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Regency Centers (REG) Q2 FFO & Revenues Beat, '22 View Up

·5 min read

Regency Centers Corporation’s REG second-quarter 2022 NAREIT funds from operations (FFO) per share were $1.00, surpassing the Zacks Consensus Estimate of 95 cents. On a year-over-year basis, NAREIT (FFO) per share improved by 1 cent from the prior-year period.

Regency’s results reflect better-than-anticipated top-line growth and solid leasing activity. It also raised 2022 guidance.

Total revenues of $302.1 million exceeded the Zacks Consensus Estimate of $297.8 million. Moreover, revenues jumped 5.2% from the prior-year quarter’s $287.2 million.

Inside the Headlines

During the second quarter, Regency Centers executed 1.3 million square feet of comparable new and renewal leases at a blended cash rent spread of 8.8%.

As of Jun 30, 2022, REG’s wholly-owned portfolio and its pro-rata share of co-investment partnerships were 94.2% leased. Its same-property portfolio was 94.5% leased, reflecting an expansion of 160 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 rise of 120 bps year over year.

The same-property shop percent leased (includes spaces less than 10,000 square feet) was 91%, rising 60 bps from the prior quarter and 220 bps from the year-ago quarter.

During the quarter, the same-property base rent improved 3% year over year to $221.7 million.

The same-property net operating income (NOI), excluding lease termination fees, marginally increased on a year-over-year basis to $216.3 million.

Portfolio Activity

During the second quarter, Regency Centers started nearly $50 million of development and redevelopment projects and completed redevelopment projects with combined costs of more than $12 million, each at the company’s share.

As of Jun 30, 2022, Regency Centers’ in-process development and redevelopment projects had estimated net project costs of around $390 million at the company’s share. So far, it has incurred 51% of the costs.

Additionally, in the reported quarter, REG completed property acquisitions of $130 million and property dispositions of $40 million, each at the company’s share.

Balance Sheet

Regency Centers ended the second quarter with cash, cash equivalents and restricted cash of $121.2 million, down from $178.7 million as of Mar 31, 2022.

As of Jun 30, 2022, this retail REIT had full capacity available under its $1.2-billion revolving credit facility. As of the same date, its pro-rata net debt-to-operating EBITDAre was 5.0X compared with 4.9X as of Mar 31, 2022.

During the reported quarter, REG repurchased roughly 1.3 million shares of its common stock at an average price of $58.25 per share for $75.4 million under its earlier announced stock repurchase program.

Dividend Update

On Aug 2, Regency Centers’ board of directors announced a quarterly cash dividend of 62.50 cents per share on its common stock. The dividend will be paid out on Oct 4 to its shareholders on record as of Sep 15, 2022.

2022 Outlook Raised

Regency Centers raised its 2022 guidance.

Management projects the current-year NAREIT FFO per share to lie in the range of $3.92-$3.96, revised upward from $3.84-$3.90 guided earlier. The Zacks Consensus Estimate for the same is presently pegged at $3.89.

The same-property NOI (excluding termination fees) is expected to lie between 1.25% and 2.25%, up from 0-1.5% projected earlier.

Regency Centers currently carries a Zacks Rank #3 (Hold).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 Retail REITs

Federal Realty Investment Trust’s FRT second-quarter 2022 FFO per share of $1.65 surpassed the Zacks Consensus Estimate of $1.50. This also compared favorably with the year-ago quarter’s tally of $1.41.

FRT's results reflect better-than-anticipated revenues. This retail REIT raised its guidance for 2022 FFO per share and hiked its dividend.

Kimco Realty Corp.’s KIM second-quarter 2022 FFO per diluted share came in at 40 cents, surpassing the Zacks Consensus Estimate of 38 cents. The figure grew 17.6% from the year-ago quarter’s 34 cents.

Results reflect year-over-year growth in the top line. The rise in occupancy levels and rental rate growth aided KIM’s performance. It raised 2022 FFO outlook.

Simon Property Group, Inc.’s SPG second-quarter 2022 comparable FFO per share of $2.96 exceeded the Zacks Consensus Estimate of $2.91. The figure compares favorably with the year-ago quarter’s $2.92.

SPG’s quarterly results reflected healthy operating performance and growth in occupancy levels. The retail REIT behemoth also raised the 2022 FFO per share outlook based on the quarterly results. It also announced a hike in the quarterly dividend.

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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