Regency Centers Corporation (
- a real estate investment trust (REIT) - reported fourth quarter
2012 core FFO (funds from operations) per share of 63 cents,
beating the Zacks Consensus Estimate by a nickel. Moreover, this
was in line with the year-ago FFO.
For full year 2012, core FFO per share jumped 6.7% year over year
to $2.56 and also exceeded the Zacks Consensus Estimate of $2.51.
The results were aided by successful execution of strategic
initiatives along with significant leasing activity.
The reported FFO for the quarter stood at $58.9 million or 65
cents per share compared with $56.5 million or 63 cents per share
in the year-ago period. For 2012, reported FFO stood at $222.1
million or $2.47 per share compared with $220.3 million or $2.48
per share last year.
Behind the Headlines
Total revenue for the fourth quarter reached $116.1 million
compared with $119.2 million in the year-ago quarter. However,
total revenue marginally beat the Zacks Consensus Estimate of
For the full year, the company reported revenues of $473.8
million, marginally dipping from $474.1 million in the previous
year. Also, the revenues missed the Zacks Consensus Estimate of
During the quarter under review, same-store net operating income
(NOI) excluding termination fees climbed 3.7% on a year-over-year
basis, with a rental rate growth of 3.4% (cash basis for spaces
vacant less than 12 months).
For the full year, same-store NOI (excluding termination fees)
hiked 4.0% from the last year, with a rental rate growth of 5.5%
(cash basis for spaces vacant less than 12 months).
Regency executed a total of 457 new and renewal lease deals,
spanning 1.1 million square feet, during the quarter under
review. This represented a 15.4% increase from the last quarter's
figure of 396 deals. For 2012, the company inked a total of 1800
new and renewal lease deals spanning 5.1 million square feet.
At the end of the year, Regency's same-store portfolio was 94.5%
leased, whereas all of its properties were 94.4% occupied.
Portfolio Restructuring Activity
During the quarter, Regency acquired 2 wholly-owned and 2
co-investment in-service assets at a gross price of $192.2
million. The company's share of the gross price was $148.9
million. At the time of the acquisition, 2 of these properties
were burdened with separate mortgage loans, with a combined
outstanding principal balance of $61.1 million. Regency's share
of the assumed debt was $38.9 million.
Other noteworthy acquisitions during the quarter include the
buyouts of three premium shopping centers - Uptown District,
Sandy Springs Plaza and Village Plaza. The properties are
anchored by eminent industry-leading grocers such as
The Kroger Co. (
Whole Foods Market Inc. (
In addition, Regency sold 1 wholly-owned and 2 co-investment
in-service properties at a gross price of $76.6 million during
the quarter. The company's share of the price was $49.7 million.
The company also sold one outparcel for $3.3 million.
During the quarter Regency finished 3 development projects worth
$57.0 million. At year-end 2012, the company had 4 projects under
development at an anticipated cost of $187.6 million. Also, it
had 1 redevelopment project in process with a projected total
price (including the pro-rata share of co-investment
partnerships) of $8.5 million.
As of Dec 31, 2012, Regency owned 348 retail properties
(including those held in co-investment partnerships), spanning a
total of 46.3 million square feet located across the top U.S.
Regency maintains a conservative capital structure and follows a
self-funding capital strategy to support its growth, which
includes disposal of non-strategic assets and a continued focus
on industry-leading co-investment partnership programs.
During the quarter, the company used the remaining $100 million
amount in its unsecured term loan to partly pay the outstanding
balance on the unsecured revolving credit facility worth $800
million. The term loan will mature on Dec 15, 2016.
At the end of 2012, Regency's cash and cash equivalents stood at
about $22.3 million and outstanding total debt came in at $1.9
On Jan 28, 2013, Regency declared a common share quarterly
dividend of 46.25 cents per share, payable on Feb 27 to
stockholders of record as of Feb 13.
For full year 2013, Regency increased its core FFO per share
guidance in the range of $2.48-$2.56, from the previous range of
We are encouraged by the Regency's fourth-quarter results.
The company is actively spreading its footprints in high-income
and high-barrier markets through the addition of upscale assets.
Also, the inclusion of premium development and redevelopment
projects as well as leading national retailers as tenants is
noteworthy. Thus, we expect these activities to provide Regency a
considerable up-market potential and boosts its top-line growth
Regency currently holds a Zacks Rank #3 (Hold). In the same
Simon Property Group Inc. (
carries a Zacks Rank #2 (Buy) and is scheduled to report its
fourth-quarter results on Feb 4, before the opening bell.
Note: FFO, a widely used metric to gauge the performance of
REITs, is obtained after adding depreciation and amortization
and other non-cash expenses to net income.
KROGER CO (KR): Free Stock Analysis Report
REGENCY CTRS CP (REG): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
WHOLE FOODS MKT (WFM): Free Stock Analysis
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