Regency Centers Corporation (
- a real estate investment trust (REIT) - recently announced that
it has acquired four shopping centers in December 2012 for $188.5
million. The company bought full ownership of the three
properties - Uptown District, Sandy Springs Plaza and Village
Plaza - and half ownership of Phillips Place.
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San Diego-based Uptown District is the area's leading grocery
shopping destination spanning 148,638 square feet. Regency
acquired the 95% occupied upscale property for $81.1 million.
Uptown district is leased to two renowned grocers, Trader Joe's
and Ralphs - a subsidiary of
The Kroger Co. (
Sandy Springs Plaza, an 115,794 square-foot center, is positioned
in the upscale location of Atlanta city. Regency bought the 95%
leased property for $35.3 million. The property boasts three
eminent tenants -
Pier 1 Imports, Inc. (
, Party City and Trader Joe's.
Regency acquired the third property - Village Plaza - in
collaboration with a co-investment partner for $16.7 million. The
Chapel Hill, North Carolina-based property spans 78,128 square
feet. The property is fully occupied by
Whole Foods Market, Inc. (
Charlotte, North Carolina-based Phillips Place is an upscale
retail center that spans 133,059 square feet. Regency purchased
the half ownership of the property, positioned in the prosperous
South Park submarket, for $55.4 million. The 99% occupied
property boasts top-notch tenants such as Regal Cinemas, Dean
& Deluca and The Palm Restaurant.
In addition, Regency sold three non-core assets worth $76.6
million during the fourth quarter of 2012. Including the
abovementioned transactions, Regency acquired worth $334.3
million of shopping centers and sold $581.2 million of
non-strategic assets in full year 2012.
We remain impressed with the company's acquisition of upscale
properties. With properties in high-income, high-barrier markets,
Regency's retail strip center portfolio is among the best in the
sector, which allows it to continually perform at the top-end of
its peer group. Moreover, Regency's quality portfolio is anchored
by dominant grocers as well as leading national retailers, which
drive traffic into its centers. This provides Regency with a
considerable up-market potential and a relatively steady source
Regency is expected to release its fourth-quarter 2012 results on
January 30, 2013. The Zacks Consensus Estimate for the fourth
quarter FFO (fund from operations) is currently pegged at 58
cents per share.
The company's fourth-quarter FFO will likely beat the Zacks
Consensus Estimate as the earnings ESP (expected surprise
prediction) is 1.72% for the stock. Regency currently has a Zacks
#3 Rank (implying a short-term Hold rating). However, we maintain
our long-term 'Neutral' recommendation on the stock.
Note: FFO, a widely accepted and reported measure of the
performance of REITs is derived by adding depreciation,
amortization and other non-cash expenses to net income.