Regency Centers (REG) Q3 FFO Beats Estimates, '23 View Raised
Regency Centers Corporation’s REG third-quarter 2023 NAREIT funds from operations (FFO) per share of $1.02 surpassed both the Zacks Consensus Estimate and the prior-year quarter’s figure of $1.01.
Total revenues of $330.6 million increased 8.8% from the year-ago period. However, the figure narrowly missed the Zacks Consensus Estimate of $331.7 million.
Results reflect healthy leasing activity and a year-over-year improvement in the base rent. The company also raised its dividend and 2023 outlook.
Behind the Headlines
In the third quarter, Regency Centers executed approximately 1.8 million square feet of comparable new and renewal leases at a blended cash rent spread of 9.3%.
As of Sep 30, 2023, REG’s wholly owned portfolio and pro-rata share of co-investment partnerships were 94.6% leased. Its same-property portfolio was 95.4% leased, reflecting an expansion of 20 basis points (bps) sequentially and 70 bps year over year.
The same-property anchor percent leased (includes spaces greater than or equal to 10,000 square feet) was 96.7%, which increased 10 bps sequentially but declined 10 bps year over year.
The same-property shop percent leased (includes spaces less than 10,000 square feet) was 93.2%, which rose 50 bps sequentially and 180 bps year over year.
The same-property net operating income (NOI), excluding lease termination fees, increased 2.1% on a year-over-year basis to $223.7 million. Same-property base rents contributed 3.2% to same-property NOI growth in the quarter.
As of Sep 30, 2023, Regency Centers’ in-process development and redevelopment projects estimated net project costs of around $440 million at the company’s share. So far, it has incurred 46% of the cost.
During the quarter, REG accomplished its previously announced acquisition of Urstadt Biddle in an all-stock transaction, including the assumption of debt and the issuance of preferred stock.
Moreover, in September, it acquired a 20% stake in Old Town Square, a Jewel-Osco-anchored shopping center in Chicago, IL, for $5.5 million at Regency’s share.
Balance Sheet
The company ended the third quarter of 2023 with cash, cash equivalents and restricted cash of $81.1 million, up from $68.8 million as of Dec 31, 2022.
As of Sep 30, 2023, this retail REIT had nearly $1.2 billion of capacity under its revolving credit facility. As of the same date, its pro-rata net debt-to-operating EBITDAre was 5.5X on a trailing 12-month basis.
Dividend Update
On Nov 2, Regency Centers’ board of directors declared a quarterly cash dividend payment on its common stock of 67 cents, reflecting an increase of 3.1% from the prior quarterly dividend. The dividend will be paid out on Jan 3, 2024 to its shareholders of record as of Dec 14, 2023.
2023 Outlook Revised
Regency Centers raised the 2023 NAREIT FFO per share guidance to the range of $4.13-$4.15 from the prior-guided range of $4.11-4.15. The Zacks Consensus Estimate is presently pegged at $4.15, within the guided range.
The same-property NOI (excluding termination fees) is expected to be +/-1.5%, revised upward from the previous estimation of 1-1.5%.
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-eps-surprise-chart | Regency Centers Corporation Quote
Performance of Other Retail REITs
Simon Property Group, Inc.’s SPG third-quarter 2023 FFO per share of $3.20 surpassed the Zacks Consensus Estimate of $2.98. Also, the figure increased 9.2% year over year. Results reflected better-than-anticipated revenues on healthy leasing activity and a rise in the base rent per square foot and occupancy levels. However, higher property operating expenses and interest expenses partly offset the upsides. However, this retail behemoth raised its 2023 FFO per share outlook.
Kimco Realty Corp. KIM reported a third-quarter 2023 FFO per share of 40 cents, ahead of the Zacks Consensus Estimate of 39 cents. The figure was only a cent lower than the year-ago quarter’s tally. Results reflected better-than-anticipated revenues, aided by rental rate growth and healthy occupancy levels. Kimco raised its 2023 FFO per share outlook and also announced a hike in its 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.
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
Simon Property Group, Inc. (SPG) : Free Stock Analysis Report
Kimco Realty Corporation (KIM) : Free Stock Analysis Report
Regency Centers Corporation (REG) : Free Stock Analysis Report
