Regency Centers Corporation (REG) inked a deal to buy 80% stake in a shopping center portfolio in Fairfield, Conn. The portfolio is controlled by Kleban Properties, a regional developer and manager of commercial real estate assets.
The shopping center portfolio comprises three properties –The Brick Walk, Fairfield Center and Black Rock Shopping Center – positioned in prosperous areas in Fairfield. The assets totaling about 315,000 square feet boasts outlets of numerous industry leading retailers like The Gap, Inc. (GPS), L Brands, Inc. (LB) and Fidelity.
We view the above transaction as a strategic fit as it is in line with Regency’s strategic objective of expanding its footprint in high-income and high-barrier markets. With respect to this, in October, Regency and a local joint venture acquired Fellsway Plaza in Medford, Mass. for $42.5 million (Regency’s share was $31.9 million).
Also, in that same month, this retail real estate investment trust (:REIT) disclosed the development of a shopping center – Glen Gate – in Glenview, Ill. These efforts will efficiently expand Regency’s portfolio in infill locations with high occupancy levels and strong tenant sales and offer the company a considerable upside potential going forward.
Notably, driven by better-than-expected growth in revenue and higher net operating income, Regency’s third-quarter 2013 core funds from operations (core FFO) per share of 65 cents, beat the Zacks Consensus Estimate by 2 cents and the year-ago quarter figure by 3 cents. The company also raised its core FFO per share guidance for 2013.
Regency currently carries a Zacks Rank #3 (Hold). Investors interested in REIT-Equity Trust – Retail industry may consider stocks like American Assets Trust, Inc. (AAT) carrying a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.Read the Full Research Report on GPS
Read the Full Research Report on REG
Read the Full Research Report on AAT
Read the Full Research Report on LB
Zacks Investment Research
- Financials Industry
- Finance Trading
- Regency Centers Corporation