Regency Centers Reports Third Quarter 2024 Results
JACKSONVILLE, Fla., Oct. 28, 2024 (GLOBE NEWSWIRE) -- Regency Centers Corporation ("Regency Centers", "Regency" or the "Company") (NASDAQ:REG) today reported financial and operating results for the period ended September 30, 2024 and provided updated 2024 earnings guidance. For the three months ended September 30, 2024 and 2023, Net Income Attributable to Common Shareholders was $0.54 per diluted share and $0.50 per diluted share, respectively.
Third Quarter Highlights
Reported Nareit FFO of $1.07 per diluted share and Core Operating Earnings of $1.03 per diluted share
Raised 2024 Nareit FFO guidance to a range of $4.27 to $4.29 per diluted share and 2024 Core Operating Earnings guidance to a range of $4.12 to $4.14 per diluted share
The midpoint of 2024 Core Operating Earnings guidance represents more than 5% year-over-year growth, excluding the collection of receivables reserved during 2020-2021
Increased Same Property NOI for the third quarter by 4.9% year-over-year, excluding lease termination fees and the collection of receivables reserved during 2020 and 2021
Increased Same Property percent leased by 20 basis points sequentially and 80 basis points year-over-year to 96.1%
Increased Same Property shop percent leased by 20 basis points sequentially and 50 basis points year-over-year to a new record high of 93.7%
Executed 1.8 million square feet of comparable new and renewal leases at blended rent spreads of +9.3% on a cash basis and +20.7% on a straight-lined basis
Started more than $100 million of new development and redevelopment projects, bringing year-to-date total project starts to $220 million
Started two new grocery-anchored ground-up development projects, Jordan Ranch Market in Houston, Texas, and Oakley Shops at Laurel Fields in the Bay Area
As of September 30, 2024, Regency's in-process development and redevelopment projects had estimated net project costs of $618 million
Acquired two grocery-anchored shopping centers, one subsequent to quarter end, for a total of $47 million at Regency's share
Priced a public offering of $325 million of senior unsecured notes due January 2035, with a coupon of 5.1%
Pro-rata net debt and preferred stock to operating EBITDAre at September 30, 2024 was 5.2x
"We are proud to report another exceptional quarter, highlighted by strong operating fundamentals and meaningful value creation activity," said Lisa Palmer, President and Chief Executive Officer. "We continue to see robust tenant demand for our grocery-anchored shopping centers, allowing us to accelerate our organic growth while further increasing our investment pipelines. As a result, we are raising current year guidance, and look forward to continued success in 2025."
Financial Results
Net Income Attributable to Common Shareholders
For the three months ended September 30, 2024, Net Income Attributable to Common Shareholders was $98.1 million, or $0.54 per diluted share, compared to Net Income Attributable to Common Shareholders of $89.1 million, or $0.50 per diluted share, for the same period in 2023.
Nareit FFO
For the three months ended September 30, 2024, Nareit FFO was $195.1 million, or $1.07 per diluted share, compared to $182.8 million, or $1.02 per diluted share, for the same period in 2023.
Core Operating Earnings
For the three months ended September 30, 2024, Core Operating Earnings was $187.8 million, or $1.03 per diluted share, compared to $174.0 million, or $0.97 per diluted share, for the same period in 2023.
Portfolio Performance
Same Property NOI
Third quarter 2024 Same Property Net Operating Income ("NOI"), excluding lease termination fees and the collection of receivables reserved during 2020 and 2021, increased by 4.9% compared to the same period in 2023.
Same Property base rents contributed 2.7% to Same Property NOI growth in the third quarter of 2024.
Occupancy
As of September 30, 2024, Regency's Same Property portfolio was 96.1% leased, an increase of 20 basis points sequentially, and an increase of 80 basis points compared to September 30, 2023.
Same Property anchor percent leased, which includes spaces greater than or equal to 10,000 square feet, was 97.6%, an increase of 100 basis points compared to September 30, 2023.
Same Property shop percent leased, which includes spaces less than 10,000 square feet, was 93.7%, an increase of 50 basis points compared to September 30, 2023.
As of September 30, 2024, Regency's Same Property portfolio was 92.7% commenced, an increase of 40 basis points sequentially and an increase of 10 basis points compared to September 30, 2023.
Leasing Activity
During the three months ended September 30, 2024, Regency executed approximately 1.8 million square feet of comparable new and renewal leases at a blended cash rent spread of +9.3% and a blended straight-lined rent spread of +20.7%.
During the trailing twelve months ended September 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 +19.2%.
Capital Allocation and Balance Sheet
Developments and Redevelopments
For the three months ended September 30, 2024, the Company started development and redevelopment projects with estimated net project costs of approximately $100 million, at the Company's share.
During the quarter, the Company started two new ground-up development projects, the H-E-B anchored Jordan Ranch Market in Houston, TX, and the Safeway anchored Oakley Shops at Laurel Fields in the Bay Area.
As of September 30, 2024, Regency's in-process development and redevelopment projects had estimated net project costs of $618 million at the Company's share, 47% of which has been incurred to date.
Property Transactions
On August 30, 2024, the Company acquired East Greenwich Square in Rhode Island for approximately $33 million, at Regency's share.
Subsequent to quarter end, on October 17, 2024, the Company acquired University Commons in Round Rock, a suburb of Austin, Texas, for approximately $14 million, at Regency's share.
On August 21, 2024, the Company disposed of Fenton Marketplace, located in Flint, Michigan, for approximately $12 million, at Regency's share.
Subsequent to quarter end, on October 15, 2024, the Company disposed of an office building, located in Greenwich, Connecticut, for approximately $3 million, at Regency's share.
Balance Sheet
On August 12, 2024, the Company's operating partnership, Regency Centers, L.P. priced a public offering of $325 million of senior unsecured notes due 2035 (the "Notes") under its existing shelf registration filed with the Securities and Exchange Commission. The Notes will mature on January 15, 2035, and were issued at 99.813% of par value with a coupon of 5.100%. Regency used the net proceeds of the offering to reduce the outstanding balance on its line of credit.
As of September 30, 2024, Regency had approximately $1.5 billion of capacity under its revolving credit facility.
As of September 30, 2024, Regency's pro-rata net debt and preferred stock to operating EBITDAre was 5.2x.
2024 Guidance
Regency Centers is hereby providing updated 2024 guidance, as summarized in the table below. Please refer to the Company's third 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
$1.66
$2.13 - $2.15
$2.02 - $2.06
Nareit Funds From Operations ("Nareit FFO") per diluted share
$3.20
$4.27 - $4.29
$4.21 - $4.25
Core Operating Earnings per diluted share(1)
$3.09
$4.12 - $4.14
$4.06 - $4.10
Same property NOI growth without termination fees or collection of 2020/2021 reserves
3.4%
+/- 3.50%
+2.25% to +2.75%
Non-cash revenues(2)
$33,613
+/-$42,000
+/- $42,000
G&A expense, net(3)
$72,058
+/-$95,000
$93,000-$95,000
Interest expense, net and Preferred stock dividends(4)
$158,433
+/-$214,000
$213,000-$215,000
Management, transaction and other fees
$19,189
+/-$26,000
+/-$25,000
Development and Redevelopment spend
$158,508
+/-$215,000
+/-$200,000
Acquisitions
$78,155
+/-$92,000
+/-$81,000
Cap rate (weighted average)
6.6%
+/- 6.5%
+/- 6.5%
Dispositions
$106,500
+/-$109,000
+/-$125,000
Cap rate (weighted average)
5.4%
+/- 5.5%
+/- 5.5%
Share/unit repurchases
$200,000
$200,000
$200,000
Merger-related transition expense
$7,069
+/-$7,000
+/-$7,000
Note: With the exception of per share and investment/transaction data, figures above represent 100% of Regency's consolidated entities and its pro-rata share ofunconsolidated real estate partnerships.
(1)
Core Operating Earnings excludes certain non-cash items, including straight-line rents, above/below market rent amortization, debt and derivative mark-to-marketamortization, as well as transaction related income/expenses and debt extinguishment charges.
(2)
As of Q3 2024, includes above and below market rent amortization and straight-line rents, and excludes 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)
As of Q3 2024, includes debt and derivative mark to market amortization, and is net of interest income.
Conference Call Information
To discuss Regency's third quarter results and provide further business updates, management will host a conference call on Tuesday, October 29th at 11:00 a.m. ET. Dial-in and webcast information is below.
Third Quarter 2024 Earnings Conference Call
Date:
Tuesday, October 29, 2024
Time:
11:00 a.m. ET
Dial#:
877-407-0789 or 201-689-8562
Webcast:
Third 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 September 30, 2024 and 2023
Three Months Ended
Year to Date
2024
2023
2024
2023
Reconciliation of Net Income Attributable to Common Shareholders to NareitFFO:
Net Income Attributable to Common Shareholders
$
98,056
89,076
$
303,672
273,139
Adjustments to reconcile to Nareit Funds From Operations (1):
Depreciation and amortization (excluding FF&E)
107,801
94,011
319,765
272,551
Gain on sale of real estate, net of tax
(11,365
)
(827
)
(33,853
)
(1,132
)
Exchangeable operating partnership units
593
520
1,836
1,490
Nareit Funds From Operations
$
195,085
182,780
$
591,420
546,048
Nareit FFO per share (diluted)
$
1.07
1.02
$
