Regency Centers(REGCP) - 2024 Q2 - Quarterly Report

Financial Performance - Net income attributable to common shareholders for the six months ended June 30, 2024, was $205.6 million, an increase from $184.1 million for the same period in 2023[138] - Net income attributable to common shareholders increased by $12.5 million, reaching $99.3 million compared to $86.8 million in the previous year[152] - Total revenues for the six months ended June 30, 2024, were $721.1 million, up from $632.2 million in 2023, marking an increase of $88.9 million[154] - Net income attributable to common shareholders for the three months ended June 30, 2024, was $99.3 million, up from $86.8 million in 2023[166] - Nareit FFO attributable to common stock and unit holders increased to $196.4 million for the three months ended June 30, 2024, compared to $176.8 million in 2023[167] - Core Operating Earnings for the three months ended June 30, 2024, were $189.3 million, an increase from $164.7 million in 2023[167] Property and Leasing - As of June 30, 2024, the company had a total of 380 properties with a gross leasable area (GLA) of 43,815 thousand square feet, compared to 381 properties and 43,758 thousand square feet as of December 31, 2023[138] - The percentage leased for operating and development properties remained stable at 94.9% as of June 30, 2024[138] - The percentage leased for operating properties was 95.3%, slightly down from 95.4% as of December 31, 2023[138] - A total of 984 new and renewal leasing transactions were executed, representing 4.1 million Pro-rata SF with positive rent spreads of 8.9% for the six months ended June 30, 2024[139] - The total property portfolio was 95.0% leased as of June 30, 2024, compared to 94.6% as of June 30, 2023[139] Revenue and Income - Total lease income increased by $43.4 million to $347.8 million for the three months ended June 30, 2024, primarily due to a $31.5 million increase in base rent[144][146] - Total lease income rose by $87.7 million, driven by a $62.7 million increase in base rent, largely from the UBP acquisition[154] - Base rent increased by $6.4 million (2.7%) and $12.7 million (2.7%) for the three and six months ended June 30, 2024, respectively, due to positive rental spreads and increased occupancy[165] Expenses and Costs - Operating expenses increased by $30.4 million to $233.2 million for the three months ended June 30, 2024, with depreciation and amortization costs rising by $17.8 million[147] - Depreciation and amortization costs increased by $32.7 million, reflecting higher asset values post-acquisition[156] - Interest expense, net increased by $6.2 million, with interest on notes payable rising to $46.9 million from $37.2 million[148] - Interest expense, net for the six months ended June 30, 2024, was $86.0 million, an increase of $12.7 million from the previous year[159] Development and Investment - Estimated Pro-rata project costs for current development projects totaled $577.6 million as of June 30, 2024, up from $468.1 million at December 31, 2023[139] - The company invested $141.8 million in real estate development and capital improvements during the first half of 2024, a $41.7 million increase from 2023[184] - The company has ongoing development projects with estimated net development costs totaling $220.5 million, with 49% of costs incurred as of June 30, 2024[185] - Redevelopment projects in process have estimated net project costs of $357.1 million, with 49% of costs incurred[187] Capital Structure and Liquidity - The company focuses on maintaining a conservative capital structure and sufficient liquidity to fund investment opportunities and debt maturities[138] - The company has $73.8 million of unrestricted cash and additional capital sources including a $1.5 billion line of credit with $1.18 billion available[173] - The company estimates a capital requirement of approximately $530.6 million over the next 12 months for leasing commissions, tenant improvements, and debt repayment[176] - Compliance with financial covenants was maintained as of June 30, 2024, ensuring continued borrowing capacity[179] Shareholder Returns - The company aims to create shareholder value by increasing earnings and dividends per share, targeting total returns at or near the top of its shopping center peers[137] - The company declared a common stock dividend of $0.67 per share, payable on October 3, 2024[174] - The company plans to continue paying dividends that meet REIT qualification requirements, having paid $255.4 million in dividends to common and preferred stockholders during the six months ended June 30, 2024[175] Environmental and Social Responsibility - The company is committed to implementing leading environmental, social, and governance (ESG) practices through its Corporate Responsibility program[137] - The company emphasizes the importance of a talented and diverse team to drive innovation and continuous improvement[137] Market and Economic Conditions - The company has implemented strategies to mitigate inflation impacts on construction costs, including fixed cost contracts and pre-ordering materials[176] - The company expects that a 100 basis point increase in interest rates could decrease future earnings and cash flows by approximately $3.1 million annually based on $313.8 million of floating rate mortgage debt[198] Credit and Ratings - Regency received a credit rating upgrade to A3 with a stable outlook from Moody's Investors Service[139]