Regency Centers(REG) - 2024 Q1 - Quarterly Results

Forward-Looking Statements & Risk Factors Forward-Looking Statements The company's forward-looking statements are not guarantees of future performance and are subject to risks, advising investors to review SEC filings - Statements regarding anticipated financial, business, legal, or other outcomes, including 2024 Guidance, are forward-looking and subject to risks and uncertainties[4][47] - Investors should not place undue reliance on these statements and should review risk factors in SEC filings (Form 10-K, 10-Q)[4][47] - Regency undertakes no duty to update forward-looking statements unless required by law[4][47] Risk Factors Various economic, geopolitical, industry, real estate, and corporate risks could materially impact the company's business and stock price - Current economic and geopolitical environments, including interest rates, potential recession, and banking industry challenges, may adversely impact borrowing costs, real estate valuation, and stock price[5][48] - Risks related to operating retail-based shopping centers include adverse economic/market conditions, shifts in retail trends (e-commerce), geographic concentration, dependence on anchor and local tenants, and compliance with regulations (e.g., ADA)[7][51] - Real estate investment risks involve potential decline in asset value, impairment losses, and challenges associated with development, redevelopment, acquisition, and disposition of properties[8][52] - Funding and capital structure risks include reliance on external capital, adverse effects of debt financing, restrictive debt covenants, and increased borrowing costs due to rising interest rates[12][56] - Technology risks include unauthorized access to data, and the use of artificial intelligence presents risks related to confidentiality, inaccurate outputs, and emerging regulatory challenges[13][57] - Failure to qualify as a REIT could result in federal income tax at corporate rates, and compliance with REIT requirements may limit hedging ability and incur tax liabilities[15][59] Earnings Press Release First Quarter 2024 Results Overview Regency Centers reported Q1 2024 Net Income of $0.58 per diluted share, driven by strong tenant demand and development activity Q1 2024 Key Financial Highlights | Metric | Q1 2024 | Q1 2023 | | :----------------------------------- | :------ | :------ | | Net Income per diluted share ($) | $0.58 | $0.57 | | Nareit FFO per diluted share ($) | $1.08 | $1.08 | | Core Operating Earnings per diluted share ($) | $1.04 | $1.03 | | Same Property NOI growth (excl. fees/reserves) (%) | 2.1% | | | Same Property percent leased (%) | 95.8% | 94.9% | | Same Property shop percent leased (%) | 93.5% | 92.0% | | Blended rent spreads (cash basis) (%) | +8.5% | | | Blended rent spreads (straight-lined basis) (%) | +17.4% | | - Regency's Board of Directors declared a quarterly cash dividend of $0.67 per share on common stock, payable July 3, 2024[21][29] - The company started approximately $80 million in new development and redevelopment projects, including The Shops at Stone Bridge ($67 million Whole Foods anchored development)[22][29] - Moody's Investors Service upgraded Regency's credit rating to A3 with a stable outlook in February[22][29] Financial Results Regency's Q1 2024 Net Income rose to $106.4 million ($0.58 per diluted share), with stable Nareit FFO and increased Core Operating Earnings Q1 2024 Financial Performance | Metric | Q1 2024 (millions) | Q1 2023 (millions) | YoY Change (millions) | | :----------------------------------- | :-------------------- | :-------------------- | :-------------------- | | Net Income Attributable to Common Shareholders (millions) | $106.4 | $97.3 | +$9.1 | | Net Income per diluted share ($) | $0.58 | $0.57 | +$0.01 | | Nareit FFO (millions) | $200.0 | $186.5 | +$13.5 | | Nareit FFO per diluted share ($) | $1.08 | $1.08 | $0.00 | | Core Operating Earnings (millions) | $193.1 | $177.8 | +$15.3 | | Core Operating Earnings per diluted share ($) | $1.04 | $1.03 | +$0.01 | Portfolio Performance Q1 2024 Same Property NOI grew 2.1%, driven by base rents, with Same Property percent leased at 95.8% and shop percent leased at 93.5% Q1 2024 Portfolio Performance Metrics | Metric | Q1 2024 | YoY Change | | :----------------------------------- | :------ | :--------- | | Same Property NOI growth (excl. fees/reserves) (%) | 2.1% | +2.1% | | Same Property base rents contribution to NOI growth (%) | 2.7% | | | Same Property percent leased (%) | 95.8% | +90 bps | | Same Property anchor percent leased (%) | 97.2% | +50 bps | | Same Property shop percent leased (%) | 93.5% | +150 bps | | Same Property commenced (%) | 92.1% | -50 bps | - Regency executed 1.8 million square feet of comparable new and renewal leases in Q1 2024, with blended cash rent spreads of +8.5% and straight-lined rent spreads of +17.4%[27] - For the trailing twelve months ended March 31, 2024, comparable new and renewal leases totaled 7.7 million square feet, with blended cash rent spreads of +10.3% and straight-lined rent spreads of +18.9%[27] Capital Allocation and Balance Sheet Regency initiated $80 million in Q1 2024 development, bringing total in-process projects to $547 million, and boosted liquidity to over $1.7 billion - Started $80 million in developments and redevelopments in Q1 2024, including The Shops at Stone Bridge ($67 million, anchored by Whole Foods and TJ Maxx)[29] - In-process development and redevelopment projects totaled $547 million as of March 31, 2024, with 46% of costs incurred[29] - Completed the disposition of Glengary Shoppes for $31 million in January 2024 and Tamarac Town Square for $23 million in April 2024[29] - Liquidity exceeded $1.7 billion as of March 31, 2024, including $1.5 billion capacity under its revolving credit facility and $230 million cash[29] - Priced $400 million of senior unsecured notes due 2034 with a 5.25% coupon, with proceeds intended to repay existing debt and for general corporate purposes[29] Debt Metrics (Pro-Rata, TTM) | Metric | As of March 31, 2024 | | :----------------------------------- | :------------------- | | Net debt and preferred stock to operating EBITDAre (x) | 5.4x | | Net debt and preferred stock to operating EBITDAre (adjusted for Urstadt Biddle) (x) | 5.2x | Common and Preferred Dividends Regency's Board declared a quarterly cash dividend of $0.67 per share for common stock, plus dividends for Series A and B preferred stock - Quarterly cash dividend of $0.67 per share declared for common stock, payable July 3, 2024[29] - Quarterly cash dividend of $0.390625 per share declared for Series A preferred stock, payable July 31, 2024[29] - Quarterly cash dividend of $0.367200 per share declared for Series B preferred stock, payable July 31, 2024[29] 2024 Guidance Regency updated its full-year 2024 guidance, raising Net Income per diluted share to $1.96-$2.02 and Nareit FFO to $4.15-$4.21 Full Year 2024 Guidance Update | Metric | 1Q 2024 Actual | Current Guidance | Previous Guidance | | :----------------------------------- | :------------- | :--------------- | :---------------- | | Net Income per diluted share ($) | $0.58 | $1.96-$2.02 | $1.87-$1.93 | | Nareit FFO per diluted share ($) | $1.08 | $4.15-$4.21 | $4.14-$4.20 | | Core Operating Earnings per diluted share ($) | $1.04 | $4.02-$4.08 | $4.02-$4.08 | | Same property NOI growth (excl. fees/reserves) (%) | 2.1% | +2.0% to +2.5% | +2.0% to +2.5% | | Acquisitions ($) | $0 | +/-$46,000 | $0 | | Dispositions ($) | $30,500 | +/-$125,000 | +/-$100,000 | - Development and Redevelopment spend is projected at approximately $180 million for the full year 2024[31] - Weighted average cap rate for dispositions is projected at +/- 5.5%[31] Company Overview About Regency Centers Corporation Regency Centers is a leading national owner, operator, and developer of grocer-anchored suburban shopping centers, an S&P 500 REIT - Regency Centers is a preeminent national owner, operator, and developer of shopping centers in suburban trade areas[36] - Its portfolio includes properties merchandised with highly productive grocers, restaurants, service providers, and best-in-class retailers[36] - Regency Centers is a qualified real estate investment trust (REIT), self-administered, self-managed, and an S&P 500 Index member[36] Summary Information Summary Financial Information Regency reported Q1 2024 Net Income of $106.36 million ($0.58 per diluted share), Nareit FFO of $199.97 million, and Core Operating Earnings of $193.07 million Q1 2024 Summary Financial Results | Metric | Q1 2024 (thousands) | Q1 2023 (thousands) | | :----------------------------------- | :--------------------- | :--------------------- | | Net income attributable to common shareholders (thousands) | $106,361 | $97,281 | | Net income per diluted share ($) | $0.58 | $0.57 | | Nareit FFO (thousands) | $199,967 | $186,495 | | Nareit FFO per diluted share ($) | $1.08 | $1.08 | | Core Operating Earnings (thousands) | $193,068 | $177,798 | | Core Operating Earnings per diluted share ($) | $1.04 | $1.03 | | Same Property NOI without termination fees (thousands) | $235,061 | $231,731 | | Same Property NOI without termination fees or collection of 2020/2021 reserves (thousands) | $235,061 | $230,210 | | Operating EBITDAre (thousands) | $249,596 | $221,479 | | Dividends declared per share and unit ($) | $0.670 | $0.650 | | Payout ratio of Core Operating Earnings per share (diluted) (%) | 64.4% | 63.1% | Capital Information (as of March 31, 2024) | Metric | 3/31/2024 (thousands) | 12/31/2023 (thousands) | | :----------------------------------- | :----------------------- | :------------------------ | | Market price per common share ($) | $60.56 | $67.00 | | Common shares outstanding (thousands) | 184,774 | 184,581 | | Market equity value of common shares and equivalents (thousands) | $11,256,530 | $12,441,131 | | Preferred stock (thousands) | $225,000 | $225,000 | | Outstanding debt (thousands) | $4,957,288 | $4,688,805 | | Net debt and preferred stock (thousands) | $4,952,187 | $4,822,451 | | Total market capitalization (thousands) | $16,208,717 | $17,263,582 | Debt Metrics (Pro-Rata, TTM) | Metric | 3/31/2024 | 12/31/2023 | | :----------------------------------- | :-------- | :--------- | | Net Debt and Preferreds-to-Operating EBITDAre (x) | 5.4x | 5.4x | | Net Debt and Preferreds-to-Operating EBITDAre, adjusted (x) | 5.2x | 5.1x | | Fixed charge coverage (x) | 4.5x | 4.7x | Summary Real Estate Information As of March 31, 2024, Regency owned 482 properties, with Same Property portfolio 95.8% leased and total GLA of 57.01 million square feet Real Estate Portfolio Summary (Consolidated and 100% of Real Estate Partnerships) | Metric | 3/31/2024 | 12/31/2023 | 3/31/2023 | | :----------------------------------- | :-------- | :--------- | :-------- | | Number of properties | 482 | 482 | 404 | | Number of retail operating properties | 473 | 474 | 402 | | Number of same properties | 400 | 394 | 395 | | GLA - All properties (thousands sq ft) | 57,013 | 56,831 | 51,137 | | GLA - Retail operating properties (thousands sq ft) | 56,091 | 56,062 | 50,628 | | GLA - Same properties (thousands sq ft) | 50,597 | 49,754 | 49,808 | | Leased - All properties (%) | 95.0% | 95.1% | 94.9% | | Leased - Retail operating properties (%) | 95.4% | 95.3% | 95.0% | | Leased - Same properties (%) | 95.8% | 95.6% | 94.9% | | Leased - Same properties (Spaces ≥ 10,000 sf) (%) | 97.2% | 96.9% | 96.7% | | Leased - Same properties (Spaces < 10,000 sf) (%) | 93.5% | 93.4% | 92.0% | | Commenced - Same properties (%) | 92.1% | 92.8% | 92.6% | Same Property NOI Growth (YTD) | Metric | 3/31/2024 | 3/31/2023 | | :----------------------------------- | :-------- | :-------- | | Same property NOI Growth without Termination Fees (%) | 1.4% | 2.5% | | Same property NOI Growth without Termination Fees or Redevelopments (%) | 1.1% | 2.5% | | Same property NOI Growth without Termination Fees or Collection of 2020/2021 Reserves (%) | 2.1% | 6.3% | - Rent spreads for the trailing 12 months ended March 31, 2024, were 10.3% (cash basis), up from 7.3% a year prior[65] Financial Information Consolidated Balance Sheets As of March 31, 2024, Regency reported total assets of $12.65 billion, net real estate investments at $11.09 billion, and total liabilities at $5.47 billion Consolidated Balance Sheet Summary (in thousands) | Account | 3/31/2024 | 12/31/2023 | | :----------------------------------- | :-------- | :--------- | | Assets: | | | | Net real estate investments (thousands) | $11,088,028 | $11,142,315 | | Cash, cash equivalents, and restricted cash (thousands) | $230,101 | $91,354 | | Total assets (thousands) | $12,650,903 | $12,426,913 | | Liabilities: | | | | Total notes payable (thousands) | $4,417,181 | $4,153,949 | | Total liabilities (thousands) | $5,472,884 | $5,234,978 | | Equity: | | | | Total shareholders' equity (thousands) | $7,019,711 | $7,032,687 | | Total equity (thousands) | $7,178,019 | $7,191,935 | | Total liabilities and equity (thousands) | $12,650,903 | $12,426,913 | - Cash, cash equivalents, and restricted cash significantly increased to $230.1 million from $91.4 million QoQ[68] - Notes payable, net, increased to $4.39 billion from $4.00 billion QoQ[68] Consolidated Statements of Operations For Q1 2024, Regency reported total revenues of $363.85 million, up from $317.98 million YoY, with net income attributable to common shareholders rising to $106.36 million Consolidated Statements of Operations Summary (in thousands) | Account | Three Months Ended 3/31/2024 | Three Months Ended 3/31/2023 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Total revenues (thousands) | $363,852 | $317,977 | | Lease income (thousands) | $353,106 | $308,801 | | Total operating expenses (thousands) | $233,941 | $196,989 | | Interest expense, net (thousands) | $42,868 | $36,393 | | Gain on sale of real estate, net of tax (thousands) | $(11,403) | $(250) | | Net income (thousands) | $112,658 | $98,488 | | Net income attributable to common shareholders (thousands) | $106,361 | $97,281 | - Lease income increased by $44.3 million YoY, while other property income also saw a rise[71] - Operating expenses increased by $36.95 million YoY, with depreciation and amortization, property operating expense, and real estate taxes being the main contributors[71] Supplemental Details of Operations (Consolidated Only) Consolidated operations show base rent as the largest revenue component, increasing to $244.14 million in Q1 2024, with operating expenses also rising Consolidated Revenues (in thousands) | Revenue Item | Three Months Ended 3/31/2024 | Three Months Ended 3/31/2023 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Base rent (thousands) | $244,135 | $212,930 | | Recoveries from tenants (thousands) | $85,023 | $71,226 | | Percentage rent (thousands) | $7,807 | $7,030 | | Termination Fees (thousands) | $1,755 | $4,717 | | Uncollectible lease income (thousands) | $(1,233) | $1,937 | | Other lease income (thousands) | $4,202 | $2,499 | | Straight-line rent on lease income (thousands) | $5,594 | $2,597 | | Above/below market rent amortization (thousands) | $5,823 | $5,865 | | Other property income (thousands) | $4,350 | $3,138 | | Management, transaction, and other fees (thousands) | $6,396 | $6,038 | | Total revenues (thousands) | $363,852 | $317,977 | Consolidated Operating Expenses (in thousands) | Expense Item | Three Months Ended 3/31/2024 | Three Months Ended 3/31/2023 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Depreciation and amortization (including FF&E) (thousands) | $97,585 | $82,707 | | Operating and maintenance (thousands) | $58,439 | $46,945 | | Real estate taxes (thousands) | $44,307 | $38,477 | | General & administrative (thousands) | $26,132 | $25,280 | | Other operating expenses (thousands) | $2,643 | $(497) | | Total operating expenses (thousands) | $233,941 | $196,989 | - Gain on sale of real estate, net of tax, was $(11.40) million in Q1 2024, compared to $(0.25) million in Q1 2023[73] Supplemental Details of Assets and Liabilities (Real Estate Partnerships Only) This section details real estate partnership assets and liabilities, with Regency's share of JV assets totaling $940.34 million and liabilities at $571.63 million Real Estate Partnerships Assets (in thousands) | Asset | Noncontrolling Interests (2024) | Noncontrolling Interests (2023) | Share of JVs (2024) | Share of JVs (2023) | | :----------------------------------- | :------------------------------ | :------------------------------ | :------------------ | :------------------ | | Real estate assets, net (thousands) | $(86,569) | $(85,972) | $801,908 | $801,101 | | Cash, cash equivalents, and restricted cash (thousands) | $(63,891) | $(66,036) | $17,085 | $14,940 | | Total assets (thousands) | $(162,197) | $(162,135) | $940,342 | $936,427 | Real Estate Partnerships Liabilities (in thousands) | Liability | Noncontrolling Interests (2024) | Noncontrolling Interests (2023) | Share of JVs (2024) | Share of JVs (2023) | | :----------------------------------- | :------------------------------ | :------------------------------ | :------------------ | :------------------ | | Notes payable, net (thousands) | $(38,908) | $(38,982) | $540,107 | $534,856 | | Total liabilities (thousands) | $(45,495) | $(45,082) | $571,633 | $565,822 | Supplemental Details of Operations (Real Estate Partnerships Only) For Q1 2024, Regency's share of JV revenues totaled $36.85 million, with base rent contributing $26.17 million, and net income contribution from JVs at $11.96 million Share of JVs Revenues (in thousands) | Revenue Item | Three Months Ended 3/31/2024 | Three Months Ended 3/31/2023 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Base rent (thousands) | $26,166 | $24,139 | | Recoveries from tenants (thousands) | $8,818 | $7,978 | | Total revenues (thousands) | $36,853 | $34,192 | Share of JVs Operating Expenses (in thousands) | Expense Item | Three Months Ended 3/31/2024 | Three Months Ended 3/31/2023 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Depreciation and amortization (thousands) | $8,245 | $7,422 | | Property operating expense (thousands) | $6,219 | $5,494 | | Real estate taxes (thousands) | $4,483 | $4,277 | | Total operating expenses (thousands) | $19,804 | $17,544 | - Interest expense, net, for Regency's share of JVs was $5.09 million in Q1 2024, up from $4.72 million in Q1 2023[78] Supplemental Details of Same Property NOI (Pro-Rata) Same Property NOI (pro-rata) remained stable at $236.43 million in Q1 2024, with a 2.1% increase excluding termination fees and reserves Same Property NOI Detail (in thousands) | Metric | Three Months Ended 3/31/2024 | Three Months Ended 3/31/2023 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Total real estate revenues (thousands) | $339,976 | $335,234 | | Total real estate operating expenses (thousands) | $103,542 | $98,786 | | Same Property NOI (thousands) | $236,434 | $236,448 | | Same Property NOI without Termination Fees (thousands) | $235,061 | $231,731 | | Same Property NOI without Termination Fees or Redevelopments (thousands) | $201,279 | $198,998 | | Same Property NOI without Termination Fees or Collection of 2020/2021 Reserves (thousands) | $235,061 | $230,210 | Percent Contribution to Same Property NOI Performance | Contribution Item | % Impact | | :----------------------------------- | :------- | | Base rent (% impact) | 2.7% | | Uncollectible lease income (% impact) | -0.6% | | Collection of 2020/2021 reserves (% impact) | -0.7% | | Net expense recoveries (% impact) | -0.2% | | Other lease / property income (% impact) | 0.1% | | Percentage rent (% impact) | 0.1% | | Same Property NOI without Termination Fees (% impact) | 1.4% | Reconciliations of Non-GAAP Financial Measures This section reconciles Net Income to Nareit FFO, Core Operating Earnings, and AFFO, with Q1 2024 Nareit FFO at $199.97 million Reconciliation of Net Income to Nareit FFO (in thousands) | Metric | Three Months Ended 3/31/2024 | Three Months Ended 3/31/2023 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Net Income Attributable to Common Shareholders (thousands) | $106,361 | $97,281 | | Depreciation and amortization (excluding FF&E) (thousands) | $104,372 | $89,035 | | Gain on sale of real estate, net of tax (thousands) | $(11,408) | $(241) | | Nareit Funds From Operations (thousands) | $199,967 | $186,495 | | Nareit FFO per share (diluted) ($) | $1.08 | $1.08 | Reconciliation of Nareit FFO to Core Operating Earnings (in thousands) | Metric | Three Months Ended 3/31/2024 | Three Months Ended 3/31/2023 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Nareit Funds From Operations (thousands) | $199,967 | $186,495 | | Merger transition costs (thousands) | $2,561 | - | | Loss on early extinguishment of debt (thousands) | $180 | - | | Straight-line rent (thousands) | $(5,738) | $(2,389) | | Above/below market rent amortization, net (thousands) | $(5,467) | $(5,665) | | Debt and derivative mark-to-market amortization (thousands) | $909 | $(8) | | Core Operating Earnings (thousands) | $193,068 | $177,798 | | Core Operating Earnings per share (diluted) ($) | $1.04 | $1.03 | Reconciliation of Core Operating Earnings to AFFO (in thousands) | Metric | Three Months Ended 3/31/2024 | Three Months Ended 3/31/2023 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Core Operating Earnings (thousands) | $193,068 | $177,798 | | Operating capital expenditures (thousands) | $(20,852) | $(17,459) | | Debt cost and derivative adjustments (thousands) | $2,140 | $1,672 | | Stock-based compensation (thousands) | $4,640 | $4,819 | | Adjusted Funds from Operations (thousands) | $178,996 | $166,830 | Capital Expenditures and Additional Disclosures Q1 2024 capital expenditures totaled $20.85 million for operating properties and $41.07 million for development, with Operating EBITDAre at $249.60 million Capital Expenditures (in thousands) | Category | Three Months Ended 3/31/2024 | Three Months Ended 3/31/2023 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Operating Properties: | | | | Leasing Capital Expenditures (thousands) | $18,856 | $12,685 | | Building improvements (thousands) | $1,996 | $4,774 | | Operating Capital Expenditures (thousands) | $20,852 | $17,459 | | Development & Redevelopment Properties: | | | | Ground-up development (thousands) | $15,875 | $6,070 | | Redevelopment (thousands) | $25,198 | $18,675 | | Development & Redevelopment Expenditures (thousands) | $41,073 | $24,745 | Reconciliation of Net Income to Operating EBITDAre (in thousands) | Metric | Three Months Ended 3/31/2024 | Three Months Ended 3/31/2023 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Net Income (thousands) | $112,658 | $98,488 | | Nareit EBITDAre (thousands) | $258,049 | $230,230 | | Operating EBITDAre (thousands) | $249,596 | $221,479 | - Operating capital expenditures increased by $3.39 million YoY, while development and redevelopment expenditures increased by $16.33 million YoY[87] Summary of Consolidated Debt Regency's total consolidated debt increased to $4.42 billion as of March 31, 2024, with fixed-rate unsecured public debt as the largest portion Total Consolidated Debt Outstanding (in thousands) | Debt Type | 3/31/2024 | 12/31/2023 | | :----------------------------------- | :-------- | :--------- | | Fixed rate mortgage loans (thousands) | $734,516 | $745,478 | | Variable rate mortgage loans (thousands) | $3,723 | $3,716 | | Fixed rate unsecured public debt (thousands) | $3,452,288 | $3,056,467 | | Fixed rate unsecured private debt (thousands) | $196,654 | $196,288 | | Unsecured credit facility (Revolving line of credit) (thousands) | $30,000 | $152,000 | | Total (thousands) | $4,417,181 | $4,153,949 | Schedule of Maturities by Year (in thousands) | Year | Total Debt (thousands) | Weighted Average Contractual Interest Rate (%) | | :--- | :--------------------- | :--------------------------------------- | | 2024 | $391,569 | 3.73% | | 2025 | $312,215 | 3.82% | | 2026 | $357,768 | 3.94% | | 2027 | $754,571 | 3.65% | | 2028 | $371,882 | 4.52% | | 2029 | $464,406 | 3.07% | | 2030 | $605,658 | 3.71% | | >10 years | $1,125,342 | 4.82% | | Total (thousands) | $4,417,181 | 4.00% | Weighted Average Interest Rates and Maturity | Metric | 3/31/2024 | 12/31/2023 | | :----------------------------------- | :-------- | :--------- | | Percentage of Total Debt (Fixed) (%) | 99.2% | 96.3% | | Percentage of Total Debt (Variable) (%) | 0.8% | 3.7% | | Current Weighted Average Contractual Interest Rates (Combined) (%) | 4.0% | 3.9% | | Current Weighted Average Effective Interest Rate (Combined) (%) | 4.3% | 4.2% | | Average Years to Maturity (Fixed) (years) | 7.2 | 7.1 | | Average Years to Maturity (Variable) (years) | 3.8 | 1.3 | Summary of Consolidated Debt Detail This section details consolidated debt, including secured fixed-rate mortgage loans and unsecured debt offerings, with the largest secured loan at $88 million - Secured debt includes 30 fixed-rate mortgage loans with maturities ranging from 2024 to 2037, and one variable-rate mortgage loan[92] - Unsecured debt comprises 9 public debt offerings and 2 private placements, with maturities from 2024 to 2049[92] - The unsecured revolving line of credit has a variable rate of Adjusted SOFR + 0.715% and matures on March 23, 2028[92] Summary of Unsecured Debt Covenants and Leverage Ratios Regency maintains strong compliance with unsecured public debt covenants, with consolidated debt to total assets at 27% and unencumbered assets at 399% Unsecured Public Debt Covenants (as of 3/31/2024) | Covenant | Required | 3/31/2024 | 12/31/2023 | | :----------------------------------- | :------- | :-------- | :--------- | | Total Consolidated Debt to Total Consolidated Assets (%) | ≤ 65% | 27% | 26% | | Secured Consolidated Debt to Total Consolidated Assets (%) | ≤ 40% | 4% | 5% | | Consolidated Income for Debt Service to Consolidated Debt Service (x) | ≥ 1.5x | 4.9x | 5.6x | | Unencumbered Consolidated Assets to Unsecured Consolidated Debt (%) | >150% | 399% | 420% | Consolidated Only Ratios (as of 3/31/2024) | Ratio | 3/31/2024 | 12/31/2023 | | :----------------------------------- | :-------- | :--------- | | Net debt to total market capitalization (%) | 26.7% | 26.7% | | Net debt and preferreds to Operating EBITDAre - TTM (x) | 4.9x | 4.9x | | Fixed charge coverage (x) | 5.0x | 5.1x | | Interest coverage (x) | 5.6x | 5.7x | Total Pro-Rata Share Ratios (as of 3/31/2024) | Ratio | 3/31/2024 | 12/31/2023 | | :----------------------------------- | :-------- | :--------- | | Net debt to total market capitalization (%) | 29.2% | 29.2% | | Net debt and preferreds to Operating EBITDAre - TTM (x) | 5.4x | 5.4x | | Fixed charge coverage (x) | 4.5x | 4.7x | | Interest coverage (x) | 5.1x | 5.1x | Summary of Unconsolidated Debt Total unconsolidated debt for real estate partnerships increased to $1.51 billion, with Regency's pro-rata share at $540.11 million Total Unconsolidated Debt Outstanding (in thousands) | Debt Type | 3/31/2024 | 12/31/2023 | | :----------------------------------- | :-------- | :--------- | | Fixed rate secured loans (thousands) | $1,434,477 | $1,430,030 | | Variable rate secured loans (thousands) | $34,159 | $27,872 | | Unsecured credit facilities variable rate (thousands) | $44,800 | $41,800 | | Total (thousands) | $1,513,436 | $1,499,702 | Regency's Pro Rata Share of Unconsolidated Debt Maturities (in thousands) | Year | Regency's Pro Rata Share (thousands) | Weighted Average Contractual Interest Rate (%) | | :--- | :----------------------- | :--------------------------------------- | | 2024 | $4,312 | 3.41% | | 2025 | $48,443 | 3.98% | | 2026 | $92,308 | 5.36% | | 2027 | $13,669 | 2.41% | | 2028 | $92,027 | 4.96% | | 2029 | $13,017 | 4.34% | | 2030 | $70,522 | 2.88% | | 2031 | $137,198 | 3.13% | | 2032 | $58,369 | 3.10% | | >10 Years | $13,941 | 6.26% | | Total (thousands) | $540,107 | 3.95% | Unconsolidated Debt Interest Rates and Maturity | Metric | 3/31/2024 | 12/31/2023 | | :----------------------------------- | :-------- | :--------- | | Percentage of Total Debt (Fixed) (%) | 94.8% | 95.4% | | Percentage of Total Debt (Variable) (%) | 5.2% | 4.6% | | Current Weighted Average Contractual Interest Rates (Combined) (%) | 4.0% | 3.9% | | Current Weighted Average Effective Interest Rates (Combined) (%) | 4.2% | 4.1% | | Average Years to Maturity (Fixed) (years) | 5.2 | 5.2 | | Average Years to Maturity (Variable) (years) | 2.3 | 2.6 | Unconsolidated Investments Regency holds unconsolidated investments across 101 properties with $2.70 billion in total assets, contributing $11.96 million in equity income Unconsolidated Investments Summary (in thousands) | Investment Partner | Number of Properties | Total Assets (thousands) | Total Debt (thousands) | Regency Ownership Interest (%) | Regency Share of Debt (thousands) | Investment 3/31/2024 (thousands) | Equity in Income (thousands) | | :----------------------------------- | :------------------- | :----------------------- | :--------------------- | :------------------------- | :-------------------- | :----------------------- | :------------------- | | State of Oregon (JV-C, JV-C2, JV-CCV) | 22 | $660,868 | $360,490 | 20.00% - 30.00% | $79,579 | $56,204 | $1,528 | | GRI (JV-GRI) | 66 | $1,475,102 | $933,805 | 40.00% | $373,522 | $142,238 | $9,126 | | Publix (JV-O) | 2 | $26,274 | - | 50.00% | - | $13,036 | $479 | | Individual Investors (Ballard Blocks, Bloom on Third, Others) | 11 | $535,718 | $219,141 | 11.80% - 49.90% | $87,006 | $157,231 | $828 | | Total | 101 | $2,697,962 | $1,513,436 | | $540,107 | $368,709 | $11,961 | - Regency's total ownership share of debt in unconsolidated investments is $540.11 million[98] Investment Activity Property Transactions In Q1 2024, Regency completed one disposition, Glengary Shoppes, for $30.5 million at a 6.0% cap rate, with no acquisitions Property Dispositions (in thousands) | Anchor(s) | Date Property Name | Market | GLA (thousands sq ft) | Total Sales Price (thousands) | Weighted Average Cap Rate (%) | | :----------------------------------- | :----------------- | :----- | :-------------------- | :---------------------------- | :---------------------------- | | Best Buy, Barnes & Noble | Jan-24 Glengary Shoppes | Tampa | 93 | $30,500 | 6.0% | - No acquisitions were reported for the period[99] Summary of In-Process Developments and Redevelopments Regency has $547 million in in-process developments and redevelopments, with 46% of costs incurred, targeting stabilized yields of 7%+/- for ground-up In-Process Developments Summary (in thousands) | Project Type | Total GLA (thousands sq ft) | Center Leased (%) | Net Project Costs (thousands) | Costs Incurred (%) | Stabilized Yield (%) | | :----------------------------------- | :-------------------------- | :---------------- | :---------------------------- | :----------------- | :------------------- | | Ground-up Developments | 859 | 64% | $220,000 | 43% | 7% +/- | | Redevelopments | 4,182 | 94% | $327,000 | 47% | 10% +/- | | Total In-Process (In Construction) | 5,041 | 89% | $547,000 | 46% | 9% +/- | - Key ground-up developments include Glenwood Green (Metro NYC, anchored by ShopRite/Target) and The Shops at Stone Bridge (Cheshire, CT, anchored by Whole Foods)[101] - Significant redevelopments include The Abbot (Boston, MA, retail/office), Westbard Square Phase 1 (Bethesda, MD, Giant-anchored), and Bloom on Third (Los Angeles, CA, Whole Foods-anchored)[101] Development and Redevelopment Current Year Completions For the current year, Regency completed one redevelopment project with estimated net project costs of $3 million, achieving 100% leased Current Year Development and Redevelopment Completions (in thousands) | Project Type | Center GLA (thousands sq ft) | Center Leased (%) | Net Project Costs (thousands) | Costs Incurred (%) | Stabilized Yield (%) | | :----------------------------------- | :--------------------------- | :---------------- | :---------------------------- | :----------------- | :------------------- | | Redevelopment Completion (est costs < $10 million individually) | 63 | 100% | $3,000 | 90% | 10% +/- | | Total Completions | 63 | 100% | $3,000 | 90% | 10% +/- | - No ground-up development completions were reported for the current year[103] - Estimated GAAP project costs for in-process developments and redevelopments are $609.57 million, with 46% of costs incurred[103] Real Estate Information Leasing Statistics In Q1 2024, Regency executed 1.81 million square feet of leases, with blended rent spreads of +8.5% cash and +17.4% straight-lined Leasing Statistics - Comparable (Q1 2024) | Metric | Total | New Leases | Renewals | | :----------------------------------- | :---- | :--------- | :------- | | Leasing Transactions | 389 | 96 | 293 | | GLA (thousands sq ft) | 1,811 | 274 | 1,537 | | New Base Rent/Sq. Ft. ($) | $28.49 | $33.54 | $27.58 | | Rent Spread (Cash) (%) | 8.5% | 11.7% | 7.8% | | Rent Spread (Straight-lined) (%) | 17.4% | 23.0% | 16.2% | | Weighted Avg. Lease Term (years) | 6.0 | 8.5 | 5.5 | | Tenant Allowance & Landlord Work/Sq. Ft. ($) | $8.53 | $48.51 | $1.34 | - For the trailing 12 months, total comparable leases were 7.66 million square feet with blended cash rent spreads of +10.3% and straight-lined rent spreads of +18.9%[105] - Rent spreads are calculated on a comparable-space, cash basis for new and renewal leases executed, including spaces vacant for over 12 months[107] New Lease Net Effective Rent and Leases Signed Not Yet Commenced Weighted average net effective rent for new leases was $26.95 per square foot, with 346 leases (1.96 million sq ft) signed but not yet commenced New Lease Net Effective Rent (Trailing Twelve Months Ended 3/31/2024) | Metric | Amount | | :----------------------------------- | :----- | | Base rent ($) | $32.72 | | Tenant allowance and landlord work ($) | $(4.82) | | Third party leasing commissions ($) | $(0.95) | | Net Effective Rent ($) | $26.95 | | Net effective rent / base rent (%) | 82% | | Weighted avg. lease term (years) | 11.3 | Leases Signed Not Yet Commenced (as of 3/31/2024) | Category | Leases | GLA (thousands sq ft) | Annual ABR (thousands) | Annual ABR ($ PSF) | | :----------------------------------- | :----- | :------------ | :--------------------- | :----------------- | | ≥ 10,000 SF | 39 | 1,140 | $21,559 | $21.03 | | < 10,000 SF | 307 | 822 | $28,922 | $41.30 | | Total | 346 | 1,962 | $50,482 | $29.26 | - New leases for spaces less than 10,000 square feet accounted for 55% of new leases by anchor & shop, indicating strong demand for smaller retail units[110] Annual Base Rent by State California and Florida are top states for Regency's ABR, accounting for 23.3% and 19.1% respectively, with California having the highest ABR per square foot Annual Base Rent by Top States (as of 3/31/2024) | State | Number of Properties | GLA (thousands sq ft) | Leased (%) | ABR (thousands) | ABR/Sq. Ft. ($) | ABR (%) | | :----------------------------------- | :------------------- | :-------------------- | :------- | :---------------- | :-------------- | :------- | | California | 71 | 9,192 | 95.1% | $266,581 | $30.37 | 23.3% | | Florida | 93 | 10,928 | 95.3% | $218,640 | $20.98 | 19.1% | | New York | 47 | 3,711 | 89.5% | $98,934 | $28.86 | 8.6% | | Connecticut | 45 | 3,936 | 90.4% | $94,978 | $26.76 | 8.3% | | Texas | 31 | 3,613 | 97.2% | $75,452 | $21.49 | 6.6% | | Total All Properties | 482 | 48,732 | 95.0% | $1,144,079 | $24.63 | 100% | - The total portfolio GLA is 48.73 million square feet, with an overall 95.0% leased rate[114] - States with lower ABR/Sq. Ft. include Ohio ($13.74), Colorado ($17.07), and Missouri ($11.05)[114] Annual Base Rent by CBSA The New York-Newark-Jersey City CBSA represents the largest share of Regency's ABR at 11.5%, with top 50 CBSAs accounting for 84.8% Annual Base Rent by Largest CBSAs (as of 3/31/2024) | CBSA | Number of Properties | GLA (thousands sq ft) | Leased (%) | ABR (thousands) | ABR/Sq. Ft. ($) | ABR (%) | | :----------------------------------- | :------------------- | :-------------------- | :------- | :---------------- | :-------------- | :------- | | New York-Newark-Jersey City | 65 | 5,033 | 90.2% | $131,988 | $29.06 | 11.5% | | Los Angeles-Long Beach-Anaheim | 25 | 2,546 | 97.9% | $77,444 | $31.09 | 6.8% | | Houston-Woodlands-Sugar Land | 15 | 1,866 | 97.3% | $36,978 | $20.36 | 3.2% | | Washington-Arlington-Alexandria | 26 | 1,830 | 95.8% | $54,292 | $30.97 | 4.7% | | Atlanta-SandySprings-Alpharetta | 22 | 2,121 | 96.1% | $50,502 | $24.78 | 4.4% | | Miami-Ft Lauderdale-PompanoBch | 41 | 5,320 | 92.5% | $115,921 | $23.57 | 10.1% | | San Francisco-Oakland-Berkeley | 18 | 3,342 | 93.5% | $97,090 | $31.06 | 8.5% | | Top 50 CBSAs by Population | 386 | 40,580 | 95.4% | $970,597 | $24.96 | 84.8% | | Total All Properties | 482 | 48,732 | 95.0% | $1,144,079 | $24.63 | 100% | - The highest ABR/Sq. Ft. among the top CBSAs is in San Jose-Sunnyvale-Santa Clara ($32.45) and San Diego-Chula Vista-Carlsbad ($31.47)[117] Annual Base Rent by Tenant Category Grocery tenants represent the largest ABR category at 20%, with shop tenants contributing 57% and anchor tenants 43% of total ABR Tenant Category Exposure (% of ABR) | Tenant Category | ABR (%) | | :----------------------------------- | :------- | | Grocery | 20% | | Restaurant - Quick Service/Fast Casual | 13% | | Personal Services | 7% | | Medical | 7% | | Restaurant - Full Service | 6% | | Apparel/Accessories | 5% | | Fitness | 5% | | Off-Price | 5% | | Banks | 5% | | Business Services | 4% | | Hobby/Sports | 4% | | Pet | 3% | | Pharmacy | 3% | | Home | 3% | | Office/Communications | 3% | | Other | 2% | | Home Improvement/Auto | 2% | | Liquor/Wine/Beer | 2% | | Beauty/Cosmetics | 1% | | Entertainment | 1% | Anchor/Shop Exposure (% of ABR) | Category | ABR (%) | | :----------------------------------- | :------- | | Shop | 57% | | Anchor | 43% | - Shop tenants are defined as less than 10,000 square feet, and Anchor tenants are greater than or equal to 10,000 square feet[119] Significant Tenant Rents Publix is Regency's largest tenant, contributing 3.0% of total ABR, with the top 25 tenants collectively representing 30.4% of total ABR Top 25 Significant Tenants (as of 3/31/2024) | | Tenant | Total GLA (thousands sq ft) | Company Owned GLA (%) | Annualized Base Rent (thousands) | Total Annualized Base Rent (%) | Total of Leased Stores | | :-- | :----------------------------------- | :----------------------- | :--------------------- | :---------------------------------- | :------------------------------ | :----------------------- | | 1 | Publix | 2,960 | 6.4% | $34,071 | 3.0% | 68 | | 2 | Albertsons Companies, Inc. | 2,192 | 4.7% | $33,634 | 2.9% | 53 | | 3 | TJX Companies, Inc. | 1,736 | 3.8% | $31,829 | 2.8% | 73 | | 4 | Amazon/Whole Foods | 1,296 | 2.8% | $30,832 | 2.7% | 39 | | 5 | Kroger Co. | 2,933 | 6.3% | $30,228 | 2.6% | 52 | | 6 | Ahold Delhaize | 924 | 2.0% | $22,876 | 2.0% | 20 | | 7 | CVS | 770 | 1.7% | $19,089 | 1.7% | 65 | | 8 | L.A. Fitness Sports Club | 516 | 1.1% | $11,223 | 1.0% | 14 | | 9 | Trader Joe's | 311 | 0.7% | $11,108 | 1.0% | 30 | | 10 | JPMorgan Chase Bank | 172 | 0.4% | $10,561 | 0.9% | 55 | | ... | ... | ... | ... | ... | ... | ... | | | Top Tenants (Total) | 18,895 | 41.0% | $347,658 | 30.4% | 952 | - The top 25 tenants collectively occupy 41.0% of Regency's company-owned GLA[121] - The list includes major grocery chains (Publix, Albertsons, Kroger, Whole Foods), discount retailers (TJX, Ross), pharmacies (CVS), and fitness centers (L.A. Fitness)[121] Tenant Lease Expirations Regency's lease expiration schedule shows 4.8% of GLA and 4.6% of ABR expiring in 2024, with the largest concentration between 2025 and 2028 Tenant Lease Expirations - All Tenants (as of 3/31/2024) | Year | GLA (thousands sq ft) | GLA (%) | Total ABR (%) | ABR ($ PSF) | | :--- | :-------------------- | :------------- | :------------------- | :---------- | | MTM | 376 | 0.8% | 0.9% | $27.62 | | 2024 | 2,176 | 4.8% | 4.6% | $23.29 | | 2025 | 5,371 | 11.9% | 12.0% | $24.66 | | 2026 | 5,570 | 12.3% | 12.3% | $24.50 | | 2027 | 6,293 | 13.9% | 14.1% | $24.87 | | 2028 | 5,883 | 13.0% | 13.9% | $26.09 | | 2029 | 5,236 | 11.6% | 10.9% | $23.09 | | 2030 | 2,360 | 5.2% | 5.5% | $25.71 | | 2031 | 1,970 | 4.3% | 4.8% | $26.88 | | 2032 | 1,891 | 4.2% | 4.9% | $28.57 | | 2033 | 1,999 | 4.4% | 5.2% | $29.00 | | 10 Year Total | 39,125 | 86.4% | 89.2% | $25.21 | | Thereafter | 6,173 | 13.6% | 10.8% | $19.44 | | Total | 45,298 | 100% | 100% | $24.43 | Tenant Lease Expirations - Anchor vs. Shop (as of 3/31/2024) | Category | Total GLA (thousands sq ft) | Total ABR (%) | ABR ($ PSF) | | :----------------------------------- | :----------------------- | :------------------- | :---------- | | Anchor Tenants | 28,360 | 42.7% | $16.65 | | Shop Tenants | 16,938 | 57.3% | $37.45 | - The data reflects commenced leases only and does not account for contractual rent steps or renewal options[128] Portfolio Summary Report by State This report details Regency's portfolio properties by state, including GLA, % leased, major tenants, and in-process developments - California properties (71) have a total GLA of 9.19 million sq ft, 95.1% leased, with major tenants including Ralphs, Albertsons, Whole Foods, and Target[131][132][133] - Florida properties (93) have a total GLA of 10.93 million sq ft, 95.3% leased, with Publix being a dominant grocery anchor[136][137][138][139] - Connecticut properties (45) have a total GLA of 3.94 million sq ft, 90.4% leased, featuring anchors like ShopRite, Trader Joe's, and Whole Foods[133][134][135] - In-process developments like The Shops at Stone Bridge (CT) and Glenwood Green (NJ) are highlighted, indicating future growth areas[135][143] Additional Disclosures and Forward-Looking Information Components of Net Asset Value (NAV) As of March 31, 2024, Regency's pro-rata share of operating portfolio cash NOI was $262.94 million, detailing valuation components for in-process developments Real Estate - Operating (in thousands) | Metric | Amount | | :----------------------------------- | :----- | | Consolidated NOI (thousands) | $239,334 | | Share of Unconsolidated JV NOI (thousands) | $25,650 | | Less: Noncontrolling Interests (thousands) | $(2,046) | | Pro Rata Share of Operating Portfolio Cash NOI (thousands) | $262,938 | | Retail Operating Properties Including In-Process Redevelopments (Quarterly) (thousands) | $12,620 | Real Estate: In-Process Ground-Up Developments and Redevelopments (in thousands) | Project Type | REG's Estimated Net Project Costs (thousands) | Stabilized Yield (%) | Annualized Proforma Stabilized NOI (thousands) | Costs Incurred (%) | Construction in Progress (thousands) | | :----------------------------------- | :-------------------------------------------- | :------------------- | :--------------------------------------------- | :----------------- | :--------------------------- | | In-Process Ground-Up Development | $220,000 | 7% | $15,400 | 43% | $94,600 | | In-Process Redevelopment Projects | $327,000 | 10% | $32,700 | 47% | $153,690 | Other Assets and Liabilities (Regency's Pro-Rata Share, in thousands) | Category | Amount | | :----------------------------------- | :----- | | Estimated Market Value of Land & Non-income Producing Assets (thousands) | $65,146 | | Cash and Cash Equivalents (thousands) | $183,295 | | Notes payable (thousands) | $4,888,380 | | Preferred Stock (thousands) | $225,000 | | Common Shares and Equivalents Issued and Outstanding | 185,874 | Earnings Guidance Regency updated its full-year 2024 guidance, raising Net Income per diluted share to $1.96-$2.02 and Nareit FFO to $4.15-$4.21 Full Year 2024 Guidance (in thousands, except per share data) | Metric | 1Q 2024 | Current Guidance | Previous Guidance | | :----------------------------------- | :------ | :--------------- | :---------------- | | Net Income per diluted share ($) | $0.58 | $1.96-$2.02 | $1.87-$1.93 | | Nareit FFO per diluted share ($) | $1.08 | $4.15-$4.21 | $4.14-$4.20 | | Core Operating Earnings per diluted share ($) | $1.04 | $4.02-$4.08 | $4.02-$4.08 | | Same property NOI growth (excl. fees/reserves) (%) | 2.1% | +2.0% to +2.5% | +2.0% to +2.5% | | Acquisitions ($) | $0 | +/-$46,000 | $0 | | Dispositions ($) | $30,500 | +/-$125,000 | +/-$100,000 | Reconciliation of Net Income to Earnings Guidance (per diluted share) | Metric | Full Year 2024 (Low) | Full Year 2024 (High) | | :----------------------------------- | :------------------- | :-------------------- | | Net income attributable to common shareholders ($) | $1.95 | $2.01 | | Nareit Funds From Operations ($) | $4.15 | $4.21 | | Core Operating Earnings ($) | $4.02 | $4.08 | - The guidance figures represent 100% of Regency's consolidated entities and its pro-rata share of unconsolidated real estate partnerships, except for per share data[156] Glossary of Terms Key Financial and Real Estate Definitions This section defines key financial and real estate terms, including non-GAAP measures like AFFO, Core Operating Earnings, Nareit FFO, and NOI - Adjusted Funds From Operations (AFFO) reflects cash available to fund business needs and distributions, adjusted from Core Operating Earnings for capital expenditures, debt cost, and stock-based compensation[160] - Core Operating Earnings excludes certain non-comparable items from Nareit FFO, such as transaction-related expenses, debt extinguishment gains/losses, and non-cash components like straight-line rents[161] - Nareit FFO is a standard REIT performance measure, defined as net income excluding real estate gains/impairments, plus depreciation and amortization, adjusted for unconsolidated partnerships[163] - Net Operating Income (NOI) is the sum of various real estate revenues less operating and maintenance expenses, real estate taxes, ground rent, and uncollectible lease income, excluding non-cash rent adjustments[164] - Same Property refers to retail operating properties owned and operated for the entirety of both comparative calendar year periods, generally including properties in redevelopment unless otherwise indicated[169]