Regency Centers(REG) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Presents unaudited consolidated financial statements for Regency Centers Corporation and L.P. for Q2 2025, detailing balance sheets, operations, and cash flows Consolidated Balance Sheet Highlights (Regency Centers Corporation) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $12,730,474 | $12,391,961 | | Total Liabilities | $5,873,534 | $5,491,654 | | Total Equity | $6,856,940 | $6,900,307 | - Total assets increased by $338.5 million from December 31, 2024, to June 30, 2025, primarily driven by an increase in net real estate investments and cash[16] - Total liabilities increased by $381.9 million, mainly due to an increase in notes payable, net[16] Consolidated Statements of Operations Highlights (Regency Centers Corporation) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Revenues | $380,848 | $357,250 | $761,760 | $721,102 | | Total Operating Expenses | $235,218 | $233,241 | $470,099 | $467,182 | | Net Income | $108,349 | $104,929 | $220,202 | $217,587 | | Net Income Attributable to Common Shareholders | $102,608 | $99,255 | $208,782 | $205,616 | | Diluted EPS | $0.56 | $0.54 | $1.15 | $1.12 | - Total revenues increased by $23.6 million (6.6%) for the three months ended June 30, 2025, and by $40.7 million (5.6%) for the six months ended June 30, 2025, compared to the prior year periods[18] - Net income attributable to common shareholders increased by $3.35 million (3.4%) for the three months and $3.17 million (1.5%) for the six months ended June 30, 2025, year-over-year[18] Consolidated Statements of Comprehensive Income Highlights (Regency Centers Corporation) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income | $108,349 | $104,929 | $220,202 | $217,587 | | Other Comprehensive (Loss) Income | $(2,216) | $683 | $(6,415) | $6,790 | | Comprehensive Income Attributable to the Company | $103,948 | $103,338 | $209,594 | $218,885 | - Other comprehensive income shifted from a gain of $683 thousand in Q2 2024 to a loss of $2.2 million in Q2 2025, primarily due to changes in the fair value of derivative instruments[21] Consolidated Statements of Equity Highlights (Regency Centers Corporation) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Shareholders' Equity | $6,677,872 | $6,724,146 | | Total Equity | $6,856,940 | $6,900,307 | - Total shareholders' equity decreased by $46.3 million from December 31, 2024, to June 30, 2025, mainly due to distributions in excess of net income and accumulated other comprehensive loss[16][27] - Common stock shares issued and outstanding increased from 181,361,454 at December 31, 2024, to 181,550,531 at June 30, 2025[16] Consolidated Statements of Cash Flows Highlights (Regency Centers Corporation) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Net Cash Provided by Operating Activities | $405,079 | $371,214 | | Net Cash Used in Investing Activities | $(372,693) | $(114,143) | | Net Cash Provided by (Used in) Financing Activities | $60,549 | $(268,502) | | Net Increase (Decrease) in Cash | $92,935 | $(11,431) | | Cash at End of Period | $154,819 | $79,923 | - Net cash provided by operating activities increased by $33.9 million, primarily due to timing of receipts and payments and increased distributions from real estate partnerships[184][185] - Net cash used in investing activities significantly increased by $258.6 million, driven by higher acquisitions of operating real estate, increased real estate development and capital improvements, and lower proceeds from property sales[184][186] - Net cash provided by financing activities saw a substantial increase of $329.1 million, shifting from a net use in 2024 to a net provision in 2025, mainly due to no common share repurchases in 2025 (vs. $200M in 2024) and proceeds from new unsecured public debt[191] Consolidated Balance Sheet Highlights (Regency Centers, L.P.) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $12,730,474 | $12,391,961 | | Total Liabilities | $5,873,534 | $5,491,654 | | Total Capital | $6,856,940 | $6,900,307 | - The assets and liabilities of Regency Centers, L.P. are identical to those of Regency Centers Corporation, reflecting the Parent Company's consolidation of the Operating Partnership[11][32] - Total capital for the Operating Partnership decreased by $43.4 million, mirroring the change in total equity for the Parent Company[32] Consolidated Statements of Operations Highlights (Regency Centers, L.P.) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Revenues | $380,848 | $357,250 | $761,760 | $721,102 | | Total Operating Expenses | $235,218 | $233,241 | $470,099 | $467,182 | | Net Income | $108,349 | $104,929 | $220,202 | $217,587 | | Net Income Attributable to Common Unit Holders | $103,194 | $99,856 | $210,010 | $206,859 | | Diluted EPU | $0.56 | $0.54 | $1.15 | $1.12 | - The Operating Partnership's statements of operations are largely consistent with the Parent Company's, reflecting the consolidated business model[34] - Net income attributable to common unit holders increased by $3.34 million (3.3%) for the three months and $3.15 million (1.5%) for the six months ended June 30, 2025, year-over-year[34] Consolidated Statements of Comprehensive Income Highlights (Regency Centers, L.P.) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income | $108,349 | $104,929 | $220,202 | $217,587 | | Other Comprehensive (Loss) Income | $(2,216) | $683 | $(6,415) | $6,790 | | Comprehensive Income Attributable to the Partnership | $104,521 | $103,943 | $210,781 | $220,167 | - Other comprehensive income for the Operating Partnership also shifted from a gain to a loss, consistent with the Parent Company, reflecting the consolidated nature of their financial reporting[37] Consolidated Statements of Capital Highlights (Regency Centers, L.P.) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Partners' Capital | $6,716,231 | $6,764,890 | | Total Capital | $6,856,940 | $6,900,307 | - Total capital for the Operating Partnership decreased by $43.4 million from December 31, 2024, to June 30, 2025, primarily due to distributions to partners and accumulated other comprehensive loss[32][43] - The General Partner's common units decreased, while limited partners' common units also saw a slight decrease, reflecting repurchases and exchanges[32][43] Consolidated Statements of Cash Flows Highlights (Regency Centers, L.P.) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Net Cash Provided by Operating Activities | $405,079 | $371,214 | | Net Cash Used in Investing Activities | $(372,693) | $(114,143) | | Net Cash Provided by (Used in) Financing Activities | $60,549 | $(268,502) | | Net Increase (Decrease) in Cash | $92,935 | $(11,431) | | Cash at End of Period | $154,819 | $79,923 | - The cash flow activities for Regency Centers, L.P. are identical to those of Regency Centers Corporation, as the Operating Partnership conducts all operating, investing, and financing activities[46][47][129] Notes to Consolidated Financial Statements 1. Organization and Significant Accounting Policies - Regency Centers Corporation operates as a REIT and is the general partner of Regency Centers, L.P., owning approximately 99.4% of Common Units and all Preferred Units as of June 30, 2025[7][49][58] - The Company's consolidated portfolio includes 380 wholly-owned/controlled properties and partial interests in 103 unconsolidated properties through real estate partnerships as of June 30, 2025[50][59] - The Company has significant geographic concentrations in California (23.1%), Florida (20.5%), and the New York-Newark-Jersey City area (12.5%) of aggregate annualized base rent, making these areas susceptible to localized adverse events[55] VIE Assets and Liabilities (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Total Assets | $534,483 | $363,609 | | Total Liabilities | $213,065 | $80,059 | 2. Real Estate Investments Property Acquisitions (Six months ended June 30, 2025) | Property Name | City/State | Ownership | Purchase Price (in thousands) | Debt Assumed (in thousands) | | :-------------------- | :---------------- | :-------- | :---------------------------- | :-------------------------- | | Putnam Plaza | Carmel Hamlet, NY | 100% | $31,000 | $16,749 | | Orange Meadows | Orange, CT | 100% | $4,200 | — | | Brentwood Place | Nashville, TN | 100% | $118,500 | $40,060 | | Armonk Square | Armonk, NY | 20% | $26,250 | $11,884 | | Total Acquisitions | | | $179,950 | $68,693 | - In July 2025, the Company completed a $357 million acquisition of five operating properties in Orange County, California, funded by Operating Partnership units and assumed mortgage debt[69] 3. Property Dispositions and Assets Held for Sale Property Dispositions (Six months ended June 30) | Metric (in thousands) | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Net proceeds from sale of real estate investments | $7,165 | $92,159 | | (Loss) Gain on sale of real estate, net of tax | $(193) | $22,484 | | Number of operating properties sold | 1 | 3 | - The Company recognized a $1.3 million provision for impairment of real estate during the six months ended June 30, 2025, including a $0.7 million charge for an operating property held for sale[71] - As of June 30, 2025, one operating property and one land parcel were classified as held for sale, with total assets of $15.55 million[72] 4. Other Assets Components of Other Assets (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Goodwill | $166,739 | $166,739 | | Investments | $138,087 | $51,820 | | Prepaid and other | $56,451 | $40,240 | | Derivative assets | $8,402 | $12,781 | | Total Other Assets | $386,473 | $289,046 | - Total other assets increased by $97.4 million, primarily due to a significant increase in investments, including approximately $90 million in commercial time deposits during Q2 2025[73] 5. Notes Payable and Unsecured Credit Facilities Debt Outstanding (in thousands) | Debt Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Fixed rate mortgage loans | $366,886 | $337,703 | | Variable rate mortgage loans | $282,311 | $282,117 | | Fixed rate unsecured debt | $4,119,985 | $3,723,880 | | Unsecured credit facility | $30,000 | $65,000 | | Total Debt Outstanding | $4,799,182| $4,408,700 | - Total debt outstanding increased by $390.5 million from December 31, 2024, to June 30, 2025[74] - On May 13, 2025, the Company issued $400 million of senior unsecured notes due 2032 with a 5.0% coupon[74] - As of June 30, 2025, 96.5% of variable rate debt is fixed through interest rate swaps[74] Scheduled Principal Payments and Maturities (in thousands) | Year | Total (in thousands) | | :--- | :------------------- | | 2025 | $271,117 | | 2026 | $358,295 | | 2027 | $758,866 | | 2028 | $393,108 | | 2029 | $524,906 | | Beyond 5 Years | $2,533,640 | 6. Derivative Instruments - The Company uses interest rate swaps to hedge interest rate risk, not for speculative purposes, and only with high-credit-rated counterparties[76][78] Interest Rate Derivatives Outstanding (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Notional amount | $301,885 | $301,444 | | Number of instruments | 15 | 14 | | Derivative assets | $8,402 | $12,781 | | Derivative liabilities | $(1,735) | $(423) | - Changes in the fair value of cash flow hedges are recorded in Accumulated Other Comprehensive Income (AOCI) and reclassified to earnings when hedged interest payments affect earnings[79] 7. Leases - Substantially all of the Company's leases are classified as operating leases, with income comprising both fixed and variable components[81] Lease Income Disaggregation (in thousands) | Lease Income Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Fixed and in-substance fixed lease income | $271,608 | $256,991 | $538,344 | $513,616 | | Variable lease income | $93,762 | $86,082 | $192,141 | $178,372 | | Total Lease Income | $369,105 | $347,845 | $740,184 | $700,951 | - Total lease income increased by $21.3 million (6.1%) for the three months and $39.2 million (5.6%) for the six months ended June 30, 2025, year-over-year[82] 8. Fair Value Measurements Fair Value of Financial Instruments (in thousands) | Instrument | Carrying Amount (June 30, 2025) | Fair Value (June 30, 2025) | Carrying Amount (Dec 31, 2024) | Fair Value (Dec 31, 2024) | | :-------------------------- | :------------------------------ | :------------------------- | :----------------------------- | :------------------------ | | Notes receivable | $31,650 | $31,723 | $31,790 | $31,755 | | Notes payable, net | $4,769,182 | $4,658,270 | $4,343,700 | $4,141,096 | - The Company's financial instruments are generally reflected at fair value, with exceptions for notes receivable and notes payable where carrying amounts and fair values are presented[85] - Fair value measurements for securities, available-for-sale debt securities, and interest rate derivatives primarily use Level 1 and Level 2 inputs, with credit valuation adjustments for derivatives utilizing Level 3 inputs but deemed not significant to overall valuation[87][89][90][91] 9. Equity and Capital Preferred Stock Outstanding (June 30, 2025 and December 31, 2024) | Series | Shares Issued and Outstanding | Liquidation Preference (in thousands) | Distribution Rate | | :----- | :---------------------------- | :------------------------------------ | :---------------- | | Series A | 4,600,000 | $115,000 | 6.250% | | Series B | 4,400,000 | $110,000 | 5.875% | | Total| 9,000,000 | $225,000 | | - The Parent Company has an At The Market (ATM) Program with $400 million of common stock remaining available for issuance as of June 30, 2025, after accounting for forward sale agreements[97][99][100] - A common stock repurchase program authorized up to $250 million expires on June 30, 2026; no repurchases were made during the six months ended June 30, 2025[101][102] - In July 2025, the Operating Partnership issued 2,773,087 exchangeable operating partnership units, valued at $199.7 million, as partial consideration for property acquisitions[105] 10. Stock-Based Compensation Stock-Based Compensation (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Restricted stock | $5,455 | $4,662 | $10,898 | $9,302 | | Stock-based compensation, net of capitalization | $4,899 | $4,346 | $9,864 | $8,704 | - The Company granted 321,704 shares of restricted stock in the first six months of 2025, compared to 343,014 shares in the same period of 2024[106] - Stock-based compensation expense, net of capitalization, increased by $553 thousand (12.7%) for the three months and $1.16 million (13.3%) for the six months ended June 30, 2025, year-over-year[107] 11. Earnings per Share and Unit Earnings Per Share (EPS) and Unit (EPU) (Regency Centers Corporation) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income per common share – basic | $0.57 | $0.54 | $1.15 | $1.12 | | Net income per common share – diluted | $0.56 | $0.54 | $1.15 | $1.12 | Earnings Per Share (EPS) and Unit (EPU) (Regency Centers, L.P.) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income per common unit – basic | $0.57 | $0.54 | $1.15 | $1.12 | | Net income per common unit – diluted | $0.56 | $0.54 | $1.15 | $1.12 | - Diluted EPS for the Parent Company increased from $0.54 to $0.56 for the three months ended June 30, 2025, and remained stable at $1.15 for the six months[110] - Diluted EPU for the Operating Partnership showed similar trends, increasing from $0.54 to $0.56 for the three months and remaining $1.15 for the six months ended June 30, 2025[111] 12. Segment Information - The Company aggregates its individual properties into one reportable segment due to similarities in nature, economics, tenants, operational processes, and long-term average financial performance[112] Net Operating Income (NOI) (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total real estate revenues | $398,277 | $372,090 | $796,288 | $751,510 | | Operating expenses | $(65,664) | $(64,087) | $(139,128) | $(132,159) | | Real estate taxes | $(51,680) | $(49,611) | $(102,689) | $(98,021) | | NOI | $280,933 | $258,392 | $554,471 | $521,330 | - NOI increased by $22.5 million (8.7%) for the three months and $33.1 million (6.4%) for the six months ended June 30, 2025, year-over-year[113] 13. Commitments and Contingencies - The Company is involved in ordinary course litigation and disputes, which management believes will not have a material adverse effect on its financial position, results of operations, or liquidity[114] - The Company is subject to environmental laws and regulations, with accrued liabilities for remediation of $16.6 million as of June 30, 2025, down from $17.3 million at December 31, 2024[116][117] - Letters of credit outstanding under the Company's credit facility totaled $13.4 million as of June 30, 2025, an increase from $10.9 million at December 31, 2024[118] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's discussion and analysis of financial condition and results, covering strategy, non-GAAP measures, and cash flow analysis Forward-Looking Statements - The report contains forward-looking statements regarding future financial and operational performance, subject to various risk factors including economic conditions, pandemics, real estate investments, and capital structure[120][124] - Readers are cautioned that actual results may differ materially from expectations and should consider the detailed risk factors in the Company's 2024 Form 10-K and subsequent reports[121] Non-GAAP Financial Measures - The Company uses non-GAAP financial measures like Net Operating Income (NOI), Pro-rata information, Adjusted Funds From Operations (AFFO), Core Operating Earnings (COE), and Nareit Funds from Operations (Nareit FFO) to provide additional insights into operational results[125][127] - These non-GAAP measures are used by management for trend analyses, incentive compensation, budgeting, and planning, but are not considered alternatives to GAAP measures and have limitations[122][123][128] - Pro-rata Same Property NOI is a key non-GAAP measure for evaluating operating performance of properties held during comparable periods, excluding non-same properties[128] Overview of Our Strategy - Regency Centers Corporation is a REIT focused on owning, operating, and developing high-quality neighborhood and community shopping centers, primarily anchored by market-leading grocers in desirable suburban metro areas[132] - The Company's strategic goals include increasing earnings and dividends per share, maintaining a disciplined development platform, supporting business activities with a conservative capital structure, and implementing sustainability and governance practices[133] - As of June 30, 2025, the Company had full or partial ownership interests in 483 retail properties, totaling approximately 57.6 million square feet of gross leasable area (GLA)[132] Executing on our Strategy - Net income attributable to common shareholders increased to $208.8 million for the six months ended June 30, 2025, up from $205.6 million in the prior year[133] - Pro-rata same property NOI, excluding termination fees, grew by 5.8% for the six months ended June 30, 2025, driven by increased occupancy, contractual rent steps, and positive rent spreads[133] - The total property portfolio was 96.2% leased at June 30, 2025, with the same property portfolio at 96.5% leased[133] - Development and redevelopment projects completed during the six months ended June 30, 2025, represented $26.6 million in estimated net project costs with an average stabilized yield of 17.7%[136] - The Company received a credit rating upgrade to A- with a stable outlook from S&P Global Ratings in February 2025 and issued $400 million of senior unsecured notes in May 2025[136] Economic Conditions - The Company refers to the 'Estimated Risks and Uncertainties' section in Note 1 for a detailed discussion of economic conditions that could materially impact future results[134] Property Portfolio Consolidated Property Portfolio Summary | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Number of Properties | 380 | 379 | | GLA (in thousands) | 44,343 | 43,876 | | % Leased – Operating and Development | 96.2% | 96.2% | | Weighted average annual effective rent PSF | $26.01 | $25.56 | Unconsolidated Property Portfolio Summary | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Number of Properties | 103 | 103 | | GLA (in thousands) | 13,300 | 13,439 | | % Leased – Operating and Development | 96.7% | 96.8% | | Weighted average annual effective rent PSF | $25.05 | $24.51 | Pro-rata Occupancy Rates – All Properties | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Percent Leased – All Properties | 96.2% | 96.3% | | Anchor Space (≥ 10,000 SF) | 98.0% | 98.4% | | Shop Space (< 10,000 SF) | 93.4% | 93.0% | - The weighted-average base rent PSF on signed Shop Space leases in 2025 was $41.00, higher than the $36.49 PSF for leases expiring in the next 12 months[137] - New and renewal rent spreads were positive at 9.1% for the six months ended June 30, 2025, compared to 8.9% in the prior year[137] Diversification and Concentration of Tenant Risk - The Company aims to reduce risk by limiting dependence on any single tenant; no single tenant comprised 10% or more of aggregate annualized base rent as of June 30, 2025[55][138] Most Significant Tenants by Annualized Base Rent (June 30, 2025) | Tenant | Percentage of Annual Base Rent | | :-------------------------- | :----------------------------- | | Publix | 2.8% | | TJX Companies, Inc. | 2.8% | | Albertsons Companies, Inc. | 2.7% | | Amazon/Whole Foods | 2.6% | | Kroger Co. | 2.6% | Bankruptcies and Credit Concerns - Management actively monitors consumer trends and market shifts to mitigate adverse impacts, focusing on high-quality portfolios, diversified tenant mix, and grocery-anchored centers in desirable suburban areas[139] - Current economic conditions, including inflation, interest rates, and supply chain disruptions, pose financial strain on retailers, potentially impacting their ability to meet lease obligations[140] - Tenants currently in bankruptcy and occupying space represent an aggregate of 0.3% of the Company's Pro-rata annual base rent as of June 30, 2025[141] Results of Operations (Comparison of the three months ended June 30, 2025 and 2024) Changes in Revenues (Three months ended June 30, in thousands) | Revenue Type | 2025 | 2024 | Change | | :-------------------------- | :--- | :--- | :----- | | Lease income | $369,105 | $347,845 | $21,260 | | Other property income | $4,499 | $2,670 | $1,829 | | Management, transaction, and other fees | $7,244 | $6,735 | $509 | | Total Revenues | $380,848 | $357,250 | $23,598 | - Lease income increased by $21.3 million, primarily due to a $12.9 million increase in billable Base rent from same properties (occupancy, rent steps, positive spreads), redevelopment projects, and acquisitions[142] Changes in Operating Expenses (Three months ended June 30, in thousands) | Expense Type | 2025 | 2024 | Change | | :-------------------------- | :--- | :--- | :----- | | Depreciation and amortization | $99,535 | $100,968 | $(1,433) | | Property operating expense | $60,759 | $59,491 | $1,268 | | Real estate taxes | $47,500 | $45,478 | $2,022 | | General and administrative | $25,480 | $24,238 | $1,242 | | Other operating expenses | $1,944 | $3,066 | $(1,122) | | Total Operating Expenses| $235,218 | $233,241 | $1,977 | - Interest expense, net, increased by $7.1 million, mainly due to new net public debt issuances, a higher weighted average outstanding balance on unsecured credit facilities, and decreased interest income[147][149] Results of Operations (Comparison of the six months ended June 30, 2025 and 2024) Changes in Revenues (Six months ended June 30, in thousands) | Revenue Type | 2025 | 2024 | Change | | :-------------------------- | :--- | :--- | :----- | | Lease income | $740,184 | $700,951 | $39,233 | | Other property income | $7,520 | $7,020 | $500 | | Management, transaction, and other fees | $14,056 | $13,131 | $925 | | Total Revenues | $761,760 | $721,102 | $40,658 | - Lease income increased by $39.2 million, primarily from a $23.3 million increase in Base rent (same properties, redevelopment, acquisitions) and a $13.2 million increase in Recoveries from tenants[150][152] Changes in Operating Expenses (Six months ended June 30, in thousands) | Expense Type | 2025 | 2024 | Change | | :-------------------------- | :--- | :--- | :----- | | Depreciation and amortization | $196,309 | $198,553 | $(2,244) | | Property operating expense | $129,218 | $122,765 | $6,453 | | Real estate taxes | $93,860 | $89,785 | $4,075 | | General and administrative | $47,080 | $50,370 | $(3,290) | | Other operating expenses | $3,632 | $5,709 | $(2,077) | | Total Operating Expenses| $470,099 | $467,182 | $2,917 | - Interest expense, net, increased by $12.2 million, mainly due to new public debt issuances, higher unsecured credit facility balances and rates, and decreased interest income[154][156] - Net investment income decreased by $3.1 million due to market volatility impacting returns on deferred compensation plan investments and other corporate investments[158] Supplemental Earnings Information on Non-GAAP Financial Measures - Pro-rata same property NOI, excluding termination fees, grew by 7.4% for the three months and 5.8% for the six months ended June 30, 2025, driven by base rent increases, higher tenant recoveries, and improved collection rates[163][164] Pro-rata Same Property NOI (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Pro-rata same property NOI | $276,888 | $257,596 | $550,581 | $519,557 | | Pro-rata same property NOI, excluding termination fees | $274,844 | $255,963 | $546,213 | $516,152 | Nareit FFO, Core Operating Earnings, and AFFO (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Nareit FFO attributable to common stock and unit holders | $212,131 | $196,368 | $422,880 | $396,335 | | Core Operating Earnings | $202,225 | $189,253 | $401,668 | $382,321 | | AFFO | $177,453 | $162,051 | $360,715 | $341,047 | - Nareit FFO increased by $15.76 million (8.0%) for the three months and $26.55 million (6.7%) for the six months ended June 30, 2025, year-over-year[166] - AFFO increased by $15.4 million (9.5%) for the three months and $19.67 million (5.8%) for the six months ended June 30, 2025, year-over-year[166] Liquidity and Capital Resources - The Company maintains sufficient liquidity and capital resources, including $150.7 million of unrestricted cash, $400 million available under its ATM program, and $1.46 billion available on its unsecured credit facility (Line)[169][175] - The Company has $556.4 million of debt maturing within the next 12 months, including $350 million of unsecured public debt in November 2025, which it intends to refinance or pay off[172] - Estimated capital requirements for the next 12 months total approximately $982.5 million for leasing commissions, tenant improvements, developments, redevelopments, real estate partnership contributions, and debt repayment[178] - As of June 30, 2025, 89.4% of consolidated real estate assets were unencumbered, providing flexibility for accessing debt markets[180] Summary of Cash Flow Activity (Six months ended June 30, in thousands) | Activity | 2025 | 2024 | Change | | :-------------------------- | :--- | :--- | :----- | | Net cash provided by operating activities | $405,079 | $371,214 | $33,865 | | Net cash used in investing activities | $(372,693) | $(114,143) | $(258,550) | | Net cash provided by (used in) financing activities | $60,549 | $(268,502) | $329,051 | | Net change in cash | $92,935 | $(11,431) | $104,366 | Real Estate Development and Capital Improvements (Six months ended June 30, in thousands) | Category | 2025 | 2024 | Change | | :-------------------------- | :--- | :--- | :----- | | Land acquisitions | $0 | $11,650 | $(11,650) | | Building and tenant improvements | $48,676 | $43,918 | $4,758 | | Redevelopment costs | $69,906 | $48,364 | $21,542 | | Development costs | $71,820 | $27,584 | $44,236 | | Total | $204,657 | $141,775 | $62,882 | Investments in Real Estate Partnerships Unconsolidated Real Estate Partnerships Summary (in thousands) | Metric | Combined (June 30, 2025) | Regency's Share (June 30, 2025) | | :-------------------------- | :----------------------- | :------------------------------ | | Number of real estate partnerships | 18 | | | Number of properties | 103 | | | Assets | $2,847,010 | $1,055,391 | | Liabilities | $1,684,782 | $619,386 | | Equity | $1,162,228 | $436,005 | | Investments in real estate partnerships | | $389,828 | - Regency's ownership interest in these partnerships ranges from 12% to 83%[192] - The Company's pro-rata share of notes payable held by these partnerships was $575.0 million as of June 30, 2025, with 91.3% at a weighted average fixed interest rate of 3.9%[193] - Management fee income from these partnerships totaled $7.36 million for the three months and $14.0 million for the six months ended June 30, 2025[195] Critical Accounting Estimates - There have been no material changes in the Company's critical accounting estimates from those reported in the 2024 Form 10-K[196] Item 3. Quantitative and Qualitative Disclosures about Market Risk Details the Company's interest rate risk exposure from debt, outlining mitigation strategies and impacts on earnings and cash flows - The Company is exposed to interest rate risk from variable interest rates on its credit facility (Line) and when refinancing existing long-term fixed-rate debt[197][200] - Strategies to mitigate interest rate risk include using interest rate swaps, caps, or forward-starting hedges, and prioritizing refinancing with long-duration fixed-rate debt[170][200] - A 100 basis point increase in interest rates would decrease future earnings and cash flows by approximately $0.4 million per year, based on $39.6 million of floating rate debt outstanding at June 30, 2025[198] Principal Cash Flows and Weighted Average Interest Rates of Debt (June 30, 2025, in thousands) | Year | Fixed Rate Debt | Average Fixed Rate | Variable Rate SOFR Debt | Average Variable Rate | | :--- | :-------------- | :----------------- | :---------------------- | :-------------------- | | 2025 | $271,057 | 4.19% | $60 | 5.45% | | 2026 | $358,175 | 4.21% | $120 | 5.44% | | 2027 | $754,996 | 4.33% | $3,870 | 5.40% | | 2028 | $357,583 | 4.33% | $35,525 | 5.40% | | 2029 | $524,906 | 4.56% | — | | | Thereafter | $2,533,640 | 4.83% | — | | | Total| $4,800,357 | | $39,575 | | Item 4. Controls and Procedures Confirms effective disclosure controls and procedures for Regency Centers Corporation and L.P. as of June 30, 2025, with no material internal control changes - Regency Centers Corporation's management, including its CEO and CFO, concluded that its disclosure controls and procedures were effective as of June 30, 2025[203] - Regency Centers, L.P.'s management also concluded that its disclosure controls and procedures were effective as of June 30, 2025[205] - No material changes in internal controls over financial reporting were identified for either entity during the quarter ended June 30, 2025[204][206] PART II - OTHER INFORMATION Item 1. Legal Proceedings Refers to Note 13 for material legal proceedings and confirms no new material developments since the 2024 Form 10-K - Material legal proceedings and contingencies are discussed in Note 13 to the Consolidated Financial Statements[207] - No material developments in legal proceedings have occurred since the 2024 Form 10-K[207] Item 1A. Risk Factors Highlights additional risk factors from political and economic events, macroeconomic uncertainties, and their adverse impact on tenant businesses and operations - Evolving political and economic events, including tariffs, trade disputes, and immigration policies, could adversely impact tenant businesses and the Company[208] - Macroeconomic uncertainties such as inflation, labor shortages, increasing energy prices, interest rates, and supply chain disruptions could strain retailers and reduce consumer confidence and spending[208] - Government policies, including Federal Reserve rate changes and economic sanctions, could lead to adverse impacts on the U.S. economy, potentially affecting occupancy rates and rents[208] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Reports no unregistered equity sales in Q2 2025, details July 2025 issuance of operating partnership units for acquisitions, and common stock repurchases - No unregistered sales of equity securities occurred during the three months ended June 30, 2025[209] - In July 2025, the Operating Partnership issued 2,773,087 exchangeable operating partnership units to partially fund the acquisition of five operating properties, under Section 4(a)(2) of the Securities Act[210] Common Stock Repurchases for Tax Withholding (Three months ended June 30, 2025) | Period | Total number of shares purchased | Average price paid per share | | :-------------------------- | :----------------------------- | :--------------------------- | | April 1 through April 30, 2025 | 317 | $72.42 | | May 1 through May 31, 2025 | — | — | | June 1 through June 30, 2025 | — | — | - The Company has a common stock repurchase program authorized for up to $250 million, expiring June 30, 2026[211] Item 3. Defaults Upon Senior Securities States no defaults upon senior securities occurred during the reporting period - There were no defaults upon senior securities[212] Item 4. Mine Safety Disclosures Indicates mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to the Company[213] Item 5. Other Information Confirms no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q2 2025 - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025[214] Item 6. Exhibits Lists exhibits filed with Form 10-Q, including material contracts, certifications, tax considerations, and Interactive Data Files - Exhibits include the Second Amendment to Sixth Amended and Restated Credit Agreement, dated May 6, 2025[218] - Certifications from the Chief Executive Officer and Chief Financial Officer for both Regency Centers Corporation and Regency Centers, L.P. are included under Rule 13a-14 and Section 1350[218] - Interactive Data Files (XBRL) are provided, including the Inline XBRL Instance Document and Taxonomy Extension Schema[218] SIGNATURES Contains required signatures for the Form 10-Q, certifying submission on behalf of Regency Centers Corporation and L.P. by their principal officers - The report was signed on August 4, 2025, by Michael J. Mas, Executive Vice President and Chief Financial Officer, and Terah L. Devereaux, Senior Vice President, Chief Accounting Officer, for both Regency Centers Corporation and Regency Centers, L.P[221][223]