Regency Centers Reports Second Quarter 2024 Results
Regency Centers (Nasdaq: REG) reported strong Q2 2024 results, with Net Income Attributable to Common Shareholders at $0.54 per diluted share. Key highlights include:
- Nareit FFO of $1.06 per diluted share
- Core Operating Earnings of $1.02 per diluted share
- Raised 2024 Nareit FFO guidance to $4.21-$4.25 per diluted share
- Same Property NOI increased by 3.3% year-over-year
- Same Property percent leased increased to 95.8%
- Executed 2.2 million sq ft of leases at +9.2% cash rent spreads
- Repurchased 3.3 million shares for $200 million
The company's strong performance, leasing activity, and development pipeline position it well for future growth.
I Regency Centers (Nasdaq: REG) hanno riportato risultati forti per il secondo trimestre del 2024, con un utile netto attribuibile agli azionisti ordinari di $0,54 per azione diluita. I principali punti salienti includono:
- FFO Nareit di $1,06 per azione diluita
- Utile operativo core di $1,02 per azione diluita
- Aumento della previsione del FFO Nareit 2024 a $4,21-$4,25 per azione diluita
- L' NOI della stessa proprietà è aumentato del 3,3% rispetto all'anno precedente
- La percentuale di proprietà locata è aumentata al 95,8%
- Eseguiti contratti di locazione per 2,2 milioni di piedi quadrati a +9,2% di spread di affitto in contante
- Riacquistati 3,3 milioni di azioni per $200 milioni
Le forti prestazioni, l'attività di locazione e il pipeline di sviluppo dell'azienda la pongono in una buona posizione per la crescita futura.
Regency Centers (Nasdaq: REG) informó resultados sólidos para el segundo trimestre de 2024, con un ingreso neto atribuible a los accionistas comunes de $0.54 por acción diluida. Los aspectos destacados incluyen:
- FFO de Nareit de $1.06 por acción diluida
- Ganancias operativas básicas de $1.02 por acción diluida
- Aumento de la guía de FFO de Nareit 2024 a $4.21-$4.25 por acción diluida
- NOI de propiedades comparables aumentó en 3.3% interanual
- El porcentaje de propiedades arrendadas aumentó al 95.8%
- Se ejecutaron 2.2 millones de pies cuadrados de arrendamientos con spread de alquiler en efectivo +9.2%
- Se recompraron 3.3 millones de acciones por $200 millones
El sólido rendimiento de la empresa, la actividad de arrendamiento y el pipeline de desarrollo la posicionan bien para el crecimiento futuro.
Regency Centers (Nasdaq: REG)는 2024년 2분기 강력한 실적을 보고했으며, 보통주주에게 귀속되는 순이익이 희석주당 $0.54입니다. 주요 하이라이트는 다음과 같습니다:
- Nareit FFO가 희석주당 $1.06
- 핵심 운영 수익이 희석주당 $1.02
- 2024년 Nareit FFO 가이던스를 희석주당 $4.21-$4.25로 상향 조정
- 동일한 부동산 NOI가 전년 대비 3.3% 증가
- 동일한 부동산 임대율이 95.8%로 증가
- +9.2% 현금 임대 스프레드로 220만 평방피트의 임대 계약을 체결
- $2억에 330만 주를 재매입함
회사의 강력한 실적, 임대 활동 및 개발 파이프라인은 미래 성장을 위한 좋은 위치에 있습니다.
Regency Centers (Nasdaq: REG) a rapporté de solides résultats pour le deuxième trimestre 2024, avec un bénéfice net attribuable aux actionnaires ordinaires de 0,54 $ par action diluée. Les principaux faits saillants incluent :
- FFO Nareit de 1,06 $ par action diluée
- Bénéfice opérationnel de base de 1,02 $ par action diluée
- Rehaussement des prévisions de FFO Nareit 2024 à 4,21 $ - 4,25 $ par action diluée
- L'NOI des propriétés comparables a augmenté de 3,3 % d'une année sur l'autre
- Le pourcentage des propriétés louées a augmenté à 95,8 %
- Exécution de baux totalisant 2,2 millions de pieds carrés à +9,2 % d'écart de loyer en espèces
- Rachat de 3,3 millions d'actions pour 200 millions de dollars
Les solides performances, les activités de location et le pipeline de développement de l'entreprise la positionnent bien pour une croissance future.
Regency Centers (Nasdaq: REG) berichtete für das zweite Quartal 2024 von starken Ergebnissen, mit einem den Stammaktionären zurechenbaren Nettogewinn von $0,54 pro verwässerter Aktie. Die wichtigsten Eckpunkte umfassen:
- Nareit FFO von $1,06 pro verwässerter Aktie
- Kernbetriebsgewinn von $1,02 pro verwässerter Aktie
- Anhebung der Prognose für den Nareit FFO 2024 auf $4,21-$4,25 pro verwässerter Aktie
- Das NOI der gleichen Immobilien stieg um 3,3% im Jahresvergleich
- Der Vermietungsanteil der gleichen Immobilien stieg auf 95,8%
- 2,2 Millionen Quadratfuß an Mietverträgen mit +9,2% Mietspread in bar abgeschlossen
- 3,3 Millionen Aktien für $200 Millionen zurückgekauft
Die starke Leistung des Unternehmens, die Mietaktivitäten und die Entwicklungspipeline positionieren es gut für zukünftiges Wachstum.
- Raised 2024 Nareit FFO guidance to $4.21-$4.25 per diluted share
- Same Property NOI increased by 3.3% year-over-year
- Same Property percent leased increased to 95.8%, up 80 basis points year-over-year
- Executed 2.2 million square feet of leases at +9.2% cash rent spreads
- Started $40 million of new development and redevelopment projects
- S&P Global upgraded Regency's outlook to 'Positive' and affirmed BBB+ credit rating
- Acquired Compo Shopping Center for $46 million
- Same Property commenced occupancy declined by 30 basis points year-over-year to 92.3%
Insights
Regency Centers' Q2 2024 results demonstrate solid performance and positive momentum in the retail real estate sector. The company reported Nareit FFO of
Key highlights include:
- Same Property NOI growth of
3.3% , driven by a2.9% increase in base rents - Impressive leasing activity with 2.2 million square feet executed at blended rent spreads of
+9.2% on a cash basis - Increased occupancy rates, with Same Property percent leased up 80 basis points to
95.8% - Strategic capital allocation, including
$40 million in new development and redevelopment projects
The company's updated 2024 guidance reflects confidence in its business model, with Nareit FFO now expected to be between
Regency's balance sheet remains strong, with a pro-rata net debt to operating EBITDAre ratio of 5.2x, indicating prudent financial management. The S&P Global outlook upgrade to 'Positive' further underscores the company's solid financial position.
Overall, Regency Centers' Q2 results and updated guidance paint a picture of a well-managed retail REIT capitalizing on the strength of suburban shopping centers and effectively navigating the evolving retail landscape.
Regency Centers' Q2 2024 performance offers valuable insights into the current state of the retail real estate market, particularly in suburban areas. The company's strong leasing activity and occupancy rates suggest a robust demand for high-quality retail spaces in these locations.
Several key indicators point to a healthy retail real estate environment:
- The 80 basis point increase in Same Property percent leased to
95.8% indicates strong tenant demand and available space in prime locations. - Blended rent spreads of
+9.2% on a cash basis for new and renewal leases demonstrate landlords' pricing power and the willingness of tenants to pay premium rents for quality locations. - The increase in shop percent leased to
93.5% is particularly noteworthy, as smaller tenants often serve as a barometer for overall retail health and local economic conditions.
Regency's focus on suburban shopping centers appears to be paying off, likely benefiting from post-pandemic shifts in consumer behavior favoring local and convenient shopping options. The company's ability to start
However, it's important to note the potential challenges ahead, such as inflationary pressures and the ongoing evolution of e-commerce. Regency's strategic focus on necessity-based and service-oriented tenants should help mitigate these risks, positioning the company well for sustained growth in the evolving retail landscape.
JACKSONVILLE, Fla., Aug. 01, 2024 (GLOBE NEWSWIRE) -- Regency Centers Corporation (“Regency Centers”, “Regency” or the “Company”) (Nasdaq: REG) today reported financial and operating results for the period ended June 30, 2024 and provided updated 2024 earnings guidance. For the three months ended June 30, 2024 and 2023, Net Income Attributable to Common Shareholders was
Second Quarter Highlights
- Reported Nareit FFO of
$1.06 per diluted share and Core Operating Earnings of$1.02 per diluted share - Raised 2024 Nareit FFO guidance to a range of
$4.21 t o$4.25 per diluted share and 2024 Core Operating Earnings guidance to a range of$4.06 t o$4.10 per diluted share - The midpoint of 2024 Core Operating Earnings guidance represents approximately
4% year-over-year growth, excluding the collection of receivables reserved during 2020-2021 - Increased Same Property NOI year-over-year, excluding lease termination fees and the collection of receivables reserved during 2020 and 2021, by
3.3% - Increased Same Property percent leased by 80 basis points year-over-year to
95.8% , and Same Property shop percent leased by 80 basis points year-over-year to93.5% - Executed 2.2 million square feet of comparable new and renewal leases at blended rent spreads of +
9.2% on a cash basis and +18.2% on a straight-lined basis - Repurchased approximately 3.3 million shares of Regency stock for
$200 million , at an average price of$60.48 per share - Started approximately
$40 million of new development and redevelopment projects, bringing year-to-date total project starts to$120 million - As of June 30, 2024, Regency's in-process development and redevelopment projects had estimated net project costs of
$578 million - In May, S&P Global upgraded Regency's outlook to 'Positive' and affirmed the Company's BBB+ credit rating
- Pro-rata net debt and preferred stock to operating EBITDAre at June 30, 2024 was 5.3x, and 5.2x as adjusted for the annualized impact of the EBITDAre contribution from Urstadt Biddle
- Issued our annual Corporate Responsibility report in May, highlighting achievements and progress within our corporate responsibility program and initiatives
Subsequent Highlights
- On July 31, 2024, Regency’s Board of Directors (the “Board”) declared a quarterly cash dividend on the Company’s common stock of
$0.67 per share
“We drove another great quarter of leasing activity and overall results, and tenant demand remains strong for our high-quality suburban shopping centers,” said Lisa Palmer, President and Chief Executive Officer. "We also continue to identify and execute on new investment opportunities, highlighted in the second quarter by several value-creating project starts, sourcing accretive acquisitions, and executing on opportunistic share repurchases. The strength of our year-to-date results, combined with our strong pipelines of executed leases and development and redevelopment projects, position us well for future growth."
Financial Results
Net Income Attributable to Common Shareholders
- For the three months ended June 30, 2024, Net Income Attributable to Common Shareholders was
$99.3 million , or$0.54 per diluted share, compared to Net Income Attributable to Common Shareholders of$86.8 million , or$0.51 per diluted share, for the same period in 2023.
Nareit FFO
- For the three months ended June 30, 2024, Nareit FFO was
$196.4 million , or$1.06 per diluted share, compared to$176.8 million , or$1.03 per diluted share, for the same period in 2023.
Core Operating Earnings
- For the three months ended June 30, 2024, Core Operating Earnings was
$189.3 million , or$1.02 per diluted share, compared to$164.7 million , or$0.96 per diluted share, for the same period in 2023.
Portfolio Performance
Same Property NOI
- Second quarter 2024 Same Property Net Operating Income (“NOI”), excluding lease termination fees and the collection of receivables reserved during 2020 and 2021, increased by
3.3% compared to the same period in 2023.- Same Property base rents contributed
2.9% to Same Property NOI growth in the second quarter of 2024.
- Same Property base rents contributed
Occupancy
- As of June 30, 2024, Regency’s Same Property portfolio was
95.8% leased, flat sequentially and an increase of 80 basis points compared to June 30, 2023.- Same Property anchor percent leased, which includes spaces greater than or equal to 10,000 square feet, was
97.2% , an increase of 80 basis points compared to June 30, 2023. - Same Property shop percent leased, which includes spaces less than 10,000 square feet, was
93.5% , an increase of 80 basis points compared to June 30, 2023.
- Same Property anchor percent leased, which includes spaces greater than or equal to 10,000 square feet, was
- As of June 30, 2024, Regency’s Same Property portfolio was
92.3% commenced, an increase of 10 basis points sequentially and a decline of 30 basis points compared to June 30, 2023.
Leasing Activity
- During the three months ended June 30, 2024, Regency executed approximately 2.2 million square feet of comparable new and renewal leases at a blended cash rent spread of +
9.2% and a blended straight-lined rent spread of +18.2% . - During the trailing twelve months ended June 30, 2024, the Company executed approximately 7.9 million square feet of comparable new and renewal leases at a blended cash rent spread of +
9.7% and a blended straight-lined rent spread of +18.5% .
Corporate Responsibility
- On May 16, 2024, Regency issued its annual Corporate Responsibility Report, illustrating the Company’s continued commitment to and leadership in environmental, social and governance initiatives and achievements to further our business strategy and performance. The report can be found on our Corporate Responsibility website.
Capital Allocation and Balance Sheet
Developments and Redevelopments
- For the three months ended June 30, 2024, the Company started development and redevelopment projects with estimated net project costs of approximately
$40 million , at the Company’s share. - As of June 30, 2024, Regency’s in-process development and redevelopment projects had estimated net project costs of
$578 million at the Company’s share,49% of which has been incurred to date. - Subsequent to quarter end, the Company started the ground-up development Jordan Ranch Market in a suburb of Houston. The 162,000-square-foot center will be anchored by H-E-B and will serve as the retail component of a new master-planned community.
Property Transactions
- On May 9, 2024, the Company acquired Compo Shopping Center in Westport, CT for
$46 million , at Regency's share. - On April, 8, 2024, the Company sold Tamarac Town Square for
$23 million , at Regency's share. - On May 21, 2024, the Company sold Star's at Quincy for
$42 million , at Regency's share.
Share Repurchases
- During the quarter, the Company repurchased approximately 3.3 million shares of Regency stock for
$200 million at an average price of$60.48 per share. - Following the second quarter repurchase activity, on July 31, 2024, Regency’s Board of Directors authorized a new share repurchase program, which authorizes the repurchase by Regency of up to
$250 million of its common stock. The program will remain in place until July 30, 2026 unless earlier modified, extended or terminated in the discretion of the Board. The timing and price of share repurchases, if any, will be dependent upon market conditions and other factors.
Balance Sheet
- During the quarter, the Company repaid
$250 million of3.75% senior unsecured notes at maturity in June 2024. - In May, S&P Global upgraded Regency's outlook to 'Positive' and affirmed the Company's BBB+ credit rating.
- As of June 30, 2024, Regency had approximately
$1.2 billion of capacity under its revolving credit facility. - As of June 30, 2024, Regency’s pro-rata net debt and preferred stock to operating EBITDAre was 5.2x, adjusted for the annualized impact of the EBITDAre contribution from the acquisition of Urstadt Biddle.
Common and Preferred Dividends
- On July 31, 2024, Regency’s Board declared a quarterly cash dividend on the Company’s common stock of
$0.67 per share. The dividend is payable on October 3, 2024, to shareholders of record as of September 12, 2024. - On July 31, 2024, Regency’s Board declared a quarterly cash dividend on the Company’s Series A preferred stock of
$0.39 0625 per share. The dividend is payable on October 31, 2024, to shareholders of record as of October 16, 2024. - On July 31, 2024, Regency’s Board declared a quarterly cash dividend on the Company’s Series B preferred stock of
$0.36 7200 per share. The dividend is payable on October 31, 2024, to shareholders of record as of October 16, 2024.
2024 Guidance
Regency Centers is hereby providing updated 2024 guidance, as summarized in the table below. Please refer to the Company’s second quarter 2024 ‘Earnings Presentation’ and ‘Quarterly Supplemental’ for additional detail. All materials are posted on the Company’s website at investors.regencycenters.com.
| Full Year 2024 Guidance (in thousands, except per share data) | YTD 2024 | 2024 Guidance | Previous Guidance | ||
| Net Income Attributable to Common Shareholders per diluted share | |||||
| Nareit Funds From Operations (“Nareit FFO”) per diluted share | |||||
| Core Operating Earnings per diluted share(1) | |||||
| Same property NOI growth without termination fees | + | + | |||
| Certain non-cash items(2) | +/- | +/- | |||
| G&A expense, net(3) | |||||
| Interest expense, net and Preferred stock dividends(4) | |||||
| Management, transaction and other fees | +/- | +/- | |||
| Development and Redevelopment spend | +/- | +/- | |||
| Acquisitions | +/- | +/- | |||
| Cap rate (weighted average) | +/- | +/- | |||
| Dispositions | +/- | +/- | |||
| Cap rate (weighted average) | +/- | +/- | |||
| Share/unit repurchases | |||||
| Merger-related transition expense | +/- | +/- | |||
Note: With the exception of per share and investment/transaction data, figures above represent
(1) Core Operating Earnings excludes certain non-cash items, including straight-line rents, above/below market rent amortization, debt and derivative mark-to-market amortization, as well as transaction related income/expenses and debt extinguishment charges.
(2) Includes above and below market rent amortization, straight-line rents, and debt and derivative mark-to-market amortization.
(3) Represents 'General & administrative, net' before gains or losses on deferred compensation plan, as reported on supplemental pages 5 and 7 and calculated on a pro rata basis.
(4) Net of interest income; excludes debt and derivative mark-to-market amortization, which is included in Certain non-cash items.
Conference Call Information
To discuss Regency’s second quarter results and provide further business updates, management will host a conference call on Friday, August 2nd at 11:00 a.m. ET. Dial-in and webcast information is below.
Second Quarter 2024 Earnings Conference Call
| Date: | Friday, August 2, 2024 |
| Time: | 11:00 a.m. ET |
| Dial#: | 877-407-0789 or 201-689-8562 |
| Webcast: | Second Quarter 2024 Webcast Link |
Replay: Webcast Archive – Investor Relations page under Events & Webcasts
About Regency Centers Corporation (Nasdaq: REG)
Regency Centers is a preeminent national owner, operator, and developer of shopping centers located in suburban trade areas with compelling demographics. Our portfolio includes thriving properties merchandised with highly productive grocers, restaurants, service providers, and best-in-class retailers that connect to their neighborhoods, communities, and customers. Operating as a fully integrated real estate company, Regency Centers is a qualified real estate investment trust (REIT) that is self-administered, self-managed, and an S&P 500 Index member. For more information, please visit RegencyCenters.com.
Reconciliation of Net Income Attributable to Common Shareholders to Nareit FFO, Core Operating Earnings, and Adjusted Funds from Operations – Actual (in thousands, except per share amounts)
| For the Periods Ended June 30, 2024 and 2023 | Three Months Ended | Year to Date | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Reconciliation of Net Income Attributable to Common Shareholders to Nareit FFO: | |||||||||||||||
| Net Income Attributable to Common Shareholders | $ | 99,255 | 86,782 | $ | 205,616 | 184,063 | |||||||||
| Adjustments to reconcile to Nareit Funds From Operations (1): | |||||||||||||||
| Depreciation and amortization (excluding FF&E) | 107,592 | 89,505 | 211,964 | 178,540 | |||||||||||
| Gain on sale of real estate, net of tax | (11,080 | ) | (64 | ) | (22,488 | ) | (305 | ) | |||||||
| Exchangeable operating partnership units | 601 | 550 | 1,243 | 970 | |||||||||||
| Nareit Funds From Operations | $ | 196,368 | 176,773 | $ | 396,335 | 363,268 | |||||||||
| Nareit FFO per share (diluted) | $ | 1.06 | 1.03 | $ | 2.14 | 2.11 | |||||||||
| Weighted average shares (diluted) | 184,968 | 172,176 | 185,433 | 172,192 | |||||||||||
| Reconciliation of Nareit FFO to Core Operating Earnings: | |||||||||||||||
| Nareit Funds From Operations | $ | 196,368 | 176,773 | $ | 396,335 | 363,268 | |||||||||
| Adjustments to reconcile to Core Operating Earnings (1): | |||||||||||||||
| Not Comparable Items | |||||||||||||||
| Merger transition costs | 2,133 | - | 4,694 | - | |||||||||||
| Loss on early extinguishment of debt | - | - | 180 | - | |||||||||||
| Certain Non-Cash Items | |||||||||||||||
| Straight-line rent | (5,283 | ) | (1,784 | ) | (11,021 | ) | (4,173 | ) | |||||||
| Uncollectible straight-line rent | 1,377 | (1,755 | ) | 2,033 | (2,390 | ) | |||||||||
| Above/below market rent amortization, net | (7,073 | ) | (8,554 | ) | (12,540 | ) | (14,219 | ) | |||||||
| Debt and derivative mark-to-market amortization | 1,731 | 8 | 2,640 | — | |||||||||||
| Core Operating Earnings | $ | 189,253 | 164,688 | 382,321 | 342,486 | ||||||||||
| Core Operating Earnings per share (diluted) | $ | 1.02 | 0.96 | $ | 2.06 | 1.99 | |||||||||
| Weighted average shares (diluted) | 184,968 | 172,176 | 185,433 | 172,192 | |||||||||||
| Weighted Average Shares For Diluted Earnings per Share | 183,868 | 171,275 | 184,332 | 171,369 | |||||||||||
| Weighted Average Shares For Diluted FFO and Core Operating Earnings per Share | 184,968 | 172,176 | 185,433 | 172,192 | |||||||||||
| Reconciliation of Core Operating Earnings to Adjusted Funds from Operations: | |||||||||||||||
| Core Operating Earnings | $ | 189,253 | 164,688 | $ | 382,321 | 342,486 | |||||||||
| Adjustments to reconcile to Adjusted Funds from Operations (1): | |||||||||||||||
| Operating capital expenditures | (33,886 | ) | (21,086 | ) | (54,738 | ) | (38,545 | ) | |||||||
| Debt cost and derivative adjustments | 2,022 | 1,686 | 4,162 | 1,686 | |||||||||||
| Stock-based compensation | 4,662 | 4,105 | 9,302 | 4,105 | |||||||||||
| Adjusted Funds from Operations | $ | 162,051 | 149,393 | $ | 341,047 | 309,732 | |||||||||
(1) Includes Regency's consolidated entities and its pro-rata share of unconsolidated real estate partnerships, net of pro-rata share attributable to noncontrolling interests.
Reconciliation of Net Income Attributable to Common Shareholders to Pro-Rata Same Property NOI - Actual (in thousands)
| For the Periods Ended June 30, 2024 and 2023 | Three Months Ended | Year to Date | |||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||
| Net income attributable to common shareholders | 86,782 | 184,063 | |||||||||
| Less: | |||||||||||
| Management, transaction, and other fees | (6,735) | (7,106) | (13,131) | (13,144) | |||||||
| Other(1) | (12,726) | (12,799) | (25,313) | (22,301) | |||||||
| Plus: | |||||||||||
| Depreciation and amortization | 100,968 | 83,161 | 198,553 | 165,868 | |||||||
| General and administrative | 24,238 | 25,065 | 50,370 | 50,345 | |||||||
| Other operating expense | 3,066 | 1,682 | 5,709 | 1,185 | |||||||
| Other expense, net | 31,394 | 35,133 | 60,608 | 69,549 | |||||||
| Equity in income of investments in real estate partnerships excluded from NOI (2) | 13,258 | 11,813 | 26,947 | 23,598 | |||||||
| Net income attributable to noncontrolling interests | 2,261 | 1,390 | 5,145 | 2,597 | |||||||
| Preferred stock dividends | 3,413 | - | 6,826 | - | |||||||
| NOI | 258,392 | 225,121 | 521,330 | 461,760 | |||||||
| Less non-same property NOI (3) | (26,474) | 135 | (53,965) | (975) | |||||||
| Same Property NOI | 225,256 | 460,785 | |||||||||
| % change | 3.0% | 1.4% | |||||||||
| Same Property NOI without Termination Fees | 224,570 | 455,382 | |||||||||
| % change | 2.7% | 2.1% | |||||||||
| Same Property NOI without Termination Fees or Redevelopments | 192,019 | 388,496 | |||||||||
| % change | 1.8% | 1.5% | |||||||||
| Same Property NOI without Termination Fees or Collection of 2020/2021 Reserves | 223,404 | 452,696 | |||||||||
| % change | 3.3% | 2.7% | |||||||||
(1) Includes straight-line rental income and expense, net of reserves, above and below market rent amortization, other fees, and noncontrolling interests.
(2) Includes non-NOI expenses incurred at our unconsolidated real estate partnerships, such as, but not limited to, straight-line rental income, above and below market rent amortization, depreciation and amortization, interest expense, and real estate gains and impairments.
(3) Includes revenues and expenses attributable to Non-Same Property, Projects in Development, corporate activities, and noncontrolling interests.
Same Property NOI is a key non-GAAP measure used by management in evaluating the operating performance of Regency’s properties. The Company provides a reconciliation of Net Income Attributable to Common Shareholders to pro-rata Same Property NOI.
Reported results are preliminary and not final until the filing of the Company’s Form 10-Q with the SEC and, therefore, remain subject to adjustment.
The Company has published forward-looking statements and additional financial information in its second quarter 2024 supplemental package that may help investors estimate earnings. A copy of the Company’s second quarter 2024 supplemental package will be available on the Company's website at investors.regencycenters.com or by written request to: Investor Relations, Regency Centers Corporation, One Independent Drive, Suite 114, Jacksonville, Florida, 32202. The supplemental package contains more detailed financial and property results including financial statements, an outstanding debt summary, acquisition and development activity, investments in partnerships, information pertaining to securities issued other than common stock, property details, a significant tenant rent report and a lease expiration table in addition to earnings and valuation guidance assumptions. The information provided in the supplemental package is unaudited and includes non-GAAP measures, and there can be no assurance that the information will not vary from the final information in the Company’s Form 10-Q for the period ended June 30, 2024. Regency may, but assumes no obligation to, update information in the supplemental package from time to time.
Non-GAAP Disclosure
We believe these non-GAAP measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes.
We do not consider non-GAAP measures an alternative to financial measures determined in accordance with GAAP, rather they supplement GAAP measures by providing additional information we believe to be useful to our shareholders. The principal limitation of these non-GAAP financial measures is they may exclude significant expense and income items that are required by GAAP to be recognized in our consolidated financial statements. In addition, they reflect the exercise of management’s judgment about which expense and income items are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, reconciliations of the non-GAAP financial measures we use to their most directly comparable GAAP measures are provided. Non-GAAP financial measures should not be relied upon in evaluating the financial condition, results of operations or future prospects of the Company.
Nareit FFO is a commonly used measure of REIT performance, which the National Association of Real Estate Investment Trusts (“Nareit”) defines as net income, computed in accordance with GAAP, excluding gains on sale and impairments of real estate, net of tax, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Regency computes Nareit FFO for all periods presented in accordance with Nareit's definition. Since Nareit FFO excludes depreciation and amortization and gains on sales and impairments of real estate, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in percent leased, rental rates, operating costs, acquisition and development activities, and financing costs. This provides a perspective of the Company’s financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, Nareit FFO is a supplemental non-GAAP financial measure of the Company's operating performance, which does not represent cash generated from operating activities in accordance with GAAP; and, therefore, should not be considered a substitute measure of cash flows from operations. The Company provides a reconciliation of Net Income Attributable to Common Shareholders to Nareit FFO.
Core Operating Earnings is an additional performance measure that excludes from Nareit FFO: (i) transaction related income or expenses; (ii) gains or losses from the early extinguishment of debt; (iii) certain non-cash components of earnings derived from above and below market rent amortization, straight-line rents, and amortization of mark-to-market of debt adjustments; and (iv) other amounts as they occur. The Company provides a reconciliation of Net Income Attributable to Common Shareholders to Nareit FFO to Core Operating Earnings.
Adjusted Funds From Operations is an additional performance measure used by Regency that reflects cash available to fund the Company’s business needs and distribution to shareholders. AFFO is calculated by adjusting Core Operating Earnings ("COE") for (i) capital expenditures necessary to maintain and lease the Company’s portfolio of properties, (ii) debt cost and derivative adjustments and (iii) stock-based compensation. The Company provides a reconciliation of Net Income Attributable to Common Shareholders to Nareit FFO, to Core Operating Earnings, and to Adjusted Funds from Operations.
Forward-Looking Statements
Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to Regency’s future events, developments, or financial or operational performance or results such as our 2024 Guidance, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as “may,” “will,” “could,” “should,” “would,” “expect,” “estimate,” “believe,” “intend,” “forecast,” “project,” “plan,” “anticipate,” “guidance,” and other similar language. However, the absence of these or similar words or expressions does not mean a statement is not forward-looking. While we believe these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance these expectations will be attained, and it is possible actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Our operations are subject to a number of risks and uncertainties including, but not limited to, those risk factors described in our Securities and Exchange Commission (“SEC”) filings, our Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”) under Item 1A. When considering an investment in our securities, you should carefully read and consider these risks, together with all other information in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and our other filings and submissions to the SEC. If any of the events described in the risk factors actually occur, our business, financial condition or operating results, as well as the market price of our securities, could be materially adversely affected. Forward-looking statements are only as of the date they are made, and Regency undertakes no duty to update its forward-looking statements, whether as a result of new information, future events or developments or otherwise, except as to the extent required by law. These risks and events include, without limitation:
Risk Factors Related to the Current Economic and Geopolitical Environments
Interest rates in the current economic environment may adversely impact our cost to borrow, real estate valuation, and stock price. Current economic challenges, including the potential for recession, may adversely impact our tenants and our business. Unfavorable developments affecting the banking and financial services industry could adversely affect our business, liquidity and financial condition, and overall results of operations. Additionally, current geopolitical challenges would impact the U.S. economy and our results of operations and financial condition.
Risk Factors to Regency’s Financial Performance Related to the Company’s Acquisition of Urstadt Biddle
Regency may not realize the anticipated benefits and synergies from the Urstadt Biddle merger.
Risk Factors Related to Pandemics or other Health Crises
Pandemics or other health crises, such as the COVID-19 pandemic, may adversely affect our tenants’ financial condition, the profitability of our properties, and our access to the capital markets and could have a material adverse effect on our business, results of operations, cash flows and financial condition.
Risk Factors Related to Operating Retail-Based Shopping Centers
Economic and market conditions may adversely affect the retail industry and consequently reduce our revenues and cash flow and increase our operating expenses. Shifts in retail trends, sales, and delivery methods between brick-and-mortar stores, e-commerce, home delivery, and curbside pick-up may adversely impact our revenues, results of operations, and cash flows. Changing economic and retail market conditions in geographic areas where our properties are concentrated may reduce our revenues and cash flow. Our success depends on the continued presence and success of our “anchor” tenants. A percentage of our revenues are derived from “local” tenants and our net income may be adversely impacted if these tenants are not successful, or if the demand for the types or mix of tenants significantly change. We may be unable to collect balances due from tenants in bankruptcy. Many of our costs and expenses associated with operating our properties may remain constant or increase, even if our lease income decreases. Compliance with the Americans with Disabilities Act and other building, fire, and safety and regulations may have a material negative effect on us.
Risk Factors Related to Real Estate Investments
Our real estate assets may decline in value and be subject to impairment losses which may reduce our net income. We face risks associated with development, redevelopment and expansion of properties. We face risks associated with the development of mixed-use commercial properties. We face risks associated with the acquisition of properties. We may be unable to sell properties when desired because of market conditions. Changes in tax laws could impact our acquisition or disposition of real estate.
Risk Factors Related to the Environment Affecting Our Properties
Climate change may adversely impact our properties directly and may lead to additional compliance obligations and costs as well as additional taxes and fees. Geographic concentration of our properties makes our business more vulnerable to natural disasters, severe weather conditions and climate change. Costs of environmental remediation may adversely impact our financial performance and reduce our cash flow.
Risk Factors Related to Corporate Matters
An increased focus on metrics and reporting relating to environmental, social, and governance (“ESG”) factors may impose additional costs and expose us to new risks. An uninsured loss or a loss that exceeds the insurance coverage on our properties may subject us to loss of capital and revenue on those properties. Failure to attract and retain key personnel may adversely affect our business and operations.
Risk Factors Related to Our Partnerships and Joint Ventures
We do not have voting control over all of the properties owned in our real estate partnerships and joint ventures, so we are unable to ensure that our objectives will be pursued. The termination of our partnerships may adversely affect our cash flow, operating results, and our ability to make distributions to stock and unit holders.
Risk Factors Related to Funding Strategies and Capital Structure
Our ability to sell properties and fund acquisitions and developments may be adversely impacted by higher market capitalization rates and lower NOI at our properties which may dilute earnings. We depend on external sources of capital, which may not be available in the future on favorable terms or at all. Our debt financing may adversely affect our business and financial condition. Covenants in our debt agreements may restrict our operating activities and adversely affect our financial condition. Increases in interest rates would cause our borrowing costs to rise and negatively impact our results of operations. Hedging activity may expose us to risks, including the risks that a counterparty will not perform and that the hedge will not yield the economic benefits we anticipate, which may adversely affect us.
Risk Factors Related to Information Management and Technology
The unauthorized access, use, theft or destruction of tenant or employee personal, financial, or other data or of Regency's proprietary or confidential information stored in our information systems or by third parties on our behalf could impact our reputation and brand and expose us to potential liabilities and adverse financial impact. The use of technology based on artificial intelligence presents risks relating to confidentiality, creation of inaccurate and flawed outputs and emerging regulatory risk, any or all of which may adversely affect our business and results of operations.
Risk Factors Related to the Market Price for Our Securities
Changes in economic and market conditions may adversely affect the market price of our securities. There is no assurance that we will continue to pay dividends at current or historical rates.
Risk Factors Related to the Company’s Qualification as a REIT
If the Company fails to qualify as a REIT for federal income tax purposes, it would be subject to federal income tax at regular corporate rates. Dividends paid by REITs generally do not qualify for reduced tax rates. Certain foreign shareholders may be subject to U.S. federal income tax on gain recognized on a disposition of our common stock if we do not qualify as a “domestically controlled” REIT. Legislative or other actions affecting REITs may have a negative effect on us or our investors. Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities. Partnership tax audit rules could have a material adverse effect.
Risk Factors Related to the Company’s Common Stock
Restrictions on the ownership of the Company’s capital stock to preserve its REIT status may delay or prevent a change in control. The issuance of the Company's capital stock may delay or prevent a change in control. Ownership in the Company may be diluted in the future.
Christy McElroy
904 598 7616
ChristyMcElroy@regencycenters.com
FAQ
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