Phillips Edison & Co Inc

NASDAQ:PECO

Earnings Call Transcript 2020-Q4

[Operator]

Good afternoon, and welcome to Phillips Edison & Company's Fourth Quarter and Full Year 2020 Results Presentation. My name is Sarah, and I will be your conference call operator today.

Before we begin, I would like to remind our listeners that today's presentation is being recorded and simultaneously webcast. The webcast and slide presentation containing financial information can be accessed by visiting the Events and Presentations page in the Investors section of the Phillips Edison & Company website at www.phillipsedison.com or at phillipsedison.com/investors. A replay of today's call will be available later today on the same website.

I would now like to turn the call over to Michael Koehler with Phillips Edison & Company. Sir, please proceed.

[Michael Koehler, executive]

Thank you, operator. Good afternoon, everyone, and thank you for joining us. I'm Michael Koehler, Vice President of Investor Relations with Phillips Edison & Company. Joining me on today's call are our Chairman and Chief Executive Officer, Jeff Edison; our President, Devin Murphy; and our Chief Financial Officer, John Caulfield.

During today's presentation, Jeff will provide an overview of our portfolio, including an update on COVID-19, and touch on our fourth quarter highlights. John will then discuss our financial results and balance sheet. And finally, Jeff will return to discuss our outlook for 2021 and provide some comments on liquidity. Upon the conclusion of our prepared remarks, Jeff, Devin and John will address your questions. If you are logged into the webcast and have a question, you can submit it by typing it into the webcast text box and clicking submit question. We encourage you to submit your questions as soon as possible.

Before we begin, I would like to remind our audience that statements made during today's call may contain forward-looking statements, which are subject to various risks and uncertainties. Please refer to Slide 3 for additional disclosure and direction on where you can find information regarding potential risks.

In addition, we will also refer to certain non-GAAP financial measures. Information regarding our use of these measures and reconciliations of these measures to our GAAP results are available in our earnings release issued yesterday as well as the slide presentation for this webinar, which is available for download on our website.

Now please turn to Slide 4, and I will turn the call over to Jeff Edison, our Chief Executive Officer. Jeff?

[Jeffrey Edison, executive]

Thank you, Michael. Good afternoon, everyone. Over the past 12 months, people around the country have turned to their local neighborhood shopping centers more than they ever had before. Grocers and other necessity-based businesses have continued to supply essential goods and services during these unusual times. Local brick-and-mortar retailers, restaurants and service providers have kept the country going. The perseverance and innovation are commendable.

Throughout the COVID-19 pandemic, our tenants, who we call our neighbors, have demonstrated the resilience, which is reflected in our year-end results. As of December 31, 2020, our portfolio consisted of 283 wholly-owned shopping centers, over 97% of which were grocer-anchored. They were located in 31 states, totaling 31.7 million square feet of gross leasable area, or GLA.

At year-end, our lease portfolio occupancy was 94.7% and our in-line occupancy was 88.9%, both down slightly from 2019. Our total portfolio annualized base rent, or ABR per square foot was $12.89 at year-end. That was an increase of 2.3% from a year ago. Our in-line or nonanchor ABR, was $20.61 per square foot, which was an increase of 3.2% from a year ago. Our top 5 markets by ABR are among the top 20 MSAs in the United States. These are Atlanta, Chicago, Dallas, Minneapolis-St. Paul and Denver.

Our centers have an average 3-mile household income of $67,000 and an average 3-mile population of 63,000. Our experience has proven that these metrics are important to support the health of our neighbors and the merchandise mix of our centers. 76.3% of our annualized base rent came from grocers and national and regional neighbors, representing strong credit-worthy neighbor base.

Now turning to Slide 7 (sic) [ Slide 5 ]. It provides an overview of our diverse necessity and service-based tenants. Kroger and its brands are collectively our largest neighbor, making up 6.9% of our ABR across 64 centers. We're Kroger's largest landlord. Publix is our second largest neighbor, making up 5.6% of our ABR across 56 centers. We are Publix's second largest landlord. Rounding out our remaining top 5 neighbors are Ahold Delhaize, Albertsons/Safeway and Walmart.

Our top 5 in line or nonanchor neighbors are Subway, Anytime Fitness, Wells Fargo, T-Mobile and Starbucks. By industry, 36% of our ABR comes from our grocery anchors, 26% from service providers, 22% from traditional retailers and 16% from restaurants. By neighbor type, 36% of our ABR, again, comes from our grocery anchors, 40% from national and regional neighbors and 24% from local neighbors.

Turning to Slide 6. We are pleased that 100% of our centers remained open throughout the entirety of the pandemic. At the beginning of March 2021, 98% of our neighbors were open for business, representing 99% of our ABR. We still have neighbors closed where the restrictions have been most severe. While we have seen a number of retailers filed for bankruptcy protection since the onset of the pandemic, our portfolio has been minimally impacted. We believe our neighbors currently in the bankruptcy process represent exposure of less than 1% of our ABR.

Our team of hard-working associates has been committed to working with our neighbors throughout the pandemic. To accommodate new social distancing guidelines and indoor dining restrictions, our property management and construction teams currently have 79 projects completed or underway. These projects include drive-thrus, walk-up windows and outdoor patios and dining spaces. This is in addition to the 1,400 Front Row To Go parking spaces we have added at the front of our centers that customers can utilize when ordering online and picking up in the store.

Our efforts to work with our neighbors has paid off. Our Q2 collections increased to 93%, up from our originally announced figure of 86%. And our Q3 collections increased to 95%, up from our originally announced figure of 94%. These figures compare favorably to our public peers to recognize just 82% and 90% collections on average for Q2 2020 and Q3 2020, respectively.

During Q4 2020, our collections totaled over 95% compared to 93% on average for our public peers. These positive results continued through the first months of 2021 as we collected 94% of rent and receivables that were billed. In total, we've collected over 94% of rent and recovery billings originally charged between April 1, 2020 and December 31, 2020. This leaves us with an uncollected balance of $19.9 million. Of this balance, $5.9 million is expected to be collected based on executed payment plans that are currently active. We have abated approximately $4.2 million of rent. We will continue to work with our neighbors on the remaining balance.

Now turning to Slide 7. Despite these uncertain times, we have seen surprisingly strong new leasing velocity from our leasing team. They have been busy executing both new and renewal leases with high-quality neighbors. During the fourth quarter, we executed 248 leases, including new leases, renewals and options, totaling 1.1 million square feet. This compares to 251 leases executed, also totaling 1.1 million square feet during the fourth quarter of 2019. For the full year 2020, we executed 861 leases, including new leases, renewals and options, totaling 4.7 million square feet. This compared to 1,026 leases executed, totaling 4.6 million square feet during 2019.

During the quarter, combined, comparable rent spreads were 5.5% for new and renewal leases. For the full year, combined comparable rent spreads were 7% for new and renewal leases. This compares to 9.6% for both Q4 and full year 2019. At December 31, 2020, the average remaining lease term for our portfolio was 4.5 years. Our current leasing pipeline remains healthy, and we've already signed more leases in January and February than we did during the first 2 months of 2020. That said, we may still see our occupancy pressured in the first half of this year as a result of the prolonged pandemic. However, we're hopeful that our new leasing activity will allow us to emerge from the pandemic even stronger.

Turning to Slide 8. We were successful in mitigating the impact of COVID-19 pandemic had on our portfolio, but our results were impacted, nonetheless. Our 2020 same-center net operating income, or NOI, decreased 4.1% to $328 million. Our core funds from operations, or core FFO, decreased 4.5% to $220 million or $0.66 per diluted share versus $0.70 last year. Despite these declines, our cash conservation measures and improving collections allowed us to announce the resumption of our monthly distributions. We reinstated our monthly distributions at approximately $0.0283 per share or $0.34 per share if annualized. We have made distributions in January, February and March, and the Board just approved the distribution payable in April.

We also completed a tender offer, providing liquidity to our shareholders that needed it. We purchased 13.5 million shares of stock at $5.75 per share. This represents approximately 4% of our total equity outstanding for a total purchase price of approximately $77.6 million. We funded the tender offer with cash on hand.

With that, I will now turn the call over to our CFO, John Caulfield, to review our financial results for the full year 2020. John?

[John Caulfield, executive]

Thank you, Jeff, and good afternoon, everyone. Slide 9 reviews our year-to-date same-center NOI. During 2020, same-center NOI decreased 4.1% when compared to 2019. The decline was the result of lower rent and recovery collections as well as revenues not recognized in 2020 based on our assessment of neighbor creditworthiness due to the impact of the COVID-19 pandemic. This decrease came despite an increase of $0.23 or 1.9% in ABR per square foot and a 0.8% improvement in average same-center occupancy over 2019. Please note that our same-center NOI includes 275 properties that we have owned and operated since January 2019.

Slide 10 outlines our net income and core FFO results for the year ended December 31, 2020. During 2020, we recorded net income of $5.5 million compared to a net loss of $72.8 million for the same period in 2019. The full year improvement was driven by a decrease in noncash impairments from dispositions during 2019, lower interest expense resulting from lower interest rates and reduced general and administrative expenses. Reductions in associate headcount, executive and director compensation and performance-based compensation contributed to the improvement. However, the decreases in expenses were partially offset by lower earnings from our properties, as previously mentioned.

For the year ended December 31, 2020, we generated core FFO of $220 million, which is a 4.5% decrease from core FFO of $231 million for the same period in 2019. On a per share basis, core FFO decreased by 5.7% to $0.66 per diluted share during 2020. Because the tender offer was completed at year-end, and this metric uses a weighted average share count, the accretion from the lower share count will come in 2021. The decrease in core FFO was driven by the reduction in NOI due to the impact of the pandemic and property dispositions, partially offset by expense reduction initiatives undertaken in response to the pandemic and lower interest expense as previously noted.

Slide 11 outlines our debt profile and maturity ladder as of December 31, 2020. Our net debt to total enterprise value was 44.5% as of December 31, 2020, which includes the impact of our reduced estimated value per share on our total enterprise value. This compared to 39.5% at December 31, 2019, despite our net debt decreasing by $162.5 million during 2020. At December 31, 2020, our debt had a weighted average interest rate of 3.1% and a weighted average maturity of 4.1 years. Approximately 75% of our debt was fixed rate. This compares to December 31, 2019, when we had a weighted average interest rate of 3.4%, a weighted average maturity of 5 years and approximately 89% fixed rate debt.

Our net debt to adjusted EBITDAR was 7.3x at December 31, 2020, compared to 7.2x at December 31, 2019. Our publicly traded peers has comparable ratios between approximately 6x and 7.4x with an average of approximately 6.9x debt to adjusted EBITDAR. While we are comfortable with our leverage in the current environment, we would like to continue to improve this ratio over the long term. We are in compliance with our debt covenants and continue to have great relationships with our lenders. Our revolving credit facility, which is currently undrawn, has an original maturity date of this October, but we have an option to extend the maturity to October 2022. We intend to refinance this facility or to extend the maturity to 2022 based on market conditions. We've had very positive discussions with our lenders in that regard.

Turning to Slide 12. We are pleased with our track record of creating and protecting stockholder value and are optimistic about the future of PECO. Depending on the timing of your investment and treatment of your distributions, PECO common stock has returned between 30% and 66% of your original investment. When taking total distributions and the current estimated value per share into consideration on a per share basis, your original $10 investment has a value between $16.64 per share and $13.01 per share. For our former REIT II stockholders, your investment has returned up to 11% on your original investment. When taking total distributions and the current estimated value per share into consideration on a per share basis, your original $25 investment has a value between $27.79 per share and $24.63 per share, and we continue to return value to you through monthly distributions.

Slide 13 illustrates PECO's long history of monthly stockholder distributions. The first PECO common share purchased in our initial offering has received distributions totaling $6.34 per share, and the last PECO common share purchased in our initial offering has received distributions totaling $4.19 per share. Further, we have made total distributions of over $1.3 billion to our stockholders, representing approximately 45% of the capital we raised.

I would now like to turn the call back over to Jeff for a closing summary and our outlook for 2021, starting on Slide 14. Jeff?

[Jeffrey Edison, executive]

Thanks, John. As one of the nation's largest owners and operators of grocer-anchored shopping centers, 2020 has been a year unlike any other for PECO. The COVID-19 pandemic, social justice demonstrations and political unrest highlighted a truly unprecedented and challenging year for our country as well as our business. Despite the turmoil, our well-located grocer-anchored shopping centers and our neighbors demonstrated their resilience. Our team of talented associates worked tirelessly throughout the year to ensure our neighbors could operate their business as best they could, given the circumstances.

As we look forward, we need to continue to focus on what has made us successful throughout our 30-year history. First, we will remain focused on owning and operating well-located, grocer-anchored shopping centers. This type of asset has been among the top-performing sectors of retail real estate and has proven resilient during the most challenging environments. Second, we remain committed to achieving our operational goals with our fully integrated operating platform. Doing so has allowed us to outperform our peers during both before, through and hopefully after the pandemic.

Third, we will continue to invest strategically in our business to drive long-term value for existing stockholders. This includes recycling capital into new property acquisitions, redevelopment projects and stock repurchases. Fourth and finally, we need to capitalize on opportunities that will allow us to produce outsized returns and favorable growth, including opportunities in our investment management business. So long as we commit to these 4 principles, we believe we can drive long-term value for our stockholders, both as a nontraded REIT and beyond.

Slide 15 illustrates our favorable performance on key metrics when compared with our public peers. Our leased occupancy rates have fared better than our public peers during the pandemic. Our occupancy declined only 70 basis points from where we were a year ago compared to our peers average decline of 245 basis points over the same period. Our same-center NOI growth from 2017 through '19 outperformed our peers by 80 basis points on average.

And during 2020, we outperformed by 4.1 percentage points. Our forward annualized dividend yield is 3.89% compared to our public peers average of 3.25%. Our core FFO per share growth from 2017 to 2019 outperformed our peers' growth by 6.7 percentage points on average. And during 2020, we outperformed by 13 percentage points. As we look to the long term, we believe that our continued outperformance relative to our peers will provide a meaningful value for our stockholders.

Turning to Slide 16. Given the difficulty we faced in 2020, it is hard to say this, but there are a number of tailwinds in the current environment that are positively impacting our business. From a microeconomic perspective, our assets continued to perform well. We experienced strong growth, occupancy and momentum prior to the pandemic, and our business has proven resilient during the pandemic. We are seeing encouraging leasing velocity.

As we previously discussed, we believe this positive activity will help us get back to the pre-pandemic levels quicker than our peers. From a macroeconomic perspective, there are also a number of positive factors that we believe are beneficial. As a result of COVID-19, we're seeing a migration to the suburbs and the migration to the Sunbelt. We're seeing a move to work from home and a shift in consumer preferences to shop local and support small business. All of these impacts will be very positive for the company.

Perhaps our largest potential disruptor is direct-to-consumer delivery from companies like Amazon. Almost 4 years ago, Amazon made a $14 billion investment into bricks-and-mortar grocery through their acquisition of Whole Foods. And most recently, we have seen Amazon launch their own brick-and-mortar grocery stores. These are proof that well-located bricks-and-mortar real estate is an integral component to even the most innovative companies and their growth plans. What was once our biggest threat has now become a potential neighbor.

And lastly, we see retailers continue to adopt omnichannel strategy. This includes bricks-and-mortar retail, together with BOPUS, or buy online and pick up at the store, and direct-to-consumer delivery. Our neighborhood centers are well positioned to facilitate last-mile delivery as well as to serve the BOPUS customer.

Slide 17 outlines the performance of our publicly traded peers equity since the beginning of 2020. As you can see, the pandemic had a significant impact on their average stock price during March of 2020. However, we have seen a remarkable rebound since November of 2020 when the positive news about the vaccine developments were released. Notably, the equity value relative to the net asset value of our public peers has seen a meaningful improvement over the past 5 months. In fact, our peers are trading at an average premium to their net asset value of 3.9%. The lowest value peer is trading at a 3.8% discount to NAV and the highest valued peer is trading at a 7.6% premium to their NAV. Our asset class appears to be gaining momentum in the public markets, with specific tailwinds for our well-located suburban grocer-anchored centers.

Now turning to Slide 18. Our focus is on positioning PECO for a successful liquidity event, and we're encouraged by the current environment. As we have stated in past calls, one of the possible ways we can do this is by listing our shares on the New York Stock Exchange or the NASDAQ. We believe the positive momentum in the public markets could open up liquidity options for our stockholders. That said, we want to see that this rally is not just a short-term rise, if we continue to closely evaluate our options and remain committed to providing liquidity to our investors. We expect to update our estimated value per share with our Q1 2021 results in May. Our valuation will be based upon March 31, 2021 financials.

Over the past several months, we have seen strong performance at our centers. And while transaction volume is still light, there has been positive movement in cap rates for well-located grocer-anchored real estate. Additionally, we will benefit from the reduced share count as a result of our tender offer executed last December. A more stable real estate environment, government stimulus and a bullish sentiment on Wall Street around the economic recovery have all contributed to our optimism. For these reasons, we are hopeful to see an increase in our estimated value per share in May.

Lastly, the previously announced one-for-four reverse stock split has been delayed. The split will be subject to the ongoing review of market conditions and liquidity options. At this point in time, we do not have an update on when the split may occur.

Now with that, I'd like to turn the call back over to Michael Koehler, our Vice President of Investor Relations. Michael?

[Michael Koehler, executive]

Thank you, Jeff. This concludes our prepared remarks, and we will now begin our question-and-answer session.

[Michael Koehler, executive]

Our webcast listeners are able to submit a question via the webcast portal. [Operator Instructions]

Our first question comes from Greg Sutton, a stockholder. He asked what are the plans for future buyback programs, including tender offers and/or the share repurchase program? And do you have an anticipated buyback price? Jeff?

[Jeffrey Edison, executive]

Greg, thank you for the question. Just as we look back, we decided to do a tender offer late last year. And the decision was made to do a $25 million buyback. In that process, we set a price and executed that. We ended up with over $78 million worth of demand. We decided at that time to fully buy those shares back.

We felt that, that was important to get liquidity for those investors and to get them fully out of the investment. At that time, we mentioned that we would do this periodically. We don't have a set date for the next buyback, but it is in our plans based upon the liquidity we have at the time. Let me add on there. In terms of the pricing, we're going to determine that at the time of the tender offer.

[Michael Koehler, executive]

Great. Our next question comes from Kurt Jamiel, a financial adviser. Kurt asked a number of detailed questions, which I will summarize here. In light of the economic improvement over the past 5 months, what's the plan to revive the distribution to its pre-COVID levels? And is there a plan to distribute retained earnings from unpaid distributions from 2020? And will there be a special dividend? Jeff?

[Jeffrey Edison, executive]

Kurt, thanks for that question. As we've talked about on several of these presentations, where we spend our capital and use our capital is a balancing act, and it's a balancing act to try and make sure that we satisfy our entire shareholder base to the best that we can. And as we've mentioned a number of times, we have a variety of different types of investors that are owners of the stock. We have 65,000 investors that you will have that diversity. Some of them are very interested in a current return. Some are very interested in getting their cash back as quickly as possible. And some are very interested in both preserving their principal, but then growing it.

And our balancing act with the dividend and how much cash we use in that is based upon balancing those 3 types of investors. And so we are -- we do not have plans today for a special dividend, but we are constantly working on balancing the different pieces of our cash so that we can grow the business, provide a strong return and preserve the capital balance, which we will continue to do. And I will tell you from -- as we said in some of our notes, we are in a very strong environment today. And when we get out of this pandemic over the next 3 to 5 months, we are very optimistic about what could happen through the end of this year.

[Michael Koehler, executive]

Great. Thank you, Jeff. Our next question comes from Bill Mack from PlanMember Services Corporation. How is Phillips Edison management intending to greatly improve the REIT's overall performance so that shareholders will no longer focus on getting out, but instead focus on their ability to own a very profitable REIT and investment should the company pursue a public listing? Jeff?

[Jeffrey Edison, executive]

Again, another great question. Thank you, Bill, for the question. I think as I sort of ended the last question on, we are probably as optimistic as we have ever been about the potential for PECO coming out of the pandemic. And let me just tell you some of the reasons. Obviously, we had a lot better performance during the pandemic than we anticipated. And that's really driven by our leasing activity, which was very strong. So we feel really good about the operating side of the business.

And then there are a number of things on the macro side, which have been really headwinds for us historically and have really turned, we believe, into tailwinds coming out of the pandemic. And let me just tell you some of the -- the main ones that we're focused on. First of all, it's the migration from the urban areas, the deurbanization, so to speak, of some of our big cities. They're moving to the suburbs, which is where our shopping centers are, providing us better -- more customers. There's also a movement to the Sunbelt. You can't look at any demographics without seeing that pull there. And as you know, our portfolio is heavily concentrated in the Southeast and the Southwest, both of which are benefiting from that Sunbelt migration.

The other issue that we're looking at is work from home. As people start to -- as more people work from home, they're going to be closer to our shopping centers because their homes are closer to our shopping centers. And instead of going to lunch at the restaurant by their office, they're going to go to the -- to one of our centers to have lunch. And those, we believe, will be very beneficial trips to our shopping centers.

The other piece that -- on the macro side is that when you look at where Walmart and Kroger are going, they're moving towards what we call BOPUS, which is buy online and pick up at the store. That's the most efficient way to deliver sort of the omnichannel experience without having to actually deliver it yourself, which is very expensive for a lot of these retailers. The best place for them to do BOPUS is close to your home, and our centers are close to your home. We've all seen the advertisements for buying local. Well, buying local is becoming an increasing part of a lot of shoppers' decision process. And where those local restaurants and retailers can go is limited. And where they want to be in today's market is near a grocery store. And that has put us in a really good spot there.

We -- I talked historically about Amazon and the concerns we have about Amazon. Well, it's now well-known Amazon is in the process of building out a bricks-and-mortar grocery store business. And if you look at that, you move one of your biggest competitors, one of your biggest concerns in your business into a potential neighbor. And we do see them as a potential neighbor, some tenants that we would love to have into our centers. But the risk of them taking over the grocery business with an Internet delivery-only business is highly muted and we think is one of the big things that's changed in the last 5 years as we've been talking about the business.

The -- we know the evolution of the retailer is moving towards omnichannel. The best place for them to do omnichannel is in the grocer-anchored side of the business. They've got all the options there. They've got delivery. They've got pickup. They're close to your home, so you can shop in the store. All of those are pieces that play well for our centers.

And then the last thing that we see as a tailwind is the solution for last-mile delivery. I mean, you can't pick up an article about retail today without this last-mile delivery coming up. And what we believe is that our centers are the best solution for last-mile delivery. And we will see -- we're seeing that. We're seeing that in leasing activity we're having and the positive feedback we're getting from our neighbors. And we think that, that's going to be an ongoing trend.

These are all things that were not there really less than 24 months ago, and they're all moving in our direction. And because of that, I am extremely optimistic about the potential for this investment. And as you know, I'm one of the largest shareholders. Our management team is one of the largest shareholders, and we are committed to growing the value of this company over a long period of time and creating the best returns we can for you. And it's nice to be not feeling like we're running into a major headwind at a return, and hopefully that's going to be able to show you good returns on your investment.

[Michael Koehler, executive]

Thank you, Jeff. A related question. You've talked a lot about a listing. We've seen other nontraded REITs list their shares unsuccessfully. Why will Phillips Edison be any different?

[Jeffrey Edison, executive]

I think the answer to that is why we hope you invested in the first place, which is we are an operating business first. We've been operating grocer-anchored shopping centers for over 30 years and built a team that we believe is the best at it. We fully internalize that with your -- with the portfolio. So we're all in the exact same alignment in terms of that investment. And a number of the other nontraded REITs that have listed, they've listed what is an externally managed kind of shell company, which is really just a fund.

We're very different than that. And we believe that the market will recognize that and they'll recognize the performance that this team had during a really tough time, and we think that's going to create a really good window for us to be seen really positively. And so we are not afraid of that. We actually believe that we will -- if we were to list, we would trade very well and be well received. It takes time as it does in every business to be recognized by the investors, but we're very optimistic that if we were to list, that we would be really well received.

[Michael Koehler, executive]

Thank you, Jeff. Why was there a delay in the stock split? And when will it be executed? John, do you want to take that?

[John Caulfield, executive]

Sure. Thanks, Michael. We announced in November that we were going to do a reverse stock split because we thought it was the appropriate thing to do. And we still believe it's the appropriate thing to do. But based on the current environment, we're not in favor of executing it at this time. So we're going to delay it. I don't know when, but we do anticipate doing it, but we will do it in the future.

[Michael Koehler, executive]

Thanks, John. Another question came in. When you price the death and disability portion of the SRP at $5.75, you did it to match the tender offer price. But that was a long time ago, and the share price of the peers have dramatically increased. How can you justify continuing to repurchase shares under the death and disability provision at such a low price? John?

[John Caulfield, executive]

Yes. The death and disability repurchase price was offered at the same value as those that participated in our last tender offer, just recently here in the fourth quarter. We did this so as not to give preference to any particular group of stockholders. And the program was structured in a way that it would not fluctuate. And actually, that's a conversation we've had with our attorneys with regards to the SEC and their oversight of the program. So we believe that we will address the price for DDI when we update our estimated value per share in May when we report our first quarter results.

[Michael Koehler, executive]

Thank you, John. The peers you follow, as you mentioned in the presentation today, are trading at a premium to NAV. So what needs to happen before we'll see Phillips Edison list their shares or have a full cycle liquidity event? Jeff?

[Jeffrey Edison, executive]

That is a -- it's a great question. And I think the question I sort of ask is why are they trading at a premium to NAV. And I think if you go back and you look at the virus and its impact and you look at the end -- the light at the end of the tunnel, it's becoming a trade that a lot of people are seeing as a post-COVID trait. And then I think a lot of the things that I mentioned is answered in the last question in terms of some of the macro things that are going on. There's also very positive news there.

So I think that it's trading that way because there is a belief that this is a great investment at this point in time. We believe that, and we will continue to look at all of our liquidity options with that more optimistic view than we had at the last quarterly meeting. So that's not a direct answer to what needs to happen. I can -- what we can say at this time is that we're looking at all our options, like we always do, and we are more optimistic than we have been about what the opportunities are.

[Michael Koehler, executive]

Thank you, Jeff. Our last question for the day comes from Mike Thomas, an investor. He asks, could you go public through a SPAC? John, do you want to take that?

[John Caulfield, executive]

Sure, Michael. So SPAC was quite a topic in 2020. We were certainly watching along with everyone else at their incredible rise in the market, and that phenomenon has been amazing. So it is something that we have considered and looked at. To my knowledge, at this time, there has not been a real estate SPAC completed. Some real estate technology and other technology SPACs have been out there and been launched. But as we have looked at it at this time, we don't believe it's the right option for us, but it is a continually evolving market. So it is something that we are watching and monitoring. But at this time, we don't believe that's a solution, but we'll continue to evaluate.

[Michael Koehler, executive]

Great. Thank you, John. This now concludes our question-and-answer session, and I would like to turn the call back over to Jeff for some closing comments.

[Jeffrey Edison, executive]

Thanks, Michael. On behalf of the entire management team, I want to express our appreciation for your continued support from you, our stockholders, to all of our associates and, importantly, to our neighbors. They -- during this really tough time in the pandemic, they've shown what true entrepreneurs they are, being able to survive a really difficult environment, both obviously, from a safety standpoint, but also from a government regulation standpoint. And it's inspiring to see what they've been able to do and to accomplish and to stay alive. And we give them a huge amount of credit for what they've been able to do. Hopefully, we've been able to help them through that process. And so it's -- we're very glad to put 2020 behind us.

But I would say we learned a lot. We made even better relationships with our neighbors than we've had before. And we're optimistic about 2021. It's not -- we're not there yet, but there's light at the end of the tunnel and better light and better factors helping our business than we've had in quite some time. So we're optimistic. We are -- we hope that 2021 has some great results for all of us. So thanks again for being on the call, and have a great day.

[Operator]

Thank you for joining us today. You may now disconnect.