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Regency Centers (REG) Beats on Q1 FFO & Revenues, Raises View

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Regency Centers Corporation’s REG first-quarter 2022 NAREIT funds from operations (FFO) per share were $1.03, surpassing the Zacks Consensus Estimate of 93 cents. On a year-over-year basis, NAREIT (FFO) per share improved 14.4% from the prior-year period’s 90 cents.

The quarterly results reflect higher-than-anticipated top-line growth and robust leasing activity.

Total revenues of $303.4 million exceeded the Zacks Consensus Estimate of $297.4 million. Moreover, revenues jumped 10.5% from the prior-year quarter’s $274.7 million.

According to Lisa Palmer, president and CEO of Regency Centers, “The vibrancy of today’s retail environment is evidenced in our healthy operating trends, including robust leasing activity that is resulting in increased occupancy and growing rents.”

Inside the Headlines

During the first quarter, Regency Centers executed 1.7 million square feet of comparable new and renewal leases at a blended rent spread of 6.5%.

As of Mar 31, 2022, REG’s wholly-owned portfolio and its pro-rata shares of co-investment partnerships were 93.9% leased. Its same-property portfolio was 94.3% leased, reflecting an expansion of 170 basis points (bps) year over year.

The same-property anchor percent leased (includes spaces greater than or equal to 10,000 square feet) was 96.6%, marking a contraction of 30 bps sequentially.

The same-property shop percent leased (includes spaces less than 10,000 square feet) was 90.3%, highlighting an expansion of 40 bps from the prior quarter.

The same-property NOI, excluding termination fees, climbed 7.8% on a year-over-year basis to $219.3 million.

Portfolio Activity

During the first quarter, Regency Centers started more than $50 million of development and redevelopment projects and completed redevelopment projects with combined costs of approximately $9 million, each at the company’s share.

As of Mar 31, 2022, Regency Centers’ in-process development and redevelopment projects had estimated net project costs of $348 million and an estimated $150 million of remaining costs to complete these projects, each at the company’s share.

Additionally, in the reported quarter, REG completed property acquisitions of $41 million and property dispositions of $138 million, each at the company’s share.

Balance Sheet

As of Mar 31, 2022, Regency Centers had cash, cash equivalents and restricted cash of $178.7 million, up from $95 million as of Dec 31, 2021. The company’s net debt was $4.1 billion for the same period.

The retail REIT had full capacity under its $1.2-billion revolving credit facility. As of March-end, its pro-rata net debt-to-operating EBITDAre was 4.9X compared with 5.1X as of Dec 31, 2021.

Dividend Update

On Apr 29, Regency Centers’ board of directors announced a quarterly cash dividend of 62.5 cents per share on its common stock. The dividend will be paid out on Jul 6 to its shareholders on record as of Jun 15, 2022.

Outlook

Regency Centers raised its 2022 guidance.

Management now projects the current-year NAREIT FFO per share to lie in the range of $3.84-$3.90, revised upward from $3.72-$3.80 guided earlier. The range is above the Zacks Consensus Estimate of $3.79.

Management now estimates the same-property NOI (excluding termination fees) between 0% and 1.5%, up from -1.25-0.25% projected earlier.

Regency Centers currently carries a Zacks Rank #4 (Sell).


You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Regency Centers Corporation Price, Consensus and EPS Surprise

Regency Centers Corporation Price, Consensus and EPS Surprise
Regency Centers Corporation Price, Consensus and EPS Surprise

Regency Centers Corporation price-consensus-eps-surprise-chart | Regency Centers Corporation Quote

Performance of Other REITs

Boston Properties, Inc.’s BXP first-quarter 2022 FFO per share of $1.82 beat the Zacks Consensus Estimate of $1.74. The figure also compared favorably with the year-ago quarter’s $1.56.

BXP’s quarterly results reflect decent growth in lease revenues. Also, it experienced strong leasing activity during the quarter.

Quarterly revenues of Boston Properties from lease came in at $718.1 million, up 4.7% from $685.8 million in the year-ago quarter. Moreover, the figure surpassed the consensus mark of $700.6 million.

Mid-America Apartment Communities, Inc. MAA, commonly referred to as MAA, reported first-quarter 2022 core FFO per share of $1.97, surpassing the Zacks Consensus Estimate of $1.92. The reported number increased 20.1% year over year.

MAA’s quarterly results were driven by an increase in the average effective rent per unit for the same-store portfolio. The average physical occupancy for the same-store portfolio also increased year over year.

The rental and other property revenues came in at $476.1 million, outpacing the Zacks Consensus Estimate of $474.20 million. The reported figure was 12% higher than the previous-year quarter’s $425 million.

AvalonBay Communities, Inc.’s AVB first-quarter 2022 core FFO per share of $2.26 matched the Zacks Consensus Estimate.

However, total revenues of $613.9 million lagged the consensus estimate of $615.4 million.

On a year-over-year basis, AVB’s core FFO per share increased 15.9% and total revenues grew 11.4%.

The first-quarter results reflected a year-over-year increase in same-store residential revenues, partially offset by rising operating expenses.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.


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