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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
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☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2025
or
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☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 1-12298 (Regency Centers Corporation)
Commission File Number 0-24763 (Regency Centers, L.P.)
REGENCY CENTERS CORPORATION
REGENCY CENTERS, L.P.
(Exact name of registrant as specified in its charter)
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florida (REGENCY CENTERS CORPORATION) |
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59-3191743 |
Delaware (REGENCY CENTERS, L.P) |
59-3429602 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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One Independent Drive, Suite 114 Jacksonville, Florida 32202 |
(904) 598-7000 |
(Address of principal executive offices) (zip code) |
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(Registrant's telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
Regency Centers Corporation
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Title of each class |
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Trading Symbol |
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Name of each exchange on which registered |
Common Stock, $0.01 par value |
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REG |
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The Nasdaq Stock Market LLC |
6.250% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share |
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REGCP |
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The Nasdaq Stock Market LLC |
5.875% Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share |
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REGCO |
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The Nasdaq Stock Market LLC |
Regency Centers, L.P.
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Title of each class |
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Trading Symbol |
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Name of each exchange on which registered |
None |
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N/A |
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N/A |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Regency Centers Corporation Yes ☒ No ☐ Regency Centers, L.P. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Regency Centers Corporation Yes ☒ No ☐ Regency Centers, L.P. Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:
Regency Centers Corporation:
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Large accelerated filer |
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Accelerated filer |
☐ |
Emerging growth company |
☐ |
Non-accelerated filer |
☐ |
Smaller reporting company |
☐ |
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Regency Centers, L.P.:
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Large accelerated filer |
☐ |
Accelerated filer |
☐ |
Emerging growth company |
☐ |
Non-accelerated filer |
☒ |
Smaller reporting company |
☐ |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Regency Centers Corporation Yes ☐ No ☐ Regency Centers, L.P. Yes ☐ No ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Regency Centers Corporation Yes ☐ No ☒ Regency Centers, L.P. Yes ☐ No ☒
The number of shares outstanding of Regency Centers Corporation's common stock was 181,529,289 as of April 30, 2025.
EXPLANATORY NOTE
This Quarterly Report on Form 10-Q (this "Report") combines the quarterly reports on Form 10-Q for the quarter ended March 31, 2025, of Regency Centers Corporation and Regency Centers, L.P. Unless stated otherwise or the context otherwise requires, references to "Regency Centers Corporation" or the "Parent Company" mean Regency Centers Corporation and its controlled subsidiaries and references to "Regency Centers, L.P." or the "Operating Partnership" mean Regency Centers, L.P. and its controlled subsidiaries. The terms "the Company," "Regency Centers," "Regency," "we," "our," and "us" as used in this Report mean the Parent Company, the Operating Partnership and their controlled subsidiaries, collectively.
The Parent Company is a real estate investment trust ("REIT") and the general partner of the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has exclusive control of the Operating Partnership's day-to-day management. The Operating Partnership's capital includes general and limited common partnership units ("Common Units"). As of March 31, 2025, the Parent Company owned approximately 99.4% of the Common Units in the Operating Partnership. The remaining Common Units, which are all limited Common Units, are owned by third party investors. In addition to the Common Units, the Operating Partnership has also issued two series of preferred units: the 6.250% Series A Cumulative Redeemable Preferred Units (the "Series A Preferred Units") and the 5.875% Series B Cumulative Redeemable Preferred Units (the "Series B Preferred Units"). The Parent Company currently owns all of the Series A Preferred Units and Series B Preferred Units. The Series A Preferred Units and Series B Preferred Units are sometimes referred to collectively as the "Preferred Units."
The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report provides the following benefits:
•Enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
•Eliminates duplicative disclosure and provides a more streamlined and readable presentation; and
•Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
Management operates the Parent Company and the Operating Partnership as a single business. The management of the Parent Company consists of the same individuals as the management of the Operating Partnership. These individuals are officers of the Parent Company, and officers and employees of the Operating Partnership.
The Company believes it is important to understand the key differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its ownership of Common and Preferred Units of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership. Except for $200 million of unsecured private placement debt, the Parent Company does not directly hold any indebtedness, but guarantees all of the unsecured debt of the Operating Partnership. The Operating Partnership, directly or indirectly, is also the co-issuer and guarantor of the Parent Company's $200 million unsecured private placement debt referenced above. The Operating Partnership holds all the assets of the Company and ownership of the Company's subsidiaries and equity interests in its joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for Common Units or Preferred Units, the Operating Partnership generates all other capital required by the Company's business. These sources include the Operating Partnership's operations, its direct or indirect incurrence of indebtedness, and the issuance of Common Units and Preferred Units.
Shareholders' equity, partners' capital, and noncontrolling interests are the main areas of difference between the Consolidated Financial Statements of the Parent Company and those of the Operating Partnership. The Operating Partnership's capital includes the Common Units and the Preferred Units. The limited partners' Common Units in the Operating Partnership owned by third parties are accounted for in partners' capital in the Operating Partnership's financial statements and outside of shareholders' equity in noncontrolling interests in the Parent Company's financial statements. The Preferred Units owned by the Parent Company are eliminated in consolidation in the accompanying consolidated financial statements of the Parent Company and are classified as preferred units of the general partner in the accompanying consolidated financial statements of the Operating Partnership.
In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this Report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements, controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this Report refers to actions or holdings as being actions or holdings of the Company.
As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have assets other than its investment in the Operating Partnership. Therefore, while shareholders' equity and partners' capital differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements.
TABLE OF CONTENTS
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Form 10-Q Report Page |
PART I - FINANCIAL INFORMATION |
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Item 1. |
Financial Statements (Unaudited) |
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Regency Centers Corporation: |
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Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 |
1 |
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Consolidated Statements of Operations for the periods ended March 31, 2025 and 2024 |
2 |
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Consolidated Statements of Comprehensive Income for the periods ended March 31, 2025 and 2024 |
3 |
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Consolidated Statements of Equity for the periods ended March 31, 2025 and 2024 |
4 |
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Consolidated Statements of Cash Flows for the periods ended March 31, 2025 and 2024 |
5 |
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Regency Centers, L.P.: |
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Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 |
7 |
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Consolidated Statements of Operations for the periods ended March 31, 2025 and 2024 |
8 |
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Consolidated Statements of Comprehensive Income for the periods ended March 31, 2025 and 2024 |
9 |
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Consolidated Statements of Capital for the periods ended March 31, 2025 and 2024 |
10 |
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Consolidated Statements of Cash Flows for the periods ended March 31, 2025 and 2024 |
11 |
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Notes to Consolidated Financial Statements |
13 |
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Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
26 |
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Item 3. |
Quantitative and Qualitative Disclosures about Market Risk |
43 |
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Item 4. |
Controls and Procedures |
45 |
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PART II - OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
46 |
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Item 1A. |
Risk Factors |
46 |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
46 |
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Item 3. |
Defaults Upon Senior Securities |
47 |
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Item 4. |
Mine Safety Disclosures |
47 |
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Item 5. |
Other Information |
47 |
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Item 6. |
Exhibits |
48 |
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SIGNATURES |
49 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
REGENCY CENTERS CORPORATION
Consolidated Balance Sheets
March 31, 2025 and December 31, 2024
(in thousands, except share data)
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2025 |
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2024 |
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Assets |
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(unaudited) |
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Net real estate investments: |
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Real estate assets, at cost |
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$ |
13,910,190 |
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13,698,419 |
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Less: accumulated depreciation |
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3,037,614 |
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2,960,399 |
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Real estate assets, net |
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10,872,576 |
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10,738,020 |
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Investments in sales-type leases, net |
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16,520 |
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16,291 |
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Investments in real estate partnerships |
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389,175 |
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399,044 |
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Net real estate investments |
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11,278,271 |
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11,153,355 |
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Properties held for sale, net |
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16,220 |
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— |
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Cash, cash equivalents, and restricted cash, including $3,444 and $5,601 of restricted cash at March 31, 2025 and December 31, 2024, respectively |
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78,537 |
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61,884 |
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Tenant and other receivables, net |
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250,210 |
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255,495 |
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Deferred leasing costs, less accumulated amortization of $133,046 and $131,080 at March 31, 2025 and December 31, 2024, respectively |
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85,272 |
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79,911 |
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Acquired lease intangible assets, less accumulated amortization of $402,274 and $395,209 at March 31, 2025 and December 31, 2024, respectively |
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231,526 |
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229,983 |
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Right of use assets, net |
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320,317 |
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322,287 |
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Other assets |
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299,717 |
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289,046 |
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Total assets |
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$ |
12,560,070 |
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12,391,961 |
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Liabilities and Equity |
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Liabilities: |
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Notes payable, net |
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$ |
4,376,240 |
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4,343,700 |
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Unsecured credit facility |
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265,000 |
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65,000 |
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Accounts payable and other liabilities |
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340,997 |
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392,302 |
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Acquired lease intangible liabilities, less accumulated amortization of $227,051 and $222,052 at March 31, 2025 and December 31, 2024, respectively |
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374,606 |
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364,608 |
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Lease liabilities |
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243,923 |
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244,861 |
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Tenants' security, escrow deposits and prepaid rent |
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82,864 |
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81,183 |
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Total liabilities |
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5,683,630 |
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5,491,654 |
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Commitments and contingencies |
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— |
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— |
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Equity: |
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Shareholders' equity: |
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Preferred stock $0.01 par value per share, 30,000,000 shares authorized; 9,000,000 shares issued and outstanding, in the aggregate, in Series A and Series B at March 31, 2025 and December 31, 2024 |
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225,000 |
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225,000 |
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Common stock $0.01 par value per share, 220,000,000 shares authorized; 181,525,936 and 181,361,454 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively |
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1,815 |
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1,814 |
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Treasury stock at cost, 476,037 and 479,251 shares held at March 31, 2025 and December 31, 2024, respectively |
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(29,133 |
) |
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(28,045 |
) |
Additional paid-in-capital |
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8,505,489 |
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8,503,227 |
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Accumulated other comprehensive (loss) income |
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(1,715 |
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2,226 |
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Distributions in excess of net income |
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(2,001,878 |
) |
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(1,980,076 |
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Total shareholders' equity |
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6,699,578 |
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6,724,146 |
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Noncontrolling interests: |
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Exchangeable operating partnership units, aggregate redemption value of $80,890 and $81,076 at March 31, 2025 and December 31, 2024, respectively |
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40,584 |
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40,744 |
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Limited partners' interests in consolidated partnerships |
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136,278 |
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135,417 |
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Total noncontrolling interests |
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176,862 |
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176,161 |
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Total equity |
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6,876,440 |
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6,900,307 |
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Total liabilities and equity |
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$ |
12,560,070 |
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12,391,961 |
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The accompanying notes are an integral part of the consolidated financial statements.
REGENCY CENTERS CORPORATION
Consolidated Statements of Operations
For the periods ended March 31, 2025, and 2024
(in thousands, except per share data)
(unaudited)
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Three months ended March 31, |
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2025 |
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2024 |
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Revenues: |
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Lease income |
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$ |
371,079 |
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353,106 |
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Other property income |
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3,021 |
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4,350 |
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Management, transaction, and other fees |
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6,812 |
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6,396 |
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Total revenues |
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380,912 |
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363,852 |
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Operating expenses: |
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Depreciation and amortization |
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96,774 |
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97,585 |
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Property operating expense |
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68,459 |
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63,274 |
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Real estate taxes |
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46,360 |
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44,307 |
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General and administrative |
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21,600 |
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26,132 |
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Other operating expenses |
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1,688 |
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2,643 |
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Total operating expenses |
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234,881 |
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233,941 |
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Other expense, net: |
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Interest expense, net |
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48,013 |
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42,868 |
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Gain on sale of real estate, net of tax |
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(101 |
) |
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(11,403 |
) |
Loss on early extinguishment of debt |
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— |
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180 |
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Net investment loss (income) |
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761 |
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(2,431 |
) |
Total other expense, net |
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48,673 |
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29,214 |
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Income before equity in income of investments in real estate partnerships |
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97,358 |
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100,697 |
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Equity in income of investments in real estate partnerships |
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14,495 |
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11,961 |
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Net income |
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111,853 |
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112,658 |
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Noncontrolling interests: |
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Exchangeable operating partnership units |
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(642 |
) |
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(642 |
) |
Limited partners' interests in consolidated partnerships |
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(1,624 |
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(2,242 |
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Net income attributable to noncontrolling interests |
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(2,266 |
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(2,884 |
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Net income attributable to the Company |
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109,587 |
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109,774 |
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Preferred stock dividends |
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(3,413 |
) |
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(3,413 |
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Net income attributable to common shareholders |
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$ |
106,174 |
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106,361 |
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Net income attributable to common shareholders: |
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Per common share - basic |
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$ |
0.59 |
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0.58 |
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Per common share - diluted |
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$ |
0.58 |
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0.58 |
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The accompanying notes are an integral part of the consolidated financial statements.
REGENCY CENTERS CORPORATION
Consolidated Statements of Comprehensive Income
For the periods ended March 31, 2025, and 2024
(in thousands)
(unaudited)
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Three months ended March 31, |
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2025 |
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2024 |
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Net income |
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$ |
111,853 |
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112,658 |
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Other comprehensive (loss) income: |
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Effective portion of change in fair value of derivative instruments: |
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Effective portion of change in fair value of derivative instruments |
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(2,648 |
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8,593 |
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Reclassification adjustment of derivative instruments included in net income |
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(1,745 |
) |
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(2,367 |
) |
Unrealized gain (loss) on available-for-sale debt securities |
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194 |
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(119 |
) |
Other comprehensive (loss) income |
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(4,199 |
) |
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6,107 |
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Comprehensive income |
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107,654 |
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|
118,765 |
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Less: comprehensive income attributable to noncontrolling interests: |
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Net income attributable to noncontrolling interests |
|
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2,266 |
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|
2,884 |
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Other comprehensive (loss) income attributable to noncontrolling interests |
|
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(258 |
) |
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|
334 |
|
Comprehensive income attributable to noncontrolling interests |
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|
2,008 |
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|
3,218 |
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Comprehensive income attributable to the Company |
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$ |
105,646 |
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|
115,547 |
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The accompanying notes are an integral part of the consolidated financial statements.
REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the three months ended March 31, 2025 and 2024
(in thousands, except per share data)
(unaudited)
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Noncontrolling Interests |
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Preferred
Stock |
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Common
Stock |
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Treasury
Stock |
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Additional
Paid In
Capital |
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Accumulated
Other
Comprehensive
Income (Loss) |
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Distributions
in Excess of
Net Income |
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Total
Shareholders'
Equity |
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Exchangeable
Operating
Partnership
Units |
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Limited
Partners'
Interest in
Consolidated
Partnerships |
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Total
Noncontrolling
Interests |
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Total
Equity |
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Balance at December 31, 2023 |
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$ |
225,000 |
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|
1,846 |
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|
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(25,488 |
) |
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|
8,704,240 |
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|
(1,308 |
) |
|
|
(1,871,603 |
) |
|
|
7,032,687 |
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|
42,195 |
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|
|
117,053 |
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|
159,248 |
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|
|
7,191,935 |
|
Net income |
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|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
109,774 |
|
|
|
109,774 |
|
|
|
642 |
|
|
|
2,242 |
|
|
|
2,884 |
|
|
|
112,658 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income before reclassification |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7,987 |
|
|
|
— |
|
|
|
7,987 |
|
|
|
48 |
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|
439 |
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|
|
487 |
|
|
|
8,474 |
|
Amounts reclassified from accumulated other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
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|
|
— |
|
|
|
(2,214 |
) |
|
|
— |
|
|
|
(2,214 |
) |
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|
(13 |
) |
|
|
(140 |
) |
|
|
(153 |
) |
|
|
(2,367 |
) |
Deferred compensation plan, net |
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|
— |
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|
|
— |
|
|
|
(833 |
) |
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|
833 |
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|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
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|
— |
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|
|
— |
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|
— |
|
Amortization of equity awards |
|
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
6,574 |
|
|
|
— |
|
|
|
— |
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|
6,576 |
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|
— |
|
|
|
— |
|
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|
— |
|
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|
6,576 |
|
Tax withholding on stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8,578 |
) |
|
|
— |
|
|
|
— |
|
|
|
(8,578 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8,578 |
) |
Common stock issued under dividend reinvestment plan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
158 |
|
|
|
— |
|
|
|
— |
|
|
|
158 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
158 |
|
Common stock issued for exchangeable units exchanged |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
529 |
|
|
|
— |
|
|
|
— |
|
|
|
529 |
|
|
|
(529 |
) |
|
|
— |
|
|
|
(529 |
) |
|
|
— |
|
Contributions from partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,472 |
|
|
|
1,472 |
|
|
|
1,472 |
|
Distributions to partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,364 |
) |
|
|
(4,364 |
) |
|
|
(4,364 |
) |
Dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock/unit (Series A: $0.390625 per share/unit; Series B: $0.367200 per share/unit) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,413 |
) |
|
|
(3,413 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,413 |
) |
Common stock/unit ($0.670 per share/unit) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(123,795 |
) |
|
|
(123,795 |
) |
|
|
(737 |
) |
|
|
— |
|
|
|
(737 |
) |
|
|
(124,532 |
) |
Balance at March 31, 2024 |
|
$ |
225,000 |
|
|
|
1,848 |
|
|
|
(26,321 |
) |
|
|
8,703,756 |
|
|
|
4,465 |
|
|
|
(1,889,037 |
) |
|
|
7,019,711 |
|
|
|
41,606 |
|
|
|
116,702 |
|
|
|
158,308 |
|
|
|
7,178,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2024 |
|
$ |
225,000 |
|
|
|
1,814 |
|
|
|
(28,045 |
) |
|
|
8,503,227 |
|
|
|
2,226 |
|
|
|
(1,980,076 |
) |
|
|
6,724,146 |
|
|
|
40,744 |
|
|
|
135,417 |
|
|
|
176,161 |
|
|
|
6,900,307 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
109,587 |
|
|
|
109,587 |
|
|
|
642 |
|
|
|
1,624 |
|
|
|
2,266 |
|
|
|
111,853 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income before reclassification |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,289 |
) |
|
|
— |
|
|
|
(2,289 |
) |
|
|
(20 |
) |
|
|
(145 |
) |
|
|
(165 |
) |
|
|
(2,454 |
) |
Amounts reclassified from accumulated other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,652 |
) |
|
|
— |
|
|
|
(1,652 |
) |
|
|
(8 |
) |
|
|
(85 |
) |
|
|
(93 |
) |
|
|
(1,745 |
) |
Adjustment for noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,210 |
|
|
|
— |
|
|
|
— |
|
|
|
2,210 |
|
|
|
(2,210 |
) |
|
|
— |
|
|
|
(2,210 |
) |
|
|
— |
|
Deferred compensation plan, net |
|
|
— |
|
|
|
— |
|
|
|
(1,088 |
) |
|
|
1,088 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Amortization of equity awards |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
5,547 |
|
|
|
— |
|
|
|
— |
|
|
|
5,548 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,548 |
|
Tax withholding on stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6,760 |
) |
|
|
— |
|
|
|
— |
|
|
|
(6,760 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6,760 |
) |
Common stock issued under dividend reinvestment plan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
177 |
|
|
|
— |
|
|
|
— |
|
|
|
177 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
177 |
|
Contributions from partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,210 |
|
|
|
2,977 |
|
|
|
5,187 |
|
|
|
5,187 |
|
Distributions to partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,510 |
) |
|
|
(3,510 |
) |
|
|
(3,510 |
) |
Dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock stock/unit (Series A: $0.390625 per share/unit;
Series B: $0.367200 per share/unit) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,413 |
) |
|
|
(3,413 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,413 |
) |
Common stock/unit ($0.705 per share/unit) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(127,976 |
) |
|
|
(127,976 |
) |
|
|
(774 |
) |
|
|
— |
|
|
|
(774 |
) |
|
|
(128,750 |
) |
Balance at March 31, 2025 |
|
$ |
225,000 |
|
|
|
1,815 |
|
|
|
(29,133 |
) |
|
|
8,505,489 |
|
|
|
(1,715 |
) |
|
|
(2,001,878 |
) |
|
|
6,699,578 |
|
|
|
40,584 |
|
|
|
136,278 |
|
|
|
176,862 |
|
|
|
6,876,440 |
|
The accompanying notes are an integral part of the consolidated financial statements.
REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the periods ended March 31, 2025, and 2024
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2025 |
|
|
2024 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net income |
|
$ |
111,853 |
|
|
|
112,658 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
96,774 |
|
|
|
97,585 |
|
Amortization of deferred financing costs and debt premiums |
|
|
3,334 |
|
|
|
2,762 |
|
Amortization of above and below market lease intangibles, net |
|
|
(6,215 |
) |
|
|
(5,287 |
) |
Stock-based compensation, net of capitalization |
|
|
4,966 |
|
|
|
6,294 |
|
Equity in income of investments in real estate partnerships |
|
|
(14,495 |
) |
|
|
(11,961 |
) |
Gain on sale of real estate, net of tax |
|
|
(101 |
) |
|
|
(11,403 |
) |
Loss on early extinguishment of debt |
|
|
— |
|
|
|
180 |
|
Distribution of earnings from investments in real estate partnerships |
|
|
16,076 |
|
|
|
16,960 |
|
Deferred compensation (income) expense |
|
|
(521 |
) |
|
|
2,089 |
|
Realized and unrealized loss (gain) on investments |
|
|
686 |
|
|
|
(2,358 |
) |
Changes in assets and liabilities: |
|
|
|
|
|
|
Tenant and other receivables |
|
|
9,051 |
|
|
|
1,220 |
|
Deferred leasing costs |
|
|
(1,748 |
) |
|
|
(3,714 |
) |
Other assets |
|
|
(16,176 |
) |
|
|
(15,724 |
) |
Accounts payable and other liabilities |
|
|
(43,735 |
) |
|
|
(19,410 |
) |
Tenants' security, escrow deposits and prepaid rent |
|
|
1,282 |
|
|
|
(2,133 |
) |
Net cash provided by operating activities |
|
|
161,031 |
|
|
|
167,758 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
Acquisition of operating real estate, net of cash acquired of $787 |
|
|
(83,232 |
) |
|
|
— |
|
Real estate development and capital improvements |
|
|
(101,386 |
) |
|
|
(60,850 |
) |
Proceeds from sale of real estate |
|
|
— |
|
|
|
30,033 |
|
Proceeds from property insurance casualty claims |
|
|
— |
|
|
|
4,110 |
|
Issuance of notes receivable |
|
|
— |
|
|
|
(29,830 |
) |
Collection of notes receivable |
|
|
120 |
|
|
|
1,561 |
|
Investments in real estate partnerships |
|
|
(230 |
) |
|
|
(4,156 |
) |
Return of capital from investments in real estate partnerships |
|
|
— |
|
|
|
3,152 |
|
Dividends on investment securities |
|
|
988 |
|
|
|
122 |
|
Purchase of investment securities |
|
|
(2,233 |
) |
|
|
(92,527 |
) |
Proceeds from sale of investment securities |
|
|
5,825 |
|
|
|
6,049 |
|
Net cash used in investing activities |
|
|
(180,148 |
) |
|
|
(142,336 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
Tax withholding on stock-based compensation |
|
|
(6,760 |
) |
|
|
(8,730 |
) |
Proceeds from sale of treasury stock |
|
|
462 |
|
|
|
210 |
|
Contributions from noncontrolling interests |
|
|
2,977 |
|
|
|
1,472 |
|
Distributions to and redemptions of noncontrolling interests |
|
|
(3,510 |
) |
|
|
(4,364 |
) |
Distributions to exchangeable operating partnership unit holders |
|
|
(773 |
) |
|
|
(742 |
) |
Dividends paid to common shareholders |
|
|
(127,684 |
) |
|
|
(123,507 |
) |
Dividends paid to preferred shareholders |
|
|
(3,413 |
) |
|
|
(3,413 |
) |
Proceeds from issuance of fixed rate unsecured notes, net of debt discount |
|
|
— |
|
|
|
398,468 |
|
Proceeds from unsecured credit facilities |
|
|
280,000 |
|
|
|
132,419 |
|
Repayment of unsecured credit facilities |
|
|
(80,000 |
) |
|
|
(254,419 |
) |
Proceeds from notes payable |
|
|
10,000 |
|
|
|
— |
|
Repayment of notes payable |
|
|
(32,787 |
) |
|
|
(7,597 |
) |
Scheduled principal payments |
|
|
(2,548 |
) |
|
|
(3,183 |
) |
Payment of financing costs |
|
|
(194 |
) |
|
|
(13,289 |
) |
Net cash provided by financing activities |
|
|
35,770 |
|
|
|
113,325 |
|
Net increase in cash and cash equivalents and restricted cash |
|
|
16,653 |
|
|
|
138,747 |
|
Cash and cash equivalents and restricted cash at beginning of the period |
|
|
61,884 |
|
|
|
91,354 |
|
Cash and cash equivalents and restricted cash at end of the period |
|
$ |
78,537 |
|
|
|
230,101 |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2025 |
|
|
2024 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
Cash paid for interest (net of capitalized interest of $2,112 and $1,656 in 2025 and 2024, respectively) |
|
$ |
64,540 |
|
|
|
47,981 |
|
Cash paid for income taxes, net of refunds |
|
$ |
— |
|
|
|
6,070 |
|
Supplemental disclosure of non-cash transactions: |
|
|
|
|
|
|
Common and Preferred stock, and exchangeable operating partnership dividends declared but not paid |
|
$ |
131,020 |
|
|
|
126,807 |
|
Right of use assets obtained in exchange for new operating lease liabilities |
|
$ |
— |
|
|
|
829 |
|
Sale of leased asset in exchange for net investment in sales-type lease |
|
$ |
— |
|
|
|
703 |
|
Acquisition of operating real estate: |
|
|
|
|
|
|
Tenant and other receivable and other assets |
|
$ |
593 |
|
|
|
— |
|
Acquired lease intangible assets |
|
$ |
9,725 |
|
|
|
— |
|
Notes payable assumed in acquisition, at fair value |
|
$ |
40,060 |
|
|
|
— |
|
Intangible liabilities, Accounts payable and other liabilities |
|
$ |
18,957 |
|
|
|
— |
|
Acquisition of unconsolidated real estate investments: |
|
|
|
|
|
|
Tenant and other receivable and other assets |
|
$ |
941 |
|
|
|
— |
|
Acquired lease intangible assets |
|
$ |
4,308 |
|
|
|
— |
|
Notes payable assumed in acquisition, at fair value |
|
$ |
16,749 |
|
|
|
— |
|
Intangible liabilities, Accounts payable and other liabilities |
|
$ |
1,119 |
|
|
|
— |
|
Change in accrued capital expenditures |
|
$ |
13,144 |
|
|
|
1,619 |
|
Stock-based compensation capitalized |
|
$ |
583 |
|
|
|
434 |
|
The accompanying notes are an integral part of the consolidated financial statements.
REGENCY CENTERS, L.P.
Consolidated Balance Sheets
March 31, 2025 and December 31, 2024
(in thousands, except unit data)
|
|
|
|
|
|
|
|
|
|
|
2025 |
|
|
2024 |
|
Assets |
|
(unaudited) |
|
|
|
|
Net real estate investments: |
|
|
|
|
|
|
Real estate assets, at cost |
|
$ |
13,910,190 |
|
|
|
13,698,419 |
|
Less: accumulated depreciation |
|
|
3,037,614 |
|
|
|
2,960,399 |
|
Real estate assets, net |
|
|
10,872,576 |
|
|
|
10,738,020 |
|
Investments in sales-type leases, net |
|
|
16,520 |
|
|
|
16,291 |
|
Investments in real estate partnerships |
|
|
389,175 |
|
|
|
399,044 |
|
Net real estate investments |
|
|
11,278,271 |
|
|
|
11,153,355 |
|
Properties held for sale, net |
|
|
16,220 |
|
|
|
— |
|
Cash, cash equivalents, and restricted cash, including $3,444 and $5,601 of restricted cash at March 31, 2025 and December 31, 2024, respectively |
|
|
78,537 |
|
|
|
61,884 |
|
Tenant and other receivables, net |
|
|
250,210 |
|
|
|
255,495 |
|
Deferred leasing costs, less accumulated amortization of $133,046 and $131,080 at March 31, 2025 and December 31, 2024, respectively |
|
|
85,272 |
|
|
|
79,911 |
|
Acquired lease intangible assets, less accumulated amortization of $402,274 and $395,209 at March 31, 2025 and December 31, 2024, respectively |
|
|
231,526 |
|
|
|
229,983 |
|
Right of use assets, net |
|
|
320,317 |
|
|
|
322,287 |
|
Other assets |
|
|
299,717 |
|
|
|
289,046 |
|
Total assets |
|
$ |
12,560,070 |
|
|
|
12,391,961 |
|
Liabilities and Capital |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Notes payable, net |
|
$ |
4,376,240 |
|
|
|
4,343,700 |
|
Unsecured credit facility |
|
|
265,000 |
|
|
|
65,000 |
|
Accounts payable and other liabilities |
|
|
340,997 |
|
|
|
392,302 |
|
Acquired lease intangible liabilities, less accumulated amortization of $227,051 and $222,052 at March 31, 2025 and December 31, 2024, respectively |
|
|
374,606 |
|
|
|
364,608 |
|
Lease liabilities |
|
|
243,923 |
|
|
|
244,861 |
|
Tenants' security, escrow deposits and prepaid rent |
|
|
82,864 |
|
|
|
81,183 |
|
Total liabilities |
|
|
5,683,630 |
|
|
|
5,491,654 |
|
Commitments and contingencies |
|
|
— |
|
|
|
— |
|
Capital: |
|
|
|
|
|
|
Partners' capital: |
|
|
|
|
|
|
Preferred units $0.01 par value per unit, 30,000,000 units authorized; 9,000,000 units issued and outstanding, in the aggregate, in Series A and Series B at March 31, 2025 and December 31, 2024 |
|
|
225,000 |
|
|
|
225,000 |
|
General partner's common units, 181,525,936 and 181,361,454 units issued and outstanding at March 31, 2025 and December 31, 2024, respectively |
|
|
6,476,293 |
|
|
|
6,496,920 |
|
Limited partners' common units, 1,096,659 and 1,096,659 units issued and outstanding at March 31, 2025 and December 31, 2024 respectively |
|
|
40,584 |
|
|
|
40,744 |
|
Accumulated other comprehensive (loss) income |
|
|
(1,715 |
) |
|
|
2,226 |
|
Total partners' capital |
|
|
6,740,162 |
|
|
|
6,764,890 |
|
Noncontrolling interest: Limited partners' interests in consolidated partnerships |
|
|
136,278 |
|
|
|
135,417 |
|
Total capital |
|
|
6,876,440 |
|
|
|
6,900,307 |
|
Total liabilities and capital |
|
$ |
12,560,070 |
|
|
|
12,391,961 |
|
The accompanying notes are an integral part of the consolidated financial statements.
REGENCY CENTERS, L.P.
Consolidated Statements of Operations
For the periods ended March 31, 2025, and 2024
(in thousands, except per unit data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2025 |
|
|
2024 |
|
Revenues: |
|
|
|
|
|
|
Lease income |
|
$ |
371,079 |
|
|
|
353,106 |
|
Other property income |
|
|
3,021 |
|
|
|
4,350 |
|
Management, transaction, and other fees |
|
|
6,812 |
|
|
|
6,396 |
|
Total revenues |
|
|
380,912 |
|
|
|
363,852 |
|
Operating expenses: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
96,774 |
|
|
|
97,585 |
|
Property operating expense |
|
|
68,459 |
|
|
|
63,274 |
|
Real estate taxes |
|
|
46,360 |
|
|
|
44,307 |
|
General and administrative |
|
|
21,600 |
|
|
|
26,132 |
|
Other operating expenses |
|
|
1,688 |
|
|
|
2,643 |
|
Total operating expenses |
|
|
234,881 |
|
|
|
233,941 |
|
Other expense, net: |
|
|
|
|
|
|
Interest expense, net |
|
|
48,013 |
|
|
|
42,868 |
|
Gain on sale of real estate, net of tax |
|
|
(101 |
) |
|
|
(11,403 |
) |
Loss on early extinguishment of debt |
|
|
— |
|
|
|
180 |
|
Net investment loss (income) |
|
|
761 |
|
|
|
(2,431 |
) |
Total other expense, net |
|
|
48,673 |
|
|
|
29,214 |
|
Income before equity in income of investments in real estate partnerships |
|
|
97,358 |
|
|
|
100,697 |
|
Equity in income of investments in real estate partnerships |
|
|
14,495 |
|
|
|
11,961 |
|
Net income |
|
|
111,853 |
|
|
|
112,658 |
|
Limited partners' interests in consolidated partnerships |
|
|
(1,624 |
) |
|
|
(2,242 |
) |
Net income attributable to the Partnership |
|
|
110,229 |
|
|
|
110,416 |
|
Preferred unit distributions |
|
|
(3,413 |
) |
|
|
(3,413 |
) |
Net income attributable to common unit holders |
|
$ |
106,816 |
|
|
|
107,003 |
|
|
|
|
|
|
|
|
Net income attributable to common unit holders: |
|
|
|
|
|
|
Per common unit - basic |
|
$ |
0.59 |
|
|
|
0.58 |
|
Per common unit - diluted |
|
$ |
0.58 |
|
|
|
0.58 |
|
The accompanying notes are an integral part of the consolidated financial statements.
REGENCY CENTERS, L.P.
Consolidated Statements of Comprehensive Income
For the periods ended March 31, 2025, and 2024
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2025 |
|
|
2024 |
|
Net income |
|
$ |
111,853 |
|
|
|
112,658 |
|
Other comprehensive (loss) income: |
|
|
|
|
|
|
Effective portion of change in fair value of derivative instruments: |
|
|
|
|
|
|
Effective portion of change in fair value of derivative instruments |
|
|
(2,648 |
) |
|
|
8,593 |
|
Reclassification adjustment of derivative instruments included in net income |
|
|
(1,745 |
) |
|
|
(2,367 |
) |
Unrealized gain (loss) on available-for-sale debt securities |
|
|
194 |
|
|
|
(119 |
) |
Other comprehensive (loss) income |
|
|
(4,199 |
) |
|
|
6,107 |
|
Comprehensive income |
|
|
107,654 |
|
|
|
118,765 |
|
Less: comprehensive income attributable to noncontrolling interests: |
|
|
|
|
|
|
Net income attributable to noncontrolling interests |
|
|
1,624 |
|
|
|
2,242 |
|
Other comprehensive (loss) income attributable to noncontrolling interests |
|
|
(230 |
) |
|
|
299 |
|
Comprehensive income attributable to noncontrolling interests |
|
|
1,394 |
|
|
|
2,541 |
|
Comprehensive income attributable to the Partnership |
|
$ |
106,260 |
|
|
|
116,224 |
|
The accompanying notes are an integral part of the consolidated financial statements.
REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the three months ended March 31, 2025 and 2024
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Partner Preferred
and Common Units |
|
|
Limited
Partners |
|
|
Accumulated
Other
Comprehensive
Income (Loss) |
|
|
Total
Partners'
Capital |
|
|
Noncontrolling Interests in
Limited Partners' Interest in
Consolidated Partnerships |
|
|
Total
Capital |
|
Balance at December 31, 2023 |
|
$ |
7,033,995 |
|
|
|
42,195 |
|
|
|
(1,308 |
) |
|
|
7,074,882 |
|
|
|
117,053 |
|
|
|
7,191,935 |
|
Net income |
|
|
109,774 |
|
|
|
642 |
|
|
|
— |
|
|
|
110,416 |
|
|
|
2,242 |
|
|
|
112,658 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income before reclassification |
|
|
— |
|
|
|
48 |
|
|
|
7,987 |
|
|
|
8,035 |
|
|
|
439 |
|
|
|
8,474 |
|
Amounts reclassified from accumulated other comprehensive income |
|
|
— |
|
|
|
(13 |
) |
|
|
(2,214 |
) |
|
|
(2,227 |
) |
|
|
(140 |
) |
|
|
(2,367 |
) |
Contributions from partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,472 |
|
|
|
1,472 |
|
Distributions to partners |
|
|
(123,795 |
) |
|
|
(737 |
) |
|
|
— |
|
|
|
(124,532 |
) |
|
|
(4,364 |
) |
|
|
(128,896 |
) |
Preferred unit distributions |
|
|
(3,413 |
) |
|
|
— |
|
|
|
— |
|
|
|
(3,413 |
) |
|
|
— |
|
|
|
(3,413 |
) |
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization |
|
|
6,576 |
|
|
|
— |
|
|
|
— |
|
|
|
6,576 |
|
|
|
— |
|
|
|
6,576 |
|
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances |
|
|
(8,420 |
) |
|
|
— |
|
|
|
— |
|
|
|
(8,420 |
) |
|
|
— |
|
|
|
(8,420 |
) |
Exchangeable operating partnership units exchanged for common stock of Parent Company |
|
|
529 |
|
|
|
(529 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Balance at March 31, 2024 |
|
$ |
7,015,246 |
|
|
|
41,606 |
|
|
|
4,465 |
|
|
|
7,061,317 |
|
|
|
116,702 |
|
|
|
7,178,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2024 |
|
$ |
6,721,920 |
|
|
|
40,744 |
|
|
|
2,226 |
|
|
|
6,764,890 |
|
|
|
135,417 |
|
|
|
6,900,307 |
|
Net income |
|
|
109,587 |
|
|
|
642 |
|
|
|
— |
|
|
|
110,229 |
|
|
|
1,624 |
|
|
|
111,853 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income before reclassification |
|
|
— |
|
|
|
(20 |
) |
|
|
(2,289 |
) |
|
|
(2,309 |
) |
|
|
(145 |
) |
|
|
(2,454 |
) |
Amounts reclassified from accumulated other comprehensive income |
|
|
— |
|
|
|
(8 |
) |
|
|
(1,652 |
) |
|
|
(1,660 |
) |
|
|
(85 |
) |
|
|
(1,745 |
) |
Adjustment for noncontrolling interests in the Operating Partnership |
|
|
2,210 |
|
|
|
(2,210 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Contributions from partners |
|
|
— |
|
|
|
2,210 |
|
|
|
— |
|
|
|
2,210 |
|
|
|
2,977 |
|
|
|
5,187 |
|
Distributions to partners |
|
|
(127,976 |
) |
|
|
(774 |
) |
|
|
— |
|
|
|
(128,750 |
) |
|
|
(3,510 |
) |
|
|
(132,260 |
) |
Preferred unit distributions |
|
|
(3,413 |
) |
|
|
— |
|
|
|
— |
|
|
|
(3,413 |
) |
|
|
— |
|
|
|
(3,413 |
) |
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization |
|
|
5,548 |
|
|
|
— |
|
|
|
— |
|
|
|
5,548 |
|
|
|
— |
|
|
|
5,548 |
|
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances |
|
|
(6,583 |
) |
|
|
— |
|
|
|
— |
|
|
|
(6,583 |
) |
|
|
— |
|
|
|
(6,583 |
) |
Balance at March 31, 2025 |
|
$ |
6,701,293 |
|
|
|
40,584 |
|
|
|
(1,715 |
) |
|
|
6,740,162 |
|
|
|
136,278 |
|
|
|
6,876,440 |
|
The accompanying notes are an integral part of the consolidated financial statements.
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the periods ended March 31, 2025, and 2024
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2025 |
|
|
2024 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net income |
|
$ |
111,853 |
|
|
|
112,658 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
96,774 |
|
|
|
97,585 |
|
Amortization of deferred financing costs and debt premiums |
|
|
3,334 |
|
|
|
2,762 |
|
Amortization of above and below market lease intangibles, net |
|
|
(6,215 |
) |
|
|
(5,287 |
) |
Stock-based compensation, net of capitalization |
|
|
4,966 |
|
|
|
6,294 |
|
Equity in income of investments in real estate partnerships |
|
|
(14,495 |
) |
|
|
(11,961 |
) |
Gain on sale of real estate, net of tax |
|
|
(101 |
) |
|
|
(11,403 |
) |
Loss on early extinguishment of debt |
|
|
— |
|
|
|
180 |
|
Distribution of earnings from investments in real estate partnerships |
|
|
16,076 |
|
|
|
16,960 |
|
Deferred compensation (income) expense |
|
|
(521 |
) |
|
|
2,089 |
|
Realized and unrealized loss (gain) on investments |
|
|
686 |
|
|
|
(2,358 |
) |
Changes in assets and liabilities: |
|
|
|
|
|
|
Tenant and other receivables |
|
|
9,051 |
|
|
|
1,220 |
|
Deferred leasing costs |
|
|
(1,748 |
) |
|
|
(3,714 |
) |
Other assets |
|
|
(16,176 |
) |
|
|
(15,724 |
) |
Accounts payable and other liabilities |
|
|
(43,735 |
) |
|
|
(19,410 |
) |
Tenants' security, escrow deposits and prepaid rent |
|
|
1,282 |
|
|
|
(2,133 |
) |
Net cash provided by operating activities |
|
|
161,031 |
|
|
|
167,758 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
Acquisition of operating real estate, net of cash acquired of $787 |
|
|
(83,232 |
) |
|
|
— |
|
Real estate development and capital improvements |
|
|
(101,386 |
) |
|
|
(60,850 |
) |
Proceeds from sale of real estate |
|
|
— |
|
|
|
30,033 |
|
Proceeds from property insurance casualty claims |
|
|
— |
|
|
|
4,110 |
|
Issuance of notes receivable |
|
|
— |
|
|
|
(29,830 |
) |
Collection of notes receivable |
|
|
120 |
|
|
|
1,561 |
|
Investments in real estate partnerships |
|
|
(230 |
) |
|
|
(4,156 |
) |
Return of capital from investments in real estate partnerships |
|
|
— |
|
|
|
3,152 |
|
Dividends on investment securities |
|
|
988 |
|
|
|
122 |
|
Acquisition of investment securities |
|
|
(2,233 |
) |
|
|
(92,527 |
) |
Proceeds from sale of investment securities |
|
|
5,825 |
|
|
|
6,049 |
|
Net cash used in investing activities |
|
|
(180,148 |
) |
|
|
(142,336 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
Tax withholding on stock-based compensation |
|
|
(6,760 |
) |
|
|
(8,730 |
) |
Proceeds from sale of treasury stock |
|
|
462 |
|
|
|
210 |
|
Contributions from noncontrolling interests |
|
|
2,977 |
|
|
|
1,472 |
|
Distributions to and redemptions of noncontrolling interests |
|
|
(3,510 |
) |
|
|
(4,364 |
) |
Distributions to partners |
|
|
(128,457 |
) |
|
|
(124,249 |
) |
Dividends paid to preferred unit holders |
|
|
(3,413 |
) |
|
|
(3,413 |
) |
Proceeds from issuance of fixed rate unsecured notes, net of debt discount |
|
|
— |
|
|
|
398,468 |
|
Proceeds from unsecured credit facilities |
|
|
280,000 |
|
|
|
132,419 |
|
Repayment of unsecured credit facilities |
|
|
(80,000 |
) |
|
|
(254,419 |
) |
Proceeds from notes payable |
|
|
10,000 |
|
|
|
— |
|
Repayment of notes payable |
|
|
(32,787 |
) |
|
|
(7,597 |
) |
Scheduled principal payments |
|
|
(2,548 |
) |
|
|
(3,183 |
) |
Payment of financing costs |
|
|
(194 |
) |
|
|
(13,289 |
) |
Net cash provided by financing activities |
|
|
35,770 |
|
|
|
113,325 |
|
Net increase in cash and cash equivalents and restricted cash |
|
|
16,653 |
|
|
|
138,747 |
|
Cash and cash equivalents and restricted cash at beginning of the period |
|
|
61,884 |
|
|
|
91,354 |
|
Cash and cash equivalents and restricted cash at end of the period |
|
$ |
78,537 |
|
|
|
230,101 |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2025 |
|
|
2024 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
Cash paid for interest (net of capitalized interest of $2,112 and $1,656 in 2025 and 2024, respectively) |
|
$ |
64,540 |
|
|
|
47,981 |
|
Cash paid for income taxes, net of refunds |
|
$ |
— |
|
|
|
6,070 |
|
Supplemental disclosure of non-cash transactions: |
|
|
|
|
|
|
Common and Preferred stock, and exchangeable operating partnership dividends declared but not paid |
|
$ |
131,020 |
|
|
|
126,807 |
|
Right of use assets obtained in exchange for new operating lease liabilities |
|
$ |
— |
|
|
|
829 |
|
Sale of leased asset in exchange for net investment in sales-type lease |
|
$ |
— |
|
|
|
703 |
|
Acquisition of operating real estate: |
|
|
|
|
|
|
Tenant and other receivable and other assets |
|
$ |
593 |
|
|
|
— |
|
Acquired lease intangible assets |
|
$ |
9,725 |
|
|
|
— |
|
Notes payable assumed in acquisition, at fair value |
|
$ |
40,060 |
|
|
|
— |
|
Intangible liabilities, Accounts payable and other liabilities |
|
$ |
18,957 |
|
|
|
— |
|
Acquisition of unconsolidated real estate investments: |
|
|
|
|
|
|
Tenant and other receivable and other assets |
|
$ |
941 |
|
|
|
— |
|
Acquired lease intangible assets |
|
$ |
4,308 |
|
|
|
— |
|
Notes payable assumed in acquisition, at fair value |
|
$ |
16,749 |
|
|
|
— |
|
Intangible liabilities, Accounts payable and other liabilities |
|
$ |
1,119 |
|
|
|
— |
|
Change in accrued capital expenditures |
|
$ |
13,144 |
|
|
|
1,619 |
|
Stock-based compensation capitalized |
|
$ |
583 |
|
|
|
434 |
|
The accompanying notes are an integral part of the consolidated financial statements.
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
|
|
1. |
Organization and Significant Accounting Policies |
General
Regency Centers Corporation (the "Parent Company") began its operations as a REIT in 1993 and is the general partner of Regency Centers, L.P. (the "Operating Partnership"). The Parent Company primarily engages in the ownership, management, leasing, acquisition, development, and redevelopment of shopping centers through the Operating Partnership and has no other assets other than through its investment in the Operating Partnership. Its only indebtedness consists of $200 million of unsecured private placement notes, which are co-issued and guaranteed by the Operating Partnership. The Parent Company guarantees all of the unsecured debt of the Operating Partnership.
As of March 31, 2025, the Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis owned 381 properties and held partial interests in an additional 102 properties through unconsolidated Investments in real estate partnerships (also referred to as "joint ventures" or "investment partnerships").
Basis of Presentation
The information included in this Report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report on Form 10-K”), as certain disclosures in this Report that would duplicate those included in such Annual Report on Form 10-K are not included in these consolidated financial statements. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. These adjustments are considered to be of a normal recurring nature.
Estimates, Risks and Uncertainties
The preparation of the Consolidated Financial Statements in conformity with Generally Accepted Accounting Principles ("GAAP") requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of commitments and contingent assets and liabilities, as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates in the Company's financial statements relate to the net carrying values of its real estate investments, collectibility of lease income, and acquired lease intangible assets and liabilities. It is possible that the estimates and assumptions that have been utilized in the preparation of the Consolidated Financial Statements could change significantly if economic conditions were to change.
The success of the Company's tenants in operating their businesses and their corresponding ability to pay rent may be influenced by evolving political, economic, trade and immigration policies and macroeconomic uncertainties, and the success of the Company's tenants, in the aggregate, is important to the operating and financial success of the Company. These issues include, but are not limited to, the potential for impacts from tariffs and potential trade disputes, retaliatory actions by other countries, inflation, the cost and availability of labor, including labor shortages related to deportations or threat of deportations, increasing energy prices and interest rates, supply chain disruptions, and access to and cost of capital. Additionally, geopolitical and macroeconomic challenges, including the war involving Russia and Ukraine, the Middle East conflicts and wars, and economic conflicts with China, as well as the slowing of its economy, could impact aspects of the U.S. economy and, therefore, consumer confidence and spending.
The policies implemented by the U.S. government to address these and related issues, including changes by the Board of Governors of the Federal Reserve System of its benchmark federal funds rate, increases or decreases in federal government spending, and economic sanctions and tariffs, could result in adverse impacts on the U.S. economy, including inflation, reduction in consumer confidence and spending, a slowing of growth, and potentially a recession, thereby adversely impacting the costs to our tenants of operating their businesses, demand for their products and services, and their ability to pay rent, and/or decreasing future demand for space in shopping centers, which could adversely impact occupancy rates and rents. The potential impact of current macroeconomic and geopolitical challenges on the Company's financial condition, results of operations, and cash flows is subject to change and continues to depend on the extent and duration of these risks and uncertainties. See Item 1A of Part I of the Company's Annual Report on Form 10-K, as supplemented by the discussion in Item 1A of Part II of this Quarterly Report on Form 10-Q, for a more detailed discussion of the Risk Factors potentially impacting the Company's business and results of operations.
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
Investment Risk Concentrations
As of March 31, 2025, no single tenant comprised 10% or more of our aggregate annualized base rent ("ABR"). As of March 31, 2025, the Company had three geographic concentrations that individually accounted for at least 10% of its aggregate ABR. Real estate properties located in California, Florida and the New York-Newark-Jersey City core-based statistical area accounted for 23.1%, 20.4% and 12.6% of ABR respectively. This geographic concentration makes those portions of the portfolio more susceptible to adverse weather, natural disasters or economic events that may specifically and disproportionately impact these areas. None of the Regency's shopping centers are located outside the United States.
Consolidation
The Company consolidates properties that are wholly-owned and properties where it owns less than 100% but holds a controlling financial interest in the entity. Controlling financial interest is determined using an evaluation based on accounting standards related to the consolidation of Variable Interest Entities ("VIEs") and voting interest entities.
Ownership of the Parent Company
The Parent Company currently has a single class of common stock and two series of preferred stock outstanding.
Ownership of the Operating Partnership
The Operating Partnership's capital includes Common Units and Preferred Units. As of March 31, 2025, the Parent Company owned approximately 99.4% of the outstanding Common Units, with the remaining limited partners' Common Units held by third parties ("Exchangeable operating partnership units" or "EOP units"). The Parent Company currently owns all of the Preferred Units.
Real Estate Partnerships
As of March 31, 2025, Regency held partial ownership interests in 121 properties through real estate partnerships, of which 19 are consolidated. Regency's partners include institutional investors, real estate developers and/or operators, and passive investors (the "Partners" or "Limited Partners"). These partnerships have been established to own and operate real estate properties. The Company’s involvement with these entities is through its ownership of its equity interest in the partnerships and management of the properties. The entities were deemed VIEs primarily because the unrelated investors do not have substantive kick-out rights to remove the general or managing partner by a vote of a simple majority or less, and they do not have substantive participating rights. Regency has variable interests in these entities through its equity ownership, with Regency being the primary beneficiary in certain of these real estate partnerships. Regency consolidates the partnerships into its financial statements for which it is the primary beneficiary and reports the limited partners' interests as noncontrolling interests. For those partnerships which Regency is not the primary beneficiary and does not have a controlling financial interest, but has significant influence, Regency recognizes its equity investments in them in accordance with the equity method of accounting.
The assets of these partnerships are restricted to use by the respective partnerships and cannot be directly reached by general creditors of the Company. Similarly, the obligations of the partnerships are backed by, and can only be settled through the assets of these partnerships or by additional capital contributions by the partners, except to the extent that the Company has provided contractual payment guarantees.
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
The carrying amounts of VIEs' assets and liabilities included in the Company's consolidated financial statements, exclusive of the Operating Partnership, are as follows:
|
|
|
|
|
|
|
|
|
(in thousands) |
|
March 31, 2025 |
|
|
December 31, 2024 |
|
Assets |
|
|
|
|
|
|
Real estate assets, net |
|
$ |
451,333 |
|
|
|
312,873 |
|
Cash, cash equivalents and restricted cash |
|
|
13,098 |
|
|
|
16,687 |
|
Tenant and other receivables, net |
|
|
5,636 |
|
|
|
5,833 |
|
Deferred costs, net |
|
|
6,022 |
|
|
|
3,178 |
|
Acquired lease intangible assets, net |
|
|
15,119 |
|
|
|
6,293 |
|
Right of use assets, net |
|
|
18,024 |
|
|
|
18,148 |
|
Other assets |
|
|
1,035 |
|
|
|
597 |
|
Total Assets |
|
$ |
510,267 |
|
|
|
363,609 |
|
Liabilities |
|
|
|
|
|
|
Notes payable |
|
$ |
73,268 |
|
|
|
32,653 |
|
Accounts payable and other liabilities |
|
|
90,048 |
|
|
|
16,149 |
|
Acquired lease intangible liabilities, net |
|
|
28,660 |
|
|
|
10,627 |
|
Tenants' security, escrow deposits and prepaid rent |
|
|
1,376 |
|
|
|
1,260 |
|
Lease liabilities |
|
|
19,416 |
|
|
|
19,370 |
|
Total Liabilities |
|
$ |
212,768 |
|
|
|
80,059 |
|
Revenues, and Tenant and other Receivables
Income within Management, transaction, and other fees is primarily derived from contracts with the Company's investments in real estate partnerships. The primary components of these revenue streams, the timing of satisfying the performance obligations, and amounts are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
(in thousands) |
|
Timing of satisfaction of performance obligations |
|
2025 |
|
|
2024 |
|
Management, transaction, and other fees: |
|
|
|
|
|
|
|
|
Property management services |
|
Over time |
|
$ |
4,110 |
|
|
|
3,961 |
|
Asset management services |
|
Over time |
|
|
1,717 |
|
|
|
1,602 |
|
Leasing services |
|
Point in time |
|
|
872 |
|
|
|
574 |
|
Other transaction fees |
|
Point in time |
|
|
113 |
|
|
|
259 |
|
Total management, transaction, and other fees |
|
|
|
$ |
6,812 |
|
|
|
6,396 |
|
The accounts receivable for total management, transactions, and other fees, which are included within Tenant and other receivables in the accompanying Consolidated Balance Sheets, are $18.0 million and $19.7 million, as of March 31, 2025 and December 31, 2024, respectively.
Recent Accounting Pronouncements
The following table provides a brief description of recent accounting pronouncements and the expected impact on our financial statements:
|
|
|
|
|
|
|
Standard |
|
Description |
|
Date of adoption |
|
Effect on the financial statements or other significant matters |
Recently issued: |
|
|
|
|
|
|
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. |
|
ASU 2023-09 requires public business entities to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes. It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold. |
|
January 1, 2025 |
|
The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements. |
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
|
|
|
|
|
|
|
Standard |
|
Description |
|
Date of adoption |
|
Effect on the financial statements or other significant matters |
|
|
|
|
|
|
|
ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses |
|
ASU 2024-03 requires public business entities to provide additional disclosures that disaggregate certain income statement expense captions into specified categories. The ASU does not impact the presentation of expenses on the face of the income statement but requires additional footnote disclosures to provide users of the financial statements with greater insight into the nature and composition of reported expenses. |
|
January 1, 2027 |
|
The Company is assessing the impact this ASU will have on the Company’s financial statement disclosures. While the adoption of this standard is not expected to have a material impact on the financial position or results of operations, it will require enhanced footnote disclosures related to the disaggregation of income statement expenses. |
|
|
|
|
|
|
|
ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments |
|
ASU 2024-04 clarifies guidance on the accounting for inducements offered to holders of convertible debt instruments to encourage them to convert the debt into equity securities. Specifically, the ASU clarifies the recognition and measurement of inducement costs and their impact on the issuer’s financial statements. |
|
January 1, 2026 |
|
The Company is assessing the impact this ASU will have on the Company’s financial statement disclosures. The adoption is not expected to have a material impact on the financial position or results of operations, as the Company currently does not have any convertible debt instruments in our financing arrangements. |
|
|
2. |
Real Estate Investments |
The following tables detail the properties acquired for the periods set forth below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Three months ended March 31, 2025 |
|
Date Purchased |
Property Name |
City/State |
Property
Type |
Regency's Ownership |
Purchase
Price (1) |
|
|
Debt
Assumed,
Net of
Discounts (1) |
|
|
Intangible
Assets (1) |
|
|
Intangible
Liabilities (1) |
|
1/1/2025 |
Putnam Plaza (2) |
Carmel Hamlet, NY |
Operating |
100% |
$ |
31,000 |
|
|
|
16,749 |
|
|
|
4,308 |
|
|
|
460 |
|
1/10/2025 |
Orange Meadows |
Orange, CT |
Outparcel |
100% |
|
4,200 |
|
|
|
— |
|
|
|
354 |
|
|
|
299 |
|
3/14/2025 |
Brentwood Place |
Nashville, TN |
Operating |
100% |
|
118,500 |
|
|
|
40,060 |
|
|
|
9,371 |
|
|
|
18,295 |
|
Total property acquisitions |
|
|
|
$ |
153,700 |
|
|
|
56,809 |
|
|
|
14,033 |
|
|
|
19,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Three months ended March 31, 2024 |
|
Date Purchased |
Property Name |
City/State |
Property
Type |
Regency's Ownership |
Purchase
Price (1) |
|
|
Debt
Assumed,
Net of
Discounts (1) |
|
|
Intangible
Assets (1) |
|
|
Intangible
Liabilities (1) |
|
2/23/2024 |
The Shops at Stone Bridge |
Cheshire, CT |
Development |
100% |
$ |
8,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total property acquisitions |
|
|
|
$ |
8,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
(1)Amounts for purchase price and allocation are reflected at 100%.
(2)This property was held within a single property unconsolidated real estate partnership, in which the Company held a 66.7% ownership interest. Effective January 1, 2025, the Company purchased our partner's remaining 33.3% ownership interest.
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
|
|
3. |
Property Dispositions and Assets Held for Sale |
There were no property dispositions during the three months ended March 31, 2025. The following table provides a summary of consolidated shopping centers and land parcels sold during the comparative period:
|
|
|
|
|
|
|
Three months ended March 31, |
|
(in thousands, except number sold data) |
|
2024 |
|
Net proceeds from sale of real estate investments |
|
$ |
30,033 |
|
Gain on sale of real estate, net of tax |
|
|
11,403 |
|
Number of operating properties sold |
|
|
1 |
|
Percent interest sold |
|
100% |
|
As of March 31, 2025 the Company had one operating property and one land parcel classified as held for sale. There were no liabilities associated with these properties. As of December 31, 2024 the Company did not have any of its properties classified as held for sale. The following table presents the assets associated with the properties classified as held for sale as of March 31, 2025:
|
|
|
|
|
(in thousands) |
|
March 31, 2025 |
|
Land and improvements |
|
$ |
12,345 |
|
Buildings and improvements |
|
|
4,858 |
|
Less: accumulated depreciation |
|
|
(983 |
) |
Assets associated with real estate assets held for sale |
|
$ |
16,220 |
|
The following table represents the components of Other assets in the accompanying Consolidated Balance Sheets as of the periods set forth below:
|
|
|
|
|
|
|
|
|
(in thousands) |
|
March 31, 2025 |
|
|
December 31, 2024 |
|
Goodwill |
|
$ |
166,739 |
|
|
|
166,739 |
|
Investments |
|
|
46,754 |
|
|
|
51,820 |
|
Prepaid and other |
|
|
58,864 |
|
|
|
40,240 |
|
Derivative assets |
|
|
10,204 |
|
|
|
12,781 |
|
Furniture, fixtures, and equipment, net ("FF&E") |
|
|
8,395 |
|
|
|
7,954 |
|
Deferred financing costs, net |
|
|
8,761 |
|
|
|
9,512 |
|
Total other assets |
|
$ |
299,717 |
|
|
|
289,046 |
|
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
|
|
5. |
Notes Payable and Unsecured Credit Facilities |
The Company's outstanding debt, net of unamortized debt premium (discount) and debt issuance costs, consisted of the following as of the dates set forth below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Scheduled Maturity Date |
|
Weighted
Average
Contractual
Rate |
|
Weighted
Average
Effective
Rate |
|
March 31, 2025 |
|
|
December 31, 2024 |
|
Notes payable: |
|
|
|
|
|
|
|
|
|
|
|
|
Fixed rate mortgage loans |
|
11/5/2025 - 6/1/2037 |
|
3.9% |
|
4.4% |
|
$ |
367,648 |
|
|
|
337,703 |
|
Variable rate mortgage loans (1) |
|
10/1/2026 - 2/20/2032 |
|
4.5% |
|
4.6% |
|
|
283,496 |
|
|
|
282,117 |
|
Fixed rate unsecured debt |
|
11/1/2025 - 3/15/2049 |
|
4.1% |
|
4.2% |
|
|
3,725,096 |
|
|
|
3,723,880 |
|
Total notes payable, net |
|
|
|
|
|
|
|
|
4,376,240 |
|
|
|
4,343,700 |
|
Unsecured credit facility: |
|
|
|
|
|
|
|
|
|
|
|
|
$1.5 Billion Line of Credit
(the "Line") (2) |
|
3/23/2028 |
|
5.2% |
|
5.5% |
|
|
265,000 |
|
|
|
65,000 |
|
Total unsecured credit facility |
|
|
|
|
|
|
|
|
265,000 |
|
|
|
65,000 |
|
Total debt outstanding |
|
|
|
|
|
|
|
$ |
4,641,240 |
|
|
|
4,408,700 |
|
(1)As of March 31, 2025, 96.1% of the variable rate mortgage loans are fixed through interest rate swaps.
(2)The Company has the option to extend the maturity date by two additional six-month periods. Weighted average effective rate for the Line is calculated based on a fully drawn Line balance using the period end variable rate.
Scheduled principal payments and maturities on notes payable and the unsecured credit facility were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
March 31, 2025 |
|
Scheduled Principal Payments and Maturities by Year: |
|
Scheduled
Principal
Payments |
|
|
Mortgage
Loan
Maturities |
|
|
Unsecured
Maturities (1) |
|
|
Total |
|
2025 (2) |
|
$ |
7,635 |
|
|
|
16,000 |
|
|
|
250,000 |
|
|
|
273,635 |
|
2026 |
|
|
10,445 |
|
|
|
147,848 |
|
|
|
200,000 |
|
|
|
358,293 |
|
2027 |
|
|
7,558 |
|
|
|
226,308 |
|
|
|
525,000 |
|
|
|
758,866 |
|
2028 |
|
|
5,734 |
|
|
|
57,374 |
|
|
|
565,000 |
|
|
|
628,108 |
|
2029 |
|
|
2,786 |
|
|
|
97,120 |
|
|
|
425,000 |
|
|
|
524,906 |
|
Beyond 5 Years |
|
|
5,170 |
|
|
|
78,466 |
|
|
|
2,050,000 |
|
|
|
2,133,636 |
|
Unamortized debt premium/(discount) and issuance costs |
|
|
— |
|
|
|
(11,300 |
) |
|
|
(24,904 |
) |
|
|
(36,204 |
) |
Total |
|
$ |
39,328 |
|
|
|
611,816 |
|
|
|
3,990,096 |
|
|
|
4,641,240 |
|
(1)Includes unsecured public and private debt and unsecured credit facilities.
(2)Reflects scheduled principal payments and maturities for the remainder of the year.
The Company was in compliance as of March 31, 2025, with all debt covenants.
|
|
6. |
Derivative Instruments |
The Company may use derivative financial instruments, including interest swaps, caps, options, floors, and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The Company does not intend to utilize derivative instruments for speculative transactions or purposes other than mitigation of interest rate risk. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties that have high credit ratings. The Company does not anticipate that any of the counterparties will fail to meet their obligations.
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
Detail on the Company's interest rate derivatives outstanding as of March 31, 2025 and December 31, 2024 is as follows:
|
|
|
|
|
|
|
|
|
(in thousands, except number of instruments data) |
|
|
|
|
|
|
Interest Rate Swaps |
|
March 31, 2025 |
|
|
December 31, 2024 |
|
Notional amount |
|
$ |
303,116 |
|
|
|
301,444 |
|
Number of instruments |
|
|
15 |
|
|
|
14 |
|
Detail on the fair value of the Company's interest rate derivatives as of March 31, 2025 and December 31, 2024 is as follows:
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
Interest rate swaps classified as: |
|
March 31, 2025 |
|
|
December 31, 2024 |
|
Derivative assets |
|
$ |
10,204 |
|
|
|
12,781 |
|
Derivative liabilities |
|
|
(1,352 |
) |
|
|
(423 |
) |
Derivatives in an asset position are included within Other assets in the accompanying Consolidated Balance Sheets, while those in a liability position are included within Accounts payable and other liabilities.
These derivative financial instruments are all interest rate swaps, which are designated and qualify as cash flow hedges. The Company does not enter into derivative instruments for trading or speculative purposes. As of March 31, 2025, all of the Company's derivatives are designated as cash flow hedges.
The changes in the fair value of derivatives designated and qualifying as cash flow hedges are recorded in Accumulated other comprehensive income ("AOCI") and subsequently reclassified into earnings in the period that the hedged interest payments affects earnings.
The following table represents the effect of the derivative financial instruments on the accompanying Consolidated Financial Statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location and Amount of (Loss) Gain Recognized in OCI on Derivative |
|
|
Location and Amount of Gain Reclassified from AOCI into Net Income |
|
|
Total amounts presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded |
|
|
|
Three months ended March 31, |
|
|
|
|
Three months ended March 31, |
|
|
|
|
Three months ended March 31, |
|
(in thousands) |
|
2025 |
|
|
2024 |
|
|
|
|
2025 |
|
|
2024 |
|
|
|
|
2025 |
|
|
2024 |
|
Interest rate swaps |
|
$ |
(2,648 |
) |
|
|
8,593 |
|
|
Interest expense, net |
|
$ |
(1,745 |
) |
|
|
(2,367 |
) |
|
Interest expense, net |
|
$ |
48,013 |
|
|
|
42,868 |
|
As of March 31, 2025, the Company expects approximately $1.7 million of accumulated comprehensive income on derivative instruments, including the Company's share from its Investments in real estate partnerships, to be reclassified into earnings during the next 12 months.
Substantially all of the Company's leases are classified as operating leases. The Company's Lease income is comprised of both fixed and variable income. Fixed and in-substance fixed lease income includes stated amounts per lease contracts, which are primarily related to base rent, and in some cases stated amounts for common area maintenance ("CAM"), real estate taxes, and insurance (collectively, "Recoverable Costs"). Income for these amounts is recognized on a straight-line basis.
Variable lease income includes the following two main items in the lease contracts:
•Recoveries from tenants represent the tenants' contractual obligations to reimburse the Company for their portion of Recoverable Costs incurred. Generally, the Company's leases provide for the tenants to reimburse the Company based on the tenants' share of the actual costs incurred in proportion to the tenants' share of leased space in the property.
•Percentage rent represents amounts billable to tenants based on the tenants' actual sales volume in excess of levels specified in the lease contract.
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
The following table provides a disaggregation of lease income recognized as either fixed or variable lease income based on the criteria specified in Topic 842:
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Three months ended March 31, |
|
|
|
2025 |
|
|
2024 |
|
Operating lease income |
|
|
|
|
|
|
Fixed and in-substance fixed lease income |
|
$ |
266,737 |
|
|
|
256,626 |
|
Variable lease income |
|
|
98,378 |
|
|
|
92,290 |
|
Other lease related income, net: |
|
|
|
|
|
|
Above/below market rent and tenant rent inducement amortization, net |
|
|
6,750 |
|
|
|
5,823 |
|
Uncollectible straight-line rent (1) |
|
|
(400 |
) |
|
|
(400 |
) |
Uncollectible amounts billable in lease loss |
|
|
(386 |
) |
|
|
(1,233 |
) |
Total lease income |
|
$ |
371,079 |
|
|
|
353,106 |
|
(1)The amounts include straight-line rent adjustments associated with converting between cash basis and accrual basis of accounting for certain leases.
The following table represents the components of Tenant and other receivables, net of amounts considered uncollectible, in the accompanying Consolidated Balance Sheets:
|
|
|
|
|
|
|
|
|
(in thousands) |
|
March 31, 2025 |
|
|
December 31, 2024 |
|
Tenant receivables |
|
$ |
26,094 |
|
|
|
35,306 |
|
Straight-line rent receivables |
|
|
162,885 |
|
|
|
157,507 |
|
Other receivables (1) |
|
|
61,231 |
|
|
|
62,682 |
|
Total tenant and other receivables |
|
$ |
250,210 |
|
|
|
255,495 |
|
(1)Other receivables include notes receivable, construction receivables, insurance receivables, and amounts due from real estate partnerships for Management, transaction, and other fee income.
|
|
8. |
Fair Value Measurements |
(a) Disclosure of Fair Value of Financial Instruments
All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management's estimation, reasonably approximate their fair values, except those instruments listed below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2025 |
|
|
December 31, 2024 |
|
(in thousands) |
|
Carrying
Amount |
|
|
Fair Value |
|
|
Carrying
Amount |
|
|
Fair Value |
|
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Notes receivable |
|
$ |
31,702 |
|
|
|
31,728 |
|
|
$ |
31,790 |
|
|
|
31,755 |
|
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable, net |
|
$ |
4,376,240 |
|
|
|
4,213,402 |
|
|
$ |
4,343,700 |
|
|
|
4,141,096 |
|
Unsecured credit facilities (1) |
|
$ |
265,000 |
|
|
|
265,000 |
|
|
$ |
65,000 |
|
|
|
65,000 |
|
(1)The carrying amounts approximated its fair values due to the variable nature of the terms.
The above fair values represent management's estimate of the amounts that would be received from selling those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants as of March 31, 2025, and December 31, 2024, respectively. These fair value measurements maximize the use of observable inputs which are classified within Level 2 of the fair value hierarchy. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company's own judgments about the assumptions that market participants would use in pricing the asset or liability.
The Company develops its judgments based on the best information available at the measurement date, including expected cash flows, appropriate risk-adjusted discount rates, and available observable and unobservable inputs. Service providers involved in fair value measurements are evaluated for competency and qualifications on an ongoing basis. As considerable judgment is often necessary to estimate the fair value of these financial instruments, the fair values presented above are not necessarily indicative of amounts that will be realized upon disposition of the financial instruments.
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
(b) Fair Value Measurements
The following financial instruments are measured at fair value on a recurring basis:
Securities
The Company has investments in marketable securities that are included within Other assets on the accompanying Consolidated Balance Sheets. The fair value of the securities was determined using quoted prices in active markets, which are considered Level 1 inputs of the fair value hierarchy. Changes in the value of securities are recorded within Net investment loss (income) in the accompanying Consolidated Statements of Operations, and include unrealized losses of $2.4 million and unrealized gains of $2.4 million during the three months ended March 31, 2025 and 2024, respectively.
Available-for-Sale Debt Securities
Available-for-sale debt securities consist of investments in corporate bonds, and are recorded at fair value using either recent trade prices for the identical debt instrument or comparable instruments by issuers of similar industry sector, issuer rating, and size, to estimate fair value, which are considered Level 2 inputs of the fair value hierarchy. Unrealized gains or losses on these debt securities are recognized through Other comprehensive income.
Interest Rate Derivatives
The fair value of the Company's interest rate derivatives is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy.
The following tables present the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements as of March 31, 2025 |
|
|
|
|
|
Quoted Prices in Active Markets for Identical Assets |
|
|
Significant Other Observable Inputs |
|
|
Significant Unobservable Inputs |
|
(in thousands) |
Balance |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
Securities |
$ |
34,563 |
|
|
|
34,563 |
|
|
|
— |
|
|
|
— |
|
Available-for-sale debt securities |
|
12,191 |
|
|
|
— |
|
|
|
12,191 |
|
|
|
— |
|
Interest rate derivatives |
|
10,204 |
|
|
|
— |
|
|
|
10,204 |
|
|
|
— |
|
Total |
$ |
56,958 |
|
|
|
34,563 |
|
|
|
22,395 |
|
|
|
— |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Interest rate derivatives |
$ |
(1,352 |
) |
|
|
— |
|
|
|
(1,352 |
) |
|
|
— |
|
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements as of December 31, 2024 |
|
|
|
|
|
Quoted Prices in Active Markets for Identical Assets |
|
|
Significant Other Observable Inputs |
|
|
Significant Unobservable Inputs |
|
(in thousands) |
Balance |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
Securities |
$ |
39,419 |
|
|
|
39,419 |
|
|
|
— |
|
|
|
— |
|
Available-for-sale debt securities |
|
12,401 |
|
|
|
— |
|
|
|
12,401 |
|
|
|
— |
|
Interest rate derivatives |
|
12,781 |
|
|
|
— |
|
|
|
12,781 |
|
|
|
— |
|
Total |
$ |
64,601 |
|
|
|
39,419 |
|
|
|
25,182 |
|
|
|
— |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Interest rate derivatives |
$ |
(423 |
) |
|
|
— |
|
|
|
(423 |
) |
|
|
— |
|
Preferred Stock of the Parent Company
Terms and conditions of the preferred stock outstanding are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock Outstanding as of March 31, 2025 and December 31, 2024 |
|
Date of Issuance |
|
Shares Issued and Outstanding |
|
|
Liquidation Preference |
|
|
Distribution Rate |
|
Callable By Company |
Series A |
8/18/2023 |
|
|
4,600,000 |
|
|
$ |
115,000,000 |
|
|
6.250% |
|
On demand |
Series B |
8/18/2023 |
|
|
4,400,000 |
|
|
|
110,000,000 |
|
|
5.875% |
|
On demand |
|
|
|
|
9,000,000 |
|
|
$ |
225,000,000 |
|
|
|
|
|
Each series of Preferred Stock is non-voting, has no stated maturity and is redeemable for cash at $25.00 per share at the Company's option. The holders of the Preferred Stock have general preference rights over common stockholders with respect to liquidation and quarterly distributions. Except under certain limited conditions, holders of the Preferred Stock will not be entitled to vote. In the event of a cumulative arrearage equal to six quarterly dividends, holders of the Preferred Stock (voting as a single class without regard to series) will have the right to elect two additional members to serve on the Company's Board of Directors until the arrearage has been cured. Upon the occurrence of a Change of Control, as defined in the Company's Articles of Incorporation, the holders of the Preferred Stock will have the right to convert all or part of the shares of the Preferred Stock held by such holders on the applicable conversion date into a number of shares of common stock.
Common Stock of the Parent Company
At the Market ("ATM") Program
Under the Parent Company's ATM Program, as authorized by the Board, the Parent Company may sell up to $500 million of common stock at prices determined by the market at the time of sale. The timing of sales, if any, will be dependent on market conditions and other factors.
During 2024, the Company entered into forward sale agreements under its ATM program through which the Parent Company is obligated to issue 1,339,377 shares of its common stock at a weighted average offering price of $74.66 per share before any underwriting discount and offering expenses. The shares under the forward sales agreements must be settled within one year of their trade dates, which vary by agreement, and range from November 26, 2025, to December 5, 2025. Upon settlement, subject to certain exceptions, the Company may elect, in its sole discretion, to physically settle, cash settle, or net share settle all or any portion of our obligations under any forward sale agreement.
No shares to be issued under the 2024 forward sales agreements have been settled as of March 31, 2025. Proceeds from the issuance of shares are expected to be approximately $100.0 million before any underwriting discount and offering expenses and are expected to be used to fund acquisitions of operating properties, fund developments and redevelopments, and for general corporate purposes.
As of March 31, 2025, and after giving effect to the aforementioned forward equity offering, $400 million of common stock remained available for issuance under this ATM Program.
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
Stock Repurchase Program
On July 31, 2024, the Board authorized a common stock repurchase program under which the Company may purchase up to a maximum of $250 million of its outstanding common stock through open market transactions, and/or in privately negotiated transactions (referred to as the "Repurchase Program"). The timing and price of stock repurchases, if any, are dependent upon market conditions and other factors. The stock repurchased, if not retired, is treated as treasury stock. The Board's authorization for the Repurchase Program expires on June 30, 2026, unless modified, extended or earlier terminated by the Board in its discretion.
During the three months ended March 31, 2025, the Company made no repurchases and $250 million remained available under the Repurchase Program.
Preferred Units of the Operating Partnership
The number of Series A Preferred Units and Series B Preferred Units, respectively, issued by the Operating Partnership is equal to the number of Series A Preferred Stock and Series B Preferred Stock, respectively, issued by the Parent Company.
Common Units of the Operating Partnership
Common Units are issued, or redeemed and retired, for each share of the Parent Company stock issued or redeemed, or retired, as described above.
|
|
10. |
Stock-Based Compensation |
The Company granted 305,041 shares of restricted stock with a weighted-average grant-date fair value of $77.61 per share and 322,159 shares of restricted stock with a weighted-average grant-date fair value of $60.31 per share during the three months ended March 31, 2025 and the three months ended March 31, 2024, respectively. The Company records stock-based compensation expense within General and administrative expenses in the accompanying Consolidated Statements of Operations, and recognizes forfeitures as they occur.
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
(in thousands) |
|
2025 |
|
|
2024 |
|
Restricted stock (1) |
|
$ |
5,443 |
|
|
|
4,640 |
|
Directors' fees paid in common stock and other employee stock grants |
|
|
105 |
|
|
|
152 |
|
Capitalized stock-based compensation |
|
|
(583 |
) |
|
|
(434 |
) |
Stock-based compensation, net of capitalization |
|
$ |
4,965 |
|
|
|
4,358 |
|
(1)In addition, during the three months ended March 31, 2024, the Company expensed $1.9 million within Other operating expenses in connection with vesting of restricted stock units related to the 2023 acquisition of UBP.
|
|
11. |
Earnings per Share and Unit |
Parent Company Earnings per Share
The following summarizes the calculation of basic and diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
(in thousands, except per share data) |
|
2025 |
|
|
2024 |
|
Numerator: |
|
|
|
|
|
|
Net income attributable to common shareholders - basic |
|
$ |
106,174 |
|
|
|
106,361 |
|
Net income attributable to common shareholders - diluted |
|
$ |
106,174 |
|
|
|
106,361 |
|
Denominator: |
|
|
|
|
|
|
Weighted average common shares outstanding for basic EPS |
|
|
181,449 |
|
|
|
184,678 |
|
Weighted average common shares outstanding for diluted EPS (1) |
|
|
181,813 |
|
|
|
184,770 |
|
Net income per common share – basic |
|
$ |
0.59 |
|
|
|
0.58 |
|
Net income per common share – diluted |
|
$ |
0.58 |
|
|
|
0.58 |
|
(1)Includes the dilutive impact of unvested restricted stock.
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
The effect of the assumed exchange of the EOP units and certain other exchangeable units had an anti-dilutive effect upon the calculation of net income attributable to the common shareholders per share. Accordingly, the impact of such assumed exchanges has not been included in the determination of diluted net income per share calculations. Weighted average EOP units outstanding were 1,096,659 and 1,101,104 for the three months ended March 31, 2025 and 2024, respectively.
Operating Partnership Earnings per Unit
The following summarizes the calculation of basic and diluted earnings per unit ("EPU"):
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
(in thousands, except per unit data) |
|
2025 |
|
|
2024 |
|
Numerator: |
|
|
|
|
|
|
Net income attributable to common unit holders - basic |
|
$ |
106,816 |
|
|
|
107,003 |
|
Net income attributable to common unit holders - diluted |
|
$ |
106,816 |
|
|
|
107,003 |
|
Denominator: |
|
|
|
|
|
|
Weighted average common units outstanding for basic EPU |
|
|
182,546 |
|
|
|
185,779 |
|
Weighted average common units outstanding for diluted EPU (1) |
|
|
182,910 |
|
|
|
185,872 |
|
Net income per common unit – basic |
|
$ |
0.59 |
|
|
|
0.58 |
|
Net income per common unit – diluted |
|
$ |
0.58 |
|
|
|
0.58 |
|
(1)Includes the dilutive impact of unvested restricted stock.
The effect of the assumed exchange of certain other exchangeable units had an anti-dilutive effect upon the calculation of net income attributable to the common unit holders per share. Accordingly, the impact of such assumed exchanges has not been included in the determination of diluted net income per unit calculations.
The Company's portfolio is located throughout the United States. Management does not distinguish or group its operations on a geographical basis for purposes of allocating resources or capital. The Company’s chief operating decision maker ("CODM") evaluates operating and financial performance for each property on an individual property level; therefore, the Company defines an operating segment as its individual properties. The individual properties have been aggregated into one reportable segment based upon their similarities with regard to both the nature and economics of the centers, tenants and operational processes, as well as long-term average financial performance.
The following tables provide information about the Company's reportable segment's revenues, significant expenses, NOI and the reconciliation of NOI to the Company’s consolidated Net income:
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
2025 |
|
|
2024 |
|
Lease income |
$ |
408,088 |
|
|
|
386,349 |
|
Other property income |
|
3,379 |
|
|
|
4,594 |
|
Less: |
|
|
|
|
|
Straight-line rent on lease income |
|
(6,451 |
) |
|
|
(5,511 |
) |
Above/below market rent amortization, net |
|
(7,005 |
) |
|
|
(6,012 |
) |
Total real estate revenues |
|
398,011 |
|
|
|
379,420 |
|
Operating expenses (1) |
|
(73,464 |
) |
|
|
(68,072 |
) |
Real estate taxes |
|
(51,009 |
) |
|
|
(48,410 |
) |
NOI |
$ |
273,538 |
|
|
|
262,938 |
|
(1)Operating expenses include Operating and maintenance, Ground rent and Termination expense
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
March 31, 2025
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
2025 |
|
|
2024 |
|
Reconciliation of NOI to Net income: |
|
|
|
|
|
NOI |
$ |
273,538 |
|
|
|
262,938 |
|
Consolidated: |
|
|
|
|
|
Straight-line rent on lease income |
|
5,607 |
|
|
|
5,594 |
|
Above/below market rent amortization, net |
|
6,750 |
|
|
|
5,823 |
|
Management, transaction, and other fees |
|
6,812 |
|
|
|
6,396 |
|
Straight-line rent on ground rent |
|
(337 |
) |
|
|
(341 |
) |
Above/below market ground rent amortization |
|
(535 |
) |
|
|
(535 |
) |
Depreciation and amortization |
|
(96,774 |
) |
|
|
(97,585 |
) |
General and administrative |
|
(21,600 |
) |
|
|
(26,132 |
) |
Other operating expenses |
|
(1,688 |
) |
|
|
(2,643 |
) |
Other expense, net |
|
(48,673 |
) |
|
|
(29,214 |
) |
Add: Share of noncontrolling interests excluded from NOI |
|
2,204 |
|
|
|
2,046 |
|
Less: Equity in income of investments in real estate excluded from NOI |
|
(13,451 |
) |
|
|
(13,689 |
) |
Net income |
$ |
111,853 |
|
|
|
112,658 |
|
|
|
13. |
Commitments and Contingencies |
Litigation
The Company is a party to litigation and other disputes that arise in the ordinary course of business. While the outcome of any particular lawsuit or dispute cannot be predicted with certainty, in the opinion of management, the Company's currently pending litigation and disputes are not expected to have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity. Legal fees are expensed as incurred.
Environmental
The Company is subject to numerous environmental laws and regulations. With respect to applicability to the Company, these pertain primarily to chemicals historically used by certain current and former dry cleaning tenants, the existence of asbestos in older shopping centers, underground petroleum storage tanks and other historic land uses. The Company believes that the ultimate disposition of currently known environmental matters will not have a material effect on its financial position, liquidity, or operations. The Company can give no assurance that existing environmental studies with respect to its shopping centers have revealed all potential environmental contamination; that its estimate of liabilities will not change as more information becomes available; that any previous owner, occupant or tenant did not create any material environmental condition not known to the Company; that the current environmental condition of the shopping centers will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties; and that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to the Company.
The Company had accrued liabilities of $17.1 million and $17.3 million for environmental remediation, which are included in Accounts payable, and other liabilities on the Company’s Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024, respectively.
Letters of Credit
The Company has the right to issue letters of credit under the Line up to an aggregate amount not to exceed $50.0 million, which reduces the credit availability under the Line. These letters of credit are primarily issued as collateral on behalf of its captive insurance subsidiary and to facilitate the construction of development projects. The Company had $10.9 million in letters of credit outstanding as of both March 31, 2025 and December 31, 2024.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to Regency's future events, developments, or financial or operational performance or results, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as "may," "will," "could," "should," "would," "expect," "estimate," "believe," "intend," "forecast," "project," "plan," "anticipate," "guidance," and other similar language. However, the absence of these or similar words or expressions does not mean a statement is not forward-looking. While we believe these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance these expectations will be attained, and it is possible actual results may differ materially from those indicated by these forward-looking statements due to a variety of risk factors, including, without limitation, risk factors relating to:
•the current economic and geopolitical environments
•pandemics or other health crises
•operating retail-based shopping centers
•the environment affecting our properties
•our partnerships and joint ventures
•funding strategies and capital structure
•information management and technology
•taxes and the Parent Company’s qualification as a REIT
•the Company’s stock price
As more specifically described in Part I, Item 1A. “Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K") and in Part II, Item 1A. "Risk Factors" in this Report. When considering an investment in our securities, you should carefully read and consider these risks, together with all other information in our most recent 2024 Form 10-K, subsequent Quarterly Reports on Form 10-Q, and our other filings with and submissions to the SEC. If any of the events described in the risk factors actually occur, our business, financial condition or operating results, as well as the market price of our securities, could be materially adversely affected. Forward-looking statements are only as of the date they are made, and Regency undertakes no duty to update its forward-looking statements, whether as a result of new information, future events or developments or otherwise, except as and to the extent required by law.
Non-GAAP Financial Measures
In addition to the required Generally Accepted Accounting Principles ("GAAP") presentations, we use and report certain non-GAAP financial measures as we believe these measures improve the understanding of our operational results. We believe these non-GAAP financial measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP financial measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP financial measures to determine how best to provide relevant information to the public, and thus such reported measures could change.
We do not consider non-GAAP financial measures an alternative to financial measures determined in accordance with GAAP, rather they supplement GAAP measures by providing additional information we believe to be useful to our shareholders. The principal limitation of these non-GAAP financial measures is that they may exclude significant expense and income items that are required by GAAP to be recognized in our Consolidated Financial Statements. In addition, they reflect the exercise of management's judgment about which expense and income items are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, reconciliations of the non-GAAP financial measures we use to their most directly comparable GAAP
measures are provided. Non-GAAP financial measures should not be relied upon in evaluating the financial condition, results of operations, or future prospects of the Company.
Our non-GAAP financial measures include the following:
•Adjusted Funds From Operations ("AFFO") is an additional performance measure we use that reflects cash available to fund the Company’s business needs and distribution to shareholders. AFFO is calculated by adjusting Core Operating Earnings ("COE") for (i) capital expenditures necessary to maintain and lease our portfolio of properties, (ii) debt cost and derivative adjustments and (iii) stock-based compensation.
•Core Operating Earnings is an additional performance measure we use because the computation of Nareit Funds from Operations ("Nareit FFO") includes certain non-comparable items that affect our period-over-period performance. Core Operating Earnings excludes from Nareit FFO: (i) transaction related income or expenses, (ii) gains or losses from the early extinguishment of debt, (iii) certain non-cash components of earnings derived from straight-line rents, above and below market rent amortization, and debt and derivative mark-to-market amortization, and (iv) other amounts as they occur.
•Nareit Funds from Operations ("Nareit FFO") is a commonly used measure of REIT performance, which Nareit defines as net income, computed in accordance with GAAP, excluding gains on sales and impairments of real estate, net of tax, plus depreciation and amortization, and after adjustments for unconsolidated real estate investment partnerships and joint ventures. We compute Nareit FFO for all periods presented in accordance with Nareit's definition.
Companies use different depreciable lives and methods, and real estate values historically fluctuate with market conditions. Since Nareit FFO excludes depreciation and amortization and gains on sale and impairments of real estate, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in percent leased, rental rates, operating costs, acquisition and development activities, and financing costs. This provides a perspective of our financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, Nareit FFO is a supplemental non-GAAP financial measure of our operating performance, which does not represent cash generated from operating activities in accordance with GAAP; and, therefore, should not be considered a substitute measure of cash flows from operations.
•Net Operating Income ("NOI") is the sum of base rent, percentage rent, termination fee income, tenant recoveries, other lease income, and other property income, less operating and maintenance expenses, real estate taxes, ground rent, termination expense, and uncollectible lease income. NOI excludes straight-line rental income and expense, above and below market rent and ground rent amortization, tenant lease inducement amortization, and other fees. We also provide disclosure of NOI excluding termination fees, which excludes both termination fee income and expenses.
Management believes that NOI is a useful measure for investors because it provides insight into the core operations and performance of our properties, independent of the capital structure, financing activities, and non-operating factors. By focusing on property-level performance, NOI allows investors to compare the performance of our real estate assets across periods and with those of other REIT peers in the industry, facilitating a clearer understanding of trends in occupancy, rental income, and operating expense management. In addition to its relevance for investors, management uses NOI as a key performance metric in making operational and strategic decisions. NOI is used to evaluate income generated from shopping centers (i.e., return on assets) and to guide decisions on capital investments. These decisions may include acquisitions, redevelopments, and investments in capital improvements.
•Pro-rata information includes 100% of our consolidated properties plus our economic share (based on our ownership interest) in our unconsolidated real estate investment partnerships.
We provide Pro-rata financial information because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated real estate investment partnerships, when read in conjunction with our reported results under GAAP. We believe presenting our Pro-rata share of assets, liabilities, operating results, and other metrics, along with certain other non-GAAP financial measures, makes comparisons of our operating results to those of other REITs more meaningful. The Pro-rata information provided is not, nor is it intended to be, presented in accordance with GAAP. The Pro-rata supplemental details of assets and liabilities and supplemental details of operations reflect our proportionate economic ownership of the assets, liabilities, and operating results of the properties in our portfolio.
The Pro-rata information is prepared on a basis consistent with the comparable consolidated amounts and is intended to more accurately reflect our proportionate economic interest in the assets, liabilities, and operating results of properties in our portfolio. We do not control the unconsolidated real estate partnerships, and the Pro-rata presentations of the assets and liabilities, and revenues and expenses do not represent our legal claim to such items. The partners are entitled to profit or loss allocations and distributions of cash flows according to the operating agreements, which generally provide for such allocations according to their invested capital. Our share of invested capital establishes the ownership interests we use to prepare our Pro-rata share.
The presentation of Pro-rata information has limitations which include, but are not limited to, the following:
oThe amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses; and
oOther companies in our industry may calculate their Pro-rata interest differently, limiting the comparability of Pro-rata information.
Because of these limitations, the Pro-rata financial information should not be considered independently or as a substitute for our financial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP financial statements, using the Pro-rata information as a supplement.
•Pro-rata Same Property NOI is a key non-GAAP financial measure commonly used by REITs to evaluate operating performance. It is calculated on a proportionate ownership basis for properties held during the comparable reporting periods, excluding revenue and expenses related to non-same properties during the periods.
Management believes this measure provides investors with a useful and consistent comparison of the Company’s operating performance and trends. Management uses Pro-rata Same Property NOI as a supplemental measure to assess property-level performance, excluding the effects of corporate-level expenses, financing costs, and non-operating activities. This measure allows investors to evaluate trends in revenue and expense growth for properties that have been consistently operated during the periods.
Other Defined Terms
The following terms, as defined, are commonly used by management and the investing public to understand and evaluate our operational results, and are included in this document:
•Anchor Space is a space equal to or greater than 10,000 SF.
•Development Completion is a Property in Development that is deemed complete upon the earlier of: (i) 90% of total estimated net development costs have been incurred and percent leased equals or exceeds 95%, or (ii) the property features at least two years of anchor operations. Once deemed complete, the property is termed a Retail Operating Property.
•A Non-Same Property is any property, during either calendar year period being compared, that was acquired, sold, a Property in Development, a Development Completion, or a property under, or being positioned for, significant redevelopment that distorts comparability between periods. Non-retail properties and corporate activities, including the captive insurance program, are part of Non-Same Property.
•Property In Development includes properties in various stages of ground-up development.
•Property In Redevelopment includes Retail Operating Properties under redevelopment or being positioned for redevelopment. Unless otherwise indicated, a Property in Redevelopment is included in the Same Property pool.
•Redevelopment Completion is a Property in Redevelopment that is deemed complete upon the earlier of: (i) 90% of total estimated project costs have been incurred and percent leased equals or exceeds 95% for the Company owned GLA related to the project, or (ii) the property features at least two years of anchor operations, if applicable.
•Retail Operating Property is any retail property not termed a Property in Development. A retail property is any property where the majority of the income is generated from retail uses.
•Same Property is a Retail Operating Property that was owned and operated for the entirety of both calendar year periods being compared. This term excludes Properties in Development, prior year Development Completions, and Non-Same Properties. Properties in Redevelopment are included unless otherwise indicated.
•Shop Space is a space under 10,000 SF.
Overview of Our Strategy
Regency Centers Corporation began operations as a publicly-traded REIT in 1993. All of our operating, investing, and financing activities are performed through our Operating Partnership, Regency Centers, L.P. and its wholly-owned subsidiaries, and through our real estate partnerships. As of March 31, 2025, the Parent Company owned approximately 99.4% of the outstanding Common Units and 100% of the Preferred Units of the Operating Partnership.
We are a preeminent national owner, operator, and developer of neighborhood and community shopping centers predominantly located in suburban trade areas with compelling demographics. As of March 31, 2025, we had full or partial ownership interests in 483 retail properties. Our properties are high-quality neighborhood and community shopping centers primarily anchored by market leading grocers and principally located in suburban markets within the country's most desirable metro areas, and contain approximately 57.7 million square feet ("SF") of gross leasable area ("GLA"). Our mission is to create thriving environments for retailers and service providers to connect with surrounding neighborhoods and communities. Our vision is to elevate quality of life as an integral thread in the fabric of our communities. Our portfolio includes thriving properties merchandised with highly productive grocers, restaurants, service providers, and best-in-class retailers that connect with their neighborhoods, communities, and customers.
Our values:
•We are our people: Our people are our greatest asset, and we believe that our highly skilled and talented team makes us better.
•We do what is right: We act with unwavering standards of honesty and integrity.
•We connect with our communities: We promote philanthropic ideas and strive for the betterment of our neighborhoods by giving our time and financial support.
•We are responsible: Our duty is to balance purpose and profit, being good stewards of capital and the environment for the benefit of all our stakeholders.
•We strive for excellence: When we are passionate about what we do, it is reflected in our performance.
•We are better together: When we listen to each other and our customers, we will succeed together.
Our goals are to:
•Own and manage a portfolio of high-quality neighborhood and community shopping centers anchored primarily by market leading grocers and principally located in suburban trade areas in the most desirable metro areas in the United States. We believe that this strategy will result in highly desirable and attractive centers with best-in-class retailers. These centers should command higher rental and occupancy rates resulting in excellent prospects to grow NOI;
•Create shareholder value by increasing earnings and dividends per share that generate total returns at or near the top of our shopping center peers;
•Maintain an industry leading, disciplined development and redevelopment platform to create exceptional retail centers that deliver favorable returns;
•Support our business activities with a conservative capital structure, including a strong balance sheet with sufficient liquidity to meet our capital needs together with a carefully constructed debt maturity profile; and
•Implement sustainability and governance practices through our Corporate Responsibility program to support and enhance our business goals and objectives.
Executing on our Strategy
During the three months ended March 31, 2025, we had Net income attributable to common shareholders of $106.2 million as compared to $106.4 million during the three months ended March 31, 2024.
During the three months ended March 31, 2025:
•Our Pro-rata same property NOI, excluding termination fees, grew 4.3%, as compared to the three months ended March 31, 2024, primarily attributable to improvements in base rent from increases in year over year occupancy rates, contractual rent steps in existing leases, and positive rent spreads on comparable new and renewal leases.
•We executed 450 new and renewal leasing transactions representing 1.4 million Pro-rata SF with positive rent spreads of 8.1% during the three months ended March 31, 2025, compared to 461 leasing transactions representing 2.0 million Pro-rata SF with positive rent spreads of 8.5% during the three months ended March 31, 2024. Rent spreads are calculated on all executed leasing transactions for comparable Retail Operating Property spaces, including spaces vacant greater than 12 months.
•At March 31, 2025, December 31, 2024, and March 31, 2024 our total property portfolio was 96.3%, 96.3%, and 95.0% leased, respectively. At March 31, 2025, December 31, 2024, and March 31, 2024 our same property portfolio was 96.5%, 96.5%, and 95.5% leased, respectively.
We continued our development and redevelopment of high quality shopping centers:
•Estimated Pro-rata project costs of our current in process development and redevelopment projects totaled $498.5 million at March 31, 2025, compared to $497.3 million at December 31, 2024.
•Development and redevelopment projects completed during the three months ended March 31, 2025 represented $5.3 million of estimated net project costs, with an average stabilized yield of 52.5%. A stabilized yield for development and redevelopment projects represents the incremental NOI (estimated stabilized NOI less NOI prior to project commencement) divided by the total project costs.
We maintained liquidity and the financial flexibility to cost effectively fund investment opportunities and debt maturities:
•In February 2025, we received a credit rating upgrade to A- with a stable outlook from S&P Global Ratings.
•We have $430.3 million of loans maturing during the next 12 months, including Regency's pro-rata share of maturities within our unconsolidated real estate partnerships, which we intend to refinance or pay-off as they mature.
•At March 31, 2025, we had $1.22 billion available on the Line, which expires on March 23, 2028 unless we exercise the available options to extend the expiration for two additional six-month periods, in which case the term will be extended in accordance with any such option exercise.
Economic Conditions
Refer to the Estimated Risks and Uncertainties section in Note 1 — Organization and Significant Accounting Policies, as these risks and uncertainties could have a material impact on future results of operations and trends.
Property Portfolio
The following table summarizes general information related to the consolidated properties in our portfolio:
|
|
|
|
|
|
|
|
(GLA in thousands) |
March 31, 2025 |
|
|
December 31, 2024 |
|
Number of Properties |
381 |
|
|
379 |
|
GLA |
|
44,405 |
|
|
|
43,876 |
|
% Leased – Operating and Development |
|
96.2 |
% |
|
|
96.2 |
% |
% Leased – Operating |
|
96.4 |
% |
|
|
96.5 |
% |
Weighted average annual effective rent per square foot ("PSF"), net of tenant concessions. |
$25.81 |
|
|
$25.56 |
|
The following table summarizes general information related to the unconsolidated properties owned in real estate investment partnerships in our portfolio:
|
|
|
|
|
|
|
|
(GLA in thousands) |
March 31, 2025 |
|
|
December 31, 2024 |
|
Number of Properties |
102 |
|
|
103 |
|
GLA |
|
13,249 |
|
|
|
13,439 |
|
% Leased – Operating and Development |
|
97.0 |
% |
|
|
96.8 |
% |
% Leased –Operating |
|
97.1 |
% |
|
|
96.8 |
% |
Weighted average annual effective rent PSF, net of tenant concessions |
$24.82 |
|
|
$24.51 |
|
The following table summarizes Pro-rata occupancy rates of our combined consolidated and unconsolidated shopping center portfolio:
|
|
|
|
|
|
|
|
|
March 31, 2025 |
|
|
December 31, 2024 |
|
Percent Leased – All Properties |
|
96.3 |
% |
|
|
96.3 |
% |
Anchor Space (spaces ≥ 10,000 SF) |
|
98.3 |
% |
|
|
98.4 |
% |
Shop Space (spaces < 10,000 SF) |
|
93.1 |
% |
|
|
93.0 |
% |
The following table summarizes leasing activity, including our Pro-rata share of activity within the portfolio of our real estate partnerships (totals as a weighted average PSF):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2025 |
|
|
|
Leasing
Transactions |
|
|
SF (in
thousands) |
|
|
Base Rent
PSF |
|
|
Tenant
Allowance
and Landlord
Work PSF |
|
|
Leasing
Commissions
PSF |
|
Anchor Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New |
|
|
4 |
|
|
|
85 |
|
|
$ |
19.82 |
|
|
$ |
75.50 |
|
|
$ |
4.98 |
|
Renewal |
|
|
20 |
|
|
|
557 |
|
|
|
13.80 |
|
|
|
0.23 |
|
|
|
0.15 |
|
Total Anchor Space Leases |
|
|
24 |
|
|
|
642 |
|
|
$ |
14.60 |
|
|
$ |
10.16 |
|
|
$ |
0.79 |
|
Shop Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New |
|
|
119 |
|
|
|
227 |
|
|
$ |
41.94 |
|
|
$ |
47.82 |
|
|
$ |
17.01 |
|
Renewal |
|
|
307 |
|
|
|
541 |
|
|
|
40.58 |
|
|
|
1.41 |
|
|
|
1.39 |
|
Total Shop Space Leases |
|
|
426 |
|
|
|
768 |
|
|
$ |
40.98 |
|
|
$ |
15.12 |
|
|
$ |
6.01 |
|
Total Leases |
|
|
450 |
|
|
|
1,410 |
|
|
$ |
28.97 |
|
|
$ |
12.86 |
|
|
$ |
3.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2024 |
|
|
|
Leasing
Transactions |
|
|
SF (in
thousands) |
|
|
Base Rent
PSF |
|
|
Tenant
Allowance
and Landlord
Work PSF |
|
|
Leasing
Commissions
PSF |
|
Anchor Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New |
|
|
11 |
|
|
|
241 |
|
|
$ |
21.59 |
|
|
$ |
52.82 |
|
|
$ |
8.10 |
|
Renewal |
|
|
29 |
|
|
|
851 |
|
|
|
21.00 |
|
|
|
0.29 |
|
|
|
0.05 |
|
Total Anchor Space Leases |
|
|
40 |
|
|
|
1,092 |
|
|
$ |
21.13 |
|
|
$ |
11.91 |
|
|
$ |
1.83 |
|
Shop Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New |
|
|
136 |
|
|
|
286 |
|
|
$ |
37.65 |
|
|
$ |
38.66 |
|
|
$ |
13.10 |
|
Renewal |
|
|
285 |
|
|
|
573 |
|
|
|
37.27 |
|
|
|
3.66 |
|
|
|
0.61 |
|
Total Shop Space Leases |
|
|
421 |
|
|
|
859 |
|
|
$ |
37.40 |
|
|
$ |
15.33 |
|
|
$ |
4.77 |
|
Total Leases |
|
|
461 |
|
|
|
1,951 |
|
|
$ |
28.29 |
|
|
$ |
13.41 |
|
|
$ |
3.13 |
|
The weighted-average base rent PSF on signed Shop Space leases during 2025 was $40.98 PSF, which is higher than the weighted average annual base rent PSF of all Shop Space leases due to expire during the next 12 months of $36.13 PSF. New and renewal rent spreads, compared to prior rents on these same spaces leased, were positive at 8.1% for the three months ended March 31, 2025, compared to 8.5% for the three months ended March 31, 2024.
Diversification and Concentration of Tenant Risk
We seek to reduce our risk by limiting dependence on any single tenant. Based on percentage of annualized base rent, the following table summarizes our most significant tenants, of which four of the top five are grocers:
|
|
|
|
|
|
|
|
|
|
|
March 31, 2025 |
Tenant |
|
Number of
Stores |
|
|
Percentage of
Company-
owned GLA (1) |
|
Percentage of
Annual Base Rent (1) |
Publix |
|
|
67 |
|
|
5.9% |
|
2.8% |
Albertsons Companies, Inc. |
|
|
52 |
|
|
4.2% |
|
2.8% |
TJX Companies, Inc. |
|
|
75 |
|
|
3.7% |
|
2.8% |
Amazon/Whole Foods |
|
|
39 |
|
|
2.6% |
|
2.6% |
Kroger Co. |
|
|
52 |
|
|
6.0% |
|
2.6% |
(1)Includes Regency's Pro-rata share of unconsolidated properties and excludes those owned by anchors.
Bankruptcies and Credit Concerns
Our management team devotes significant time to researching and monitoring consumer preferences and trends, customer shopping behaviors, changes in delivery methods, shifts to e-commerce, and changing demographics in order to anticipate the challenges and opportunities impacting our industry. We seek to mitigate potentially adverse impacts through maintaining a high quality portfolio, diversifying our geographic and tenant mix, replacing less successful tenants with stronger operators, anchoring our centers with market leading grocery stores that drive customer traffic, and investing in suburban trade areas with compelling demographic populations benefiting from high levels of disposal income.
We recognize that current economic conditions including, but not limited to, the potential impacts of tariffs and trade deals, inflation, cost and availability of labor, including potential labor shortages related to deportations or threat of deportations, increasing energy prices and interest rates, supply chain disruptions, and access to and cost of credit have introduced additional macroeconomic uncertainty. These economic conditions could place further financial strain on retailers by raising costs and compressing margins. The potential for a recession and the severity and duration of any economic downturn could negatively impact our existing tenants and their ability to continue to meet their lease obligations.
Although base rent is derived from long-term lease contracts, tenants that file for bankruptcy generally have the legal right to reject any or all of their leases and close related stores. Any unsecured claim we hold against a bankrupt tenant for unpaid rent might be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. As a result, in a tenant bankruptcy situation it is likely that we would recover substantially less than the full value of any unsecured claims we hold. Additionally, we may incur significant expense to adjudicate our claim and significant downtime to re-lease the vacated space. In the event that a tenant with a significant number of leases in our shopping centers files for bankruptcy and rejects its leases, we could experience a significant reduction in our revenues. At March 31, 2025, the tenants who are currently in bankruptcy and which continue to occupy space in our shopping centers represent an aggregate of 0.9% of our Pro-rata annual base rent with no single tenant exceeding 0.5% of Pro-rata annual base rent.
Results of Operations
Comparison of the three months ended March 31, 2025 and 2024:
Changes in revenues are summarized in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
|
(in thousands) |
|
2025 |
|
|
2024 |
|
|
Change |
|
Lease income |
|
|
|
|
|
|
|
|
|
Base rent |
|
$ |
254,556 |
|
|
|
244,135 |
|
|
|
10,421 |
|
Recoveries from tenants |
|
|
91,481 |
|
|
|
85,023 |
|
|
|
6,458 |
|
Percentage rent |
|
|
6,658 |
|
|
|
7,807 |
|
|
|
(1,149 |
) |
Uncollectible lease income |
|
|
(386 |
) |
|
|
(1,233 |
) |
|
|
847 |
|
Other lease income |
|
|
6,413 |
|
|
|
5,957 |
|
|
|
456 |
|
Straight-line rent |
|
|
5,607 |
|
|
|
5,594 |
|
|
|
13 |
|
Above / below market rent amortization, net |
|
|
6,750 |
|
|
|
5,823 |
|
|
|
927 |
|
Total lease income |
|
$ |
371,079 |
|
|
|
353,106 |
|
|
|
17,973 |
|
Other property income |
|
|
3,021 |
|
|
|
4,350 |
|
|
|
(1,329 |
) |
Management, transaction, and other fees |
|
|
6,812 |
|
|
|
6,396 |
|
|
|
416 |
|
Total revenues |
|
$ |
380,912 |
|
|
|
363,852 |
|
|
|
17,060 |
|
Lease income increased by $18.0 million primarily due to the following:
•$10.4 million increase in Base rent, mainly driven by the following:
o$9.7 million increase resulting from same properties, including:
▪$7.4 million increase due to increases from occupancy, rent steps in existing leases, and positive rental spreads on new and renewal leases; and
▪$2.3 million increase due to redevelopment projects that commenced operations;
o$1.1 million increase from acquisitions of operating properties in 2025 as compared to 2024 activity; and
o$0.9 million increase from rent commencements at completed development properties; partially offset by
o$1.3 million decrease due to dispositions of operating properties.
•$6.5 million increase from contractual Recoveries from tenants which represents their proportionate share of the operating, maintenance, insurance, and real estate tax expenses that we incur to operate our shopping centers. Recoveries from tenants increased, mainly from the following:
o$5.9 million increase primarily due to higher operating costs and increased occupancy in the current year; and
o$0.8 million increase driven by the acquisition of operating properties in 2025 as compared to 2024, and rent commencements at development properties; partially offset by
o$0.2 million decrease due to disposition of operating properties.
•$1.1 million decrease in Percentage rent due to fluctuations in tenant sales.
Other property income decreased by $1.3 million primarily due to business interruption insurance proceeds received in the comparative period.
There were no significant changes in Management, transaction, and other fees.
Changes in our operating expenses are summarized in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
|
(in thousands) |
|
2025 |
|
|
2024 |
|
|
Change |
|
Depreciation and amortization |
|
$ |
96,774 |
|
|
|
97,585 |
|
|
|
(811 |
) |
Property operating expense |
|
|
68,459 |
|
|
|
63,274 |
|
|
|
5,185 |
|
Real estate taxes |
|
|
46,360 |
|
|
|
44,307 |
|
|
|
2,053 |
|
General and administrative |
|
|
21,600 |
|
|
|
26,132 |
|
|
|
(4,532 |
) |
Other operating expenses |
|
|
1,688 |
|
|
|
2,643 |
|
|
|
(955 |
) |
Total operating expenses |
|
$ |
234,881 |
|
|
|
233,941 |
|
|
|
940 |
|
There were no significant changes in Depreciation and amortization.
Property operating expense increased by $5.2 million, mainly due to the following:
•$3.6 million increase from same properties primarily attributable to higher recoverable common area maintenance and other tenant-related costs; and
•$1.1 million increase is attributable to property damage losses resulting from a variety of events.
Real estate taxes increased by $2.1 million, mainly due to increases in real estate tax assessments across the same property portfolio.
General and administrative costs decreased by $4.5 million mainly due to the following:
•$2.6 million decrease due to changes in the fair value of participant obligations within the deferred compensation plan, which were attributable to changes in the fair values of those investments recognized in Net investment loss (income); and
•$2.0 million change in overhead capitalization driven by variability in the number, timing and progress of our development and redevelopment projects.
There were no significant changes in Other operating expenses.
Changes in Other expense, net are summarized in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
|
(in thousands) |
|
2025 |
|
|
2024 |
|
|
Change |
|
Interest expense, net |
|
|
|
|
|
|
|
|
|
Interest on notes payable |
|
$ |
48,330 |
|
|
|
45,601 |
|
|
|
2,729 |
|
Interest on unsecured credit facilities |
|
|
2,913 |
|
|
|
1,439 |
|
|
|
1,474 |
|
Capitalized interest |
|
|
(2,112 |
) |
|
|
(1,656 |
) |
|
|
(456 |
) |
Hedge expense |
|
|
226 |
|
|
|
109 |
|
|
|
117 |
|
Interest income |
|
|
(1,344 |
) |
|
|
(2,625 |
) |
|
|
1,281 |
|
Interest expense, net |
|
$ |
48,013 |
|
|
|
42,868 |
|
|
|
5,145 |
|
Gain on sale of real estate, net of tax |
|
|
(101 |
) |
|
|
(11,403 |
) |
|
|
11,302 |
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
180 |
|
|
|
(180 |
) |
Net investment loss (income) |
|
|
761 |
|
|
|
(2,431 |
) |
|
|
3,192 |
|
Total other expense, net |
|
$ |
48,673 |
|
|
|
29,214 |
|
|
|
19,459 |
|
Interest expense, net increased by $5.1 million primarily due to the following:
•$2.7 million increase in Interest on notes payable is primarily due to new net public debt issuances totaling $475.0 million in 2024; and
•$1.5 million increase in Interest on unsecured credit facilities is primarily due to a higher weighted average outstanding balance under our Line coupled with incrementally higher weighted average contractual interest rates; partially offset by
•$1.3 million decrease in interest income primarily due to maintaining higher levels of excess cash in short term investments in the comparative prior period.
During the three months ended March 31, 2024, we recognized gains on sale of $11.4 million mainly from sale of one operating property and recognition of one sales-type lease.
Net investment loss (income) changed by $3.2 million driven by market volatility during the current quarter, including $2.6 million on investments held in the non-qualified deferred compensation plan and $0.6 million related to other corporate investments.
Equity in income of investments in real estate partnerships increased by $2.5 million mainly due to increases from occupancy and positive rental spreads on new and renewal leases at properties held in the unconsolidated real estate partnerships.
The following represents the remaining components that comprise Net income attributable to common shareholders and unit holders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
|
(in thousands) |
|
2025 |
|
|
2024 |
|
|
Change |
|
Net income |
|
$ |
111,853 |
|
|
|
112,658 |
|
|
|
(805 |
) |
Income attributable to noncontrolling interests |
|
|
(2,266 |
) |
|
|
(2,884 |
) |
|
|
618 |
|
Net income attributable to the Company |
|
|
109,587 |
|
|
|
109,774 |
|
|
|
(187 |
) |
Preferred stock dividends |
|
|
(3,413 |
) |
|
|
(3,413 |
) |
|
|
- |
|
Net income attributable to common shareholders |
|
$ |
106,174 |
|
|
$ |
106,361 |
|
|
$ |
(187 |
) |
Net income attributable to exchangeable operating partnership units |
|
|
(642 |
) |
|
|
(642 |
) |
|
|
- |
|
Net income attributable to common unit holders |
|
$ |
106,816 |
|
|
|
107,003 |
|
|
|
(187 |
) |
Supplemental Earnings Information on Non-GAAP Financial Measures
We use certain non-GAAP financial measures, in addition to certain performance metrics determined under GAAP, as we believe these measures improve the understanding of the operating results. We believe these non-GAAP financial measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We provide Pro-rata financial information because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated real estate partnerships, when read in conjunction with our reported results under GAAP. We believe presenting our Pro-rata share of operating results, along with other non-GAAP financial measures, may assist in comparing our operating results to other REITs. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP financial measures to determine how best to provide relevant information to the public, and thus such reported non-GAAP financial measures could change. See "Non-GAAP Financial Measures" at the beginning of this Management's Discussion and Analysis.
We do not consider non-GAAP financial measures as an alternative to financial measures determined in accordance with GAAP, rather they supplement GAAP measures by providing additional information we believe to be useful to our shareholders. The principal limitation of these non-GAAP financial measures is that they may exclude significant expense and income items that are required by GAAP to be recognized in our Consolidated Financial Statements. In addition, they reflect the exercise of management's judgment about which expense and income items are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, reconciliations of the non-GAAP financial measures we use to their most directly comparable GAAP measures are provided, including as set forth below. Non-GAAP financial measures should not be relied upon in evaluating the financial condition, results of operations, or future prospects.
Pro-rata Same Property NOI (Non-GAAP Financial Measures):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
|
(in thousands) |
|
2025 |
|
|
2024 |
|
|
Change |
|
Base rent |
|
$ |
279,486 |
|
|
|
269,154 |
|
|
|
10,332 |
|
Recoveries from tenants |
|
|
99,937 |
|
|
|
93,597 |
|
|
|
6,340 |
|
Percentage rent |
|
|
7,413 |
|
|
|
8,523 |
|
|
|
(1,110 |
) |
Termination fees |
|
|
2,325 |
|
|
|
1,842 |
|
|
|
483 |
|
Uncollectible lease income |
|
|
(420 |
) |
|
|
(1,394 |
) |
|
|
974 |
|
Other lease income |
|
|
4,683 |
|
|
|
4,602 |
|
|
|
81 |
|
Other property income |
|
|
2,711 |
|
|
|
2,675 |
|
|
|
36 |
|
Total real estate revenue |
|
|
396,135 |
|
|
|
378,999 |
|
|
|
17,136 |
|
Operating and maintenance |
|
|
68,026 |
|
|
|
64,199 |
|
|
|
3,827 |
|
Termination expense |
|
|
— |
|
|
|
70 |
|
|
|
(70 |
) |
Real estate taxes |
|
|
50,564 |
|
|
|
48,501 |
|
|
|
2,063 |
|
Ground rent |
|
|
3,722 |
|
|
|
4,237 |
|
|
|
(515 |
) |
Total real estate operating expenses |
|
|
122,312 |
|
|
|
117,007 |
|
|
|
5,305 |
|
Pro-rata same property NOI |
|
$ |
273,823 |
|
|
|
261,992 |
|
|
|
11,831 |
|
Less: Termination fees |
|
|
2,325 |
|
|
|
1,772 |
|
|
|
553 |
|
Pro-rata same property NOI, excluding termination fees |
|
$ |
271,498 |
|
|
|
260,220 |
|
|
|
11,278 |
|
Pro-rata same property NOI growth, excluding termination fees |
|
|
|
|
|
|
|
|
4.3 |
% |
Pro-rata same property NOI, excluding termination fees/expenses, changed from the following major components:
Total real estate revenue increased by $17.1 million, on a net basis, as follows:
•Base rent increased by $10.3 million due to rent steps in existing leases, positive rental spreads on new and renewal leases, and increases in occupancy, as well as redevelopment projects completing and operating.
•Recoveries from tenants increased by $6.3 million due to higher recoverable expenses and increased occupancy.
•Percentage rent decreased $1.1 million due to fluctuations in tenant sales.
Total real estate operating expenses increased by $5.3 million, on a net basis, as follows:
•Operating and maintenance increased by $3.8 million primarily due to increases in common area maintenance and other tenant-recoverable costs.
•Real estate taxes increased by $2.1 million due to an increase in real estate assessments across the portfolio.
Reconciliation of Pro-rata Same Property NOI to Net Income Attributable to Common Shareholders:
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
(in thousands) |
|
2025 |
|
|
2024 |
|
Net income attributable to common shareholders |
|
$ |
106,174 |
|
|
|
106,361 |
|
Less: |
|
|
|
|
|
|
Management, transaction, and other fees |
|
|
(6,812 |
) |
|
|
(6,396 |
) |
Other (1) |
|
|
(13,689 |
) |
|
|
(12,587 |
) |
Plus: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
96,774 |
|
|
|
97,585 |
|
General and administrative |
|
|
21,600 |
|
|
|
26,132 |
|
Other operating expense |
|
|
1,688 |
|
|
|
2,643 |
|
Other expense, net |
|
|
48,673 |
|
|
|
29,214 |
|
Equity in income of investments in real estate excluded from NOI (2) |
|
|
13,451 |
|
|
|
13,689 |
|
Net income attributable to noncontrolling interests |
|
|
2,266 |
|
|
|
2,884 |
|
Preferred stock dividends and issuance costs |
|
|
3,413 |
|
|
|
3,413 |
|
NOI |
|
$ |
273,538 |
|
|
|
262,938 |
|
Less non-same property NOI |
|
|
285 |
|
|
|
(946 |
) |
Pro-rata same property NOI |
|
$ |
273,823 |
|
|
|
261,992 |
|
(1)Includes straight-line rental income and expense, net of reserves, above and below market rent amortization, other fees, and noncontrolling interests.
(2)Includes non-NOI income earned and expenses incurred at our unconsolidated real estate partnerships, including those separated out above for our consolidated properties.
Nareit FFO, Core Operating Earnings and AFFO (Non-GAAP Financial Measures):
Our reconciliation of net income attributable to common shareholders to Nareit FFO, to Core Operating Earnings, and to AFFO is as follows:
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
(in thousands, except share information) |
|
2025 |
|
|
2024 |
|
Reconciliation of Net income attributable to common shareholders to Nareit FFO |
|
|
|
|
|
|
Net income attributable to common shareholders |
|
$ |
106,174 |
|
|
|
106,361 |
|
Adjustments to reconcile to Nareit FFO: (1) |
|
|
|
|
|
|
Depreciation and amortization (excluding FF&E) |
|
|
104,034 |
|
|
|
104,372 |
|
Gain on sale of real estate, net of tax |
|
|
(101 |
) |
|
|
(11,408 |
) |
Exchangeable operating partnership units |
|
|
642 |
|
|
|
642 |
|
Nareit FFO attributable to common stock and unit holders |
|
$ |
210,749 |
|
|
|
199,967 |
|
Reconciliation of Nareit FFO to Core Operating Earnings |
|
|
|
|
|
|
Nareit FFO |
|
$ |
210,749 |
|
|
|
199,967 |
|
Adjustments to reconcile to Core Operating Earnings: (1) |
|
|
|
|
|
|
Not Comparable Items |
|
|
|
|
|
|
Merger transition costs |
|
|
— |
|
|
|
2,561 |
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
180 |
|
Certain Non-Cash Items |
|
|
|
|
|
|
Straight-line rent |
|
|
(6,513 |
) |
|
|
(5,738 |
) |
Uncollectible straight-line rent |
|
|
376 |
|
|
|
656 |
|
Above/below market rent amortization, net |
|
|
(6,461 |
) |
|
|
(5,467 |
) |
Debt and derivative mark-to-market amortization |
|
|
1,292 |
|
|
|
909 |
|
Core Operating Earnings |
|
$ |
199,443 |
|
|
|
193,068 |
|
Reconciliation of Core Operating Earnings to AFFO: |
|
|
|
|
|
|
Core Operating Earnings |
|
$ |
199,443 |
|
|
|
193,068 |
|
Adjustments to reconcile to AFFO (1): |
|
|
|
|
|
|
Operating capital expenditures |
|
|
(23,753 |
) |
|
|
(20,852 |
) |
Debt cost and derivative adjustments |
|
|
2,129 |
|
|
|
2,140 |
|
Stock-based compensation |
|
|
5,443 |
|
|
|
4,640 |
|
AFFO |
|
$ |
183,262 |
|
|
|
178,996 |
|
(1)Includes Regency's Pro-rata share of unconsolidated investment partnerships, net of Pro-rata share attributable to noncontrolling interests.
Liquidity and Capital Resources
General
We use cash flows generated from operating, investing, and financing activities to strengthen our balance sheet, finance our development and redevelopment projects, fund our investment activities, and maintain financial flexibility. A significant portion of our cash flows from operations is distributed to our common shareholders in the form of dividends in order to maintain our status as a REIT.
Except for $200 million of private placement debt, our Parent Company has no capital commitments other than its guarantees of the commitments of our Operating Partnership. All remaining debt is held by our Operating Partnership, its subsidiaries, or by our real estate partnerships. The Operating Partnership is a co-issuer and a guarantor of the $200 million of outstanding debt of our Parent Company. The Parent Company will from time to time access the capital markets for the purpose of issuing new equity, and will simultaneously contribute all of the offering proceeds to the Operating Partnership in exchange for additional partnership units.
We continually assess our available liquidity and our expected cash requirements, including monitoring our tenant rent collections. We have access to and draw on multiple financing sources to fund our operations and our long-term capital needs, including the requirements of our in process and planned developments, redevelopments, other capital expenditures, and the repayment of debt. We expect to meet these needs by using a combination of the following: cash flows from operations after funding our common stock and preferred stock dividends, borrowings from our Line, proceeds from sale of real estate, mortgage loan and unsecured bank financing, distributions received from our real estate partnerships, and when the capital markets are favorable, proceeds from sale of equity securities or the issuance of new unsecured debt. We continually evaluate alternative financing options, and we believe we can obtain new financing on reasonable terms, although likely at higher interest rates than that of our debt currently outstanding, due to the current interest rate environment.
Given the elevated interest rate environment, we are actively monitoring market conditions and evaluating strategies to mitigate interest rate risk. These strategies may include the use of interest rate swaps, caps, or forward-starting hedges to lock in rates on future debt issuances or refinancings. We are also prioritizing refinancing of maturing debt with long-duration fixed-rate debt where appropriate, to minimize future exposure to rate volatility.
We have $430.3 million of loan maturities during the next 12 months, including $250 million of unsecured public debt maturing in November 2025, and Regency's pro-rata share of maturities within our unconsolidated real estate partnerships, which we intend to refinance or pay off as they mature. We currently expect to address these maturing obligations through a combination of refinancing, available liquidity under our Line, and proceeds from potential property sales. We continually monitor capital markets and proactively manage our debt maturity profile to maintain a strong balance sheet and financial flexibility.
Based upon our available cash balance, sources of capital, our current credit ratings, and the number of high quality, unencumbered properties we own, we believe our available capital resources are sufficient to meet our expected capital needs for the next year, although, in the longer term, we can provide no assurances.
In addition to our $75.1 million of unrestricted cash, we have the following additional sources of capital available:
|
|
|
|
(in thousands) |
March 31, 2025 |
|
ATM program |
|
|
Original offering amount |
$ |
500,000 |
|
Available capacity (1) |
$ |
400,000 |
|
Line of credit |
|
|
Total commitment amount |
$ |
1,500,000 |
|
Available capacity (2) |
$ |
1,224,940 |
|
Maturity (3) |
March 23, 2028 |
|
(1)During November and December 2024, we entered into forward sale agreements with respect to 1,339,377 shares that were sold in several tranches at a weighted average offering price of $74.66 per share before any underwriting discount and offering expenses. These shares are pledged under forward sale agreements and must be settled within one year of their trade dates, which vary by agreement and are expected to result in net proceeds of approximately $100 million. After giving effect to this forward equity offering as of March 31, 2025, $400 million of common stock remains available for issuance under the ATM program authorized by the Company's Board of Directors, which is subject to change at the discretion of the Board.
(2)Net of letters of credit issued against our Line.
(3)The Company has the option to extend the maturity for two additional six-month periods.
While future dividends on shares of our common stock will be determined at the discretion of our Board of Directors, we plan to continue paying an aggregate amount of distributions to our stock and unit holders that, at a minimum, meet the requirements to continue qualifying as a REIT for federal income tax purposes. We have historically generated sufficient cash flows from operations to fund our dividend distributions. During the three months ended March 31, 2025 and 2024, we generated cash flows from operations of $161.0 million and $167.8 million, respectively, and paid $131.9 million and $127.7 million in dividends to our common and preferred stock and unit holders.
We currently have development and redevelopment projects in various stages of planning, design and construction, along with a pipeline of potential projects for future development or redevelopment. We estimate that we will require capital during the next 12 months of approximately $856.2 million related to leasing commissions, tenant improvements, in-process developments and redevelopments, capital contributions to our real estate partnerships, and repaying maturing debt. These capital requirements may be impacted by tariffs and inflation, as well as potential shortages of labor employed by contractors, resulting in increased costs of construction materials, labor, and services from third-party contractors and suppliers. We continue to implement mitigation strategies including, but not limited to, entering into fixed cost construction contracts, pre-ordering materials, and other planning efforts. Further, continued challenges from permitting delays and labor and material shortages may extend the time to completion of these projects.
If we start new developments or redevelopments, commit to property acquisitions, repay debt prior to maturity, declare future dividends, or repurchase shares of our common stock, our cash requirements will increase. If we refinance maturing debt, our cash requirements will decrease.
We endeavor to maintain a high percentage of unencumbered assets. As of March 31, 2025, 89.4% of our wholly-owned real estate assets were unencumbered. Our low level of encumbered assets allows us to more readily access the secured and unsecured debt markets and to maintain borrowing capacity on the Line.
Our Line and unsecured debt require that we remain in compliance with various customary financial covenants, which are described in the Notes to Consolidated Financial Statements included in our 2024 Form 10-K. We were in compliance with these covenants at March 31, 2025, and expect to remain in compliance.
Summary of Cash Flow Activity
The following table summarizes net cash flows related to operating, investing, and financing activities of the Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
|
(in thousands) |
|
2025 |
|
|
2024 |
|
|
Change |
|
Net cash provided by operating activities |
|
$ |
161,031 |
|
|
|
167,758 |
|
|
|
(6,727 |
) |
Net cash used in investing activities |
|
|
(180,148 |
) |
|
|
(142,336 |
) |
|
|
(37,812 |
) |
Net cash provided by financing activities |
|
|
35,770 |
|
|
|
113,325 |
|
|
|
(77,555 |
) |
Net change in cash, cash equivalents, and restricted cash |
|
$ |
16,653 |
|
|
|
138,747 |
|
|
|
(122,094 |
) |
Total cash, cash equivalents, and restricted cash |
|
$ |
78,537 |
|
|
|
230,101 |
|
|
|
(151,564 |
) |
Net cash provided by operating activities:
Net cash provided by operating activities decreased $6.7 million due to:
•$5.8 million decrease in cash from operations due to the timing of receipts and payments
•$0.9 million decrease in operating cash flow distributions from Investments in real estate partnerships.
Net cash used in investing activities:
Net cash used in investing activities changed by $37.8 million as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
|
(in thousands) |
|
2025 |
|
|
2024 |
|
|
Change |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
Acquisition of operating real estate, net of cash acquired of $787 |
|
$ |
(83,232 |
) |
|
|
— |
|
|
|
(83,232 |
) |
Real estate development and capital improvements |
|
|
(101,386 |
) |
|
|
(60,850 |
) |
|
|
(40,536 |
) |
Proceeds from sale of real estate |
|
|
— |
|
|
|
30,033 |
|
|
|
(30,033 |
) |
Proceeds from property insurance casualty claims |
|
|
— |
|
|
|
4,110 |
|
|
|
(4,110 |
) |
Issuance of notes receivable |
|
|
— |
|
|
|
(29,830 |
) |
|
|
29,830 |
|
Collection of notes receivable |
|
|
120 |
|
|
|
1,561 |
|
|
|
(1,441 |
) |
Investments in real estate partnerships |
|
|
(230 |
) |
|
|
(4,156 |
) |
|
|
3,926 |
|
Return of capital from investments in real estate partnerships |
|
|
— |
|
|
|
3,152 |
|
|
|
(3,152 |
) |
Dividends on investment securities |
|
|
988 |
|
|
|
122 |
|
|
|
866 |
|
Purchase of investment securities |
|
|
(2,233 |
) |
|
|
(92,527 |
) |
|
|
90,294 |
|
Proceeds from sale of investment securities |
|
|
5,825 |
|
|
|
6,049 |
|
|
|
(224 |
) |
Net cash used in investing activities |
|
$ |
(180,148 |
) |
|
|
(142,336 |
) |
|
|
(37,812 |
) |
Significant changes in investing activities include:
•We paid $83.2 million in 2025 to purchase two operating properties and one operating outparcel. One of the operating properties was previously held in an a single property unconsolidated real estate investment partnership in which we held a 66.7% ownership interest.
•During 2025, we invested $40.5 million more on real estate development, redevelopment, and capital improvements, as further detailed in a table below.
•There were no sales of real estate in 2025 compared to one operating property in 2024 for proceeds of $30.0 million.
•We received additional property insurance claim proceeds of $4.1 million in 2024 primarily attributable to a single property that was impacted by a weather event in 2019.
•During 2024, in connection with a secured lending transaction entered into by the Company, we issued a note receivable in the amount of $29.8 million at an interest rate of 6.8% maturing in January 2027, secured by a grocery-anchored shopping center.
•Investments in real estate partnerships:
oIn 2025, we invested $0.2 million to fund our share of development and redevelopment activities.
oIn 2024, we invested $4.2 million, to fund our share of development and redevelopment activities.
•Return of capital from our unconsolidated investments in real estate partnerships includes sales or financing proceeds.
oDuring 2024, we received $3.2 million from our share of proceeds from debt financing activities.
•Purchase of securities and proceeds from sale of securities pertain to investment activities held in our captive insurance company and our deferred compensation plan. Additionally, in 2024, we invested approximately $90 million in commercial deposits from the proceeds received from the January 2024 public offering of senior unsecured notes.
We plan to continue developing and redeveloping shopping centers for long-term investment. During the three months ended March 31, 2025, we deployed capital of $101.4 million for the development, redevelopment, and capital improvement of our real estate properties, comprised of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
|
(in thousands) |
|
2025 |
|
|
2024 |
|
|
Change |
|
Capital expenditures: |
|
|
|
|
|
|
|
|
|
Land acquisitions |
|
$ |
— |
|
|
|
7,836 |
|
|
|
(7,836 |
) |
Building and tenant improvements |
|
|
19,094 |
|
|
|
17,914 |
|
|
|
1,180 |
|
Redevelopment costs |
|
|
35,344 |
|
|
|
19,938 |
|
|
|
15,406 |
|
Development costs |
|
|
38,721 |
|
|
|
9,113 |
|
|
|
29,608 |
|
Capitalized interest |
|
|
1,653 |
|
|
|
1,622 |
|
|
|
31 |
|
Capitalized direct compensation |
|
|
6,574 |
|
|
|
4,427 |
|
|
|
2,147 |
|
Real estate development and capital improvements |
|
$ |
101,386 |
|
|
|
60,850 |
|
|
|
40,536 |
|
•We acquired one land parcel for development in 2024.
•Building and tenant improvements increased $1.2 million in 2025, primarily related to the timing and volume of capital projects.
•Redevelopment costs are higher than prior year. We intend to continuously improve our portfolio of shopping centers through redevelopment which can include adjacent land acquisitions, existing building expansions, facade renovations, new out-parcel building constructions, and redevelopments related tenant improvement costs. The size and magnitude of each redevelopment project varies with each redevelopment plan. The timing and duration of these projects could also result in volatility in NOI. See the tables below for more details about our redevelopment projects.
•Development costs are higher in 2025 due to the progress towards completion of our development projects in process. See the tables below for more details about our development projects.
•Interest is capitalized on our development and redevelopment projects and is based on cumulative actual costs incurred. We cease interest capitalization when the property is no longer being developed or is available for occupancy upon substantial completion of tenant improvements, but in no event would we capitalize interest on the project beyond 12 months after the anchor tenant opens for business. If we reduce our development and redevelopment activity, the amount of interest that we capitalize may be lower than historical averages.
•We have a dedicated staff of employees who directly support our development program, which includes redevelopment of our existing properties. Internal compensation costs directly attributable to these activities are capitalized as part of each project.
The following table summarizes our development projects in-process and completed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except cost PSF) |
|
|
|
|
|
|
|
March 31, 2025 |
|
Property Name |
|
Market |
|
Ownership (1) |
|
Start
Date |
|
Estimated
Stabilization
Year (2) |
|
Estimated / Actual Net
Development
Costs (1) (3) |
|
|
GLA (1) |
|
|
Cost PSF
of GLA (1) (3) |
|
|
% of Costs Incurred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Developments In-Process |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Baybrook East - Phase 1B |
|
Houston, TX |
|
50% |
|
Q2-2022 |
|
2026 |
|
|
9,792 |
|
|
|
77 |
|
|
|
127 |
|
|
|
89 |
% |
Sienna Grande - Phase 1 |
|
Houston, TX |
|
75% |
|
Q2-2023 |
|
2027 |
|
|
9,409 |
|
|
|
23 |
|
|
|
409 |
|
|
|
83 |
% |
The Shops at SunVet |
|
Long Island, NY |
|
100% |
|
Q2-2023 |
|
2027 |
|
|
92,863 |
|
|
|
172 |
|
|
|
540 |
|
|
|
67 |
% |
The Shops at Stone Bridge |
|
Cheshire, CT |
|
100% |
|
Q1-2024 |
|
2027 |
|
|
68,277 |
|
|
|
155 |
|
|
|
440 |
|
|
|
57 |
% |
Jordan Ranch Market |
|
Houston, TX |
|
50% |
|
Q3-2024 |
|
2027 |
|
|
23,006 |
|
|
|
81 |
|
|
|
284 |
|
|
|
40 |
% |
Oakley Shops at Laurel Fields |
|
Bay Area, CA |
|
100% |
|
Q3-2024 |
|
2027 |
|
|
35,500 |
|
|
|
78 |
|
|
|
455 |
|
|
|
34 |
% |
Total Developments In-Process |
|
|
|
|
|
|
|
$ |
238,847 |
|
|
|
586 |
|
|
|
408 |
|
|
|
58 |
% |
(1)Estimated net development costs and GLA are reported based on Regency’s ownership interest in the real estate partnership at completion.
(2)Estimated Stabilization Year represents the estimated first full calendar year that the project will reach our expected stabilized yield.
(3)Includes leasing costs and is net of tenant reimbursements.
The following table summarizes our redevelopment projects in process and completed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except cost PSF) |
|
|
|
|
|
|
|
March 31, 2025 |
|
Property Name |
|
Market |
|
Ownership (1) |
|
Start Date |
|
Estimated Stabilization Year (2) |
|
Estimated Net
Project Costs (1) (3) |
|
|
% of Costs Incurred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redevelopments In-Process |
|
|
|
|
|
|
|
|
|
|
|
|
Bloom on Third |
|
Los Angeles, CA |
|
35% |
|
Q4-2022 |
|
2027 |
|
$ |
24,525 |
|
|
|
60 |
% |
Serramonte Center - Phase 3 |
|
San Francisco, CA |
|
100% |
|
Q2-2023 |
|
2025 |
|
|
36,989 |
|
|
|
32 |
% |
Circle Marine Shops & Marketplace |
|
Los Angeles, CA |
|
100% |
|
Q3-2023 |
|
2025 |
|
|
14,986 |
|
|
|
87 |
% |
Avenida Biscayne |
|
Miami, FL |
|
100% |
|
Q4-2023 |
|
2026 |
|
|
22,743 |
|
|
|
56 |
% |
Cambridge Square |
|
Atlanta, GA |
|
100% |
|
Q4-2023 |
|
2026 |
|
|
14,377 |
|
|
|
65 |
% |
Anastasia Plaza |
|
Jacksonville, FL |
|
100% |
|
Q3-2024 |
|
2026 |
|
|
15,607 |
|
|
|
14 |
% |
East Meadow Plaza - Phase 1 |
|
Long Island, NY |
|
100% |
|
Q3-2024 |
|
2026 |
|
|
11,736 |
|
|
|
53 |
% |
West Chester Plaza |
|
Cincinnati, OH |
|
100% |
|
Q4-2024 |
|
2028 |
|
|
15,442 |
|
|
|
34 |
% |
Willows Shopping Center |
|
Bay Area, CA |
|
100% |
|
Q4-2024 |
|
2027 |
|
|
16,807 |
|
|
|
11 |
% |
Various Redevelopments |
|
Various |
|
20% - 100% |
|
Various |
|
Various |
|
|
86,463 |
|
|
|
42 |
% |
Total Redevelopments In-Process |
|
|
|
|
|
|
|
$ |
259,675 |
|
|
|
44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redevelopments Completed |
|
|
|
|
|
|
|
|
|
|
|
|
Various Properties |
|
Various |
|
40% - 100% |
|
Various |
|
Various |
|
|
5,279 |
|
|
|
93 |
% |
Total Redevelopments Completed |
|
|
|
|
|
|
|
$ |
5,279 |
|
|
|
93 |
% |
(1)Estimated net development costs are reported based on Regency’s ownership interest in the real estate partnership at completion.
(2)Estimated Stabilization Year represents the estimated first full calendar year that the project will reach our expected stabilized yield.
(3)Includes leasing costs and is net of tenant reimbursements.
Net cash provided by financing activities:
Net cash flows provided by financing activities decreased by $77.6 million during 2025, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
|
(in thousands) |
|
2025 |
|
|
2024 |
|
|
Change |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
Tax withholding on stock-based compensation |
|
$ |
(6,760 |
) |
|
|
(8,730 |
) |
|
|
1,970 |
|
Contributions from noncontrolling interests |
|
|
2,977 |
|
|
|
1,472 |
|
|
|
1,505 |
|
Distributions to and redemptions of noncontrolling interests |
|
|
(3,510 |
) |
|
|
(4,364 |
) |
|
|
854 |
|
Dividend payments and operating partnership distributions |
|
|
(131,870 |
) |
|
|
(127,662 |
) |
|
|
(4,208 |
) |
Proceeds from (repayment of) unsecured credit facilities, net |
|
|
200,000 |
|
|
|
(122,000 |
) |
|
|
322,000 |
|
Proceeds from issuance of fixed rate unsecured notes, net of debt discount |
|
|
10,000 |
|
|
|
398,468 |
|
|
|
(388,468 |
) |
Debt repayment |
|
|
(35,335 |
) |
|
|
(10,780 |
) |
|
|
(24,555 |
) |
Payment of loan costs |
|
|
(194 |
) |
|
|
(13,289 |
) |
|
|
13,095 |
|
Proceeds from sale of treasury stock |
|
|
462 |
|
|
|
210 |
|
|
|
252 |
|
Net cash provided by financing activities |
|
$ |
35,770 |
|
|
|
113,325 |
|
|
|
(77,555 |
) |
Significant financing activities during the three months ended March 31, 2025 and 2024, include the following:
•The taxes withheld in conjunction with vesting of equity award plans to satisfy employee tax withholding requirements totaled $6.8 million and $8.7 million during 2025 and 2024, respectively.
•During 2025, we received $3.0 million in contributions for the limited partners' share of development funding compared to $1.5 million in 2024.
•During 2025, we distributed $3.5 million to limited partners, including proceeds to partially redeem a non-controlling interest in one real estate partnership, compared to $4.4 million in 2024.
•We paid $4.2 million more in dividends as a result of an increase in our dividend rate per share and the number of shares of our common stock outstanding.
•We had the following debt related activity during 2025:
oWe drew $200.0 million in net proceeds from our Line,
oWe received $10.0 million in proceeds from a mortgage refinancing,
oWe paid $35.3 million for debt repayments, including:
▪$32.8 million for repaying two mortgage loans at maturity, and
▪$2.5 million in principal mortgage payments.
•We had the following debt related activity during 2024:
oWe had $122.0 million in net repayments on our Line,
oWe received $398.5 million in proceeds from issuing unsecured public debt,
oWe paid $10.8 million for debt repayments, including:
▪$3.2 million in principal mortgage payments, and
▪$7.6 million for repaying one mortgage loan ahead of maturity,
oWe paid $13.3 million in loan costs relating to the recast of the Line as well as the unsecured public debt offering.
Investments in Real Estate Partnerships
The following table is a summary of the unconsolidated combined assets and liabilities of our real estate partnerships and our Pro-rata share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined |
|
|
Regency's Share (1) |
|
(dollars in thousands) |
|
March 31, 2025 |
|
|
December 31, 2024 |
|
|
March 31, 2025 |
|
|
December 31, 2024 |
|
Number of real estate partnerships |
|
|
18 |
|
|
|
19 |
|
|
|
|
|
|
|
Regency's ownership |
|
12% - 83% |
|
|
12% - 83% |
|
|
|
|
|
|
|
Number of properties |
|
|
102 |
|
|
|
103 |
|
|
|
|
|
|
|
Assets |
|
$ |
2,808,448 |
|
|
|
2,843,157 |
|
|
$ |
1,042,939 |
|
|
|
1,061,072 |
|
Liabilities |
|
|
1,653,665 |
|
|
|
1,676,507 |
|
|
|
607,030 |
|
|
|
616,718 |
|
Equity |
|
|
1,154,783 |
|
|
|
1,166,650 |
|
|
|
435,909 |
|
|
|
444,354 |
|
Basis difference |
|
|
|
|
|
|
(46,734 |
) |
|
|
(45,310 |
) |
Investments in real estate partnerships |
|
|
|
|
|
$ |
389,175 |
|
|
|
399,044 |
|
(1)Pro-rata financial information is not, and is not intended to be, a presentation in accordance with GAAP. However, management believes that providing such information is useful to investors in assessing the impact of our investments in real estate partnership activities on our operations, which includes such items on a single line presentation under the equity method in our Consolidated Financial Statements.
Our equity method investments in real estate partnerships consist of the following:
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Regency's Ownership |
|
March 31, 2025 |
|
|
December 31, 2024 |
|
GRI - Regency, LLC (GRIR) |
|
40% |
|
$ |
133,755 |
|
|
|
136,972 |
|
Columbia Regency Partners II, LLC (Columbia II) |
|
20% |
|
|
64,367 |
|
|
|
63,024 |
|
Columbia Village District, LLC |
|
30% |
|
|
6,540 |
|
|
|
6,434 |
|
Individual Investors |
|
|
|
|
|
|
|
|
Ballard Blocks |
|
50% |
|
|
59,153 |
|
|
|
59,596 |
|
Bloom on Third |
|
35% |
|
|
45,166 |
|
|
|
44,715 |
|
Others (1) |
|
12% - 83% |
|
|
80,194 |
|
|
|
88,303 |
|
Total Investment in real estate partnerships |
|
|
|
$ |
389,175 |
|
|
$ |
399,044 |
|
(1)Effective January 1, 2025, we acquired our partner’s 33.3% share in a single property partnership for a total purchase price of $10.3 million. Following this acquisition, the Company now owns 100% of this property, and the property has been consolidated into the Company’s financial statements.
Notes Payable - Investments in Real Estate Partnerships
Scheduled principal repayments on notes payable held by our investments in real estate partnerships were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
March 31, 2025 |
|
Scheduled Principal Payments and Maturities by Year: |
|
Scheduled
Principal
Payments |
|
|
Mortgage
Loan
Maturities |
|
|
Unsecured
Maturities |
|
|
Total |
|
|
Regency’s
Pro-Rata
Share |
|
2025 (1) |
|
$ |
5,227 |
|
|
|
126,012 |
|
|
|
— |
|
|
|
131,239 |
|
|
|
44,162 |
|
2026 |
|
|
6,989 |
|
|
|
281,683 |
|
|
|
48,300 |
|
|
|
336,972 |
|
|
|
116,077 |
|
2027 |
|
|
7,152 |
|
|
|
32,800 |
|
|
|
— |
|
|
|
39,952 |
|
|
|
13,386 |
|
2028 |
|
|
3,935 |
|
|
|
231,235 |
|
|
|
— |
|
|
|
235,170 |
|
|
|
81,559 |
|
2029 |
|
|
2,841 |
|
|
|
93,500 |
|
|
|
— |
|
|
|
96,341 |
|
|
|
34,967 |
|
Beyond 5 Years |
|
|
3,847 |
|
|
|
711,324 |
|
|
|
— |
|
|
|
715,171 |
|
|
|
280,111 |
|
Net unamortized loan costs, debt premium / (discount) |
|
|
— |
|
|
|
(7,888 |
) |
|
|
— |
|
|
|
(7,888 |
) |
|
|
(2,928 |
) |
Total |
|
$ |
29,991 |
|
|
|
1,468,666 |
|
|
|
48,300 |
|
|
|
1,546,957 |
|
|
|
567,334 |
|
(1)Reflects scheduled principal payments and maturities for the remainder of the year.
At March 31, 2025, our investments in real estate partnerships had notes payable of $1.5 billion maturing through 2034, of which 91.8% had a weighted average fixed interest rate of 3.9%. The remaining notes payable float with SOFR and had a weighted average variable interest rate of 6.5%, based on rates as of March 31, 2025. These fixed and variable rate notes payable are all non-recourse, and our Pro-rata share was $567.3 million as of March 31, 2025. As notes payable mature, they will be repaid from proceeds from new borrowings and/or partner capital contributions. Refinancing debt at maturity in the current interest rate environment could result in higher interest expense in future periods if rates remain elevated.
We are obligated to contribute our Pro-rata share to fund maturities if the loans are not refinanced, and we have the capacity to do so from existing cash balances, availability on our line of credit, and operating cash flows. We believe that our partners are financially sound and have sufficient capital or access thereto to fund future capital requirements. In the event that a real estate investment partner is unable to fund its share of the capital requirements of the real estate partnership, we would have the right, but not the obligation, to loan the defaulting partner the amount of its capital call which would be secured by the partner's membership interest.
Management fee income
In addition to earning our share of net income or loss in each of these real estate partnerships, we receive fees as follows:
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
(in thousands) |
|
2025 |
|
|
2024 |
|
Management, transaction, and other fees |
|
$ |
6,812 |
|
|
|
6,396 |
|
Critical Accounting Estimates
There have been no material changes in our Critical Accounting Estimates from the information provided in the "Critical Accounting Estimates" section of "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to two significant components of interest rate risk:
•Under the Line, we have a variable interest rate that, as of March 31, 2025, was based upon an annual rate of SOFR plus a 0.10% market adjustment ("Adjusted SOFR") plus an applicable margin of 0.715%. SOFR rates charged on our Line change monthly, and the applicable margin on the Line is dependent upon maintaining specific credit ratings or leverage targets, as well as meeting specific sustainability target thresholds. If our credit ratings were downgraded or if we fail to meet the leverage targets or sustainability target thresholds, the applicable margin on the Line would increase, resulting in higher interest costs. As of March 31, 2025 the Adjusted SOFR plus the applicable margin of 0.715% was 5.165%.
•We are also exposed to changes in interest rates when we refinance our existing long-term fixed rate debt. The objective of our interest rate risk management program is to limit the impact of interest rate changes on earnings and cash flows. To achieve these objectives, we borrow primarily at fixed interest rates and may enter into derivative financial instruments such as interest rate swaps, caps, or treasury locks in order to mitigate our interest rate risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes. Our interest rate swaps are structured solely for the purpose of interest rate protection.
We continuously monitor the capital markets and evaluate our ability to issue new debt, to repay maturing debt, or to fund our commitments. We continue to believe, in light of our credit ratings, the available capacity under our unsecured credit facility, and the number of high quality, unencumbered properties that we own which could collateralize borrowings, we will be able to successfully issue new secured or unsecured debt to fund maturing debt obligations. It is uncertain the degree to which capital market volatility and higher interest rates will adversely impact the interest rates on any new debt that we may issue.
The table below presents the principal cash flows, weighted average interest rates of remaining debt, and the fair value of total debt as of March 31, 2025. For variable rate mortgages and unsecured credit facilities for which we have interest rate swaps in place to fix the interest rate, they are included in the Fixed rate debt section below at their all-in fixed rate. The table is presented by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes. Although the average interest rate for variable rate debt is included in the table, those rates represent rates that existed as of March 31, 2025, and are subject to change. In addition, we continually assess the market risk for floating rate debt and believe that an increase of 100 basis points in interest rates would decrease future earnings and cash flows by approximately $2.7 million per year based on $274.6 million of floating rate mortgage debt and floating rate line of credit balances outstanding at March 31, 2025.
Further, the table below incorporates only those exposures that exist as of March 31, 2025, and does not consider exposures or positions that could arise after that date or obligations repaid before maturity. Since firm but unused commitments are not presented, the table has limited predictive value. As a result, our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, our hedging strategies at that time, and actual interest rates.
The table below presents the principal cash flow payments associated with our outstanding debt by year, weighted average interest rates on debt outstanding at each year-end, and fair value of total debt as of March 31, 2025.
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(dollars in thousands) |
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2025 |
|
|
2026 |
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2027 |
|
|
2028 |
|
|
2029 |
|
|
Thereafter |
|
|
Total |
|
|
Fair Value |
|
Fixed rate debt (1) |
|
$ |
273,545 |
|
|
|
358,173 |
|
|
|
754,996 |
|
|
|
357,583 |
|
|
|
524,906 |
|
|
|
2,133,636 |
|
|
|
4,402,839 |
|
|
|
4,203,641 |
|
Average interest rate for all fixed rate debt (2) |
|
|
4.11 |
% |
|
|
4.13 |
% |
|
|
4.24 |
% |
|
|
4.22 |
% |
|
|
4.48 |
% |
|
|
4.78 |
% |
|
|
|
|
|
|
Variable rate SOFR debt (1) |
|
$ |
90 |
|
|
|
120 |
|
|
|
3,870 |
|
|
|
270,525 |
|
|
|
— |
|
|
|
— |
|
|
|
274,605 |
|
|
|
274,761 |
|
Average interest rate for all variable rate debt (2) |
|
|
5.21 |
% |
|
|
5.21 |
% |
|
|
5.20 |
% |
|
|
5.20 |
% |
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|
|
|
|
|
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|
(1)Reflects amount of debt maturities during each of the years presented as of March 31, 2025.
(2)Reflects weighted average interest rates of debt outstanding at the end of each year presented. For variable rate debt, the rate as of March 31, 2025, was used to determine the average interest rate for all future periods.
Item 4. Controls and Procedures
Controls and Procedures (Regency Centers Corporation)
Under the supervision and with the participation of the Parent Company's management, including its chief executive officer and chief financial officer, the Parent Company conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on this evaluation, the Parent Company's chief executive officer and chief financial officer concluded that its disclosure controls and procedures were effective as of the end of the periods covered by this quarterly report on Form 10-Q to ensure information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Parent Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
There have been no changes in the Parent Company's internal controls over financial reporting identified in connection with this evaluation that occurred during the quarter ended March 31, 2025 which have materially affected, or are reasonably likely to materially affect, the Parent Company’s internal controls over financial reporting.
Controls and Procedures (Regency Centers, L.P.)
Under the supervision and with the participation of the Operating Partnership's management, including the chief executive officer and chief financial officer of its general partner, the Operating Partnership conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act. Based on this evaluation, the chief executive officer and chief financial officer of its general partner concluded that the Operating Partnership's disclosure controls and procedures were effective as of the end of the periods covered by this quarterly report on Form 10-Q to ensure information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Operating Partnership in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the chief executive officer and chief financial officer of its general partner, as appropriate, to allow timely decisions regarding required disclosure.
There have been no changes in the Operating Partnership's internal controls over financial reporting identified in connection with this evaluation that occurred during the quarter ended March 31, 2025 which have materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal controls over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
See Note 13 — Commitments and Contingencies in the Notes for discussion regarding material legal proceedings and contingencies. Except as set forth in such discussion, there have been no material developments in legal proceedings as reported in Item 3. "Legal Proceedings" of our 2024 Form 10-K.
Item 1A. Risk Factors
In addition to the information set forth in this report, you should carefully consider the risk factors discussed in Item 1A. of Part I of our Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Annual Report”) and the additional risk factor identified during 2025 detailed below:
Evolving political and economic events and uncertainties, including tariffs, retaliatory tariffs, international trade disputes, and immigration policies could adversely impact the businesses of our tenants and our business.
The success of the Company's tenants in operating their businesses and their corresponding ability to pay rent continue to be influenced by evolving political, economic, trade and immigration policies and macroeconomic uncertainties, and the success of the Company's tenants, in the aggregate, is important to the operating and financial success of the Company. These issues include, but are not limited to, the potential for impacts from tariffs and potential trade disputes, retaliatory actions by other countries, inflation, the cost and availability of labor, including labor shortages related to deportations or threat of deportations, increasing energy prices and interest rates, supply chain disruptions, and access to and cost of credit. Additionally, geopolitical and macroeconomic challenges, including the war involving Russia and Ukraine, the current Middle East conflicts and wars, and economic conflicts with China, as well as the slowing of its economy, could impact aspects of the U.S. economy and, therefore, consumer confidence and spending. The policies implemented by the U.S. government to address these and related issues, including changes by the Board of Governors of the Federal Reserve System of its benchmark federal funds rate, increases or decreases in federal government spending, and economic sanctions and tariffs, could result in adverse impacts on the U.S. economy, including inflation, reduction in consumer confidence and spending, a slowing of growth, and potentially a recession, thereby adversely impacting the costs to our tenants of operating their businesses, demand for their products and services, and their ability to pay rent, and/or decreasing future demand for space in shopping centers, which could adversely impact occupancy rates and rents. The potential impact of current macroeconomic and geopolitical uncertainties on the Company's financial condition, results of operations, and cash flows is subject to change and continues to depend on the extent and duration of these risks and uncertainties.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
There were no unregistered sales of equity securities during the three months ended March 31, 2025.
The following table represents information with respect to purchases by the Parent Company of its common stock, by month, during the three months ended March 31, 2025:
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Period |
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Total number of shares purchased (1) |
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|
Average price paid per share |
|
|
Total number of shares purchased as part of publicly announced plans or programs (2) |
|
|
Maximum number or approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) (2) |
|
January 1 through January 31, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
250,000 |
|
February 1 through February 28, 2025 |
|
|
95,361 |
|
|
$ |
70.89 |
|
|
|
— |
|
|
$ |
250,000 |
|
March 1 through March 31, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
250,000 |
|
(1)Represents shares repurchased to cover payment of withholding taxes in connection with restricted stock vesting by participants under Regency’s Long-Term Omnibus Plan.
(2)Our Board has authorized a common stock repurchase program under which we may purchase up to a maximum of $250 million of our outstanding common stock through open market purchases, and/or in privately negotiated transactions. The timing and price of stock repurchases will be dependent upon market conditions and other factors. Any stock repurchased, if not retired, will be treated as treasury stock. This program will expire on June 30, 2026, unless modified, extended or earlier terminated by the Board in its discretion.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Plans
During the fiscal quarter ended March 31, 2025, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" (as those terms are defined in Item 408 of Regulation S-K).
Item 6. Exhibits
Unless otherwise indicated below, the Commission file number to the exhibit is No. 001-12298 (Regency Centers Corporation) and No. 000-24763 (Regency Centers, L.P.).
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101. |
Interactive Data Files |
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101.INS |
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
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|
101.SCH |
Inline XBRL Taxonomy Extension Schema with embedded linkbases document |
104. |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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May 2, 2025 |
REGENCY CENTERS CORPORATION |
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By: |
/s/ Michael J. Mas |
|
|
Michael J. Mas, Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
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By: |
/s/ Terah L. Devereaux |
|
|
Terah L. Devereaux, Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) |
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May 2, 2025 |
REGENCY CENTERS, L.P. |
|
By: |
Regency Centers Corporation, General Partner |
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By: |
/s/ Michael J. Mas |
|
|
Michael J. Mas, Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
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By: |
/s/ Terah L. Devereaux |
|
|
Terah L. Devereaux, Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) |