PECO reported a net income of $47.5 million for the fourth quarter of 2025, up 10.0 % from $18.1 million in Q4 2024, and $111.3 million for the full year, a 77.6 % increase over $62.7 million in 2024. Core Funds From Operations (FFO) reached $0.66 per diluted share in Q4, a 7.7 % rise from $0.62 in the prior year, and $2.60 per share for the year, up 2.4 % from $2.54 in 2024. Revenue for the quarter was $187.9 million, beating the consensus estimate of $186.5 million by $1.4 million, while full‑year revenue of $1.87 billion surpassed the $1.86 billion estimate by $10 million.
The core FFO beat was driven by a combination of higher rental income and disciplined operating costs. Strong demand for grocery‑anchored centers allowed PECO to maintain double‑digit rent spreads—34.3 % on new leases and 20.0 % on renewals—while operating expenses grew only modestly. The company’s focus on high‑quality, defensively positioned assets kept occupancy at 97.3 % for the entire portfolio and 97.6 % for same‑center properties, supporting the robust NOI growth of 3.8 % year‑over‑year to $454.7 million.
Capital recycling continued to shape the balance sheet. PECO acquired $395.5 million of new assets and disposed of $145.4 million in 2025, netting $250.1 million in cash. Liquidity stood at $925 million, slightly below the $977 million figure previously cited, and the net debt‑to‑annualized adjusted EBITDA ratio was 5.2×, reflecting a modest improvement from 5.3× in the prior year. These moves reinforce the company’s ability to fund growth while maintaining a healthy debt profile.
For 2026, management guided for Core FFO per share of $2.71 to $2.77 and Nareit FFO per share of $2.65 to $2.71, a mid‑single‑digit growth outlook that is slightly below the consensus estimate of $2.93 for Core FFO. CEO Jeff Edison emphasized that the company remains confident in its portfolio’s resilience, noting, “2025 was a strong year for PECO, and we enter 2026 with good momentum.” The guidance signals cautious optimism amid a competitive leasing environment, while the company continues to prioritize strategic acquisitions and disciplined capital allocation.
Market participants responded positively to the results, with analysts highlighting the significant core FFO beat and the company’s strong occupancy and leasing spreads. While the guidance for 2026 Core FFO is modestly below some analyst expectations, the overall outlook remains supportive of continued growth in a defensively positioned retail segment.
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