Regency Centers (REG) Q2 FFO & Revenues Beat, '23 View Revised
Regency Centers Corporation’s REG second-quarter 2023 NAREIT funds from operations (FFO) per share of $1.03 surpassed the Zacks Consensus Estimate of $1.01. Moreover, the figure improved 3% from the prior-year quarter’s $1.
Total revenues of $314.2 million increased 4% from the year-ago period’s $302.1 million. The figure also outpaced the Zacks Consensus Estimate and our estimate of $313.3 million.
Results reflect a better-than-anticipated top line, healthy leasing activity and year-over-year improvement in base rent. The company also revised its 2023 outlook.
In the reported quarter, Regency Centers entered into a definitive merger agreement to acquire Urstadt Biddle in an all-stock transaction, which includes the assumption of debt and preferred stock. The transaction is expected to close in mid-to-late August 2023, subject to shareholder approval and other closing conditions.
Behind the Headlines
In the second quarter, Regency Centers executed approximately 2 million square feet of comparable new and renewal leases, at a blended cash rent spread of 11.7%.
As of Jun 30, 2023, REG’s wholly owned portfolio and its pro-rata share of co-investment partnerships were 94.6% leased. Its same-property portfolio was 95.2% leased, reflecting an expansion of 70 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%, which declined 10 bps from the prior-year period. The same-property shop percent leased (includes spaces less than 10,000 square feet) was 92.7%, which rose 60 bps sequentially and 170 bps year over year.
The same-property net operating income (NOI), excluding lease termination fees, increased 1.5% on a year-over-year basis to $223.2 million. An increase in same-property base rents contributed 3.8% to same-property NOI growth in the quarter.
As of Jun 30, 2023, Regency Centers’ in-process development and redevelopment projects estimated net project costs of around $410 million at the company’s share. So far, it has incurred 44% of the cost.
Balance Sheet
The company ended the second quarter of 2023 with cash, cash equivalents and restricted cash of $43.1 million, down from $68.1 million as of Mar 31, 2023.
As of Jun 30, 2023, this retail REIT had $1.2 billion under its revolving credit facility. As of the same date, its pro-rata net debt-to-operating EBITDAre was 4.9X on a trailing 12-month basis.
Dividend Update
On Aug 1, Regency Centers’ board of directors declared a quarterly cash dividend payment on its common stock of 65 cents. The dividend will be paid out on Oct 4, to its shareholders of record as of Sep 14, 2023.
2023 Outlook Revised
The company revised its 2023 guidance.
The current-year NAREIT FFO per share is now expected in the range of $4.11-4.15, revised from the prior-guided range of $4.07-$4.15. The Zacks Consensus Estimate is presently pegged at $4.12, within the guided range.
The same-property NOI (excluding termination fees) is expected between 1% and 1.5%, revised upward from the previous estimation of 0.5-1.5%.
Regency Centers currently carries a Zacks Rank #2 (Buy). 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-eps-surprise-chart | Regency Centers Corporation Quote
Performance of Other REITs
Realty Income Corporation’s O second-quarter 2023 adjusted funds from operations per share of $1.00 beat the Zacks Consensus Estimate of 99 cents by a penny. The reported figure also compared favorably with the prior-year quarter’s 97 cents.
O’s results reflect better-than-expected revenues in the quarter. The company benefited from expansionary effects and a healthy pipeline of opportunities globally.
Kimco Realty Corp. KIM reported second-quarter 2023 FFO per share of 39 cents, in line with the Zacks Consensus Estimate. The figure was only a cent lower than the year-ago quarter’s tally.
Results reflect better-than-anticipated revenues, aided by rental rate growth and a rise in occupancy levels. Kimco also revised its 2023 FFO per share outlook.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Kimco Realty Corporation (KIM) : Free Stock Analysis Report
Regency Centers Corporation (REG) : Free Stock Analysis Report
Realty Income Corporation (O) : Free Stock Analysis Report
