Regency Centers(US:REG)2022-08-05 20:32Financial Data and Key Metrics Changes - The company reported strong second quarter results, with an increase in same property NOI guidance by 100 basis points to 5.25% at the midpoint, excluding prior year collections [18][37] - Core operating earnings per share have returned to pre-pandemic 2019 levels, indicating the portfolio's quality and resiliency [35] - The company experienced a reversal of straight-line rent reserves contributing $3.5 million or $0.02 per share to Nareit FFO, which was not included in prior guidance [36] Business Line Data and Key Metrics Changes - New leasing volumes were up 20% year-to-date versus the historical average, with cash spreads for nearly 9% in the second quarter [19][20] - Retention rates remained above historical averages, and net effective rent growth was in the mid-teens [21] - The company has nearly $390 million of development and redevelopment projects in process at yields in the 7% to 8% range [24] Market Data and Key Metrics Changes - The demographic profile of the company's trade areas supports consumers who can absorb pressures from inflation and economic softness [10] - Tenant move-outs remained light, contributing to occupancy and rent growth [7][22] - The company noted strong demand across various sectors, including grocery, apparel, and restaurants, with a healthy mix of local and national tenants [54] Company Strategy and Development Direction - The company is focused on maintaining a strong pipeline of leases and benefiting from development and redevelopment NOI coming online [11] - The balance sheet strength and low leverage position the company well to weather economic storms and take advantage of opportunities [12][14] - The company emphasizes its commitment to ESG initiatives, including targets for reducing greenhouse gas emissions [16][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the increasing macroeconomic headwinds but expressed confidence in the company's ability to navigate challenges [8][43] - The company believes it is well-positioned ahead of a potential economic recession, with a strong tenant base that has emerged stronger post-pandemic [43][82] - Management highlighted the importance of the neighborhood community shopping center and the retail ecosystem, indicating a positive outlook for the business [56] Other Important Information - The company executed share repurchases in June, buying back 1.3 million shares for about $75 million, which was accretive to 2022 earnings [40] - The debt markets remain volatile, but the company has no unsecured maturities until 2024, allowing for a patient approach [41] Q&A Session Summary Question: GLA was down from prior quarters at 1.3 million square feet, is that just a function of more limited anchor leasing? - Management explained that the total number of transactions was in line with the trailing 12 months, and the decrease was due to a mix favoring smaller shop spaces over anchors [48][49] Question: How does post-pandemic migration impact foot traffic and merchandising decisions? - Management noted that foot traffic has returned to pre-pandemic levels, with strong demand across various categories [53] Question: Can you talk about demand from tenants, breaking it down between discretionary versus essentials? - Management indicated robust demand across all sectors, with no significant slowdown observed [61] Question: What are your annual contractual bumps generally ranging? - Management stated that annual bumps are typically in the 2% to 4% range, with some CPI adjustments [75] Question: Are you seeing anything that would make you unduly worried about your small shops? - Management expressed confidence in the health of the tenant base, stating that strong operators have emerged from the pandemic [82] Question: Can you provide an update on the Abbott and Boston projects? - Management confirmed strong demand and interest in the mixed-use asset, with leases executed and income expected to commence soon [121]