Regency Centers Corporation
) reported third-quarter 2013 core funds from operations (core
FFO) per share of 65 cents, which beat the Zacks Consensus
Estimate by 2 cents and the year-ago quarter figure by 3 cents.
The results were driven by better-than-expected growth in revenue
and higher net operating income (NOI). Notably, this retail real
estate investment trust (REIT) also raised its core FFO per share
guidance for 2013.
Including non-core items, FFO for the quarter was 65 cents per
share, up from 58 cents in the year-ago period.
Behind the Headlines
Total revenue came in at $122.1 million, up 5.6% year over year
and 1.8% ahead of the Zacks Consensus Estimate of $120 million.
Same property NOI, excluding termination fees, climbed 2.8% on a
year-over-year basis, with same-space rental rate growth of 11.5%
(cash basis for spaces vacant for less than 12 months).
Moreover, Regency executed a total of 363 new and renewal lease
deals for 1.3 million square feet of space, during the quarter.
At quarter end, its same property portfolio was 94.9% leased, up
30 basis points (bps) sequentially and 50 bps year over year. On
the other hand, all of its properties were 94.6% leased, up 30
bps sequentially and 100 bps year over year.
Acquisitions & Dispositions
During the quarter, Regency sold two wholly owned properties at
$48.7 million. The company also accomplished the sale of a
portfolio of shopping centers owned by Regency Retail Partners,
LP collectively with two adjacent property phases wholly-owned by
Regency for $332.0 million, including $207 million of mortgage
debt. The company had a share of $38.0 million in the net sales
Moreover, Regency and a co-investment partner acquired one
property at $13.6 million, of which the company's share was $2.7
Subsequent to the quarter end, Regency and a local joint venture
acquired Fellsway Plaza in Medford, Mass. for $42.5 million
(Regency's share was $31.9 million). Spanning
145,000-square-foot, this infill shopping center is fully leased
and anchored by Stop & Shop.
Developments & Redevelopments
At the quarter-end, Regency had 7 development projects in its
pipeline for an estimated cost of $291.3 million. Notably, 74% of
in-process developments are financed and, including
retailer-owned square footage, were 92% leased and committed.
Moreover, during the quarter, Regency started 1 redevelopment
project. As of Sep 30, 2013, the company had 14 redevelopment
projects in its pipeline for a total estimated cost of $48.9
Subsequent to the quarter end, Regency disclosed 2 new
development starts - Glen Gate, a 103,000 square foot center in
Glenview, Ill. with estimated net development costs of $29.7
million and Shoppes on Riverside, a 50,000 square foot shopping
center in Jacksonville, Fla, with projected net development costs
of $13.5 million.
At the end of the quarter, Regency's cash and cash equivalents
were about $68.0 million, up from $28.8 million at year-end 2012.
The company's total outstanding debt came in at $1.86 billion,
down from $1.94 billion at year-end 2012.
On Oct 30, 2013, Regency declared a common stock quarterly
dividend of 46.25 cents per share, payable on Nov 27 to
stockholders of record as of Nov 13, 2013.
Regency raised its core FFO per share guidance for full-year 2013
and now expects it in the range of $2.60 - $2.63 (prior range
being $2.55-$2.60). The projections are based on same property
NOI growth w/o term fees of 3.8% - 4.0% (previously 3.5% - 4.0%)
and same property leased at period end of 94.5% - 95.0%
(previously 94.3% - 95.0%).
Regency's portfolio of shopping centers, located in high-density
markets with affluent customers, is among the best in the sector.
Moreover, with a focus on best-in-class grocery anchors,
Whole Foods Market, Inc.
The Kroger Co.
) and Trader Joe's, the portfolio drives value and mitigates
operating risks. Its 2013 core FFO per share guidance raise is
This retail real estate investment trust now carries a Zacks Rank
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.
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