committee. Also during the quarter we had the benefit of $2.6 million or $0.01 a share from equity base compensation forfeitures associated with the February executive departure. So when you consider all the variables in this year and last year, the underlying growth was driven an increase in NOI and lower interest expense. Same property NOI growth for the quarter was 2.8% consistent with our guidance. On the balance sheet side, we ended the quarter with net debt to adjusted EBITDA on a cash basis of 7.1x. Interest savings for the quarter was about $0.02 a share resulting from 2015 debt repayment of $1.1 billion at 5.8% interest versus the issuance of $1.2 billion of senior unsecured notes with the weighted average interest rate of 3.9%. On April 1,…

[Operator Instructions] The first question we have comes from Craig Schmidt, Bank of America. Please go ahead.

Okay. Thank you. I guess I'll take advantage of Dan being on the phone. Dan I noticed that sports authority elected to go liquidation and it seems like troubled retailers pass to liquidation accelerating rather than trying to do rework. Is there any pressure on retailers that maybe accounting for this?

I don't think so, Craig. I think it's an individual case by case basis where individual retailers will assess the viability of their business plan and their strategy. I think the sporting category which in general sales in many cases commodity goods at low margins, it's very hard to justify not only the square footage that some of the retailers have but some of the merchandiser said they carry which has low inventory turn and low productivity per square foot. So I do think that it goes on case by case basis. And a lot of it depends on what the category is, what the future of that category is and with the future distribution channels are going to be for those categories. And sporting goods as I think we all know has been under pressure for some time. And obviously there was not a compelling business model that would prompt others to invest in sports authority for to continue going forward.

Next we have Christy McElroy of Citi.

Hi. Good morning, everyone. Dan, in terms of your more aggressive effort to drive occupancy, have any changes been made within the leasing structure to accommodate that initiative? Are there any tenants that you are doing increase business, business records or results? And what impact do those efforts ultimately have on your expectations for TIs and releasing spreads that you sort of roll that out?

Yes. I'll let Brian Finnegan address that.

Yes. Well, Christy we really challenge the team at the end of last year. With occupancy decline and try to make some changes to the deal approval process and not as many hands were touching things than we were getting things done faster. It really empowered our people and I think you started to see the progress in the first quarter here. We got some work to do but we are kind of on the right path. In terms of tenants that are expanding, we talked about the odd price category a lot. And Dan mentioned we have executed four deals at TJX this quarter. We got leases in the pipeline with Ross, Nordstrom Rack, and our Sierra Trading Post for TJX is a big growth vehicle. We got three more deals in the pipeline with them following on our initial deal here in Ann Arbor. We continue to see especially grocer expand, pet store expand, so we feel like there is good categories in our space that are expanding right now particularly in junior and anchor space. And our guys are focused on it from the big buy perspective to move the occupancy deal.

I think it's interesting Christy I think your point is a good one that what was gratifying this quarter was not only to see the volume increase but it did not come at the expense of rent, and it didn't come at the expense of TI. So we didn't have to buy a lot more and at the same time we got what we thought were the appropriate rents for the space. So we won't sacrificing rent just to get done -- deals done expeditiously. Bottom line was we just felt that there were too many hands touching every deal and as we have limited -- not all those hands were constructive very frankly. They were time consuming and not necessarily productive to the process. So as we eliminated some of the hands touching the deal and even as Brian said empowered the people with more authorities to make deals with retailers directly, that also get responded too much more favorably in the retail market because retailers like to know they are doing business with people they can make decisions. And that often prompts that the dialogue become much more constructive. So we try to enhance that process here. And I think we've seen some improvement. And I'd expect we'll see more much under Jim's leadership.

The next question we have comes from Handleson Justy of Mizuho [ph]

Good morning. Thanks for taking my question. Dan I guess for you. If I am not mistaken both the outgoing CEO and CFO, Mike P, Mike C had extensive operating experience while working I think with Kimco for a number of years, which I guess mitigated the need for COO. Given that the incoming CEO and CFO, Jim and Angela do not have prior operating experience should we expect or is it the Board's view that the hiring of the COO should be on to the list given the skill set required to operate well the larger more disparate breaking up portfolio and manage the company's REIT up activities? If no why not? If yes, is that can be 2016 event? And would that be currently in the contemplated guidance range?

Well, I think first of all I don't support decision. I think that's the decision of the CEO. So Jim will make that decision after he evaluate the processes, the people, visits the assets, this is a company that is very broad and very deep with talented people that run this portfolio on a day-to-day basis. I know there has been historically no COO at this company; I am familiar with other companies that haven't had COOs as well. But I'll also say that the people that run the operation on a day-to-day basis and have historically run this operation on a day-to-day basis at the asset level are still here. And they are running the assets on a day-to-day basis. And I think it's incredibly admirable that when you see the results that we have in the first quarter given that we did loose leadership at the top yet this company continued to progress and continue to run the operation effectively. And I think has proven that the talent at each level of the organization is maybe even deeper than the market thought. So I think Jim would have to evaluate that upon his arrival. I think he is a duty evaluator of talent. That's one of the things that have impressed us about him over the years. And we will rely on his judgment on that issue and we will wait to hear from him. But I do think that when he does arrive he will see that the people that have historically run this company and the people they are at the asset level producing the results on a quarterly basis are still here and doing it.

Next we have Ki Bin Kim of SunTrust.

Thank you. Good morning, Dan. So going back to your same store NOI comment side it seems like without the $900,000 benefit from the Circuit City settlement it would be about 2.3%. I know you said you make more momentum in leasing in April. Was just curious was that already in the same store NOI guidance of 3% and whether it was or not what are you seeing already that makes you comfortable at that 3% same store NOI number?

Well our guidance on same store NOI was 2.5% to 3.5% and we are still comfortable with that guidance. The matters that were in the first quarter number were primarily anticipated and going forward we don't see anything that would change that guidance level. So if we have enormous productivity on the leasing side that actually open this year that would be positive surprise but keep in mind and I think I mentioned it even though you have increased volume on a leasing activity on a quarterly basis, you typically don't see the financial results of that until the following year. So we are 2.5% to 3.5% was really based on most of the activity that occurred, the leasing activity that occurred in 2015. And the volume that you saw in the first quarter and the continued process improvement and acquisition that we expect for the rest of the year, we feel that you will see primarily in 2017. But we are still confident with the 2.5% to 3.5%, the 2.8% was not unexpected and we expect the year to follow accordingly.

The next question we have comes from Jason White of Green Street Advisors. Please go ahead.

Hey, Dan. Just quick retailer question for you. If you look at the department stores facing some pressures and changing shopping habits and you look at Kohl's, is there a way for them to kind of rework their strategy and become more of an in favor retailer rather than fighting the same fight that all the departments stores are fighting?

Yes. It's a great question, Jason. And the department store business in general has been a struggle for quite sometime. And I am not as negative on the Kohl's or the Macy's and some folks are for a couple of reasons. Number one, department store goes through cycles. They have merchandizing mistakes, they have merchandizing win and it's affected our -- very affected -- their sales are affected on quarterly basis. So when you have merchandizing decisions that are made 9 to 12 months in advance of any given quarter sometimes you are right and sometimes you are wrong and it is true that there have been a number of department stores that have been wrong recently. And have gambled on the wrong merchandizing mix and they are paying price for that. The other thing I think to keep in your mind is that non inflationary environment. When you see 1% and 2% comp store increases it is pretty extraordinary. I really don't have negative view of retailers, their plan for 1% or 2% increasing and get 1% and 2% increase particularly when we are looking at deflation in ready-to-wear which is the bulk of their business. So if we were sitting at 3% or 4% inflation for example and your economy and GDP growth have 3% plus I don't think we will be having this conversation. So if you take a look at the numbers, you look at the balance sheet relatively strong and you look at their results, I think they are being conservative on inventory which is wise. I think being conservative on inventory certainly is going to put a ceiling on your growth. So I don't think we are going to see anything exciting in the same store category. And I think the lack of inflation and the existence of deflation put enormous pressure on each one of these retailers. So if you can put up 1% or 2% increase or even a flat number, if you plan for a flat number you can still make money. If you over inventory you have a problem. And I think retailers have been very wise not to do that. So again I think in a non inflationary or price deflationary environment and in an economy that is not growing at the level that it has historically and we don't know when that will come back, I am not upset quite frankly about the production and the numbers that these retailers are producing. And I think they will continue to sort of drag along until the economy gets better or they improve their merchandize mix appropriately.

Todd Thomas of KeyBanc Capital Markets.

Hi, thanks. Good morning. Dan just a question about the CFO search. Just given Jim's appointment and announcement was made just two weeks ago. Is it safe to assume that the CFO search was primarily handled by you and the Board and what was Jim's involvement if any in the process?

This was Jim's search. Jim was leading the search. He brought his candidate to the Board. He and the Board interviewed the candidate as swiftly as we could. Many of us myself in particular knew Angela well for years. I've always been extraordinarily impressed with her talent, her intellect and her abilities and so no it really wasn't handled by the Board at all. It was handled almost exclusively by Jim who made a recommendation to the Board and he handled the negotiations and he handled the conversations with Angela. And we've said all along that we thought that the hiring of the CFO was the responsibility of the CEO and he started -- he got the work obviously right away as soon as he became our CEO. And we supported those efforts.

And next we have Jeremy Metz of UBS.

Hey, guys. Good morning. Just in terms of the dispositions. Two parts here. First, you didn't sell anything in Q1 and with the new management team coming in; have you essentially put those on hold to see what they wanted to do in terms of pruning the portfolio? And then second probably a little more for Michael but even if you are pausing the sales here you are still active in the market and when your peers talk about continued slowing in buyer pools particularly in the non-core stuff? So just wondering what you are seeing on the ground and our pricing expectations in the market more generally being said -- being reset for both core and non-core product.

As we mentioned earlier we have a number of assets in the market at currently. And number of those assets has gone under contract. You didn't see a lot of activity in first quarter because there was no -- a lot of closing in the first quarter, it will be more in the second quarter. We had not slow the process on the initial or the group of assets that we have talked about selling. We don't think there will be any disagreement that some of those assets should be sold between us and the new management team. But I do think it's prudent to after this initial round it will be up to Jim to review the portfolio and to provide guidance on the size and the scope of the portfolio that ultimately will be sold if at all. And that something I know he will address upon his arrival. But in the meantime we have assets that are under contract; we have assets that we expect will sell during the course of the year. And we have not changed our guidance that we gave last quarter on what our anticipated volume of sales will be for the year.

[Operator Instructions] Next we have Greg Schweitzer of Deutsche Bank.

Hi, thanks. Good morning, everyone. We heard about an unusually high number of store closures that's spilled over into Q2 relative to trends from past years, could you talk a little bit about the environment on the ground what you've been seeing so far this quarter? And have you seen an increase, an unusual increase for or still at the level expected relative what's baked into guidance?

Greg, this is Brian. We are actually down from where we were last year in store closures by about 30% in GLA and so far it's reflective in what we think our guidance is going to be this year now. Obviously we have sports authority that we are looking at as of right now it does not look like that's going to be a go forward business. We are in a good position on those boxes. All six locations are in great markets, good locations at under 10 bucks a foot, we already got activity almost across the board so I think we are well positioned. We may have some downtime involve in those but for the most parts store closures are going as expected and like I said down from where we were last year.

The next question we have comes from Mike Mueller of JP Morgan.

Hi, thanks. Sure, Jim is going to have some input on this and but should we think of the asset sales that's being occurring beyond say 2016 or really look at this as being some house cleaning, where you are just kind of taking care of some asset sales and you evaluate things as they come and they go beyond that.

Fair question, Mike. As you know, I've said over the years I think every portfolio always has some level of asset sales that should occur on an annual basis because things change particularly in retail. Asset quality changes, tenant move in move out, demographics change et cetera. And I am sure that's something that Jim will look at very keenly upon his arrival and will be able provide to you with direction specifically in regard to that question.

[Operator Instructions] Well, at this time it appears that we have no further questions. We'll then conclude the question-and-answer session. I'd now like to turn the conference back over to management for any closing remarks.

Once again we wanted to thank you all for your time this morning. And we look forward to the next chapter in a Brixmor story. Have a good day.

And we thank you, sir and to the rest of the management team for your time also today. The conference call is now concluded. At this time, you may disconnect your lines. Thank you and have a great day everyone.