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Why is University Commons a Trophy Asset for Regency?

Ushering in good news for shareholders, Regency Centers CorporationREG revealed the acquisition of University Commons for $80.5 million. In fact, this fully leased 180,000-square foot center in Boca Raton, FL has been termed as a "trophy asset" by the company.

Benefits for Regency

University Commons is anchored by Whole Foods Market, Inc. WFM , one of the highest-trafficked supermarket chains in the country. Moreover, its tenant roster comprises several reputed names like Nordstrom Rack and Bed Bath & Beyond Inc. BBBY , and restaurants such as J. Alexander's, P.F. Chang's, Mario's Osteria, and Shake Shack Inc. SHAK .

Importantly, it is the prime location of this property that makes it a synergistic buy for Regency. Adjacent to I-95 and positioned in a prosperous and densely populated market, the center not only enjoys proximity to a high-volume mall but also a large university campus. This ensures the continuity of growing footfalls at the center.

Fundamentals of the Company

Jacksonville, FL-based Regency Centers' portfolio constitutes mainly of grocery-anchored community and neighborhood centers. This retail real estate investment trust (REIT) reported earnings surprise of 2.74% in the last reported quarter, backed by strong growth in same-property net operating income.

Moreover, a positive Earnings ESP of 1.35% combined with its Zacks Rank #3 (Hold) show that Regency Centers is likely to beat the Zacks Consensus Estimate in the upcoming quarter.

Finally, we believe that Regency's focus on building a premium portfolio of grocery-anchored shopping centers augurs well, since such centers are usually necessity-driven and attract huge traffic. Moreover, the presence of a cluster of leading grocers protects it from market swings and we expect the University Commons center to be notable contributor to its top line. However, stiff competition and an anticipated rise in interest rates may limit its growth tempo to some extent.

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REGENCY CTRS CP (REG): Free Stock Analysis Report

BED BATH&BEYOND (BBBY): Free Stock Analysis Report

WHOLE FOODS MKT (WFM): Free Stock Analysis Report

SHAKE SHACK INC (SHAK): 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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