Regency Reports December Buyouts - Analyst Blog

Regency Centers Corporation (REG) - 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.

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. (KR) .

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. (PIR) , 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. (WFM) .

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 of revenue.

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.

KROGER CO (KR): Free Stock Analysis Report

PIER 1 IMPORTS (PIR): Free Stock Analysis Report

REGENCY CTRS CP (REG): Free Stock Analysis Report

WHOLE FOODS MKT (WFM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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