Episode 553: Brixmor CEO Brian Finnegan on the Symbiotic Bond Between Retail and Community

Lance (0:12)

Welcome into a new episode. Today's guest is Brian Finnegan. He is the CEO of Brixmor. Brian, thanks so much for joining us. Happy to have you here.

Brian Finnegan (0:19)

Yeah, thanks for having me, Lance.

Lance (0:21)

So Brixmor may not be on the mind of consumers going shopping, but your properties are part of the daily routines of millions across the country. So when someone asks just first and foremost what Brixmor does and sort of why the company matters, how would you describe the mission and the role that it plays in connecting retailers, consumers and communities?

Brian Finnegan (0:40)

Yeah, so thanks again for having me.

Our mission is to be the centers of the communities we serve. And if you think about it, it's a very relatable business, right? Everybody's got a favorite restaurant that they go to, they've got a favorite grocery store where they work out. And our team gets to do that every day and create those environments. So we've got 350 shopping centers across the US that generated 900 million visits to our portfolio over the last year. We're among the largest landlords to leading grocers like Kroger and Publix, Whole Foods, Trader Joe's, off price operators like Burlington, TJX and Ross. And so we sit at kind of the cross section of commerce, right? We've got retailers and the consumers and we help facilitate those engagements.

Lance (1:31)

And how do you think about Brixmor's role in really creating these places that become an important part of community? Because I think that's ultimately what you're doing, right? You're not just being a home for a retailer. You're doing that obviously, but you're also then bringing people into it and you're connecting the consumer with a brand and you're making sure they sort of co-exist within the greater community and sort of have a symbiosis of sorts of helping one another.

Brian Finnegan (1:58)

It's a great word to describe it because it's a symbiosis in our centers as well. It's an asset class in real estate where it matters who your neighbor is.

And when you're able to put a great anchor tenant, the larger tenants in the grocery stores, the general merchandise retailers like Walmart and Target, and then off of that traffic, you're able to complement that with other uses. So our job is to create an environment where those uses complement each other, right? Where we see voids in a market. And what's interesting today, and I'm sure we'll get into it, as consumers are demanding much more of the suburbs in terms of the type of services and restaurants and workout facilities that they have, it's really allowed us to upgrade our centers with improved merchandising.

Lance (2:51)

And what's the process of determining, right? You said you have these these anchor stores, right? These, you know, grocery stores, these these big retailers. And then you have these maybe more local mom and pops say, say next to them.

What's the process in sort of determining what those shops next to the greater anchor stores are? Because you don't want to have too much of one thing. You don't want to have too little of another. You want to find that balance. How do you find that balance?

Brian Finnegan (3:15)

First, we look at what's missing in an area. We utilize data. We get a sense of where dollars are leaving a trade area for restaurants or for grocers. Interestingly, only 17% of our rent comes from local small shop tenants. They are an important part of the community. Everybody thinks about their favorite pizza place or a great boutique retailer. We have a lot of those throughout the portfolio, but the bulk of our rent comes from large credit worthy tenants, like many of those that I mentioned. For us, it's understanding A, what the community needs, and then figuring out how we can put a merchandising mix together to complement those.

We can dig into our strategy. It's been a lot of reinvestment in the core portfolio to be able to facilitate a lot of those changes.

Lance (4:13)

We're going to talk about that reinvestment and that redevelopment just a little bit later in our conversation, but I do want to talk about the physical retail space. Obviously, it's a sector that's dealt with challenges.

There's no secret to that. Growth hasn't always been linear when it comes to this space, yet we are seeing many retailers obviously continue to invest in these brick and mortar locations. What has allowed physical retailer, even through the various headwinds, we can get into some of the headwinds too of the past, to remain such a valuable part of the consumer experience? There are so many opportunities now more than ever to where I could be sitting right here and get what I need at a regular brick and mortar, but why is that so important?