Regency Centers Updates 2017 and Introduces 2018 Earnings Guidance
Updated Full-Year 2017 Guidance | ||||
Previous |
Updated Guidance | |||
Net Income Attributable to Common Stockholders (“Net Income”) | $0.76 – $0.81 | $1.00 – $1.02 | ||
NAREIT Funds From Operations (“NAREIT FFO”) per diluted share | $3.00 – $3.05 | $3.09 – $3.11 | ||
Core Funds From Operations (“Core FFO”) per diluted share | $3.66 – $3.70 | $3.68 – $3.70 | ||
Same Property Net Operating Income (“SPNOI”) Growth excluding termination fees (pro-rata) | 3.2% – 4.0% | +/- 3.6% | ||
Initial Full-Year 2018 Guidance |
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Net Income Attributable to Common Stockholders (“Net Income”) | $1.47 – $1.56 | |
NAREIT Funds From Operations (“NAREIT FFO”) per diluted share | $3.73 – $3.82 | |
Core Funds From Operations (“Core FFO”) per diluted share | $3.76 – $3.83 | |
Operating Funds From Operations (“Operating FFO”) per diluted share | $3.48 – $3.54 | |
Same Property Net Operating Income (“SPNOI”) Growth excluding termination fees (pro-rata) | 2.25% – 3.25% | |
Updated 2017 and Initial 2018 Guidance
Net Income
The Company’s updated 2017 Net Income guidance includes incurred costs of approximately
NAREIT FFO
The Company’s updated 2017 NAREIT FFO guidance includes incurred costs of approximately
Core FFO and Introduction of Operating FFO
2017 Core FFO is now expected to be in the range of
In 2017, Regency completed its merger with
Operating FFO will continue to exclude certain non-comparable items that affect the Company’s period-over-period performance consistent with the existing definition of Core FFO. The non-cash items that will be excluded from NAREIT FFO in the determination of Operating FFO are amortization of above and below market rent, straight-line rent and amortization of mark-to-market debt adjustments. The Company will provide guidance on Operating FFO on a go-forward basis. 2018 Operating FFO is expected to be
Additional detail including a 2018 roll forward of Core FFO, a reconciliation of Operating FFO, and an Operating FFO historical lookback is provided in the guidance supplemental package on the Company’s website.
Update on Investment Activity
Update on 2017 Investment Activity
During fourth quarter 2017, the Company closed on approximately
- Scripps Ranch Marketplace (
San Diego, CA ) - In December, Regency acquired Scripps Ranch Marketplace, a 132,000 square foot neighborhood shopping center anchored by Vons for$81.6 million . Roosevelt Square (Seattle, WA ) – In December, the Company closed onRoosevelt Square , a 150,000 square foot infill retail center anchored byWhole Foods Market for$68.3 million .
During the fourth quarter of 2017, Regency sold five shopping centers, generating approximately
During the fourth quarter of 2017, Regency started the development of two projects, with the Company’s share of net estimated development costs totaling
Investment Activity Subsequent to Year-end
In 2018, Regency has closed on approximately
- Ballard Blocks I & II (
Seattle, WA ) - InJanuary 2018 , the Company acquired a 50% equity interest in Ballard Blocks I, an operating 132,000 square foot shopping center, anchored by Trader Joe’s, for$27.3 million . Regency also acquired a 50% interest in adjacent land, and concurrently announced the start of Ballard Blocks II, an 114,000 square foot joint venture development anchored byPCC Community Markets. Regency’s pro-rata share of estimated development costs in Ballard II is$31.1 million . - The District at
Metuchen (Metuchen, NJ ) – InJanuary 2018 , Regency and a co-investment partner acquired District atMetuchen , a 67,000 square footWhole Foods anchored shopping center located in theNew York metro area for a gross purchase price of$33.8 million . The Company’s share of the purchase price was$6.8 million .
Capital Markets
Equity Offerings
As previously disclosed, on
2018 Investor Day
The Company will host its 2018 Investor Day on
Reconciliation of Net Income Attributable to Common Stockholders to NAREIT FFO, Core FFO and Operating FFO
Full Year | Full Year | ||||||||||||||||||
Reconciliation of Net Income to Operating FFO |
2017 | 2018 | |||||||||||||||||
Net income attributable to common stockholders | $ | 1.00 | 1.02 | $ | 1.47 | 1.56 | |||||||||||||
Adjustments to reconcile net income to NAREIT FFO: | |||||||||||||||||||
Depreciation and amortization | 2.28 | 2.28 | 2.26 | 2.26 | |||||||||||||||
Gain on sale of operating properties | (0.19 | ) | (0.19 | ) | 0.00 | 0.00 | |||||||||||||
NAREIT Funds From Operations | $ | 3.09 | 3.11 | $ | 3.73 | 3.82 | |||||||||||||
Adjustments to reconcile NAREIT FFO to Core FFO: | |||||||||||||||||||
Development pursuit costs | 0.00 | 0.00 | 0.01 | 0.01 | |||||||||||||||
Gain on sale of land | (0.03 | ) | (0.03 | ) | 0.00 | 0.00 | |||||||||||||
Provision for income taxes | (0.06 | ) | (0.06 | ) | 0.00 | 0.00 | |||||||||||||
Early extinguishment of debt | 0.08 | 0.08 | 0.00 | 0.00 | |||||||||||||||
Merger related costs | 0.51 | 0.51 | 0.00 | 0.00 | |||||||||||||||
Preferred redemption costs | 0.08 | 0.08 | 0.00 | 0.00 | |||||||||||||||
Hurricane losses | 0.01 | 0.01 | 0.00 | 0.00 | |||||||||||||||
Other non-core costs | 0.00 | 0.00 | 0.02 | 0.00 | |||||||||||||||
Core Funds From Operations | $ | 3.68 | $ | 3.70 | $ | 3.76 | $ | 3.83 | |||||||||||
Adjustments to reconcile Core FFO to Operating FFO: | |||||||||||||||||||
Straight-line rents, net | (0.11 | ) | (0.11 | ) | (0.09 | ) | (0.10 | ) | |||||||||||
Above/Below market rent amortization | (0.15 | ) | (0.16 | ) | (0.16 | ) | (0.16 | ) | |||||||||||
Amortization of mark-to-market debt adjustments | (0.02 | ) | (0.02 | ) | (0.02 | ) | (0.02 | ) | |||||||||||
Development pursuit costs charged to OFFO | 0.00 | 0.00 | (0.01 | ) | (0.01 | ) | |||||||||||||
Operating Funds From Operations | $ | 3.40 | 3.41 | $ | 3.48 | 3.54 | |||||||||||||
Non-GAAP Disclosure
The Company uses certain non-GAAP performance measures, in addition to the required GAAP presentations, as it believes these measures improve the understanding of the Company's operational results. Regency manages its entire real estate portfolio without regard to ownership structure, although certain decisions impacting properties owned through partnerships require partner approval. Therefore, the Company believes presenting its pro-rata share of operating results regardless of ownership structure, along with other non-GAAP measures, makes comparisons of other REITs' operating results to the Company's more meaningful. Management continually evaluates the usefulness, relevance, limitations, and calculation of the Company’s reported non-GAAP performance measures to determine how best to provide relevant information to the public, and thus such reported measures could change.
NAREIT FFO is a commonly used measure of REIT performance, which the
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Source:
Regency Centers Corporation
Laura Clark, 904-598-7831
LauraClark@RegencyCenters.com