REG 10-K 12.31.12
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             

Commission File Number 1-12298 (Regency Centers Corporation)
Commission File Number 0-24763 (Regency Centers, L.P.)

REGENCY CENTERS CORPORATION
REGENCY CENTERS, L.P.
(Exact name of registrant as specified in its charter)
FLORIDA (REGENCY CENTERS CORPORATION)
 
59-3191743
DELAWARE (REGENCY CENTERS, L.P.)
 
59-3429602
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
 
One Independent Drive, Suite 114
Jacksonville, Florida 32202
 
(904) 598-7000
(Address of principal executive offices) (zip code)
 
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Regency Centers Corporation
Title of each class
 
Name of each exchange on which registered
Common Stock, $.01 par value
 
New York Stock Exchange
6.625% Series 6 Cumulative Redeemable Preferred Stock, $.01 par value
 
New York Stock Exchange
6.000% Series 7 Cumulative Redeemable Preferred Stock, $.01 par value
 
New York Stock Exchange
 
 
 
 
 
 
Regency Centers, L.P.
Title of each class
 
Name of each exchange on which registered
None
 
N/A
________________________________
Securities registered pursuant to Section 12(g) of the Act:
Regency Centers Corporation: None
Regency Centers, L.P.: Class B Units of Partnership Interest
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act
Regency Centers Corporation              YES  o    NO   x                    Regency Centers, L.P.              YES  o    NO  x



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Regency Centers Corporation                  o                     Regency Centers, L.P.                  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Regency Centers Corporation:
Large accelerated filer
x
 
Accelerated filer
o
Non-accelerated filer
o
 
Smaller reporting company
o
Regency Centers, L.P.:
Large accelerated filer
o
  
Accelerated filer
x
Non-accelerated filer
o
  
Smaller reporting company
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Regency Centers Corporation              YES  o    NO   x                    Regency Centers, L.P.              YES  o    NO  x
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants' most recently completed second fiscal quarter.
Regency Centers Corporation              $ 4,187,374,700                    Regency Centers, L.P.              N/A
The number of shares outstanding of the Regency Centers Corporation’s voting common stock was 90,395,745 as of February 21, 2013.
Documents Incorporated by Reference
Portions of Regency Centers Corporation's proxy statement in connection with its 2013 Annual Meeting of Stockholders are incorporated by reference in Part III.
 





EXPLANATORY NOTE
This report combines the annual reports on Form 10-K for the year ended December 31, 2012 of Regency Centers Corporation and Regency Centers, L.P. Unless stated otherwise or the context otherwise requires, references to “Regency Centers Corporation” or the “Parent Company” mean Regency Centers Corporation and its controlled subsidiaries; and references to “Regency Centers, L.P.” or the “Operating Partnership” mean Regency Centers, L.P. and its controlled subsidiaries. The term “the Company” or “Regency” means the Parent Company and the Operating Partnership, collectively.
The Parent Company is a real estate investment trust (“REIT”) and the general partner of the Operating Partnership. The Operating Partnership's capital includes general and limited common Partnership Units (“Units”). As of December 31, 2012, the Parent Company owned approximately 99.8% of the Units in the Operating Partnership and the remaining limited Units are owned by investors. The Parent Company owns all of the Series 6 and 7 Preferred Units of the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has exclusive control of the Operating Partnership's day-to-day management.
The Company believes combining the annual reports on Form 10-K of the Parent Company and the Operating Partnership into this single report provides the following benefits:
 
enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;  

eliminates duplicative disclosure and provides a more streamlined and readable presentation; and  

creates time and cost efficiencies through the preparation of one combined report instead of two separate reports. 
Management operates the Parent Company and the Operating Partnership as one business. The management of the Parent Company consists of the same individuals as the management of the Operating Partnership. These individuals are officers of the Parent Company and employees of the Operating Partnership.
The Company believes it is important to understand the few differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its ownership of partnership interests of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership. The Parent Company does not hold any indebtedness, but guarantees all of the unsecured public debt and approximately 18% of the secured debt of the Operating Partnership. The Operating Partnership holds all the assets of the Company and retains the ownership interests in the Company's joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates all remaining capital required by the Company's business. These sources include the Operating Partnership's operations, its direct or indirect incurrence of indebtedness, and the issuance of partnership units.
Stockholders' equity, partners' capital, and noncontrolling interests are the main areas of difference between the consolidated financial statements of the Parent Company and those of the Operating Partnership. The Operating Partnership's capital includes general and limited common Partnership Units, as well as Series 6 and 7 Preferred Units owned by the Parent Company. The limited partners' units in the Operating Partnership owned by third parties are accounted for in partners' capital in the Operating Partnership's financial statements and outside of stockholders' equity in noncontrolling interests in the Parent Company's financial statements. The Series 6 and 7 Preferred Units owned by the Parent Company are eliminated in consolidation in the accompanying consolidated financial statements of the Parent Company and are classified as preferred units of general partner in the accompanying consolidated financial statements of the Operating Partnership.
In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements, controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. 

As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have assets other than its investment in the Operating Partnership. Therefore, while stockholders' equity and partners' capital differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements.




TABLE OF CONTENTS
 
Item No.
 
Form 10-K
Report Page
 
 
 
 
PART I
 
 
 
 
1.
 
 
 
1A.
 
 
 
1B.
 
 
 
2.
 
 
 
3.
 
 
 
4.
 
 
 
 
PART II
 
 
 
 
5.
 
 
 
6.
 
 
 
7.
 
 
 
7A.
 
 
 
8.
 
 
 
9.
 
 
 
9A.
 
 
 
9B.
 
 
 
 
PART III
 
 
 
 
10.
 
 
 
11.
 
 
 
12.
 
 
 
13.
 
 
 
14.
 
 
 
 
PART IV
 
 
 
 
15.
 
 
 
 
SIGNATURES
 
 
 
 
16.






Forward-Looking Statements    

In addition to historical information, the following information contains forward-looking statements as defined under federal securities laws. These forward-looking statements include statements about potential changes in our revenues, the size of our development program, earnings per share and unit, returns and portfolio value, and expectations about our liquidity. These statements are based on current expectations, estimates and projections about the real estate industry and markets in which the Parent Company and the Operating Partnership, collectively “Regency” or “the Company”, operate, and management's beliefs and assumptions. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, changes in national and local economic conditions; financial difficulties of tenants; competitive market conditions, including timing and pricing of acquisitions and sales of properties and out-parcels; changes in leasing activity and market rents; timing of development starts; meeting development schedules; our inability to exercise voting control over the co-investment partnerships through which we own many of our properties; consequences of any armed conflict or terrorist attack against the United States; and the ability to obtain governmental approvals. We do not undertake any obligation to release publicly any revision to such forward-looking statements to reflect events or uncertainties after the date hereof or to reflect the occurrence of uncertain events. For additional information, see “Risk Factors” elsewhere herein. The following discussion should be read in conjunction with the accompanying Consolidated Financial Statements and Notes thereto of Regency Centers Corporation and Regency Centers, L.P. appearing elsewhere herein.

PART I
Item 1.    Business

Regency Centers Corporation began its operations as a real estate investment trust ("REIT") in 1993 and is the managing general partner in Regency Centers, L.P. We endeavor to be the preeminent, best-in-class national shopping center company distinguished by sustaining growth in shareholder value and compounding total shareholder return in excess of our peers. We work to achieve these goals through reliable growth in net operating income from a portfolio of dominant, infill shopping centers, balance sheet strength, value-added development capabilities and an engaged team of talented and dedicated people. All of our operating, investing, and financing activities are performed through the Operating Partnership, its wholly-owned subsidiaries, and through its investments in real estate partnerships with third parties (also referred to as "co-investment partnerships" or "joint ventures"). The Parent Company currently owns approximately 99.8% of the outstanding common partnership units of the Operating Partnership.

At December 31, 2012, we directly owned 204 shopping centers (the “Consolidated Properties”) located in 24 states representing 22.5 million square feet of gross leasable area (“GLA”). Through co-investment partnerships, we own partial ownership interests in 144 shopping centers (the “Unconsolidated Properties”) located in 24 states and the District of Columbia representing 17.8 million square feet of GLA.
We earn revenues and generate cash flow by leasing space in our shopping centers to grocery stores, major retail anchors, restaurants, side-shop retailers, and service providers, as well as ground leasing or selling building pads ("out-parcels") to these same types of tenants. Historically, we have experienced growth in revenues by increasing occupancy and rental rates in our existing shopping centers and by acquiring and developing new shopping centers. At December 31, 2012, the consolidated shopping centers were 94.1% leased, as compared to 92.2% at December 31, 2011.
We monitor the operating performance and rent collections of all tenants in our shopping centers, especially those tenants operating retail formats that are experiencing significant changes in competition, business practice, and store closings in other locations. We also evaluate consumer preferences, shopping behaviors, and demographics to anticipate both challenges and opportunities in the changing retail industry that may affect our tenants.
We grow our shopping center portfolio through acquisitions of operating centers and new shopping center development. We will continue to use our development capabilities, market presence, and anchor relationships to invest in value-added new development and redevelopments of existing centers. Development is customer driven, meaning we generally have an executed lease from the anchor before we start construction. Developments serve the growth needs of our anchors and retailers, resulting in modern shopping centers with long-term anchor leases that produce attractive returns on our invested capital. This development process typically requires two to three years once construction has commenced, but can vary subject to the size and complexity of the project. We fund our acquisition and development activity from various capital sources including property sales, equity offerings, and new debt.
 

1



Co-investment partnerships provide us with an additional capital source for shopping center acquisitions, as well as the opportunity to earn fees for asset management, property management, and other investing and financing services. As asset manager, we are engaged by our partners to apply similar operating, investment and capital strategies to the portfolios owned by the co-investment partnerships as those applied to the portfolio that we wholly-own. Co-investment partnerships grow their shopping center investments through acquisitions from third parties or direct purchases from us.  Although selling properties to co-investment partnerships reduces our direct ownership interest, it provides a source of capital that further strengthens our balance sheet while we continue to share, to the extent of our ownership interest, in the risks and rewards of shopping centers that meet our high quality standards and long-term investment strategy.

We  recognize the importance of continually improving the environmental sustainability performance  of our real estate assets.  To date we have received LEED (Leadership in Energy and Environmental Design) certifications by the U.S. Green Building Council at seven shopping centers and have four additional in-process developments targeting certification.  We also continue to implement best practices in our operating portfolio to reduce our power and water consumption, in addition to other sustainability initiatives. We believe that the design, construction and operation of environmentally efficient shopping centers will contribute to our key strategic goals.

Competition
 
We are among the largest owners of shopping centers in the nation based on revenues, number of properties, gross leasable area, and market capitalization. There are numerous companies and private individuals engaged in the ownership, development, acquisition, and operation of shopping centers that compete with us in our targeted markets, including grocery store chains that also anchor some of our shopping centers. This results in competition for attracting anchor tenants, as well as the acquisition of existing shopping centers and new development sites. We believe that our competitive advantages are driven by our locations within our market areas, the design and high quality of our shopping centers, the strong demographics surrounding our shopping centers, our relationships with our anchor tenants and our side-shop and out-parcel retailers, our practice of maintaining and renovating our shopping centers, and our ability to source and develop new shopping centers.
  
Employees
 
Our headquarters are located at One Independent Drive, Suite 114, Jacksonville, Florida. We presently maintain 17 market offices nationwide where we conduct management, leasing, construction, and investment activities. At December 31, 2012, we had 368 employees and we believe that our relations with our employees are good.

 Compliance with Governmental Regulations
 
Under various federal, state and local laws, ordinances and regulations, we may be liable for the cost to remove or remediate certain hazardous or toxic substances at our shopping centers. These laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence of the hazardous or toxic substances. The cost of required remediation and the owner's liability for remediation could exceed the value of the property and/or the aggregate assets of the owner. The presence of such substances, or the failure to properly remediate such substances, may adversely affect our ability to sell or lease the property or borrow using the property as collateral. While we have a number of properties that could require or are currently undergoing varying levels of environmental remediation, environmental remediation is not currently expected to have a material financial impact on us due to reserves for remediation, insurance programs designed to mitigate the cost of remediation, and various state-regulated programs that shift the responsibility and cost to the state.
 

2



Executive Officers
 
The executive officers of the Company are appointed each year by the Board of Directors. Each of the executive officers has been employed by the Company in the position indicated in the list or positions indicated in the pertinent notes below. Each of the executive officers has been employed by the Company for more than five years.
Name
Age
Title
Executive Officer in Position Shown Since
Martin E. Stein, Jr.
60
Chairman and Chief Executive Officer
1993
Brian M. Smith
57
President and Chief Operating Officer
    2009 (1)
Lisa Palmer
44
Executive Vice President and Chief Financial Officer
    2013 (2)
Dan M. Chandler, III
46
Managing Director - West
    2009 (3)
John S. Delatour
54
Managing Director - Central
1999
James D. Thompson
59
Managing Director - East
1993

(1) In February 2009, Brian M. Smith, Managing Director and Chief Investment Officer of the Company since 2005, was appointed to the position of President. Prior to serving as our Managing Director and Chief Investment Officer, from March 1999 to September 2005, Mr. Smith served as Managing Director of Investments for our Pacific, Mid-Atlantic, and Northeast divisions.

(2) Lisa Palmer is our Executive Vice President and Chief Financial Officer. Ms. Palmer served as Senior Manager of Investment Services in 1996 and assumed the role of Vice President of Capital Markets in 1999. She served as Senior Vice President of Capital Markets from 2003 to 2012 until assuming the role of Chief Financial Officer in January 2013.

(3) Dan M. Chandler, III, has served as our Managing Director - West since August 2009. From August 2007 to April 2009, Mr. Chandler was a principal with Chandler Partners, a private commercial and residential real estate developer in Southern California. During 2009, Mr. Chandler was also affiliated with Urban|One, a real estate development and management firm in Los Angeles. Mr. Chandler was a Managing Director for us from 2006 to July 2007, Senior Vice President of Investments from 2002 to 2006, and Vice President of Investments from 1997 to 2002.

Company Website Access and SEC Filings

The Company's website may be accessed at www.regencycenters.com. All of our filings with the Securities and Exchange Commission (“SEC”) can be accessed free of charge through our website promptly after filing; however, in the event that the website is inaccessible, we will provide paper copies of our most recent annual report on Form 10-K, the most recent quarterly report on Form 10-Q, current reports filed or furnished on Form 8-K, and all related amendments, excluding exhibits, free of charge upon request. These filings are also accessible on the SEC's website at www.sec.gov.

General Information

The Company's registrar and stock transfer agent is Wells Fargo Bank, N.A. (“Wells Fargo Shareowner Services”), Mendota Heights, MN. The Company offers a dividend reinvestment plan (“DRIP”) that enables its stockholders to reinvest dividends automatically, as well as to make voluntary cash payments toward the purchase of additional shares. For more information, contact Wells Fargo toll free at (800) 468-9716 or the Company's Shareholder Relations Department at (904) 598-7000.
The Company's Independent Registered Public Accounting Firm is KPMG LLP, Jacksonville, Florida. The Company's legal counsel is Foley & Lardner LLP, Jacksonville, Florida.
Annual Meeting

The Company's annual meeting will be held at The Ponte Vedra Inn & Club, 200 Ponte Vedra Blvd, Ponte Vedra Beach, Florida, at 11:00 a.m. on Tuesday, May 7, 2013.


3




Item 1A. Risk Factors
Risk Factors Related to Our Industry and Real Estate Investments
Downturns in the retail industry likely will have a direct adverse impact on our revenues and cash flow.
Our properties consist primarily of grocery-anchored shopping centers. Our performance therefore is generally linked to economic conditions in the market for retail space. The market for retail space has been or could be adversely affected by any of the following:
weakness in the national, regional and local economies, which could adversely impact consumer spending and retail sales and in turn tenant demand for space and lead to increased store closings;
adverse financial conditions for grocery and retail anchors;
the ongoing consolidation in the retail sector;
the excess amount of retail space in a number of markets;
reduction in the demand by tenants to occupy our shopping centers as a result of reduced consumer demand for certain retail formats such as video rental stores;
a shift in retail shopping from brick and mortar stores to Internet retailers and catalogs;
the growth of super-centers and warehouse club retailers, such as those operated by Wal-Mart and Costco, and their adverse effect on traditional grocery chains;
the impact of increased energy costs on consumers and its consequential effect on the number of shopping visits to our centers; and
consequences of any armed conflict involving, or terrorist attack against, the United States.

To the extent that any of these conditions occur, they are likely to impact market rents for retail space, occupancy in the operating portfolios, our ability to sell, acquire or develop properties, and our cash available for distributions to stock and unit holders.

Our revenues and cash flow could be adversely affected by poor economic or market conditions where our properties are geographically concentrated, which may impede our ability to generate sufficient income to pay expenses and maintain our properties.
The economic conditions in markets in which our properties are concentrated greatly influence our financial performance. During the year ended December 31, 2012, our properties in California, Florida, and Texas accounted for 30.6%, 11.1%, and 11.0%, respectively, of our net income. Our revenues and cash available to pay expenses, maintain our properties, and for distributions to stock and unit holders could be adversely affected by this geographic concentration if market conditions, such as supply of or demand for retail space, deteriorate in California, Florida, or Texas relative to other geographic areas.
Loss of revenues from significant tenants could reduce distributions to stock and unit holders.

We derive significant revenues from anchor tenants such as Kroger, Publix, Safeway and Supervalu, which are our four most significant anchor tenants as they account for 4.3%, 4.2%, 3.3% and 2.1% respectively, of our total annualized base rent from Consolidated Properties plus our pro-rata share of annualized base rent from Unconsolidated Properties ("pro-rata basis"), which is recognized in equity in income (loss) of investment in real estate partnerships, for the year ended December 31, 2012. Distributions to stock and unit holders could be adversely affected by the loss of revenues in the event a significant tenant:
becomes bankrupt or insolvent;
experiences a downturn in its business;
materially defaults on its leases;
does not renew its leases as they expire; or
renews at lower rental rates.

Vacated anchor space, including space owned by the anchor, can reduce rental revenues generated by the shopping center because of the loss of the departed anchor tenant's customer drawing power. Some anchors have the right to vacate and prevent re-tenanting by paying rent for the balance of the lease term. If significant tenants vacate a property, then other tenants may be entitled to terminate their leases at the property.

4



Our net income depends on the success and continued occupancy of our tenants.
Our net income could be adversely affected in the event of bankruptcy or insolvency of any of our anchors or a significant number of our non-anchor tenants within a shopping center, or if we fail to lease significant portions of our new developments. The adverse impact on our net income may be greater than the loss of rent from the resulting unoccupied space because co-tenancy clauses in select centers may allow other tenants to modify or terminate their rent or lease obligations. Co-tenancy clauses have several variants: they may allow a tenant to postpone a store opening if certain other tenants fail to open their stores; they may allow a tenant to close its store prior to lease expiration if another tenant closes its store prior to lease expiration; or more commonly, they may allow a tenant to pay reduced levels of rent until a certain number of tenants open their stores within the same shopping center.
A large percentage of our revenues are derived from smaller shop tenants and our net income could be adversely impacted if our smaller shop tenants are not successful.
A large percentage of our revenues are derived from smaller shop tenants (those occupying less than 10,000 square feet). Smaller shop tenants may be more vulnerable to negative economic conditions as they have more limited resources than larger tenants. The types of smaller shop tenants vary from retail shops to service providers. If we are unable to attract the right type or mix of smaller shop tenants into our centers, our net income could be adversely impacted.
We may be unable to collect balances due from tenants in bankruptcy.
Although minimum rent is supported by long-term lease contracts, tenants who file bankruptcy have the legal right to reject any or all of their leases and close related stores. In the event that a tenant with a significant number of leases in our shopping centers files bankruptcy and rejects its leases, we could experience a significant reduction in our revenues and may not be able to collect all pre-petition amounts owed by that party.
Our real estate assets may be subject to impairment charges.
Our long-lived assets, primarily real estate held for investment, are carried at cost unless circumstances indicate that the carrying value of the assets may not be recoverable. We evaluate whether there are any indicators, including property operating performance and general market conditions, that the value of the real estate properties (including any related amortizable intangible assets or liabilities) may not be recoverable. Through the evaluation, we compare the current carrying value of the asset to the estimated undiscounted cash flows that are directly associated with the use and ultimate disposition of the asset. Our estimated cash flows are based on several key assumptions, including rental rates, costs of tenant improvements, leasing commissions, anticipated hold periods, and assumptions regarding the residual value upon disposition, including the exit capitalization rate. These key assumptions are subjective in nature and could differ materially from actual results. Changes in our disposition strategy or changes in the marketplace may alter the hold period of an asset or asset group, which may result in an impairment loss and such loss could be material to the Company's financial condition or operating performance. To the extent that the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over fair value. If such indicators, as described above, are not identified, management will not assess the recoverability of a property's carrying value.

The fair value of real estate assets is highly subjective and is determined through comparable sales information and other market data if available, or through use of an income approach such as the direct capitalization method or the traditional discounted cash flow approach. Such cash flow projections consider factors, including expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors, and therefore are subject to a significant degree of management judgment. Changes in those factors could impact the determination of fair value. In estimating the fair value of undeveloped land, we generally use market data and comparable sales information.

These subjective assessments have a direct impact on our net income because recording an impairment charge results in an immediate negative adjustment to net income. There can be no assurance that we will not take additional charges in the future related to the impairment of our assets. Any future impairment could have a material adverse effect on our results of operations in the period in which the charge is taken.


5



Adverse global market and economic conditions may adversely affect us and could cause us to recognize additional impairment charges or otherwise harm our performance.
We are unable to predict the timing, severity, and length of adverse market and economic conditions. Adverse market and economic conditions may impede our ability to generate sufficient operating cash flow to pay expenses, maintain properties, pay distributions to our stock and unit holders, and refinance debt. During adverse periods, there may be significant uncertainty in the valuation of our properties and investments that could result in a substantial decrease in their value. No assurance can be given that we would be able to recover the current carrying amount of all of our properties and investments in the future. Our failure to do so would require us to recognize additional impairment charges for the period in which we reached that conclusion, which could materially and adversely affect us and the market price of our common stock.
Our acquisition activities may not produce the returns that we expect.
Our investment strategy includes investing in high-quality shopping centers that are leased to market-dominant grocers, category-leading anchors, specialty retailers, or restaurants located in areas with high barriers to entry and above average household incomes and population densities. The acquisition of properties entails risks that include, but are not limited to, the following, any of which could adversely affect our results of operations and our ability to meet our obligations:
we may not be able to identify suitable properties to acquire or may be unable to complete the acquisition of the properties we identify;
properties we acquire may fail to achieve the occupancy or rental rates we project, within the time frames we project, at the time we make the decision to invest, which may result in the properties' failure to achieve the returns we projected;
our pre-acquisition evaluation of the physical condition of each new investment may not detect certain defects or identify necessary repairs until after the property is acquired, which could significantly increase our total acquisition costs or decrease cash flow from the property;
our investigation of a property or building prior to our acquisition, and any representations we may receive from the seller of such building or property, may fail to reveal various liabilities, which could reduce the cash flow from the property or increase our acquisition costs;
our estimate of the costs to improve, reposition or redevelop a property may prove to be too low, or the time we estimate to complete the improvement, repositioning or redevelopment may be too short, either of which could result in the property failing to achieve the returns we have projected, either temporarily or for a longer time; and
we may not be able to integrate an acquisition into our existing operations successfully.

Unsuccessful development activities or a slowdown in development activities could have a direct impact on our revenues and our revenue growth.

We actively pursue development activities as opportunities arise. Development activities require various government and other approvals for entitlements and any delay in such approvals may significantly delay the development process. We may not recover our investment in development projects for which approvals are not received. We incur other risks associated with development activities, including:
the ability to lease developments to full occupancy on a timely basis;
the risk that occupancy rates and rents of a completed project will not be sufficient to make the project profitable;
the risk that development costs of a project may exceed original estimates, possibly making the project unprofitable;
delays in the development and construction process;
the risk that we may abandon development opportunities and lose our investment in these developments;
the risk that the current size of our development pipeline will strain the organization's capacity to complete the developments within the targeted timelines and at the expected returns on invested capital; and
the lack of cash flow during the construction period.

If our developments are unsuccessful or we experience a slowdown in development activities, our revenue growth and/or operating expenses may be adversely impacted.

6



We may experience difficulty or delay in renewing leases or re-leasing space.
We derive most of our revenue directly or indirectly from rent received from our tenants. We are subject to the risks that, upon expiration or termination of leases, leases for space in our properties may not be renewed, space may not be re-leased, or the terms of renewal or re-lease, including the cost of required renovations or concessions to tenants, may be less favorable than current lease terms. As a result, our results of operations and our net income could be adversely impacted.
We may be unable to sell properties when appropriate because real estate investments are illiquid.
Real estate investments generally cannot be sold quickly. Our inability to respond promptly to unfavorable changes in the performance of our investments could have an adverse effect on our ability to meet our obligations and make distributions to our stock and unit holders.
Geographic concentration of our properties makes our business vulnerable to natural disasters and severe weather conditions, which could have an adverse effect on our cash flow and operating results.
A significant portion of our property gross leasable area is located in areas that are susceptible to the harmful effects of earthquakes, tropical storms, hurricanes, tornadoes, wildfires, and similar natural disasters. As of December 31, 2012, approximately 23.4%, 14.9%, and 9.5% of our property gross leasable area, on a pro-rata basis, was located in California, Florida, and Texas, respectively. Intense weather conditions during the last decade have caused our cost of property insurance to increase significantly. While much of the cost of this insurance is passed on to our tenants as reimbursable property costs, some tenants do not pay a pro rata share of these costs under their leases. These weather conditions also disrupt our business and the business of our tenants, which could affect the ability of some tenants to pay rent and may reduce the willingness of residents to remain in or move to the affected area. Therefore, as a result of the geographic concentration of our properties, we face demonstrable risks, including higher costs, such as uninsured property losses and higher insurance premiums, and disruptions to our business and the businesses of our tenants.
An uninsured loss or a loss that exceeds the insurance policies on our properties could subject us to loss of capital or revenue on those properties.
We carry comprehensive liability, fire, flood, extended coverage, rental loss, and environmental insurance for our properties with policy specifications and insured limits customarily carried for similar properties. We believe that the insurance carried on our properties is adequate and consistent with industry standards. There are, however, some types of losses, such as from hurricanes, terrorism, wars or earthquakes, which may be uninsurable, or the cost of insuring against such losses may not be economically justifiable. In addition, tenants generally are required to indemnify and hold us harmless from liabilities resulting from injury to persons or damage to personal or real property, on or off the premises, due to activities conducted by tenants or their agents on the properties (including without limitation any environmental contamination), and at the tenant's expense, to obtain and keep in full force during the term of the lease, liability and property damage insurance policies. However, our tenants may not properly maintain their insurance policies or have the ability to pay the deductibles associated with such policies. Should a loss occur that is uninsured or in an amount exceeding the combined aggregate limits for the policies noted above, or in the event of a loss that is subject to a substantial deductible under an insurance policy, we could lose all or part of our capital invested in, and anticipated revenue from, one or more of the properties, which could have a material adverse effect on our operating results and financial condition, as well as our ability to make distributions to stock and unit holders.
Loss of our key personnel could adversely affect the value of our Parent Company's stock price.
We depend on the efforts of our key executive personnel. Although we believe qualified replacements could be found for our key executives, the loss of their services could adversely affect our Parent Company's stock price.
We face competition from numerous sources, including other real estate investment trusts and small real estate owners.
The ownership of shopping centers is highly fragmented. We face competition from other real estate investment trusts as well as from numerous small owners in the acquisition, ownership, and leasing of shopping centers. We compete to develop shopping centers with other real estate investment trusts engaged in development activities as well as with local, regional, and national real estate developers. If we cannot successfully compete in our targeted markets, our cash flow, and therefore distributions to stock and unit holders, may be adversely affected.

7



Costs of environmental remediation could reduce our cash flow available for distribution to stock and unit holders.
Under various federal, state and local laws, an owner or manager of real property may be liable for the costs of removal or remediation of hazardous or toxic substances on the property. These laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence of hazardous or toxic substances. The cost of any required remediation could exceed the value of the property and/or the aggregate assets of the owner or the responsible party. The presence of, or the failure to properly remediate, hazardous or toxic substances may adversely affect our ability to sell or lease a contaminated property or to borrow using the property as collateral. Any of these developments could reduce cash flow and our ability to make distributions to stock and unit holders.
Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unintended expenditures that adversely affect our cash flows.
All of our properties are required to comply with the Americans with Disabilities Act (“ADA”). The ADA has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to people with disabilities. Compliance with the ADA requirements could require removal of access barriers, and noncompliance could result in imposition of fines by the U.S. government or an award of damages to private litigants, or both. While the tenants to whom we lease properties are obligated by law to comply with the ADA provisions, and typically under tenant leases are obligated to cover costs associated with compliance, if required changes involve greater expenditures than anticipated, or if the changes must be made on a more accelerated basis than anticipated, the ability of these tenants to cover costs could be adversely affected. In addition, we are required to operate the properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental entities and become applicable to the properties. We may be required to make substantial capital expenditures to comply with these requirements, and these expenditures could have a material adverse effect on our ability to meet our financial obligations and make distributions to our stock and unit holders.
If we do not maintain the security of tenant-related information, we could incur substantial additional costs and become subject to litigation.
We have implemented an online payment system where we receive certain information about our tenants that depends upon secure transmissions of confidential information over public networks, including information permitting cashless payments. A compromise of our security systems that results in information being obtained by unauthorized persons could adversely affect our operations, results of operations, financial condition and liquidity, and could result in litigation against us or the imposition of penalties. In addition, a security breach could require that we expend significant additional resources related to our information security systems and could result in a disruption of our operations.
We rely extensively on computer systems to process transactions and manage our business. Disruptions in both our primary and secondary (back-up) systems could harm our ability to run our business.
Although we have independent, redundant and physically separate primary and secondary computer systems, it is critical that we maintain uninterrupted operation of our business-critical computer systems. Our computer systems, including our back-up systems, are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, catastrophic events such as fires, tornadoes and hurricanes, and usage errors by our employees. If our computer systems and our back-up systems are damaged or cease to function properly, we may have to make a significant investment to repair or replace them, and we may suffer interruptions in our operations in the interim. Any material interruption in both of our computer systems and back-up systems may have a material adverse effect on our business or results of operations.
Risk Factors Related to Our Co-investment Partnerships and Acquisition Structure
We do not have voting control over our joint venture investments, so we are unable to ensure that our objectives will be pursued.
We have invested as a partner in a number of joint venture investments for the acquisition or development of properties. These investments involve risks not present in a wholly-owned project. We do not have voting control over the ventures. The other partner might (i) have interests or goals that are inconsistent with our interests or goals or (ii) otherwise impede our objectives. The other partner also might become insolvent or bankrupt. These factors could limit the return that we receive from such investments or cause our cash flows to be lower than our estimates.

8



The termination of our co-investment partnerships could adversely affect our cash flow, operating results, and our ability to make distributions to stock and unit holders.
If co-investment partnerships owning a significant number of properties were dissolved for any reason, we would lose the asset and property management fees from these co-investment partnerships, which could adversely affect our operating results and our cash available for distribution to stock and unit holders.
Risk Factors Related to Funding Strategies and Capital Structure
Higher market capitalization rates for our properties could adversely impact our ability to sell properties and fund developments and acquisitions, and could dilute earnings.

As part of our funding strategy, we sell operating properties that no longer meet our investment standards. These sales proceeds are used to fund the construction of new developments. An increase in market capitalization rates could cause a reduction in the value of centers identified for sale, which would have an adverse impact on the amount of cash generated. In order to meet the cash requirements of our development program, we may be required to sell more properties than initially planned, which could have a negative impact on our earnings.

We depend on external sources of capital, which may not be available in the future on favorable terms or at all.
To qualify as a REIT, the Parent Company must, among other things, distribute to its stockholders each year at least 90% of its REIT taxable income (excluding any net capital gains). Because of these distribution requirements, we will likely not be able to fund all future capital needs, including capital for acquisitions or developments, with income from operations. We therefore will have to rely on third-party sources of capital, which may or may not be available on favorable terms or at all. Our access to third-party sources of capital depends on a number of things, including the market's perception of our growth potential and our current and potential future earnings. Our access to debt depends on our credit rating, the willingness of creditors to lend to us and conditions in the capital markets.  In addition to finding creditors willing to lend to us, we are dependent upon our joint venture partners to contribute their share of any amount needed to repay or refinance existing debt when lenders reduce the amount of debt our joint ventures are eligible to refinance.
In addition, our existing debt arrangements also impose covenants that limit our flexibility in obtaining other financing, such as a prohibition on negative pledge agreements. Additional equity offerings may result in substantial dilution of stockholders' interests and additional debt financing may substantially increase our degree of leverage.
Without access to external sources of capital, we would be required to pay outstanding debt with our operating cash flows and proceeds from property sales.  Our operating cash flows may not be sufficient to pay our outstanding debt as it comes due and real estate investments generally cannot be sold quickly at a return we believe is appropriate.  If we are required to deleverage our business with operating cash flows and proceeds from property sales, we may be forced to reduce the amount of, or eliminate altogether, our distributions to stock and unit holders or refrain from making investments in our business.
Our debt financing may reduce distributions to stock and unit holders.

Our organizational documents do not limit the amount of debt that we may incur. In addition, we do not expect to generate sufficient funds from operations to make balloon principal payments on our debt when due. If we are unable to refinance our debt on acceptable terms, we might be forced (i) to dispose of properties, which might result in losses, or (ii) to obtain financing at unfavorable terms. Either could reduce the cash flow available for distributions to stock and unit holders. If we cannot make required mortgage payments, the mortgagee could foreclose on the property securing the mortgage, causing the loss of cash flow from that property.

9



Covenants in our debt agreements may restrict our operating activities and adversely affect our financial condition.
Our unsecured notes, unsecured term loan, and unsecured line of credit contain customary covenants, including compliance with financial ratios, such as ratio of total debt to gross asset value and fixed charge coverage ratio. Fixed charge coverage ratio is defined as earnings before interest, taxes, depreciation and amortization ("EBITDA") divided by the sum of interest expense and scheduled mortgage principal paid to our lenders plus dividends paid to our preferred stockholders. Our debt arrangements also restrict our ability to enter into a transaction that would result in a change of control. These covenants may limit our operational flexibility and our acquisition activities. Moreover, if we breach any of the covenants in our debt agreements, and did not cure the breach within the applicable cure period, our lenders could require us to repay the debt immediately, even in the absence of a payment default. Many of our debt arrangements, including our unsecured notes, unsecured term loan, and unsecured line of credit are cross-defaulted, which means that the lenders under those debt arrangements can put us in default and require immediate repayment of their debt if we breach and fail to cure a default under certain of our other material debt obligations. As a result, any default under our debt covenants could have an adverse effect on our financial condition, our results of operations, our ability to meet our obligations, and the market value of our stock.
Increases in interest rates would cause our borrowing costs to rise and negatively impact our results of operations.
    
While a significant amount of our outstanding debt has fixed interest rates, we do borrow funds at variable interest rates under our credit facilities. Increases in interest rates would increase our interest expense on any variable rate debt, in addition, increases in interest rates will affect the terms under which we refinance our existing debt as it matures.
This would reduce our future earnings and cash flows, which could adversely affect our ability to service our debt and meet our other obligations and also could reduce the amount we are able to distribute to our stock and unit holders.

Risk Factors Related to Interest Rates and the Market Price for Our Stock

Changes in economic and market conditions could adversely affect the Parent Company's stock price.
The market price of our common stock may fluctuate significantly in response to many factors, many of which are out of our control, including:
actual or anticipated variations in our operating results or dividends;
changes in our funds from operations or earnings estimates;
publication of research reports about us or the real estate industry in general and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REIT's;
the ability of our tenants to pay rent and meet their other obligations to us under current lease terms and our ability to re-lease space as leases expire;
increases in market interest rates that drive purchasers of our stock to demand a higher dividend yield;
changes in market valuations of similar companies;
adverse market reaction to any additional debt we incur in the future;
any future issuances of equity securities;
additions or departures of key management personnel;
strategic actions by us or our competitors, such as acquisitions or restructurings;
actions by institutional stockholders;
speculation in the press or investment community; and
general market and economic conditions.

These factors may cause the market price of our common stock to decline, regardless of our financial condition, results of operations, business or prospects. It is impossible to ensure that the market price of our common stock will not fall in the future. A decrease in the market price of our common stock could reduce our ability to raise additional equity in the public markets. Selling common stock at a decreased market price would have a dilutive impact on existing stockholders.

10



Risk Factors Related to Federal Income Tax Laws
If the Parent Company fails to qualify as a REIT for federal income tax purposes, it would be subject to federal income tax at regular corporate rates.
We believe that we qualify for taxation as a REIT for federal income tax purposes, and we plan to operate so that we can continue to meet the requirements for taxation as a REIT. If we qualify as a REIT, we generally will not be subject to federal income tax on our income that we distribute currently to our stockholders. Many of the REIT requirements, however, are highly technical and complex. The determination that we are a REIT requires an analysis of various factual matters and circumstances, some of which may not be totally within our control and some of which involve questions of interpretation. For example, to qualify as a REIT, at least 95% of our gross income must come from specific passive sources, like rent, that are itemized in the REIT tax laws. There can be no assurance that the Internal Revenue Service (“IRS”) or a court would agree with the positions we have taken in interpreting the REIT requirements. We are also required to distribute to our stockholders at least 90% of our REIT taxable income, excluding capital gains. The fact that we hold many of our assets through co-investment partnerships and their subsidiaries further complicates the application of the REIT requirements. Even a technical or inadvertent mistake could jeopardize our REIT status. Furthermore, Congress and the IRS might make changes to the tax laws and regulations, and the courts might issue new rulings, that make it more difficult, or impossible, for us to remain qualified as a REIT.
Also, unless the IRS granted us relief under certain statutory provisions, we would remain disqualified as a REIT for four years following the year we first failed to qualify. If we failed to qualify as a REIT (currently and/or with respect to any tax years for which the statute of limitations has not expired), we would have to pay significant income taxes, reducing cash available to pay dividends, which would likely have a significant adverse effect on the value of our securities. In addition, we would no longer be required to pay any dividends to stockholders. Although we believe that we qualify as a REIT, we cannot assure you that we will continue to qualify or remain qualified as a REIT for tax purposes.
Even if we qualify as a REIT for federal income tax purposes, we are required to pay certain federal, state and local taxes on our income and property. For example, if we have net income from “prohibited transactions,” that income will be subject to a 100% tax. In general, prohibited transactions include sales or other dispositions of property held primarily for sale to customers in the ordinary course of business. The determination as to whether a particular sale is a prohibited transaction depends on the facts and circumstances related to that sale. While we have undertaken a significant number of asset sales in recent years, we do not believe that those sales should be considered prohibited transactions, but there can be no assurance that the IRS would not contend otherwise.
Risk Factors Related to Our Ownership Limitations and the Florida Business Corporation Act
Restrictions on the ownership of the Parent Company's capital stock to preserve our REIT status could delay or prevent a change in control.
Ownership of more than 7% by value of our outstanding capital stock is prohibited, with certain exceptions, by our articles of incorporation, for the purpose of maintaining our qualification as a REIT. This 7% limitation may discourage a change in control and may also (i) deter tender offers for our capital stock, which offers may be attractive to our stockholders, or (ii) limit the opportunity for our stockholders to receive a premium for their capital stock that might otherwise exist if an investor attempted to assemble a block in excess of 7% of our outstanding capital stock or to affect a change in control.
The issuance of the Parent Company's capital stock could delay or prevent a change in control.
Our articles of incorporation authorize our Board of Directors to issue up to 30,000,000 shares of preferred stock and 10,000,000 shares of special common stock and to establish the preferences and rights of any shares issued. The issuance of preferred stock or special common stock could have the effect of delaying or preventing a change in control. The provisions of the Florida Business Corporation Act regarding control share acquisitions and affiliated transactions could also deter potential acquisitions by preventing the acquiring party from voting the common stock it acquires or consummating a merger or other extraordinary corporate transaction without the approval of our disinterested stockholders.
Item 1B. Unresolved Staff Comments
None.


11



Item 2.    Properties
The following table is a list of the shopping centers summarized by state and in order of largest holdings presented for Consolidated Properties (excludes properties owned by unconsolidated co-investment partnerships):
 
 
 
December 31, 2012
 
December 31, 2011
Location
 
#
Properties
 
GLA (in thousands)
 
% of Total
GLA
 
%
Leased
 
#
Properties
 
GLA (in thousands)
 
% of Total
GLA
 
%
Leased
California
 
43

 
5,544

 
24.6
%
 
95.1
%
 
44

 
5,521

 
23.3
%
 
91.1
%
Florida
 
39

 
3,961

 
17.6
%
 
93.0
%
 
45

 
4,550

 
19.2
%
 
92.6
%
Texas
 
18

 
2,324

 
10.3
%
 
95.2
%
 
22

 
2,932

 
12.4
%
 
93.5
%
Ohio
 
10

 
1,402

 
6.2
%
 
97.1
%
 
12

 
1,592

 
6.7
%
 
96.3
%
Georgia
 
15

 
1,386

 
6.2
%
 
93.1
%
 
14

 
1,269

 
5.3
%
 
89.1
%
Colorado
 
14

 
1,163

 
5.2
%
 
94.3
%
 
14

 
1,162

 
4.9
%
 
91.6
%
Virginia
 
7

 
951

 
4.2
%
 
94.2
%
 
7

 
951

 
4.0
%
 
92.9
%
Illinois
 
4

 
748

 
3.3
%
 
97.3
%
 
5

 
863

 
3.6
%
 
95.0
%
North Carolina
 
9

 
743

 
3.3
%
 
91.8
%
 
9

 
837

 
3.5
%
 
92.6
%
Oregon
 
8

 
741

 
3.3
%
 
91.2
%
 
8

 
741

 
3.1
%
 
90.8
%
Washington
 
6

 
683

 
3.0
%
 
92.8
%
 
5

 
357

 
1.5
%
 
94.1
%
Missouri
 
4

 
408

 
1.8
%
 
99.0
%
 
4

 
408

 
1.7
%
 
98.7
%
Tennessee
 
5

 
392

 
1.7
%
 
95.9
%
 
6

 
479

 
2.0
%
 
94.1
%
Arizona
 
3

 
387

 
1.7
%
 
88.1
%
 
3

 
389

 
1.6
%
 
84.0
%
Massachusetts
 
2

 
357

 
1.6
%
 
94.6
%
 
2

 
360

 
1.5
%
 
94.6
%
Nevada
 
1

 
331

 
1.5
%
 
91.1
%
 
1

 
331

 
1.4
%
 
88.7
%
Pennsylvania
 
4

 
325

 
1.5
%
 
99.1
%
 
4

 
322

 
1.4
%
 
98.4
%
Delaware
 
2

 
243

 
1.1
%
 
94.2
%
 
2

 
243

 
1.0
%
 
89.6
%
Michigan
 
2

 
118

 
0.5
%
 
43.9
%
 
2

 
118

 
0.5
%
 
39.2
%
Maryland
 
1

 
88

 
0.4
%
 
100.0
%
 
1

 
88

 
0.4
%
 
97.2
%
Alabama
 
1

 
85

 
0.4
%
 
86.2
%
 
1

 
85

 
0.4
%
 
86.2
%
South Carolina
 
2

 
74

 
0.3
%
 
100.0
%
 
2

 
74

 
0.3
%
 
98.1
%
Indiana
 
3

 
55

 
0.2
%
 
89.8
%
 
3

 
55

 
0.2
%
 
82.3
%
Kentucky
 
1

 
23

 
0.1
%
 
100.0
%
 
1

 
23

 
0.1
%
 
93.9
%
Total
 
204

 
22,532

 
100.0
%
 
94.1
%
 
217

 
23,750

 
100.0
%
 
92.2
%
Certain Consolidated Properties are encumbered by mortgage loans of $474.0 million as of December 31, 2012.
The weighted average annual effective rent for the consolidated portfolio of properties, net of tenant concessions, is $16.95 per square foot as of December 31, 2012.



12



The following table is a list of the shopping centers summarized by state and in order of largest holdings presented for Unconsolidated Properties (includes properties owned by unconsolidated co-investment partnerships, excluding the properties of BRE Throne, LLC ("BRET") as the property holdings of BRET do not impact the rate of return on Regency's preferred stock investment):
 
 
 
December 31, 2012
 
December 31, 2011
Location
 
#
Properties
 
GLA (in thousands)
 
% of Total
GLA
 
%
Leased
 
#
Properties
 
GLA (in thousands)
 
% of Total
GLA
 
%
Leased
California
 
25

 
3,265

 
18.4
%
 
95.7
%
 
27

 
3,551

 
19.3
%
 
95.5
%
Virginia
 
22

 
2,789

 
15.7
%
 
96.3
%
 
21

 
2,780

 
15.1
%
 
94.8
%
Maryland
 
14

 
1,577

 
8.9
%
 
92.9
%
 
15

 
1,727

 
9.4
%
 
92.9
%
North Carolina
 
8

 
1,276

 
7.2
%
 
96.4
%
 
7

 
1,192

 
6.5
%
 
95.8
%
Texas
 
9

 
1,227

 
6.9
%
 
95.9
%
 
9

 
1,227

 
6.7
%
 
96.0
%
Illinois
 
8

 
1,067

 
6.0
%
 
97.1
%
 
10

 
1,328

 
7.2
%
 
97.5
%
Pennsylvania
 
7

 
982

 
5.5
%
 
96.1
%
 
7

 
982

 
5.3
%
 
95.9
%
Colorado
 
6

 
962

 
5.4
%
 
93.0
%
 
6

 
941

 
5.1
%
 
95.5
%
Florida
 
11

 
841

 
4.7
%
 
93.7
%
 
11

 
841

 
4.6
%
 
93.2
%
Minnesota
 
5

 
675

 
3.8
%
 
97.5
%
 
5

 
675

 
3.7
%
 
98.4
%
Washington
 
5

 
577

 
3.3
%
 
94.5
%
 
5

 
577

 
3.1
%
 
90.9
%
Ohio
 
2

 
532

 
3.0
%
 
90.2
%
 
2

 
532

 
2.9
%
 
93.3
%
South Carolina
 
4

 
286

 
1.6
%
 
96.3
%
 
4

 
286

 
1.6
%
 
96.3
%
Wisconsin
 
2

 
269

 
1.5
%
 
96.9
%
 
2

 
269

 
1.5
%
 
93.5
%
Georgia
 
3

 
244

 
1.4
%
 
95.3
%
 
3

 
243

 
1.3
%
 
92.0
%
Connecticut
 
1

 
180

 
1.0
%
 
99.8
%
 
1

 
180

 
1.0
%
 
99.8
%
New Jersey
 
2

 
157

 
0.9
%
 
94.0
%
 
2

 
157

 
0.9
%
 
96.6
%
Massachusetts
 
1

 
149

 
0.8
%
 
95.4
%
 
1

 
185

 
1.0
%
 
98.1
%
New York
 
1

 
141

 
0.8
%
 
100.0
%
 

 

 
%
 
%
Indiana
 
2

 
139

 
0.8
%
 
91.9
%
 
2

 
139

 
0.7
%
 
93.1
%
Alabama
 
1

 
119

 
0.7
%
 
71.6
%
 
1

 
119

 
0.6
%
 
64.6
%
Arizona
 
1

 
108

 
0.6
%
 
89.2
%
 
1

 
108

 
0.6
%
 
92.1
%
Oregon
 
1

 
93

 
0.5
%
 
94.8
%
 
1

 
93

 
0.5
%
 
92.5
%
Delaware
 
1

 
67

 
0.4
%
 
100.0
%
 
2

 
227

 
1.2
%
 
89.3
%
Dist. of Columbia
 
2

 
40

 
0.2
%
 
100.0
%
 
2

 
40

 
0.2
%
 
100.0
%
    Total
 
144

 
17,762

 
100.0
%
 
95.2
%
 
147

 
18,399

 
100.0
%
 
94.8
%

Certain Unconsolidated Properties are encumbered by mortgage loans of $1.8 billion as of December 31, 2012.

The weighted average annual effective rent for the unconsolidated portfolio of properties, net of tenant concessions, is $17.03 per square foot as of December 31, 2012.














13





The following table summarizes the largest tenants occupying our shopping centers for Consolidated Properties plus Regency's pro-rata share of Unconsolidated Properties, excluding the properties of BRET, as of December 31, 2012, based upon a percentage of total annualized base rent exceeding or equal to 0.5% (GLA and dollars in thousands):
Tenant
 
GLA
 
Percent of Company Owned GLA
 
Rent
 
Percentage of Annualized Base Rent
 
Number of Leased Stores
 
Anchor Owned Stores (1)
Kroger
 
1,987

 
7.0
%
$
19,182

 
4.3
%
 
40

 
7

Publix
 
1,948

 
6.9
%
 
19,041

 
4.2
%
 
53

 
1

Safeway
 
1,535

 
5.4
%
 
14,696

 
3.3
%
 
45

 
6

Supervalu
 
774

 
2.7
%
 
9,559

 
2.1
%
 
25

 
1

CVS
 
501

 
1.8
%
 
8,051

 
1.8
%
 
47

 

TJX Companies
 
573

 
2.0
%
 
7,081

 
1.6
%
 
27

 

Whole Foods
 
252

 
0.9
%
 
5,485

 
1.2
%
 
9

 

PETCO
 
264

 
0.9
%
 
5,450

 
1.2
%
 
32

 

Ahold
 
361

 
1.3
%
 
5,134

 
1.1
%
 
13

 

Ross Dress For Less
 
273

 
1.0
%
 
4,341

 
1.0
%
 
16

 

H.E.B.
 
295

 
1.0
%
 
4,326

 
1.0
%
 
5

 

Walgreens
 
150

 
0.5
%
 
3,906

 
0.9
%
 
13

 

JPMorgan Chase Bank
 
66

 
0.2
%
 
3,599

 
0.8
%
 
25

 

Sears Holdings
 
426

 
1.5
%
 
3,445

 
0.8
%
 
8

 
1

Trader Joe's
 
124

 
0.4
%
 
3,373

 
0.7
%
 
14

 

Starbucks
 
92

 
0.3
%
 
3,335

 
0.7
%
 
78

 

Wells Fargo Bank
 
72

 
0.3
%
 
3,329

 
0.7
%
 
34

 

Rite Aid
 
207

 
0.7
%
 
3,206

 
0.7
%
 
24

 

Bank of America
 
70

 
0.2
%
 
3,183

 
0.7
%
 
25

 

Sports Authority
 
141

 
0.5
%
 
3,063

 
0.7
%
 
4

 

Harris Teeter
 
248

 
0.9
%
 
2,929

 
0.7
%
 
8

 

Target
 
350

 
1.2
%
 
2,884

 
0.6
%
 
4

 
14

Subway
 
93

 
0.3
%
 
2,832

 
0.6
%
 
107

 

Toys "R" Us
 
176

 
0.6
%
 
2,750

 
0.6
%
 
7

 

Michael's
 
169

 
0.6
%
 
2,579

 
0.6
%
 
10

 

Wal-Mart
 
435

 
1.5
%
 
2,466

 
0.5
%
 
4

 
5

Hallmark
 
133

 
0.5
%
 
2,406

 
0.5
%
 
40

 

(1) Stores owned by anchor tenant that are attached to our centers.

Regency's leases for tenant space under 5,000 square feet generally have terms ranging from three to five years. Leases greater than 10,000 square feet generally have lease terms in excess of five years, mostly comprised of anchor tenants. Many of the anchor leases contain provisions allowing the tenant the option of extending the term of the lease at expiration. The leases provide for the monthly payment in advance of fixed minimum rent, additional rents calculated as a percentage of the tenant's sales, the tenant's pro-rata share of real estate taxes, insurance, and common area maintenance (“CAM”) expenses, and reimbursement for utility costs if not directly metered.






14





The following table sets forth a schedule of lease expirations for the next ten years and thereafter, assuming no tenants renew their leases (GLA and dollars in thousands):
Lease Expiration Year
 
Number of Tenants with Expiring Leases
 
Expiring GLA (2)
 
Percent of Total Company GLA (2)
 
Minimum Rent Expiring Leases (3)
 
Percent of Minimum Rent (3)
(1)
 
173

 
218

 
0.8
%
$
4,697

 
1.0
%
2013
 
936

 
1,854

 
7.3
%
 
37,980

 
8.4
%
2014
 
1,057

 
2,610

 
10.2
%
 
52,016

 
11.6
%
2015
 
1,059

 
2,312

 
9.1
%
 
47,824

 
10.6
%
2016
 
936

 
2,758

 
10.8
%
 
48,383

 
10.8
%
2017
 
1,011

 
3,303

 
12.9
%
 
64,138

 
14.2
%
2018
 
316

 
1,780

 
7.0
%
 
28,336

 
6.3
%
2019
 
158

 
1,271

 
5.0
%
 
20,302

 
4.5
%
2020
 
144

 
1,493

 
5.8
%
 
22,711

 
5.0
%
2021
 
174

 
1,245

 
4.9
%
 
20,094

 
4.5
%
2022
 
222

 
1,666

 
6.5
%
 
25,845

 
5.8
%
Thereafter
 
274

 
5,028

 
19.7
%
 
78,048

 
17.3
%
Total
 
6,460

 
25,538

 
100.0
%
 
$
450,374

 
100.0
%
(1) Leases currently under month-to-month rent or in process of renewal.
(2) Represents GLA for Consolidated Properties plus Regency's pro-rata share of Unconsolidated Properties.
(3) Minimum rent includes current minimum rent and future contractual rent steps for the Consolidated Properties plus Regency's pro-rata share from Unconsolidated Properties, but excludes additional rent such as percentage rent, common area maintenance, real estate taxes and insurance reimbursements.


15



See the following property table and also see Item 7, Management's Discussion and Analysis for further information about Regency's properties.
Property Name (1)
 
Year
Acquired
 
Year
Con-
structed
(2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased
(3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
CALIFORNIA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Los Angeles / Southern CA
 
 
 
 
 
 
 
 
 
 
 
 
Amerige Heights Town Center
 
2000
 
2000
 
89,181

 
100.0
%
 
Albertsons, (Target)
 
Brea Marketplace (5)
 
2005
 
1987
 
352,226

 
98.1
%
 
Sprout's Markets, Target
 
24 Hour Fitness, Big 5 Sporting Goods, Beverages & More!, Childtime Childcare, Golfsmith
El Camino Shopping Center
 
1999
 
1995
 
135,728

 
95.1
%
 
Von's Food & Drug
 
Sav-On Drugs
Granada Village (5)
 
2005
 
1965
 
225,528

 
97.9
%
 
Sprout's Markets
 
Rite Aid, TJ Maxx, Stein Mart, PETCO, Homegoods
Hasley Canyon Village (5)
 
2003
 
2003
 
65,801

 
100.0
%
 
Ralphs
 
Heritage Plaza
 
1999
 
1981
 
230,163

 
99.4
%
 
Ralphs
 
CVS, Daiso, Mitsuwa Marketplace, Total Woman
Laguna Niguel Plaza (5)
 
2005
 
1985
 
41,943

 
96.4
%
 
(Albertsons)
 
CVS
Marina Shores (5)
 
2008
 
2001
 
67,727

 
100.0
%
 
Whole Foods
 
PETCO
Morningside Plaza
 
1999
 
1996
 
91,212

 
97.4
%
 
Stater Bros.
 
Newland Center
 
1999
 
1985
 
149,140

 
96.0
%
 
Albertsons
 
Plaza Hermosa
 
1999
 
1984
 
94,777

 
100.0
%
 
Von's Food & Drug
 
Sav-On Drugs
Rona Plaza
 
1999
 
1989
 
51,760

 
100.0
%
 
Superior Super Warehouse
 
Seal Beach (5)
 
2002
 
1966
 
96,858

 
97.8
%
 
Von's Food & Drug
 
CVS
South Bay Village
 
2012
 
2012
 
107,706

 
100.0
%
 
Orchard Supply Hardware
 
Homegoods
Twin Oaks Shopping Center (5)
 
2005
 
1978
 
98,399

 
100.0
%
 
Ralphs
 
Rite Aid
Valencia Crossroads
 
2002
 
2003
 
172,856

 
98.8
%
 
Whole Foods, Kohl's
 
Vine at Castaic
 
2005
 
2005
 
27,314

 
70.4
%
 
 
Westridge Village
 
2001
 
2003
 
92,287

 
96.6
%
 
Albertsons
 
Beverages & More!
Woodman Van Nuys
 
1999
 
1992
 
107,614

 
99.1
%
 
El Super
 
Silverado Plaza (5)
 
2005
 
1974
 
84,916

 
100.0
%
 
Nob Hill
 
Longs Drug
Gelson's Westlake Market Plaza
 
2002
 
2002
 
84,975

 
95.5
%
 
Gelson's Markets
 
Oakbrook Plaza
 
1999
 
1982
 
83,286

 
99.3
%
 
Albertsons
 
(Longs Drug)
Ventura Village
 
1999
 
1984
 
76,070

 
91.3
%
 
Von's Food & Drug
 
Westlake Village Plaza and Center
 
1999
 
1975
 
190,529

 
90.2
%
 
Von's Food & Drug and Sprouts
 
(CVS), Longs Drug, Total Woman
Falcon Ridge Town Center Phase I (5)
 
2003
 
2004
 
232,754

 
88.0
%
 
Stater Bros., (Target)
 
Sports Authority, Ross Dress for Less, Michaels, Party City
Falcon Ridge Town Center Phase II (5)
 
2005
 
2005
 
66,864

 
100.0
%
 
24 Hour Fitness
 
CVS
French Valley Village Center
 
2004
 
2004
 
98,752

 
95.3
%
 
Stater Bros.
 
CVS
Indio Towne Center
 
2006
 
2010
 
179,505

 
85.6
%
 
(Home Depot), (WinCo), Toys R Us
 
CVS, 24 Hour Fitness, PETCO, Party City
Jefferson Square
 
2007
 
2007
 
38,013

 
81.4
%
 
Fresh & Easy
 
CVS
4S Commons Town Center
 
2004
 
2004
 
240,060

 
92.2
%
 
Ralphs, Jimbo's...Naturally!
 
Bed Bath & Beyond, Cost Plus World Market, CVS, Griffin Ace Hardware
Balboa Mesa Shopping Center
 
2012
 
1974
 
189,321

 
96.5
%
 
Von's Food & Drug, Kohl's
 
CVS
Costa Verde Center
 
1999
 
1988
 
178,623

 
94.7
%
 
Bristol Farms
 
Bookstar, The Boxing Club
El Norte Pkwy Plaza
 
1999
 
1984
 
90,549

 
84.2
%
 
Von's Food & Drug
 
CVS
Friars Mission Center
 
1999
 
1989
 
146,897

 
100.0
%
 
Ralphs
 
Longs Drug

16



Property Name (1)
 
Year
Acquired
 
Year
Con-
structed
(2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased
(3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
Navajo Shopping Center (5)
 
2005
 
1964
 
102,139

 
95.5
%
 
Albertsons
 
Rite Aid, O'Reilly Auto Parts
Point Loma Plaza (5)
 
2005
 
1987
 
212,415

 
94.0
%
 
Von's Food & Drug
 
Sport Chalet 5, 24 Hour Fitness, Jo-Ann Fabrics
Rancho San Diego Village (5)
 
2005
 
1981
 
153,256

 
87.6
%
 
Von's Food & Drug
 
(Longs Drug), 24 Hour Fitness
Twin Peaks
 
1999
 
1988
 
198,139

 
99.4
%
 
Albertsons, Target
 
Uptown District
 
2012
 
1990
 
148,638

 
96.7
%
 
Ralphs, Trader Joe's
 
Vista Village IV
 
2006
 
2006
 
11,000

 
45.5
%
 
 
Vista Village Phase I (5)
 
2002
 
2003
 
129,009

 
96.7
%
 
Krikorian Theaters, (Lowe's)
 
Vista Village Phase II (5)
 
2002
 
2003
 
55,000

 
45.5
%
 
Frazier Farms
 
 
 
 
 
 
 
 
 
 
 
 
 
 
San Francisco / Northern CA
 
 
 
 
 
 
 
 
 
 
 
 
Auburn Village (5)
 
2005
 
1990
 
133,944

 
85.4
%
 
Bel Air Market
 
Dollar Tree, Goodwill Industries, (CVS)
Bayhill Shopping Center (5)
 
2005
 
1990
 
121,846

 
100.0
%
 
Mollie Stone's Market
 
CVS
Clayton Valley Shopping Center
 
2003
 
2004
 
260,205

 
92.9
%
 
Fresh & Easy, Orchard Supply Hardware
 
Longs Drugs, Dollar Tree, Ross Dress For Less
Diablo Plaza
 
1999
 
1982
 
63,265

 
94.3
%
 
(Safeway)
 
(CVS), Beverages & More
El Cerrito Plaza
 
2000
 
2000
 
256,035

 
98.9
%
 
(Lucky's), Trader Joe's
 
(Longs Drug), Bed Bath & Beyond, Barnes & Noble, Jo-Ann Fabrics, PETCO, Ross Dress For Less
Encina Grande
 
1999
 
1965
 
102,413

 
95.8
%
 
Safeway
 
Walgreens
Folsom Prairie City Crossing
 
1999
 
1999
 
90,237

 
92.4
%
 
Safeway
 
Gateway 101
 
2008
 
2008
 
92,110

 
100.0
%
 
(Home Depot), (Best Buy), Sports Authority, Nordstrom Rack
 
Oak Shade Town Center
 
2011
 
1998
 
103,762

 
92.3
%
 
Safeway
 
Office Max, Rite Aid
Pleasant Hill Shopping Center (5)
 
2005
 
1970
 
227,681

 
100.0
%
 
Target, Toys "R" Us
 
Barnes & Noble, Ross Dress for Less
Powell Street Plaza
 
2001
 
1987
 
165,928

 
100.0
%
 
Trader Joe's
 
PETCO, Beverages & More!, Ross Dress For Less, DB Shoe Company, Marshalls
Raley's Supermarket (5)
 
2007
 
1964
 
62,827

 
100.0
%
 
Raley's
 
San Leandro Plaza
 
1999
 
1982
 
50,432

 
100.0
%
 
(Safeway)
 
(Longs Drug)
Sequoia Station
 
1999
 
1996
 
103,148

 
94.2
%
 
(Safeway)
 
Longs Drug, Barnes & Noble, Old Navy, Pier 1
Strawflower Village
 
1999
 
1985
 
78,827

 
95.3
%
 
Safeway
 
(Longs Drug)
Tassajara Crossing
 
1999
 
1990
 
146,140

 
96.4
%
 
Safeway
 
Longs Drug, Tassajara Valley Hardware
Woodside Central
 
1999
 
1993
 
80,591

 
100.0
%
 
(Target)
 
Chuck E. Cheese, Marshalls
Ygnacio Plaza (5)
 
2005
 
1968
 
109,701

 
100.0
%
 
Fresh & Easy
 
Sports Basement
Blossom Valley (5)
 
1999
 
1990
 
93,316

 
98.4
%
 
Safeway
 
CVS
Loehmanns Plaza California
 
1999
 
1983
 
113,310

 
96.9
%
 
(Safeway)
 
Longs Drug, Loehmann's
Mariposa Shopping Center (5)
 
2005
 
1957
 
126,658

 
100.0
%
 
Safeway
 
Longs Drug, Ross Dress for Less
Snell & Branham Plaza (5)
 
2005
 
1988
 
92,352

 
100.0
%
 
Safeway
 
West Park Plaza
 
1999
 
1996
 
88,104

 
98.4
%
 
Safeway
 
Rite Aid
Golden Hills Promenade
 
2006
 
2006
 
241,846

 
95.8
%
 
Lowe's
 
Bed Bath & Beyond, TJ Maxx
Five Points Shopping Center (5)
 
2005
 
1960
 
144,553

 
98.5
%
 
Albertsons
 
Longs Drug, Ross Dress for Less, Big 5 Sporting Goods, PETCO
East Washington Place (4)
 
2011
 
2011
 
203,155

 
81.8
%
 
(Target), Dick's Sporting Goods, TJ Maxx
 
Corral Hollow (5)
 
2000
 
2000
 
167,184

 
98.3
%
 
Safeway, Orchard Supply & Hardware
 
Longs Drug

17



Property Name (1)
 
Year
Acquired
 
Year
Con-
structed
(2)
 
Gross Leasable Area
(GLA)
 
Percent
Leased
(3)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Drug Stores & Other Junior Anchors > 10,000 Sq Ft
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (CA)
 
 
 
 
 
8,808,500

 
95.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FLORIDA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ft. Myers / Cape Coral
 
 
 
 
 
 
 
 
 
 
 
 
Corkscrew Village
 
2007
 
1997
 
82,011

 
98.3
%
 
Publix
 
Grande Oak
 
2000
 
2000
 
78,784

 
94.7
%
 
Publix
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jacksonville / North Florida
 
 
 
 
 
 
 
 
 
 
 
 
Anastasia Plaza
 
1993
 
1988
 
102,342

 
96.5
%
 
Publix
 
Canopy Oak Center (5)
 
2006
 
2006
 
90,042

 
88.7
%
 
Publix
 
Carriage Gate
 
1994
 
1978
 
76,784

 
86.8
%
 
 
Leon County Tax Collector, TJ Maxx
Courtyard Shopping Center
 
1993
 
1987
 
137,256

 
100.0
%
 
(Publix), Target
 
Fleming Island
 
1998
 
2000
 
136,663

 
77.5
%
 
Publix, (Target)
 
PETCO
Hibernia Pavilion
 
2006
 
2006
 
51,298

 
97.4
%
 
Publix
 
Hibernia Plaza
 
2006
 
2006
 
8,400

 
16.7
%
 
 
(Walgreens)
Horton's Corner
 
2007
 
2007
 
14,820

 
100.0
%
 
 
Walgreens
John's Creek Center (5)
 
2003
 
2004
 
75,101

 
80.5
%
 
Publix
 
Julington Village (5)
 
1999
 
1999
 
81,820

 
98.3
%
 
Publix
 
(CVS)
Lynnhaven (5)
 
2001
 
2001
 
63,871

 
100.0
%
 
Publix
 
Millhopper Shopping Center
 
1993
 
1974
 
80,421

 
100.0
%
 
Publix
 
CVS
Newberry Square
 
1994
 
1986
 
180,524

 
91.1
%
 
Publix, K-Mart
 
Jo-Ann Fabrics
Nocatee Town Center
 
2007
 
2007
 
69,679

 
100.0
%
 
Publix
 
Oakleaf Commons
 
2006
 
2006
 
73,717

 
82.9
%
 
Publix
 
(Walgreens)
Ocala Corners
 
2000
 
2000
 
86,772

 
98.6
%
 
Publix
 
Old St Augustine Plaza
 
1996
 
1990
 
232,459

 
93.5
%
 
Publix, Burlington Coat Factory, Hobby Lobby
 
Pine Tree Plaza
 
1997
 
1999
 
63,387

 
100.0
%
 
Publix