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 |
or
For the transition period from to
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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 | |
7.45% Series 3 Cumulative Redeemable Preferred Stock, $.01 par value | New York Stock Exchange | |
7.25% Series 4 Cumulative Redeemable Preferred Stock, $.01 par value | New York Stock Exchange | |
6.70% Series 5 Cumulative Redeemable Preferred Stock, $.01 par value | New York Stock Exchange | |
6.625% Series 6 Cumulative Redeemable Preferred Stock, $.01 par value | New York Stock Exchange | |
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 x Regency Centers, L.P. x
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 $ 3,867,408,831 Regency Centers, L.P. N/A
The number of shares outstanding of the Regency Centers Corporation’s voting common stock was 89,923,545 as of February 28, 2012.
Documents Incorporated by Reference
Portions of Regency Centers Corporation's proxy statement in connection with its 2012 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, 2011 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, 2011, 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 3, 4, 5, and 6 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 13% 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, Series 3, 4, 5, and 6 Preferred Units owned by the Parent Company, and Series D Preferred Units owned by institutional investors. The Series D preferred units and 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 3, 4, 5, and 6 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 anticipated 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 industry and markets in which Regency Centers Corporation (the “Parent Company”) and Regency Centers, L.P. (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 or develop many of our properties; consequences of any armed conflict or terrorist attack against the United States; and the ability to obtain governmental approvals. 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 are focused on achieving total shareholder returns in excess of REIT shopping center averages and sustaining growth in our net asset value and our earnings over an extended period of time. We work to achieve these goals through owning, operating, and investing in a high-quality portfolio of primarily grocery-anchored shopping centers that are leased by market-dominant grocers, category-leading anchors, specialty retailers, and restaurants located in areas with above average household incomes and population densities. 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, 2011, we directly owned 217 shopping centers (the “Consolidated Properties”) located in 24 states representing 23.8 million square feet of gross leasable area (“GLA”). Through co-investment partnerships, we own partial ownership interests in 147 shopping centers (the “Unconsolidated Properties”) located in 24 states and the District of Columbia representing 18.4 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, side-shop retailers, and restaurants, including 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. Increasing occupancy in our shopping centers to pre-recession levels and achieving positive rental rate growth are key objectives of our strategic plan.
We grow our shopping center portfolio through acquisitions of operating centers and shopping center development. We will continue to use our unique combination of development capabilities, market presence, and anchor relationships to invest in value-added opportunities sourced from land owners and joint venture partners, the redevelopment of existing centers, developing land that we already own, and other opportunities. Development is customer driven and serves the growth needs of our anchors and specialty retailers, resulting in new modern shopping centers with long-term anchor leases that produce attractive returns on our invested capital.
Maintaining a high quality portfolio also involves identifying and selling assets that are at risk of not achieving our long-term investment goals. Proceeds from these sales are targeted for reinvestment into higher quality new development, redevelopment of existing centers, or acquisitions that will generate sustainable revenue growth and higher returns.
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 also grow their shopping center investments through acquisitions from third parties or direct purchases from us.
1
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 three shopping centers and have five 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. It is our intent to be one of the leaders in the design, construction and operation of environmentally efficient shopping centers that 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 which 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 the principle competitive factors in attracting tenants in our market areas are competitive in-fill locations, above average trade area demographics, rental costs, tenant mix, property age, and property maintenance. 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 Premier Customer Initiative program that allows us to efficiently provide retailers with multiple locations, our practice of maintaining and renovating our shopping centers, and our ability to source and develop new shopping centers.
Changes in Policies
Our Board of Directors establishes the policies that govern our investment and operating strategies including, among others, development and acquisition of shopping centers, tenant and market focus, debt and equity financing policies, quarterly distributions to stock and unit holders, and REIT tax status. The Board of Directors may amend these policies at any time without a vote of our stockholders.
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, 2011, we had 369 employees and we believe that we have strong relations with our employees.
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. | 59 | Chairman and Chief Executive Officer | 1993 |
Brian M. Smith | 57 | President and Chief Operating Officer | 2009 (1) |
Bruce M. Johnson | 64 | Executive Vice President and Chief Financial Officer | 1993 (2) |
Dan M. Chandler, III | 44 | Managing Director - West | 2009 (3) |
John S. Delatour | 52 | Managing Director - Central | 1999 |
James D. Thompson | 57 | 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) In January 2012, Bruce M. Johnson, Executive Vice President and Chief Financial Officer of the Company since 1993, announced that he will retire from the Company at the end of 2012. Lisa Palmer, the Company's Senior Vice President of Capital Markets, will succeed Mr. Johnson upon his retirement.
(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”), South St. Paul, 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 River Club, One Independent Drive, 35th Floor, Jacksonville, Florida, at 11:00 a.m. on Tuesday, May 1, 2012.
Item 1A. Risk Factors
3
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; |
• | consequences of any armed conflict involving, or terrorist attack against, the United States; |
• | adverse financial conditions for large retail companies; |
• | 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, such as those operated by Wal-Mart, and their adverse effect on major grocery chains; and |
• | the impact of increased energy costs on consumers and its consequential effect on the number of shopping visits to our centers. |
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 recycle capital, 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, 2011, our properties in California, Florida, and Texas accounted for 31.6%, 14.5%, and 13.1%, respectively, of our consolidated net operating income. Our revenues and cash available to pay expenses, maintain our properties, and for distribution to stock and unit holders could be adversely affected by this geographic concentration if market conditions, such as supply of retail space or demand for shopping centers, deteriorate in California, Florida, or Texas relative to other geographic areas.
Loss of revenues from major tenants could reduce distributions to stock and unit holders.
We derive significant revenues from anchor tenants such as Kroger, Publix and Safeway which are our three largest anchor tenants and accounted for 4.2%, 4.4%, and 3.7%, respectively, of our annualized base rent from Consolidated Properties plus our pro-rata share of annualized base rent from Unconsolidated Properties ("pro-rata basis") for the year ended December 31, 2011. Distributions to stock and unit holders could be adversely affected by the loss of revenues in the event a major 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. Most anchors have the right to vacate and prevent re-tenanting by paying rent for the balance of the lease term. If major 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 presence of our tenants.
Our net income could be adversely affected if we fail to lease significant portions of our new developments or in the event of bankruptcy or insolvency of any anchors or of a significant number of our non-anchor tenants within a shopping center. The adverse impact on our net income may be greater than the loss of rent from the resulting unoccupied space because co-tenancy clauses 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.
We may be unable to collect balances due from tenants in bankruptcy.
Although base 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 cancels 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 period, 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 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 such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors, and therefore is subject to a significant degree of management judgment and 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.
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. The return of 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 these 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.
5
Our acquisition activities may not produce the returns that we expect.
Our investment strategy includes investing in high-quality grocery-anchored shopping centers that are leased by market-dominant grocers, category-leading anchors, specialty retailers, and restaurants located in areas with above average household incomes and population densities. The acquisition of properties entails risks that include the following, any of which could adversely affect our results of operations and our ability to meet our obligations:
• | 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. As a result, the property may fail to achieve the returns we have projected, either temporarily or for a longer time; |
• | we may not be able to identify suitable properties to acquire or may be unable to complete the acquisition of the properties we identify; |
• | we may not be able to integrate an acquisition into our existing operations successfully; |
• | 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; and |
• | 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 cost. |
Unsuccessful development activities or a slowdown in development activities will 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 which can 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 up 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 and available for contribution to our co-investment partnerships or sale to third parties; |
• | 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; |
• | the risk that we may abandon development opportunities and lose our investment in these developments; |
• | the risk that development costs of a project may exceed original estimates, possibly making the project unprofitable; |
• | delays in the development and construction process; 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.
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 reduced.
We may be unable to sell properties when appropriate because real estate investments are illiquid.
Real estate investments generally cannot be sold quickly. We may not be able to alter our portfolio promptly in response to changes in economic or other conditions including being unable to sell a property at a return we believe is appropriate. Our inability to respond quickly to adverse 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.
6
Changes in accounting standards may adversely impact our financial condition and results of operations.
The SEC may decide in the near future that issuers in the United States should be required to prepare financial statements in accordance with International Financial Reporting Standards (“IFRS”) instead of U.S. Generally Accepted Accounting Principles (“GAAP”). IFRS is a comprehensive set of accounting standards promulgated by the International Accounting Standards Board (“IASB”), which are rapidly gaining worldwide acceptance. Changes in U.S. GAAP and changes in current interpretations are beyond our control, can be hard to predict and could materially impact how we report our financial results and condition. In certain cases, we could be required to apply a new or revised rule retroactively or apply existing rules differently which may adversely impact our results of operations or result in our recasting prior period financial statements for material amounts. Additionally, significant changes to U.S. GAAP may require costly technology changes, additional training and personnel, and other expenses that will negatively impact our results of operations.
The adoption of new accounting rules may adversely impact our financial condition and results of operations.
The Financial Accounting Standards Board (“FASB”) has proposed new accounting rules which could result in significant changes in the way leases and / or real estate investments are reported in our financial statements under GAAP. The proposal, if adopted, could have a significant effect on our balance sheet. FASB may issue final rules on this topic in the near future. At this time, we are unable to determine what effect, if any, the adoption of this proposal will have on our financial condition, our results of operations and our financial ratios required by our debt covenants.
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, 2011, approximately 23.3%, 19.2%, and 12.4% of our property gross leasable area, on a consolidated basis, was located in California, Florida, and Texas, respectively. Intense weather conditions during the last decade has 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 in accordance 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 performance and 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 performance and our Parent Company's stock price.
7
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.
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 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 are implementing an online payment system where we will receive certain information about our tenants that will depend upon the secure transmission 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.
8
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 co-venturer in 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 co-venturer might (i) have interests or goals that are inconsistent with our interests or goals or (ii) otherwise impede our objectives. The other co-venturer 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.
Our co-investment partnerships are an important part of our growth strategy. The termination of our co-investment partnerships could adversely affect our cash flow, operating results, and distributions to stock and unit holders.
Our management fee income has increased significantly as our participation in co-investment partnerships has increased. 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.
In addition, termination of the co-investment partnerships without replacing them with new co-investment partnerships could adversely affect our growth strategy. Property sales to the co-investment partnerships provide us with an important source of funding for additional developments and acquisitions. Without this source of capital, our ability to recycle capital, fund developments and acquisitions, and increase distributions to stock and unit holders could be adversely affected.
Our co-investment partnerships have $1.9 billion of debt as of December 31, 2011, of which 13.6% will mature through 2012, which is subject to significant refinancing risks. If real estate values continue to decline, the refinancing of maturing loans, including those maturing in our joint ventures, will require us and our joint venture partners to contribute our respective pro-rata shares of capital in order to reduce refinancing requirements to acceptable loan to value levels required for new financings.
Risk Factors Related to Our Capital Recycling and Capital Structure
Higher market capitalization rates for our properties could adversely impact our ability to recycle capital and fund developments and acquisitions, and could dilute earnings.
As part of our capital recycling program, we sell operating properties that no longer meet our investment standards. We also develop certain retail centers because of their attractive margins with the intent of selling them to co-investment partnerships or other third parties for a profit. 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 our capital recycling program by reducing the amount of cash generated and profits realized. In order to meet the cash requirements of our development program, we may be required to sell more properties than initially planned, which would have a negative impact on our earnings.
We face risks associated with the use of debt to fund our business.
We depend on external financing, principally debt financing, to fund the growth of our business and to ensure that we can meet ongoing maturities of our outstanding debt. Our access to financing 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.
Without access to external financing, 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.
9
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.
Covenants in our debt agreements may restrict our operating activities and adversely affect our financial condition.
Our unsecured notes, unsecured term loan, unsecured line of credit, and revolving credit facility 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") dividend 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, unsecured line of credit, and our revolving credit facility, 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.
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 likely will 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. 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.
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Risk Factors Related to Interest Rates and the Market 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.
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 affect 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
11
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.
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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, 2011 | December 31, 2010 | |||||||||||||||||||||||
Location | # Properties | GLA | % of Total GLA | % Leased | # Properties | GLA | % of Total GLA | % Leased | ||||||||||||||||
California | 44 | 5,521,165 | 23.3 | % | 91.1 | % | 42 | 5,211,886 | 22.4 | % | 93.7 | % | ||||||||||||
Florida | 45 | 4,550,377 | 19.2 | % | 92.6 | % | 44 | 4,467,696 | 19.2 | % | 92.5 | % | ||||||||||||
Texas | 22 | 2,932,389 | 12.4 | % | 93.5 | % | 23 | 2,875,917 | 12.4 | % | 89.9 | % | ||||||||||||
Ohio | 12 | 1,591,430 | 6.7 | % | 96.3 | % | 13 | 1,698,262 | 7.3 | % | 93.2 | % | ||||||||||||
Georgia | 14 | 1,269,372 | 5.3 | % | 89.1 | % | 16 | 1,428,281 | 6.1 | % | 88.2 | % | ||||||||||||
Colorado | 14 | 1,161,853 | 4.9 | % | 91.6 | % | 14 | 1,117,074 | 4.8 | % | 86.8 | % | ||||||||||||
Virginia | 7 | 951,410 | 4.0 | % | 92.9 | % | 7 | 910,740 | 3.9 | % | 93.9 | % | ||||||||||||
Illinois | 5 | 862,968 | 3.6 | % | 95.0 | % | 5 | 885,581 | 3.8 | % | 94.4 | % | ||||||||||||
North Carolina | 9 | 836,922 | 3.5 | % | 92.6 | % | 9 | 874,238 | 3.8 | % | 87.8 | % | ||||||||||||
Oregon | 8 | 740,605 | 3.1 | % | 90.8 | % | 7 | 659,060 | 2.8 | % | 96.8 | % | ||||||||||||
Tennessee | 6 | 478,923 | 2.0 | % | 94.1 | % | 6 | 479,321 | 2.1 | % | 92.3 | % | ||||||||||||
Missouri | 4 | 408,347 | 1.7 | % | 98.7 | % | — | — | — | % | — | % | ||||||||||||
Arizona | 3 | 388,441 | 1.6 | % | 84.0 | % | 3 | 388,440 | 1.7 | % | 90.6 | % | ||||||||||||
Massachusetts | 2 | 360,297 | 1.5 | % | 94.6 | % | 2 | 371,758 | 1.6 | % | 93.7 | % | ||||||||||||
Washington | 5 | 357,201 | 1.5 | % | 94.1 | % | 6 | 461,073 | 2.0 | % | 94.0 | % | ||||||||||||
Nevada | 1 | 330,907 | 1.4 | % | 88.7 | % | 2 | 439,422 | 1.9 | % | 79.5 | % | ||||||||||||
Pennsylvania | 4 | 321,901 | 1.4 | % | 98.4 | % | 4 | 305,444 | 1.3 | % | 94.0 | % | ||||||||||||
Delaware | 2 | 242,939 | 1.0 | % | 89.6 | % | 2 | 242,680 | 1.0 | % | 89.8 | % | ||||||||||||
Michigan | 2 | 118,273 | 0.5 | % | 39.2 | % | 2 | 118,273 | 0.5 | % | 84.6 | % | ||||||||||||
Maryland | 1 | 87,556 | 0.4 | % | 97.2 | % | 1 | 95,010 | 0.4 | % | 90.1 | % | ||||||||||||
Alabama | 1 | 84,740 | 0.4 | % | 86.2 | % | 1 | 84,740 | 0.4 | % | 77.8 | % | ||||||||||||
South Carolina | 2 | 74,421 | 0.3 | % | 98.1 | % | 2 | 74,421 | 0.3 | % | 96.2 | % | ||||||||||||
Indiana | 3 | 54,484 | 0.2 | % | 82.3 | % | 3 | 54,484 | 0.2 | % | 62.9 | % | ||||||||||||
Kentucky | 1 | 23,186 | 0.1 | % | 93.9 | % | 1 | 23,186 | 0.1 | % | 81.9 | % | ||||||||||||
Total | 217 | 23,750,107 | 100.0 | % | 92.2 | % | 215 | 23,266,987 | 100.0 | % | 91.6 | % | ||||||||||||
Certain Consolidated Properties are encumbered by mortgage loans of $448.4 million as of December 31, 2011.
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The following table is a list of the shopping centers summarized by state and in order of largest holdings presented for Unconsolidated Properties (only properties owned by unconsolidated co-investment partnerships):
December 31, 2011 | December 31, 2010 | |||||||||||||||||||||||
Location | # Properties | GLA | % of Total GLA | % Leased | # Properties | GLA | % of Total GLA | % Leased | ||||||||||||||||
California | 27 | 3,550,511 | 19.3 | % | 95.5 | % | 27 | 3,555,084 | 16.3 | % | 94.4 | % | ||||||||||||
Virginia | 21 | 2,780,216 | 15.1 | % | 94.8 | % | 22 | 2,788,919 | 12.8 | % | 94.8 | % | ||||||||||||
Maryland | 15 | 1,726,984 | 9.4 | % | 92.9 | % | 15 | 1,765,700 | 8.1 | % | 89.8 | % | ||||||||||||
Illinois | 10 | 1,328,210 | 7.2 | % | 97.5 | % | 19 | 2,258,221 | 10.4 | % | 92.1 | % | ||||||||||||
Texas | 9 | 1,226,986 | 6.7 | % | 96.0 | % | 10 | 1,277,109 | 5.9 | % | 91.4 | % | ||||||||||||
North Carolina | 7 | 1,191,869 | 6.5 | % | 95.8 | % | 7 | 1,315,343 | 6.0 | % | 96.3 | % | ||||||||||||
Pennsylvania | 7 | 981,711 | 5.3 | % | 95.9 | % | 7 | 981,635 | 4.5 | % | 93.3 | % | ||||||||||||
Colorado | 6 | 941,094 | 5.1 | % | 95.5 | % | 6 | 947,326 | 4.3 | % | 94.8 | % | ||||||||||||
Florida | 11 | 841,160 | 4.6 | % | 93.2 | % | 11 | 841,159 | 3.9 | % | 92.0 | % | ||||||||||||
Minnesota | 5 | 675,021 | 3.7 | % | 98.4 | % | 3 | 483,520 | 2.2 | % | 97.4 | % | ||||||||||||
Washington | 5 | 577,441 | 3.1 | % | 90.9 | % | 5 | 577,441 | 2.6 | % | 91.7 | % | ||||||||||||
Ohio | 2 | 532,020 | 2.9 | % | 93.3 | % | 2 | 537,073 | 2.5 | % | 92.0 | % | ||||||||||||
South Carolina | 4 | 286,222 | 1.6 | % | 96.3 | % | 4 | 286,297 | 1.3 | % | 96.4 | % | ||||||||||||
Wisconsin | 2 | 269,128 | 1.5 | % | 93.5 | % | 2 | 269,128 | 1.2 | % | 94.2 | % | ||||||||||||
Georgia | 3 | 243,351 | 1.3 | % | 92.0 | % | 3 | 243,351 | 1.1 | % | 92.8 | % | ||||||||||||
Delaware | 2 | 227,481 | 1.2 | % | 89.3 | % | 2 | 231,587 | 1.1 | % | 86.2 | % | ||||||||||||
Massachusetts | 1 | 185,279 | 1.0 | % | 98.1 | % | 1 | 185,279 | 0.8 | % | 100.0 | % | ||||||||||||
Connecticut | 1 | 179,864 | 1.0 | % | 99.8 | % | 1 | 179,863 | 0.8 | % | 99.8 | % | ||||||||||||
New Jersey | 2 | 156,531 | 0.9 | % | 96.6 | % | 2 | 156,482 | 0.7 | % | 93.8 | % | ||||||||||||
Indiana | 2 | 138,884 | 0.7 | % | 93.1 | % | 3 | 218,769 | 1.0 | % | 91.1 | % | ||||||||||||
Alabama | 1 | 118,466 | 0.6 | % | 64.6 | % | 1 | 118,466 | 0.6 | % | 64.6 | % | ||||||||||||
Arizona | 1 | 107,633 | 0.6 | % | 92.1 | % | 1 | 107,633 | 0.5 | % | 93.2 | % | ||||||||||||
Oregon | 1 | 93,101 | 0.5 | % | 92.5 | % | 1 | 93,101 | 0.4 | % | 95.9 | % | ||||||||||||
Dist. of Columbia | 2 | 39,647 | 0.2 | % | 100.0 | % | 2 | 39,647 | 0.2 | % | 90.6 | % | ||||||||||||
Missouri | — | — | — | % | — | % | 23 | 2,265,467 | 10.4 | % | 96.8 | % | ||||||||||||
Tennessee | — | — | — | % | — | % | 1 | 86,065 | 0.4 | % | 94.8 | % | ||||||||||||
Total | 147 | 18,398,810 | 100.0 | % | 94.8 | % | 181 | 21,809,665 | 100.0 | % | 93.6 | % | ||||||||||||
Certain Unconsolidated Properties are encumbered by mortgage loans of $1.9 billion as of December 31, 2011.
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The following table summarizes the largest tenants occupying our shopping centers for Consolidated Properties plus Regency's pro-rata share of Unconsolidated Properties as of December 31, 2011, based upon a percentage of total annualized base rent exceeding or equal to 0.5% (dollars in thousands):
Tenant | GLA | Percent to Company Owned GLA | Rent | Percentage of Annualized Base Rent | Number of Leased Stores | Anchor Owned Stores (1) | |||||||||||
Publix | 2,031,785 | 6.8 | % | $ | 19,992 | 4.4 | % | 55 | 1 | ||||||||
Kroger | 2,090,100 | 7.0 | % | 19,202 | 4.2 | % | 43 | 8 | |||||||||
Safeway | 1,707,700 | 5.7 | % | 16,879 | 3.7 | % | 51 | 6 | |||||||||
Supervalu | 839,301 | 2.8 | % | 10,022 | 2.2 | % | 26 | 2 | |||||||||
CVS | 483,136 | 1.6 | % | 7,192 | 1.6 | % | 46 | — | |||||||||
Whole Foods | 252,450 | 0.8 | % | 6,664 | 1.5 | % | 8 | — | |||||||||
TJX Companies | 543,334 | 1.8 | % | 6,332 | 1.4 | % | 25 | — | |||||||||
Ahold | 341,251 | 1.1 | % | 4,751 | 1.0 | % | 13 | — | |||||||||
Ross Dress For Less | 279,805 | 0.9 | % | 4,353 | 1.0 | % | 17 | — | |||||||||
H.E.B. | 294,765 | 1.0 | % | 4,326 | 1.0 | % | 5 | — | |||||||||
PETCO | 219,706 | 0.7 | % | 4,104 | 0.9 | % | 25 | — | |||||||||
Walgreens | 193,909 | 0.7 | % | 3,729 | 0.8 | % | 16 | — | |||||||||
Starbucks | 100,076 | 0.3 | % | 3,507 | 0.8 | % | 83 | — | |||||||||
Sports Authority | 181,523 | 0.6 | % | 3,461 | 0.8 | % | 5 | — | |||||||||
Wells Fargo Bank | 69,089 | 0.2 | % | 3,311 | 0.7 | % | 36 | — | |||||||||
Bank of America | 76,767 | 0.3 | % | 3,270 | 0.7 | % | 26 | — | |||||||||
Sears Holdings | 428,090 | 1.4 | % | 3,213 | 0.7 | % | 8 | 1 | |||||||||
Rite Aid | 207,459 | 0.7 | % | 3,184 | 0.7 | % | 24 | — | |||||||||
PetSmart | 178,850 | 0.6 | % | 2,959 | 0.7 | % | 10 | — | |||||||||
Harris Teeter | 247,811 | 0.8 | % | 2,929 | 0.6 | % | 8 | — | |||||||||
Subway | 98,248 | 0.3 | % | 2,915 | 0.6 | % | 112 | — | |||||||||
Target | 349,683 | 1.2 | % | 2,884 | 0.6 | % | 4 | 18 | |||||||||
JPMorgan Chase Bank | 54,573 | 0.2 | % | 2,707 | 0.6 | % | 23 | — | |||||||||
The UPS Store | 95,642 | 0.3 | % | 2,499 | 0.6 | % | 93 | — | |||||||||
Wal-Mart | 435,400 | 1.5 | % | 2,466 | 0.5 | % | 4 | 4 | |||||||||
Trader Joe's | 89,994 | 0.3 | % | 2,296 | 0.5 | % | 11 | — | |||||||||
(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.
15
The following table sets forth a schedule of lease expirations for the next ten years and thereafter, assuming no tenants renew their leases (dollars in thousands):
Lease Expiration Year | Expiring GLA (2) | Percent of Total Company GLA (2) | Minimum Rent Expiring Leases (3) | Percent of Minimum Rent (3) | |||||||||
(1) | 432,809 | 1.6 | % | $ | 7,846 | 1.7 | % | ||||||
2012 | 2,366,496 | 8.9 | % | 46,159 | 10.2 | % | |||||||
2013 | 2,594,516 | 9.8 | % | 50,532 | 11.1 | % | |||||||
2014 | 2,609,414 | 9.8 | % | 51,487 | 11.3 | % | |||||||
2015 | 2,185,396 | 8.2 | % | 43,891 | 9.7 | % | |||||||
2016 | 2,923,044 | 11.0 | % | 50,019 | 11.0 | % | |||||||
2017 | 2,096,959 | 7.9 | % | 35,866 | 7.9 | % | |||||||
2018 | 1,431,217 | 5.4 | % | 22,702 | 5.0 | % | |||||||
2019 | 1,200,274 | 4.5 | % | 18,977 | 4.2 | % | |||||||
2020 | 1,597,409 | 6.0 | % | 23,440 | 5.2 | % | |||||||
2021 | 1,306,866 | 4.9 | % | 19,698 | 4.3 | % | |||||||
Thereafter | 5,808,151 | 22.0 | % | 83,033 | 18.4 | % | |||||||
Total | 26,552,551 | 100.0 | % | $ | 453,650 | 100.0 | % | ||||||
(1) Leased 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. | |||||||||||||
16
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) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
CALIFORNIA | ||||||||||||||
Los Angeles/ Southern CA | ||||||||||||||
4S Commons Town Center | 2004 | 2004 | 240,060 | 94.3 | % | Ralphs, Jimbo's...Naturally! | Bed Bath & Beyond, Cost Plus World Market, CVS, Griffin Ace Hardware | |||||||
Amerige Heights Town Center | 2000 | 2000 | 89,181 | 95.5 | % | Albertsons, (Target) | — | |||||||
Brea Marketplace (5) | 2005 | 1987 | 352,022 | 98.4 | % | Sprout's Markets, Target | 24 Hour Fitness, Big 5 Sporting Goods, Beverages & More!, Childtime Childcare, Golfsmith | |||||||
Costa Verde Center | 1999 | 1988 | 178,623 | 96.9 | % | Bristol Farms | Bookstar, The Boxing Club | |||||||
El Camino Shopping Center | 1999 | 1995 | 135,728 | 91.9 | % | Von's Food & Drug | Sav-On Drugs | |||||||
El Norte Pkwy Plaza | 1999 | 1984 | 90,549 | 91.9 | % | Von's Food & Drug | CVS | |||||||
Falcon Ridge Town Center Phase I (5) | 2003 | 2004 | 232,754 | 98.3 | % | Stater Bros., (Target) | Sports Authority, Ross Dress for Less, Access Home, Michaels, Party City, Pier 1 Imports | |||||||
Falcon Ridge Town Center Phase II (5) | 2005 | 2005 | 66,864 | 100.0 | % | 24 Hour Fitness | CVS | |||||||
Five Points Shopping Center (5) | 2005 | 1960 | 144,553 | 98.9 | % | Albertsons | Longs Drug, Ross Dress for Less, Big 5 Sporting Goods, PETCO | |||||||
French Valley Village Center | 2004 | 2004 | 98,752 | 95.3 | % | Stater Bros. | CVS | |||||||
Friars Mission Center | 1999 | 1989 | 146,897 | 91.1 | % | Ralphs | Longs Drug | |||||||
Gelson's Westlake Market Plaza | 2002 | 2002 | 84,975 | 94.7 | % | Gelson's Markets | — | |||||||
Golden Hills Promenade | 2006 | 2006 | 241,846 | 91.6 | % | Lowe's | Bed Bath & Beyond, TJ Maxx | |||||||
Granada Village (5) | 2005 | 1965 | 226,708 | 91.0 | % | 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 | 231,380 | 98.2 | % | Ralphs | CVS, Jax Bicycle Center, Mitsuwa Marketplace, Total Woman | |||||||
Indio Towne Center | 2006 | 2006 | 132,678 | 74.7 | % | (Home Depot), (WinCo), Toys R Us | CVS, 24 Hour Fitness, PETCO, Party City | |||||||
Indio Towne Center Phase II | 2010 | 2010 | 46,827 | 100.0 | % | Toys "R" Us/Babies "R" Us | — | |||||||
Jefferson Square | 2007 | 2007 | 38,013 | 74.7 | % | Fresh & Easy | CVS | |||||||
Laguna Niguel Plaza (5) | 2005 | 1985 | 41,943 | 87.4 | % | (Albertsons) | CVS | |||||||
Marina Shores (5) | 2008 | 2001 | 67,727 | 97.8 | % | Whole Foods | PETCO | |||||||
Morningside Plaza | 1999 | 1996 | 91,212 | 95.1 | % | Stater Bros. | — | |||||||
Navajo Shopping Center (5) | 2005 | 1964 | 102,139 | 94.6 | % | Albertsons | Rite Aid, O'Reilly Auto Parts | |||||||
Newland Center | 1999 | 1985 | 149,140 | 97.7 | % | Albertsons | — | |||||||
Oakbrook Plaza | 1999 | 1982 | 83,286 | 93.8 | % | Albertsons | (Longs Drug) | |||||||
Park Plaza Shopping Center (5) | 2001 | 1991 | 194,763 | 94.2 | % | Sprout's Markets | CVS, PETCO, Ross Dress For Less, Office Depot, Tuesday Morning | |||||||
Plaza Hermosa | 1999 | 1984 | 94,777 | 92.9 | % | Von's Food & Drug | Sav-On Drugs | |||||||
Point Loma Plaza (5) | 2005 | 1987 | 212,415 | 92.1 | % | Von's Food & Drug | Sport Chalet 5, 24 Hour Fitness, Jo-Ann Fabrics | |||||||
Rancho San Diego Village (5) | 2005 | 1981 | 153,256 | 90.1 | % | Von's Food & Drug | (Longs Drug), 24 Hour Fitness | |||||||
Rio Vista Town Center | 2005 | 2005 | 67,622 | 83.5 | % | Stater Bros. | (CVS) | |||||||
Rona Plaza | 1999 | 1989 | 51,760 | 100.0 | % | Superior Super Warehouse | — | |||||||
Seal Beach (5) | 2002 | 1966 | 96,858 | 95.5 | % | Von's Food & Drug | CVS | |||||||
Paseo Del Sol | 2004 | 2004 | 29,885 | 100.0 | % | Whole Foods | — | |||||||
17
Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
CALIFORNIA (continued) | ||||||||||||||
Twin Oaks Shopping Center (5) | 2005 | 1978 | 98,399 | 98.9 | % | Ralphs | Rite Aid | |||||||
Twin Peaks | 1999 | 1988 | 198,139 | 98.1 | % | Albertsons, Target | — | |||||||
Valencia Crossroads | 2002 | 2003 | 172,856 | 98.8 | % | Whole Foods, Kohl's | — | |||||||
Ventura Village | 1999 | 1984 | 76,070 | 90.7 | % | Von's Food & Drug | — | |||||||
Vine at Castaic | 2005 | 2005 | 27,314 | 72.9 | % | — | — | |||||||
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 | — | |||||||
Vista Village IV | 2006 | 2006 | 11,000 | 100.0 | % | — | — | |||||||
Westlake Village Plaza and Center | 1999 | 1975 | 190,529 | 87.9 | % | Von's Food & Drug and Sprouts | (CVS), Longs Drug, Total Woman | |||||||
Westridge Village | 2001 | 2003 | 92,287 | 100.0 | % | Albertsons | Beverages & More! | |||||||
Woodman Van Nuys | 1999 | 1992 | 107,614 | 98.7 | % | El Super | — | |||||||
San Francisco/ Northern CA | ||||||||||||||
Applegate Ranch Shopping Center | 2006 | 2006 | 144,444 | 82.4 | % | (Super Target), (Home Depot) | Marshalls, PETCO, Big 5 Sporting Goods | |||||||
Auburn Village (5) | 2005 | 1990 | 133,944 | 84.5 | % | Bel Air Market | Dollar Tree, Goodwill Industries, (Longs Drug) | |||||||
Bayhill Shopping Center (5) | 2005 | 1990 | 121,846 | 99.2 | % | Mollie Stone's Market | Longs Drug | |||||||
Blossom Valley (5) | 1999 | 1990 | 93,316 | 100.0 | % | Safeway | Longs Drug | |||||||
Clayton Valley Shopping Center | 2003 | 2004 | 260,205 | 95.7 | % | Fresh & Easy, Orchard Supply Hardware | Longs Drugs, Dollar Tree, Ross Dress For Less | |||||||
Clovis Commons | 2004 | 2004 | 174,990 | 99.3 | % | (Super Target) | Petsmart, TJ Maxx, Office Depot, Best Buy | |||||||
Corral Hollow (5) | 2000 | 2000 | 167,184 | 98.5 | % | Safeway, Orchard Supply & Hardware | Longs Drug | |||||||
Diablo Plaza | 1999 | 1982 | 63,265 | 98.5 | % | (Safeway) | (CVS), Beverages & More | |||||||
East Washington Place (4) | 2011 | 2011 | 208,224 | — | % | (Target) | — | |||||||
El Cerrito Plaza | 2000 | 2000 | 256,035 | 99.2 | % | (Lucky's) | (Longs Drug), Bed Bath & Beyond, Barnes & Noble, Jo-Ann Fabrics, PETCO, Ross Dress For Less | |||||||
Encina Grande | 1999 | 1965 | 102,413 | 98.3 | % | Safeway | Walgreens | |||||||
Folsom Prairie City Crossing | 1999 | 1999 | 90,237 | 94.2 | % | Safeway | — | |||||||
Gateway 101 | 2008 | 2008 | 92,110 | 100.0 | % | (Home Depot), (Best Buy), Sports Authority, Nordstrom Rack | — | |||||||
Loehmanns Plaza California | 1999 | 1983 | 113,310 | 98.2 | % | (Safeway) | Longs Drug, Loehmann's | |||||||
Mariposa Shopping Center (5) | 2005 | 1957 | 126,658 | 100.0 | % | Safeway | Longs Drug, Ross Dress for Less | |||||||
Oak Shade Town Center | 2011 | 1998 | 103,762 | 93.1 | % | Safeway | Office Max, Rite Aid | |||||||
Pleasant Hill Shopping Center (5) | 2005 | 1970 | 227,681 | 99.1 | % | Target, Toys "R" Us | Barnes & Noble, Ross Dress for Less | |||||||
Powell Street Plaza | 2001 | 1987 | 165,928 | 98.8 | % | 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) | |||||||
18
Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
CALIFORNIA (continued) | ||||||||||||||
Sequoia Station | 1999 | 1996 | 103,148 | 100.0 | % | (Safeway) | Longs Drug, Barnes & Noble, Old Navy, Pier 1 | |||||||
Silverado Plaza (5) | 2005 | 1974 | 84,916 | 100.0 | % | Nob Hill | Longs Drug | |||||||
Snell & Branham Plaza (5) | 2005 | 1988 | 92,352 | 96.4 | % | Safeway | — | |||||||
Stanford Ranch Village (5) | 2005 | 1991 | 89,875 | 95.9 | % | Bel Air Market | — | |||||||
Strawflower Village | 1999 | 1985 | 78,827 | 98.3 | % | Safeway | (Longs Drug) | |||||||
Tassajara Crossing | 1999 | 1990 | 146,140 | 96.3 | % | Safeway | Longs Drug, Tassajara Valley Hardware | |||||||
West Park Plaza | 1999 | 1996 | 88,104 | 91.6 | % | Safeway | Rite Aid | |||||||
Woodside Central | 1999 | 1993 | 80,591 | 95.9 | % | (Target) | Chuck E. Cheese, Marshalls | |||||||
Ygnacio Plaza (5) | 2005 | 1968 | 109,701 | 98.7 | % | Fresh & Easy | Sports Basement | |||||||
Subtotal/Weighted Average (CA) | 9,071,676 | 92.8 | % | |||||||||||
FLORIDA | ||||||||||||||
Ft. Myers / Cape Coral | ||||||||||||||
Corkscrew Village | 2007 | 1997 | 82,011 | 100.0 | % | Publix | — | |||||||
First Street Village | 2006 | 2006 | 54,926 | 94.7 | % | Publix | — | |||||||
Grande Oak | 2000 | 2000 | 78,784 | 94.7 | % | Publix | — | |||||||
Jacksonville / North Florida | ||||||||||||||
Anastasia Plaza | 1993 | 1988 | 102,342 | 96.4 | % | Publix | — | |||||||
Canopy Oak Center (5) | 2006 | 2006 | 90,042 | 82.5 | % | 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 | 74.8 | % | 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 | 87.0 | % | Publix | — | |||||||
Julington Village (5) | 1999 | 1999 | 81,820 | 100.0 | % | Publix | (CVS) | |||||||
Millhopper Shopping Center | 1993 | 1974 | 80,421 | 100.0 | % | Publix | CVS | |||||||
Newberry Square | 1994 | 1986 | 180,524 | 94.7 | % | Publix, K-Mart | Jo-Ann Fabrics | |||||||
Nocatee Town Center (4) | 2007 | 2007 | 69,679 | 90.8 | % | Publix | — | |||||||
Oakleaf Commons | 2006 | 2006 | 73,717 | 86.7 | % | Publix | (Walgreens) | |||||||
Ocala Corners | 2000 | 2000 | 86,772 | 95.9 | % | Publix | — | |||||||
Old St Augustine Plaza | 1996 | 1990 | 232,459 | 98.3 | % | Publix, Burlington Coat Factory, Hobby Lobby | CVS | |||||||
Pine Tree Plaza | 1997 | 1999 | 63,387 | 96.8 | % | Publix | — | |||||||
Plantation Plaza (5) | 2004 | 2004 | 77,747 | 88.1 | % | Publix | — | |||||||
19
Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
FLORIDA (continued) | ||||||||||||||
Seminole Shoppes | 2009 | 2009 | 73,241 | 96.4 | % | Publix | — | |||||||
Shoppes at Bartram Park (5) | 2005 | 2004 | 105,319 | 93.5 | % | Publix, (Kohl's) | — | |||||||
Shoppes at Bartram Park Phase II (5) | 2008 | 2008 | 14,639 | 70.0 | % | — | (Tutor Time) | |||||||
Shops at John's Creek | 2003 | 2004 | 15,490 | 73.5 | % | — | — | |||||||
Starke | 2000 | 2000 | 12,739 | 100.0 | % | — | CVS | |||||||
Vineyard Shopping Center (5) | 2001 | 2002 | 62,821 | 84.7 | % | Publix | — | |||||||
Miami / Fort Lauderdale | ||||||||||||||
Aventura Shopping Center | 1994 | 1974 | 102,876 | 92.2 | % | Publix | CVS, Shuva Israel | |||||||
Berkshire Commons | 1994 | 1992 | 110,062 | 100.0 | % | Publix | Walgreens | |||||||
Caligo Crossing | 2007 | 2007 | 10,763 | 100.0 | % | (Kohl's) | — | |||||||
Five Corners Plaza (5) | 2005 | 2001 | 44,647 | 99.4 | % | Publix | — | |||||||
Garden Square | 1997 | 1991 | 90,258 | 100.0 | % | Publix | CVS | |||||||
Naples Walk Shopping Center | 2007 | 1999 | 125,390 | 79.7 | % | Publix | — | |||||||
Pebblebrook Plaza (5) | 2000 | 2000 | 76,767 | 100.0 | % | Publix | (Walgreens) | |||||||
Shoppes @ 104 | 1998 | 1990 | 108,192 | 100.0 | % | Winn-Dixie | Navarro Discount Pharmacies | |||||||
Welleby Plaza | 1996 | 1982 | 109,949 | 86.7 | % | Publix | Bealls | |||||||
Tampa / Orlando | ||||||||||||||
Beneva Village Shops | 1998 | 1987 | 141,532 | 91.1 | % | Publix | Walgreens, Harbor Freight Tools, You Fit Health Club | |||||||
Bloomingdale Square | 1998 | 1987 | 267,736 | 96.3 | % | Publix, Wal-Mart, Bealls | Ace Hardware | |||||||
East Towne Center | 2002 | 2003 | 69,841 | 86.0 | % | Publix | — | |||||||
Kings Crossing Sun City | 1999 | 1999 | 75,020 | 95.5 | % | Publix | — | |||||||
Lynnhaven (5) | 2001 | 2001 | 63,871 | 100.0 | % | Publix | — | |||||||
Marketplace Shopping Center | 1995 | 1983 | 90,296 | 74.7 | % | LA Fitness | — | |||||||
Regency Square | 1993 | 1986 | 349,848 | 92.0 | % | AMC Theater, Michaels, (Best Buy), (Macdill) | Dollar Tree, Marshalls, Shoe Carnival, Staples, TJ Maxx, PETCO, Ulta | |||||||
Suncoast Crossing Phase I | 2007 | 2007 | 108,434 | 94.8 | % | Kohl's | — | |||||||
Suncoast Crossing Phase II (4) | 2008 | 2008 | 9,451 | 70.4 | % | (Target) | — | |||||||
Town Square | 1997 | 1999 | 44,380 | 90.1 | % | — | PETCO, Pier 1 Imports | |||||||
Village Center | 1995 | 1993 | 181,110 | 93.8 | % | Publix | Walgreens, Stein Mart | |||||||
Northgate Square | 2007 | 1995 | 75,495 | 92.3 | % | Publix | — | |||||||
Westchase | 2007 | 1998 | 78,998 | 100.0 | % | Publix | — | |||||||
Willa Springs (5) | 2000 | 2000 | 89,930 | 100.0 | % | Publix | — | |||||||
West Palm Beach / Treasure Cove | ||||||||||||||
Boynton Lakes Plaza | 1997 | 1993 | 117,124 | 78.4 | % | Publix | Citi Trends | |||||||
Chasewood Plaza | 1993 | 1986 | 155,603 | 95.0 | % | Publix | Bealls, Books-A-Million | |||||||
20
Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
FLORIDA (continued) | ||||||||||||||
East Port Plaza | 1997 | 1991 | 162,831 | 91.1 | % | Publix | Walgreens, Medvance Institute, Goodwill | |||||||
Island Crossing (5) | 2007 | 1996 | 58,456 | 97.6 | % | Publix | — | |||||||
Martin Downs Village Center | 1993 | 1985 | 112,667 | 89.1 | % | — | Bealls, Coastal Care | |||||||
Martin Downs Village Shoppes | 1993 | 1998 | 48,937 | 87.9 | % | — | Walgreens | |||||||
Town Center at Martin Downs | 1996 | 1996 | 64,546 | 100.0 | % | Publix | — | |||||||
Wellington Town Square | 1996 | 1982 | 107,325 | 99.2 | % | Publix | CVS | |||||||
Subtotal/Weighted Average (FL) | 5,391,537 | 92.7 | % | |||||||||||
TEXAS | ||||||||||||||
Austin | ||||||||||||||
Hancock | 1999 | 1998 | 410,438 | 97.9 | % | H.E.B., Sears | Twin Liquors, PETCO, 24 Hour Fitness | |||||||
Market at Round Rock | 1999 | 1987 | 122,646 | 77.4 | % | Sprout's Markets | Office Depot | |||||||
North Hills | 1999 | 1995 | 144,020 | 94.9 | % | H.E.B. | — | |||||||
Tech Ridge Center | 2011 | 2001 | 187,350 | 93.8 | % | H.E.B. | Office Depot, Petco | |||||||
Dallas / Ft. Worth | ||||||||||||||
Bethany Park Place (5) | 1998 | 1998 | 98,906 | 98.0 | % | Kroger | — | |||||||
Cooper Street | 1999 | 1992 | 127,696 | 91.9 | % | (Home Depot) | Office Max, K&G Men's Company, Home Depot Expansion Tract | |||||||
Hickory Creek Plaza | 2006 | 2006 | 28,134 | 77.6 | % | (Kroger) | — | |||||||
Shops at Highland Village | 2005 | 2005 | 352,086 | 87.7 | % | AMC Theater | Barnes & Noble, Dental Insurance Company | |||||||
Hillcrest Village | 1999 | 1991 | 14,530 | 100.0 | % | — | — | |||||||
Keller Town Center | 1999 | 1999 | 114,937 | 91.8 | % | Tom Thumb | — | |||||||
Lebanon/Legacy Center | 2000 | 2002 | 56,674 | 83.4 | % | (Albertsons), Wal-Mart | — | |||||||
Market at Preston Forest | 1999 | 1990 | 96,353 | 100.0 | % | Tom Thumb | — | |||||||
Mockingbird Common | 1999 | 1987 | 120,321 | 100.0 | % | Tom Thumb | Ogle School of Hair Design | |||||||
Preston Park | 1999 | 1985 | 239,333 | 91.3 | % | Tom Thumb | Gap | |||||||
Prestonbrook | 1998 | 1998 | 91,537 | 97.2 | % | Kroger | — | |||||||
Rockwall Town Center | 2002 | 2004 | 46,095 | 100.0 | % | (Kroger) | (Walgreens) | |||||||
Shiloh Springs (5) | 1998 | 1998 | 110,040 | 83.1 | % | Kroger | — | |||||||
Signature Plaza | 2003 | 2004 | 32,415 | 80.0 | % | (Kroger) | — | |||||||
Trophy Club | 1999 | 1999 | 106,507 | 89.3 | % | Tom Thumb | (Walgreens) | |||||||
Houston | ||||||||||||||
Alden Bridge (5) | 2002 | 1998 | 138,953 | 96.8 | % | Kroger | Walgreens | |||||||
Cochran's Crossing | 2002 | 1994 | 138,192 | 93.4 | % | Kroger | CVS | |||||||
Indian Springs Center (5) | 2002 | 2003 | 136,625 | 100.0 | % | H.E.B. | — | |||||||
Kleinwood Center (5) | 2002 | 2003 | 148,964 | 89.3 | % | H.E.B. | (Walgreens) | |||||||
21
Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
TEXAS (continued) | ||||||||||||||
Panther Creek | 2002 | 1994 | 166,077 | 100.0 | % | Randall's Food | CVS, Sears Paint & Hardware (Sublease Morelands), The Woodlands Childrens Museum | |||||||
Sterling Ridge | 2002 | 2000 | 128,643 | 100.0 | % | Kroger | CVS | |||||||
Sweetwater Plaza (5) | 2001 | 2000 | 134,045 | 98.9 | % | Kroger | Walgreens | |||||||
Waterside Marketplace | 2007 | 2007 | 24,858 | 92.5 | % | (Kroger) | — | |||||||
Weslayan Plaza East (5) | 2005 | 1969 | 169,693 | 100.0 | % | — | Berings, Ross Dress for Less, Michaels, Berings Warehouse, Chuck E. Cheese, The Next Level Fitness, Spec's Liquor, Bike Barn | |||||||
Weslayan Plaza West (5) | 2005 | 1969 | 185,964 | 100.0 | % | Randall's Food | Walgreens, PETCO, Jo Ann's, Office Max, Tuesday Morning | |||||||
Westwood Village | 2006 | 2006 | 183,547 | 98.2 | % | (Target) | Gold's Gym, PetSmart, Office Max, Ross Dress For Less, TJ Maxx | |||||||
Woodway Collection (5) | 2005 | 1974 | 103,796 | 93.5 | % | Randall's Food | — | |||||||
Subtotal/Weighted Average (TX) | 4,159,375 | 94.3 | % | |||||||||||
VIRGINIA | ||||||||||||||
Richmond | ||||||||||||||
Gayton Crossing (5) | 2005 | 1983 | 156,917 | 89.3 | % | Martin's, (Kroger) | — | |||||||
Hanover Village Shopping Center (5) | 2005 | 1971 | 88,006 | 82.1 | % | — | Tractor Supply Company, Floor Trader | |||||||
Village Shopping Center (5) | 2005 | 1948 | 111,177 | 93.8 | % | Martin's | CVS | |||||||
Other Virginia | ||||||||||||||
Ashburn Farm Market Center | 2000 | 2000 | 91,905 | 100.0 | % | Giant Food | — | |||||||
Ashburn Farm Village Center (5) | 2005 | 1996 | 88,897 | 96.9 | % | Shoppers Food Warehouse | — | |||||||
Braemar Shopping Center (5) | 2004 | 2004 | 96,439 | 94.8 | % | Safeway | — | |||||||
Centre Ridge Marketplace (5) | 2005 | 1996 | 104,100 | 100.0 | % | Shoppers Food Warehouse | Sears | |||||||
Cheshire Station | 2000 | 2000 | 97,156 | 97.8 | % | Safeway | PETCO | |||||||
Culpeper Colonnade | 2006 | 2006 | 131,707 | 97.1 | % | Martin's, (Target) | PetSmart, Staples | |||||||
Fairfax Shopping Center | 2007 | 1955 | 76,311 | 80.0 | % | — | Direct Furniture | |||||||
Festival at Manchester Lakes (5) | 2005 | 1990 | 165,130 | 98.5 | % | Shoppers Food Warehouse | — | |||||||
Fortuna Center Plaza (5) | 2004 | 2004 | 104,694 | 100.0 | % | Shoppers Food Warehouse, (Target) | Rite Aid | |||||||
Fox Mill Shopping Center (5) | 2005 | 1977 | 103,269 | 97.1 | % | Giant Food | — | |||||||
Greenbriar Town Center (5) | 2005 | 1972 | 340,006 | 97.6 | % | Giant Food | CVS, HMY Roomstore, Total Beverage, Ross Dress for Less, Marshalls, PETCO | |||||||
Hollymead Town Center (5) | 2003 | 2004 | 153,739 | 98.1 | % | Harris Teeter, (Target) | Petsmart | |||||||
Kamp Washington Shopping Center (5) | 2005 | 1960 | 71,825 | 58.2 | % | — | — | |||||||
Kings Park Shopping Center (5) | 2005 | 1966 | 74,702 | 97.2 | % | Giant Food | CVS | |||||||
Lorton Station Marketplace (5) | 2006 | 2005 | 132,445 | 97.7 | % | Shoppers Food Warehouse | Advanced Design Group | |||||||
Lorton Town Center (5) | 2006 | 2005 | 51,807 | 91.5 | % | — | ReMax | |||||||
Market at Opitz Crossing | 2003 | 2003 | 149,791 | 79.1 | % | Safeway | Hibachi Grill & Supreme Buffet | |||||||
22
Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
VIRGINA (continued) | ||||||||||||||
Saratoga Shopping Center (5) | 2005 | 1977 | 113,013 | 94.7 | % | Giant Food | — | |||||||
Shops at County Center | 2005 | 2005 | 96,695 | 93.6 | % | Harris Teeter | — | |||||||
Signal Hill (5) | 2003 | 2004 | 95,172 | 100.0 | % | Shoppers Food Warehouse | — | |||||||
Shops at Stonewall | 2007 | 2007 | 267,175 | 96.6 | % | Wegmans, Dick's Sporting Goods | Staples, Ross Dress For Less, Bed Bath & Beyond, Michaels | |||||||
Shops at Stonewall Phase II | 2011 | 2011 | 40,670 | 100.0 | % | Dick's Sporting Goods | — | |||||||
Town Center at Sterling Shopping Center (5) | 2005 | 1980 | 190,069 | 89.5 | % | Giant Food | Direct Furniture, Party Depot | |||||||
Village Center at Dulles (5) | 2002 | 1991 | 297,571 | 99.2 | % | Shoppers Food Warehouse, Gold's Gym | CVS, Advance Auto Parts, Chuck E. Cheese, Staples, Goodwill, Tuesday Morning | |||||||
Willston Centre I (5) | 2005 | 1952 | 105,376 | 94.5 | % | — | CVS, Baileys Health Care | |||||||
Willston Centre II (5) | 2005 | 1986 | 135,862 | 94.3 | % | Safeway, (Target) | — | |||||||
Subtotal/Weighted Average (VA) | 3,731,626 | 94.3 | % | |||||||||||
ILLINOIS | ||||||||||||||
Chicago | ||||||||||||||
Baker Hill Center (5) | 2004 | 1998 | 135,355 | 99.1 | % | Dominick's | — | |||||||
Brentwood Commons (5) | 2005 | 1962 | 125,550 | 99.1 | % | Dominick's | Dollar Tree, Fabrics Etc 2 | |||||||
Civic Center Plaza (5) | 2005 | 1989 | 264,973 | 99.5 | % | Super H Mart, Home Depot | O'Reilly Automotive, King Spa | |||||||
Frankfort Crossing Shpg Ctr | 2003 | 1992 | 114,534 | 86.8 | % | Jewel / OSCO | Ace Hardware | |||||||
Geneva Crossing (5) | 2004 | 1997 | 123,182 | 98.8 | % | Dominick's | Goodwill | |||||||
Glen Oak Plaza | 2010 | 1967 | 62,616 | 96.0 | % | Trader Joe's | Walgreens, ENH Medical Offices | |||||||
Hinsdale | 1998 | 1986 | 178,960 | 93.8 | % | Dominick's | Goodwill, Cardinal Fitness | |||||||
McHenry Commons Shopping Center (5) | 2005 | 1988 | 99,448 | 89.8 | % | Hobby Lobby | Goodwill | |||||||
Riverside Sq & River's Edge (5) | 2005 | 1986 | 169,435 | 100.0 | % | Dominick's | Ace Hardware, Party City | |||||||
Roscoe Square (5) | 2005 | 1981 | 140,461 | 89.5 | % | Mariano's | Walgreens, Toys "R" Us | |||||||
Shorewood Crossing (5) | 2004 | 2001 | 87,705 | 98.4 | % | Dominick's | — | |||||||
Shorewood Crossing II (5) | 2007 | 2005 | 86,276 | 98.1 | % | — | Babies R Us, Staples, PETCO, Factory Card Outlet | |||||||
Stonebrook Plaza Shopping Center (5) | 2005 | 1984 | 95,825 | 100.0 | % | Dominick's | — | |||||||
Westbrook Commons | 2001 | 1984 | 123,855 | 92.4 | % | Dominick's | Goodwill | |||||||
Willow Festival | 2010 | 2007 | 383,003 | 98.6 | % | Whole Foods, Lowe's | CVS, DSW Warehouse, HomeGoods, Recreational Equipment, Best Buy | |||||||
Subtotal/Weighted Average (IL) | 2,191,178 | 96.5 | % | |||||||||||
MISSOURI | ||||||||||||||
St. Louis | ||||||||||||||
Brentwood Plaza | 2007 | 2002 | 60,452 | 96.5 | % | Schnucks | — | |||||||
23
Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
MISSOURI (continued) | ||||||||||||||
Bridgeton | 2007 | 2005 | 70,762 | 97.3 | % | Schnucks, (Home Depot) | — | |||||||
Dardenne Crossing | 2007 | 1996 | 67,430 | 97.9 | % | Schnucks | — | |||||||
Kirkwood Commons | 2007 | 2000 | 209,703 | 100.0 | % | Wal-Mart, (Target), (Lowe's) | TJ Maxx, HomeGoods, Famous Footwear | |||||||
Subtotal/Weighted Average (MO) | 408,347 | 98.7 | % | |||||||||||
OHIO | ||||||||||||||
Cincinnati | ||||||||||||||
Beckett Commons | 1998 | 1995 | 121,498 | 87.0 | % | Kroger | — | |||||||
Cherry Grove | 1998 | 1997 | 195,513 | 97.0 | % | Kroger | Hancock Fabrics, Shoe Carnival, TJ Maxx | |||||||
Hyde Park | 1997 | 1995 | 396,861 | 98.9 | % | Kroger, Biggs | Walgreens, Jo-Ann Fabrics, Ace Hardware, Michaels, Staples | |||||||
Indian Springs Market Center (5) | 2005 | 2005 | 141,063 | 100.0 | % | Kohl's, (Wal-Mart Supercenter) | Office Depot, HH Gregg Appliances | |||||||
Red Bank Village | 2006 | 2006 | 164,317 | 97.4 | % | Wal-Mart | — | |||||||
Regency Commons | 2004 | 2004 | 30,770 | 86.2 | % | — | — | |||||||
Shoppes at Mason | 1998 | 1997 | 80,800 | 92.6 | % | Kroger | — | |||||||
Sycamore Crossing & Sycamore Plaza (5) | 2008 | 1966 | 390,957 | 90.9 | % | Fresh Market, Macy's Furniture Gallery, Toys 'R Us, Dick's Sporting Goods | Barnes & Noble, Old Navy, Staples, Identity Salon & Day Spa | |||||||
Westchester Plaza | 1998 | 1988 | 88,181 | 97.0 | % | Kroger | — | |||||||
Columbus | ||||||||||||||
East Pointe | 1998 | 1993 | 86,503 | 98.4 | % | Kroger | — | |||||||
Kroger New Albany Center | 1999 | 1999 | 93,286 | 91.8 | % | Kroger | — | |||||||
Maxtown Road (Northgate) | 1998 | 1996 | 85,100 | 98.4 | % | Kroger, (Home Depot) | — | |||||||
Windmiller Plaza Phase I | 1998 | 1997 | 140,437 | 98.5 | % | Kroger | Sears Hardware | |||||||
Wadsworth Crossing | 2005 | 2005 | 108,164 | 96.5 | % | (Kohl's), (Lowe's), (Target) | Office Max, Bed, Bath & Beyond, MC Sports, PETCO | |||||||
Subtotal/Weighted Average (OH) | 2,123,450 | 95.5 | % | |||||||||||
NORTH CAROLINA | ||||||||||||||
Charlotte | ||||||||||||||
Carmel Commons | 1997 | 1979 | 132,651 | 88.7 | % | Fresh Market | Chuck E. Cheese, Party City, Rite Aid, Planet Fitness | |||||||
Cochran Commons (5) | 2007 | 2003 | 66,020 | 100.0 | % | Harris Teeter | (Walgreens) | |||||||
Providence Commons (5) | 2010 | 1994 | 77,314 | 91.6 | % | Harris Teeter | Rite Aid | |||||||
24
Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
NORTH CAROLINA (continued) | ||||||||||||||
Greensboro | ||||||||||||||
Harris Crossing (4) | 2007 | 2007 | 65,150 | 91.1 | % | Harris Teeter | — | |||||||
Raleigh / Durham | ||||||||||||||
Cameron Village (5) | 2004 | 1949 | 554,853 | 98.2 | % | Harris Teeter, Fresh Market | Eckerd, Talbots, Wake County Public Library, Great Outdoor Provision Co., York Properties, The Bargain Box, K&W Cafeteria, Johnson-Lambe Sporting Goods, Pier 1 Imports, Priscilla of Boston, The Cheshire Cat Gallery | |||||||
Colonnade Center (4) | 2009 | 2009 | 57,625 | 85.4 | % | Whole Foods | — | |||||||
Fuquay Crossing (5) | 2004 | 2002 | 124,774 | 96.3 | % | Kroger | O2 Fitness, Dollar Tree | |||||||
Garner Towne Square | 1998 | 1998 | 184,347 | 95.1 | % | Kroger, (Home Depot), (Target) | Office Max, Petsmart, Shoe Carnival, (Target) | |||||||
Glenwood Village | 1997 | 1983 | 42,864 | 91.2 | % | Harris Teeter | — | |||||||
Lake Pine Plaza | 1998 | 1997 | 87,690 | 94.5 | % | Kroger | — | |||||||
Maynard Crossing (5) | 1998 | 1997 | 122,782 | 84.4 | % | Kroger | — | |||||||
Middle Creek Commons | 2006 | 2006 | 73,634 | 100.0 | % | Lowes Foods | — | |||||||
Shoppes of Kildaire (5) | 2005 | 1986 | 145,101 | 95.5 | % | Trader Joe's | Home Comfort Furniture, Gold's Gym, Staples | |||||||
Southpoint Crossing | 1998 | 1998 | 103,128 | 89.7 | % | Kroger | — | |||||||
Sutton Square (5) | 2006 | 1985 | 101,025 | 96.9 | % | Fresh Market | Rite Aid | |||||||
Woodcroft Shopping Center | 1996 | 1984 | 89,833 | 95.4 | % | Food Lion | Triangle True Value Hardware | |||||||
Subtotal/Weighted Average (NC) | 2,028,791 | 94.5 | % | |||||||||||
COLORADO | ||||||||||||||
Colorado Springs | ||||||||||||||
Falcon Marketplace | 2005 | 2005 | 22,491 | 72.5 | % | (Wal-Mart Supercenter) | — | |||||||
Marketplace at Briargate | 2006 | 2006 | 29,075 | 100.0 | % | (King Soopers) | — | |||||||
Monument Jackson Creek | 1998 | 1999 | 85,263 | 100.0 | % | King Soopers | — | |||||||
Woodmen Plaza | 1998 | 1998 | 116,233 | 93.6 | % | King Soopers | — | |||||||
Denver | ||||||||||||||
Applewood Shopping Center (5) | 2005 | 1956 | 370,221 | 95.7 | % | King Soopers, Wal-Mart | Applejack Liquors, PetSmart, Wells Fargo Bank | |||||||
Arapahoe Village (5) | 2005 | 1957 | 159,237 | 93.0 | % | Safeway | Jo-Ann Fabrics, PETCO, Pier 1 Imports, Bottles Wine & Spirit | |||||||
Belleview Square | 2004 | 1978 | 117,331 | 100.0 | % | King Soopers | — | |||||||
Boulevard Center | 1999 | 1986 | 80,320 | 92.0 | % | (Safeway) | One Hour Optical | |||||||
Buckley Square | 1999 | 1978 | 116,147 | 98.8 | % | King Soopers | Ace Hardware | |||||||
Centerplace of Greeley III Phase I | 2007 | 2007 | 94,090 | 84.4 | % | Sports Authority | Best Buy | |||||||
Centerplace of Greeley III Phase II (4) | 2011 | 2011 | 25,000 | 100.0 | % | — | TJ Maxx | |||||||
Cherrywood Square (5) | 2005 | 1978 | 86,162 | 93.3 | % | King Soopers | — | |||||||
25
Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
COLORADO (continued) | ||||||||||||||
Crossroads Commons (5) | 2001 | 1986 | 142,694 | 98.7 | % | Whole Foods | Barnes & Noble, Bicycle Village | |||||||
Hilltop Village (5) | 2002 | 2003 | 100,030 | 93.8 | % | King Soopers | — | |||||||
Kent Place (4) | 2011 | 2011 | 47,418 | 68.1 | % | King Soopers | — | |||||||
South Lowry Square | 1999 | 1993 | 119,916 | 93.5 | % | Safeway | — | |||||||
Littleton Square | 1999 | 1997 | 94,222 | 73.4 | % | King Soopers | — | |||||||
Lloyd King Center | 1998 | 1998 | 83,326 | 96.9 | % | King Soopers | — | |||||||
Ralston Square Shopping Center (5) | 2005 | 1977 | 82,750 | 98.0 | % | King Soopers | — | |||||||
Shops at Quail Creek | 2008 | 2008 | 37,585 | 79.7 | % | (King Soopers) | — | |||||||
Stroh Ranch | 1998 | 1998 | 93,436 | 97.0 | % | King Soopers | — | |||||||
Subtotal/Weighted Average (CO) | 2,102,947 | 93.4 | % | |||||||||||
MARYLAND | ||||||||||||||
Baltimore | ||||||||||||||
Elkridge Corners (5) | 2005 | 1990 | 73,529 | 98.4 | % | Green Valley Markets | Rite Aid | |||||||
Festival at Woodholme (5) | 2005 | 1986 | 81,016 | 96.0 | % | Trader Joe's | — | |||||||
Village at Lee Airpark (4) | 2005 | 2005 | 87,556 | 97.2 | % | Giant Food, (Sunrise) | — | |||||||
Parkville Shopping Center (5) | 2005 | 1961 | 162,435 | 94.6 | % | Mrs. Greens | Parkville Lanes, Castlewood Realty (Sub: Herit) | |||||||
Southside Marketplace (5) | 2005 | 1990 | 125,146 | 95.1 | % | Shoppers Food Warehouse | Rite Aid | |||||||
Valley Centre (5) | 2005 | 1987 | 215,780 | 93.9 | % | — | TJ Maxx, Ross Dress for Less, HomeGoods, Staples, PetSmart | |||||||
Other Maryland | ||||||||||||||
Bowie Plaza (5) | 2005 | 1966 | 102,904 | 89.7 | % | — | CVS | |||||||
Clinton Park (5) | 2003 | 2003 | 206,050 | 92.9 | % | Giant Food, Sears, (Toys "R" Us) | Fitness For Less | |||||||
Cloppers Mill Village (5) | 2005 | 1995 | 137,035 | 89.8 | % | Shoppers Food Warehouse | CVS | |||||||
Firstfield Shopping Center (5) | 2005 | 1978 | 22,328 | 100.0 | % | — | — | |||||||
Goshen Plaza (5) | 2005 | 1987 | 42,906 | 84.1 | % | — | CVS | |||||||
King Farm Village Center (5) | 2004 | 2001 | 118,326 | 96.3 | % | Safeway | — | |||||||
Mitchellville Plaza (5) | 2005 | 1991 | 152,214 | 84.0 | % | Food Lion | — | |||||||
Takoma Park (5) | 2005 | 1960 | 106,469 | 93.4 | % | Shoppers Food Warehouse | — | |||||||
Watkins Park Plaza (5) | 2005 | 1985 | 113,443 | 97.0 | % | Safeway | CVS | |||||||
Woodmoor Shopping Center (5) | 2005 | 1954 | 67,403 | 93.7 | % | — | CVS | |||||||
Subtotal/Weighted Average (MD) | 1,814,540 | 93.2 | % | |||||||||||
26
Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
GEORGIA | ||||||||||||||
Atlanta | ||||||||||||||
Ashford Place | 1997 | 1993 | 53,449 | 98.1 | % | — | Harbor Freight Tools | |||||||
Briarcliff La Vista | 1997 | 1962 | 39,204 | 100.0 | % | — | Michaels | |||||||
Briarcliff Village | 1997 | 1990 | 189,551 | 93.2 | % | Publix | Office Depot, Party City, Shoe Carnival, TJ Maxx | |||||||
Buckhead Court | 1997 | 1984 | 48,318 | 97.5 | % | — | — | |||||||
Cambridge Square | 1996 | 1979 | 71,429 | 100.0 | % | Kroger | — | |||||||
Cornerstone Square | 1997 | 1990 | 80,406 | 74.4 | % | — | CVS, Hancock Fabrics | |||||||
Delk Spectrum | 1998 | 1991 | 100,539 | 77.4 | % | Publix | Eckerd | |||||||
Dunwoody Hall (5) | 1997 | 1986 | 89,351 | 96.5 | % | Publix | Eckerd | |||||||
Dunwoody Village | 1997 | 1975 | 120,169 | 88.5 | % | Fresh Market | Walgreens, Dunwoody Prep | |||||||
Howell Mill Village | 2004 | 1984 | 92,118 | 83.0 | % | Publix | Eckerd | |||||||
King Plaza (5) | 2007 | 1998 | 81,432 | 92.1 | % | Publix | — | |||||||
Loehmanns Plaza Georgia | 1997 | 1986 | 137,139 | 94.0 | % | — | Loehmann's, Dance 101, Office Max | |||||||
Lost Mountain Crossing (5) | 2007 | 1994 | 72,568 | 86.4 | % | Publix | — | |||||||
Paces Ferry Plaza | 1997 | 1987 | 61,698 | 95.9 | % | — | Harry Norman Realtors | |||||||
Powers Ferry Square | 1997 | 1987 | 97,897 | 85.1 | % | — | CVS | |||||||
Powers Ferry Village | 1997 | 1994 | 78,896 | 82.9 | % | Publix | Mardi Gras | |||||||
Russell Ridge | 1994 | 1995 | 98,559 | 88.5 | % | Kroger | — | |||||||
Subtotal/Weighted Average (GA) | 1,512,723 | 89.6 | % | |||||||||||
PENNSYLVANIA | ||||||||||||||
Allentown / Bethlehem | ||||||||||||||
Allen Street Shopping Center (5) | 2005 | 1958 | 46,228 | 100.0 | % | Ahart Market | — | |||||||
Lower Nazareth Commons | 2007 | 2007 | 86,868 | 98.2 | % | (Target), Sports Authority | PETCO | |||||||
Stefko Boulevard Shopping Center (5) | 2005 | 1976 | 133,899 | 93.8 | % | Valley Farm Market | — | |||||||
Harrisburg | ||||||||||||||
Silver Spring Square (5) | 2005 | 2005 | 314,450 | 96.9 | % | Wegmans, (Target) | Ross Dress For Less, Bed Bath and Beyond, Best Buy, Office Max, Ulta, PETCO | |||||||
Philadelphia | ||||||||||||||
City Avenue Shopping Center (5) | 2005 | 1960 | 159,095 | 93.8 | % | — | Ross Dress for Less, TJ Maxx, Sears | |||||||
Gateway Shopping Center | 2004 | 1960 | 214,213 | 98.4 | % | Trader Joe's | Staples, TJ Maxx, Famous Footwear, Jo-Ann Fabrics | |||||||
Kulpsville Village Center | 2006 | 2006 | 14,820 | 100.0 | % | — | Walgreens | |||||||
Mercer Square Shopping Center (5) | 2005 | 1988 | 91,400 | 98.0 | % | Genuardi's | — | |||||||
Newtown Square Shopping Center (5) | 2005 | 1970 | 146,959 | 94.3 | % | Acme Markets | Rite Aid | |||||||
Warwick Square Shopping Center (5) | 2005 | 1999 | 89,680 | 98.0 | % | Genuardi's | — | |||||||
27
Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
PENNSYLVANIA (continued) | ||||||||||||||
Other Pennsylvania | ||||||||||||||
Hershey | 2000 | 2000 | 6,000 | 100.0 | % | — | — | |||||||
Subtotal/Weighted Average (PA) | 1,303,612 | 96.6 | % | |||||||||||
WASHINGTON | ||||||||||||||
Portland | ||||||||||||||
Orchards Market Center I (5) | 2002 | 2004 | 100,663 | 100.0 | % | Wholesale Sports | Jo-Ann Fabrics, PETCO, (Rite Aid) | |||||||
Orchards Market Center II | 2005 | 2005 | 77,478 | 89.9 | % | LA Fitness | Office Depot | |||||||
Seattle | ||||||||||||||
Aurora Marketplace (5) | 2005 | 1991 | 106,921 | 95.9 | % | Safeway | TJ Maxx | |||||||
Cascade Plaza (5) | 1999 | 1999 | 211,072 | 79.2 | % | Safeway | Fashion Bug, Jo-Ann Fabrics, Ross Dress For Less, Big Lots | |||||||
Eastgate Plaza (5) | 2005 | 1956 | 78,230 | 100.0 | % | Albertsons | Rite Aid | |||||||
Inglewood Plaza | 1999 | 1985 | 17,253 | 100.0 | % | — | — | |||||||
Overlake Fashion Plaza (5) | 2005 | 1987 | 80,555 | 94.5 | % | (Sears) | Marshalls | |||||||
Pine Lake Village | 1999 | 1989 | 102,899 | 100.0 | % | Quality Foods | Rite Aid | |||||||
Sammamish-Highlands | 1999 | 1992 | 101,289 | 94.5 | % | (Safeway) | Bartell Drugs, Ace Hardware | |||||||
Southcenter | 1999 | 1990 | 58,282 | 86.6 | % | (Target) | — | |||||||
Subtotal/Weighted Average (WA) | 934,642 | 92.1 | % | |||||||||||
OREGON | ||||||||||||||
Portland | ||||||||||||||
Greenway Town Center (5) | 2005 | 1979 | 93,101 | 92.5 | % | Lamb's Thriftway | Rite Aid, Dollar Tree | |||||||
Murrayhill Marketplace | 1999 | 1988 | 148,967 | 81.2 | % | Safeway | — | |||||||
Sherwood Crossroads | 1999 | 1999 | 87,966 | 92.1 | % | Safeway | — | |||||||
Sherwood Market Center | 1999 | 1995 | 124,259 | 97.8 | % | Albertsons | — | |||||||
Sunnyside 205 | 1999 | 1988 | 53,547 | 88.2 | % | — | — | |||||||
Tanasbourne Market | 2006 | 2006 | 71,000 | 100.0 | % | Whole Foods | — | |||||||
Walker Center | 1999 | 1987 | 89,610 | 97.4 | % | Sports Authority | — | |||||||
Other Oregon | ||||||||||||||
Corvallis Market Center | 2006 | 2006 | 84,548 | 100.0 | % | Trader Joe's | TJ Maxx, Michael's | |||||||
Northgate Marketplace (4) | 2011 | 2011 | 80,708 | 73.1 | % | Trader Joe's | REI, PETCO, Ulta Salon | |||||||
Subtotal/Weighted Average (OR) | 833,706 | 91.0 | % | |||||||||||
28
Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
TENNESSEE | ||||||||||||||
Nashville | ||||||||||||||
Lebanon Center | 2006 | 2006 | 63,800 | 89.0 | % | Publix | — | |||||||
Harpeth Village Fieldstone | 1997 | 1998 | 70,091 | 97.7 | % | Publix | — | |||||||
Nashboro Village | 1998 | 1998 | 86,811 | 96.8 | % | Kroger | (Walgreens) | |||||||
Northlake Village | 2000 | 1988 | 137,807 | 87.6 | % | Kroger | PETCO | |||||||
Peartree Village | 1997 | 1997 | 109,506 | 100.0 | % | Harris Teeter | PETCO, Office Max | |||||||
Other Tennessee | ||||||||||||||
Dickson Tn | 1998 | 1998 | 10,908 | 100.0 | % | — | Eckerd | |||||||
Subtotal/Weighted Average (TN) | 478,923 | 94.1 | % | |||||||||||
MASSACHUSETTS | ||||||||||||||
Boston | ||||||||||||||
Shops at Saugus | 2006 | 2006 | 90,055 | 94.6 | % | Trader Joe's | La-Z-Boy, PetSmart | |||||||
Speedway Plaza (5) | 2006 | 1988 | 185,279 | 98.1 | % | Stop & Shop, BJ's Warehouse | — | |||||||
Twin City Plaza | 2006 | 2004 | 270,242 | 94.6 | % | Shaw's, Marshall's | Rite Aid, K&G Fashion, Dollar Tree, Gold's Gym, Extra Space Storage | |||||||
Subtotal/Weighted Average (MA) | 545,576 | 95.8 | % | |||||||||||
ARIZONA | ||||||||||||||
Phoenix | ||||||||||||||
Anthem Marketplace | 2003 | 2000 | 113,293 | 88.1 | % | Safeway | — | |||||||
Palm Valley Marketplace (5) | 2001 | 1999 | 107,633 | 92.1 | % | Safeway | — | |||||||
Pima Crossing | 1999 | 1996 | 239,438 | 88.9 | % | Golf & Tennis Pro Shop, Inc. | Life Time Fitness, E & J Designer Shoe Outlet, Paddock Pools Store, Pier 1 Imports, Stein Mart | |||||||
Shops at Arizona | 2003 | 2000 | 35,710 | 38.3 | % | — | — | |||||||
Subtotal/Weighted Average (AZ) | 496,074 | 85.8 | % | |||||||||||
MINNESOTA | ||||||||||||||
Apple Valley Square (5) | 2006 | 1998 | 184,841 | 100.0 | % | Rainbow Foods, Jo-Ann Fabrics, (Burlington Coat Factory) | Savers, PETCO | |||||||
Calhoun Commons (5) | 2011 | 1999 | 66,150 | 100.0 | % | Whole Foods | — | |||||||
Colonial Square (5) | 2005 | 1959 | 93,338 | 100.0 | % | Lund's | — | |||||||
Rockford Road Plaza (5) | 2005 | 1991 | 205,479 | 97.2 | % | Rainbow Foods | PetSmart, HomeGoods, TJ Maxx | |||||||
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Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
MINNESOTA (continued) | ||||||||||||||
Rockridge Center (5) | 2011 | 2006 | 125,213 | 95.8 | % | Cub Foods | — | |||||||
Subtotal/Weighted Average (MN) | 675,021 | 98.4 | % | |||||||||||
DELAWARE | ||||||||||||||
Dover | ||||||||||||||
White Oak - Dover, DE | 2000 | 2000 | 10,908 | 100.0 | % | — | Eckerd | |||||||
Wilmington | ||||||||||||||
First State Plaza (5) | 2005 | 1988 | 160,673 | 86.4 | % | Shop Rite | Cinemark, Dollar Tree, US Post Office | |||||||
Pike Creek | 1998 | 1981 | 232,031 | 89.1 | % | Acme Markets, K-Mart | Rite Aid | |||||||
Shoppes of Graylyn (5) | 2005 | 1971 | 66,808 | 96.1 | % | — | Rite Aid | |||||||
Subtotal/Weighted Average (DE) | 470,420 | 89.4 | % | |||||||||||
NEVADA | ||||||||||||||
Deer Springs Town Center | 2007 | 2007 | 330,907 | 88.7 | % | (Target), Home Depot, Toys "R" Us | Michaels, PetSmart, Ross Dress For Less, Staples | |||||||
Subtotal/Weighted Average (NV) | 330,907 | 88.7 | % | |||||||||||
SOUTH CAROLINA | ||||||||||||||
Charleston | ||||||||||||||
Merchants Village (5) | 1997 | 1997 | 79,649 | 97.0 | % | Publix | — | |||||||
Orangeburg | 2006 | 2006 | 14,820 | 100.0 | % | — | Walgreens | |||||||
Queensborough Shopping Center (5) | 1998 | 1993 | 82,333 | 93.9 | % | Publix | — | |||||||
Columbia | ||||||||||||||
Murray Landing (5) | 2002 | 2003 | 64,359 | 100.0 | % | Publix | — | |||||||
Other South Carolina | ||||||||||||||
Buckwalter Village | 2006 | 2006 | 59,601 | 97.6 | % | Publix | — | |||||||
Surfside Beach Commons (5) | 2007 | 1999 | 59,881 | 94.7 | % | Bi-Lo | — | |||||||
Subtotal/Weighted Average (SC) | 360,643 | 96.7 | % | |||||||||||
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Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
INDIANA | ||||||||||||||
Chicago | ||||||||||||||
Airport Crossing | 2006 | 2006 | 11,924 | 77.8 | % | (Kohl's) | — | |||||||
Augusta Center | 2006 | 2006 | 14,532 | 100.0 | % | (Menards) | — | |||||||
Indianapolis | ||||||||||||||
Greenwood Springs | 2004 | 2004 | 28,028 | 75.0 | % | (Gander Mountain), (Wal-Mart Supercenter) | — | |||||||
Willow Lake Shopping Center (5) | 2005 | 1987 | 85,923 | 88.8 | % | (Kroger) | Factory Card Outlet | |||||||
Willow Lake West Shopping Center (5) | 2005 | 2001 | 52,961 | 100.0 | % | Trader Joe's | — | |||||||
Subtotal/Weighted Average (IN) | 193,368 | 90.0 | % | |||||||||||
WISCONSIN | ||||||||||||||
Racine Centre Shopping Center (5) | 2005 | 1988 | 135,827 | 95.4 | % | Piggly Wiggly | Golds Gym, Factory Card Outlet, Dollar Tree | |||||||
Whitnall Square Shopping Center (5) | 2005 | 1989 | 133,301 | 91.6 | % | Pick 'N' Save | Harbor Freight Tools, Dollar Tree | |||||||
Subtotal/Weighted Average (WI) | 269,128 | 93.5 | % | |||||||||||
ALABAMA | ||||||||||||||
Shoppes at Fairhope Village | 2008 | 2008 | 84,740 | 86.2 | % | Publix | — | |||||||
Valleydale Village Shop Center (5) | 2002 | 2003 | 118,466 | 64.6 | % | Publix | — | |||||||
Subtotal/Weighted Average (AL) | 203,206 | 73.6 | % | |||||||||||
CONNECTICUT | ||||||||||||||
Corbin's Corner (5) | 2005 | 1962 | 179,864 | 99.8 | % | Trader Joe's | Toys "R" Us, Best Buy, Old Navy, Office Depot, Pier 1 Imports | |||||||
Subtotal/Weighted Average (CT) | 179,864 | 99.8 | % | |||||||||||
NEW JERSEY | ||||||||||||||
Haddon Commons (5) | 2005 | 1985 | 52,640 | 93.4 | % | Acme Markets | CVS | |||||||
Plaza Square (5) | 2005 | 1990 | 103,891 | 98.3 | % | Shop Rite | — | |||||||
Subtotal/Weighted Average (NJ) | 156,531 | 96.6 | % | |||||||||||
MICHIGAN | ||||||||||||||
Fenton Marketplace | 1999 | 1999 | 97,224 | 34.7 | % | — | Michaels | |||||||
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Property Name (1) | Year Acquired | Year Con- structed (2) | Gross Leasable Area (GLA) | Percent Leased (3) | Grocer & Major Tenant(s) >40,000sf (6) | Drug Store & Other Anchors > 10,000 Sq Ft | ||||||||
MICHIGAN (continued) | ||||||||||||||
State Street Crossing | 2006 | 2006 | 21,049 | 60.0 | % | (Wal-Mart) | — | |||||||
Subtotal/Weighted Average (MI) | 118,273 | 39.2 | % | |||||||||||
DISTRICT OF COLUMBIA | ||||||||||||||
Shops at The Columbia (5) | 2006 | 2006 | 22,812 | 100.0 | % | Trader Joe's | — | |||||||
Spring Valley Shopping Center (5) | 2005 | 1930 | 16,835 | 100.0 | % | — | CVS | |||||||
Subtotal/Weighted Average (DC) | 39,647 | 100.0 | % | |||||||||||
KENTUCKY | ||||||||||||||
Walton Towne Center | 2007 | 2007 | 23,186 | 93.9 | % | (Kroger) | — | |||||||
Subtotal/Weighted Average (KY) | 23,186 | 93.9 | % | |||||||||||
Total/Weighted Average | 42,148,917 | 93.3 | % | |||||||||||
(1) This table includes both Regency's Consolidated and Unconsolidated Properties ("Combined Portfolio"). | ||||||||||||||
(2) Or latest renovation. | ||||||||||||||
(3) Includes properties where the Company has not yet incurred at least 90% of the expected costs to complete and the anchor has not yet been open for at least two calendar years ("development properties" or "properties in development"). If development properties are excluded, the total percentage leased would be 93.9% for Company's Combined Portfolio of shopping centers. | ||||||||||||||
(4) Property in development. | ||||||||||||||
(5) Owned by a co-investment partnership with outside investors in which RCLP or an affiliate is the general partner. | ||||||||||||||
(6) An anchor tenant that supports the Company's shopping center and in which the Company has no ownership is indicated by parentheses. | ||||||||||||||
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Item 3. Legal Proceedings
We are a party to various legal proceedings which arise in the ordinary course of our business. We are not currently involved in any litigation nor to our knowledge, is any litigation threatened against us, the outcome of which would, in our judgment based on information currently available to us, have a material adverse effect on our financial position or results of operations.
Item 4. Mine Safety Disclosures
None.
PART II
Item 5. | Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities |
Our common stock (NYSE: REG) is traded on the New York Stock Exchange. The following table sets forth the high and low sales prices and the cash dividends declared on our common stock by quarter for 2011 and 2010.
2011 | 2010 | |||||||||||||
Cash | Cash | |||||||||||||
Quarter | High | Low | Dividends | High | Low | Dividends | ||||||||
Ended | Price | Price | Declared | Price | Price | Declared | ||||||||
March 31 | $ | 45.36 | 40.90 | 0.4625 | $ | 39.37 | 32.54 | 0.4625 | ||||||
June 30 | 47.51 | 41.00 | 0.4625 | 41.96 | 34.01 | 0.4625 | ||||||||
September 30 | 47.90 | 34.11 | 0.4625 | 40.24 | 32.25 | 0.4625 | ||||||||
December 31 | 41.64 | 32.30 | 0.4625 | 44.80 | 39.60 | 0.4625 | ||||||||
The Company has determined that the dividends paid during 2011 and 2010 on our common stock qualify for the following tax treatment:
Total Distribution per Share | Ordinary Dividends | Total Capital Gain Distribution | Nontaxable Distributions | ||||||
2011 | $ | 1.8500 | 0.6105 | 0.0185 | 1.2210 | ||||
2010 | $ | 1.8500 | 0.7400 | 0.0370 | 1.0730 | ||||
As of February 28, 2012, there were approximately 18,000 holders of common equity.
We intend to pay regular quarterly distributions to Regency Centers Corporations' common stockholders. Future distributions will be declared and paid at the discretion of our Board of Directors, and will depend upon cash generated by operating activities, our financial condition, capital requirements, annual dividend requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, and such other factors as our Board of Directors deem relevant. In order to maintain Regency Centers Corporation's qualification as a REIT for federal income tax purposes, we are generally required to make annual distributions at least equal to 90% of our real estate investment trust taxable income for the taxable year. Under certain circumstances, which we do not expect to occur, we could be required to make distributions in excess of cash available for distributions in order to meet such requirements. The Company has a dividend reinvestment plan under which shareholders may elect to reinvest their dividends automatically in common stock. Under the plan, the Company may elect to purchase common stock in the open market on behalf of shareholders or may issue new common stock to such shareholders.
Under the loan agreement of our line of credit, in the event of any monetary default, we may not make distributions to stockholders except to the extent necessary to maintain our REIT status.
There were no unregistered sales of equity securities during the quarter ended December 31, 2011. The Company did
33
not repurchase any of its equity securities during the quarter-ended December 31, 2011.
The performance graph furnished below compares Regency's cumulative total stockholder return since December 31, 2006. The stock performance graph should not be deemed filed or incorporated by reference into any other filing made by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate the stock performance graph by reference in another filing.
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Item 6. Selected Financial Data
(in thousands, except per share and unit data, number of properties, and ratio of earnings to fixed charges)
The following table sets forth Selected Financial Data for the Company on a historical basis for the five years ended December 31, 2011. This historical Selected Financial Data has been derived from the audited consolidated financial statements as reclassified for discontinued operations. This information should be read in conjunction with the consolidated financial statements of Regency Centers Corporation and Regency Centers, L.P. (including the related notes thereto) and Management's Discussion and Analysis of the Financial Condition and Results of Operations, each included elsewhere in this Form 10-K.
Parent Company
2011 | 2010 (1) | 2009 (1) | 2008 (1) | 2007 (1) | ||||||||||||
Operating Data: | ||||||||||||||||
Revenues | $ | 500,417 | 476,161 | 478,561 | 485,332 | 425,783 | ||||||||||
Operating expenses | 326,138 | 310,334 | 300,272 | 260,187 | 238,771 | |||||||||||
Other expense (income) | 135,273 | 151,751 | 190,729 | 109,286 | 29,280 | |||||||||||
Income (loss) before equity in income (loss) | ||||||||||||||||
of investments in real estate partnerships | 39,006 | 14,076 | (12,440 | ) | 115,859 | 157,732 | ||||||||||
Equity in income (loss) of investments in | ||||||||||||||||
real estate partnerships | 9,643 | (12,884 | ) | (26,373 | ) | 5,292 | 18,093 | |||||||||
Income (loss) from continuing operations | 48,649 | 1,192 | (38,813 | ) | 121,151 | 175,825 | ||||||||||
Income from discontinued operations | 7,139 | 11,809 | 9,777 | 26,333 | 38,300 | |||||||||||
Net income (loss) | 55,788 | 13,001 | (29,036 | ) | 147,484 | 214,125 | ||||||||||
Net income attributable to noncontrolling | ||||||||||||||||
interests | (4,418 | ) | (4,185 | ) | (3,961 | ) | (5,333 | ) | (6,365 | ) | ||||||
Net income (loss) attributable to controlling | ||||||||||||||||
interests | 51,370 | 8,816 | (32,997 | ) | 142,151 | 207,760 | ||||||||||
Preferred stock dividends | (19,675 | ) | (19,675 | ) | (19,675 | ) | (19,675 | ) | (19,675 | ) | ||||||
Net income (loss) attributable to common | ||||||||||||||||
stockholders | 31,695 | (10,859 | ) | (52,672 | ) | 122,476 | 188,085 | |||||||||
Income per Common Share- diluted: | ||||||||||||||||
Income (loss) from continuing operations | $ | 0.27 | (0.28 | ) | (0.82 | ) | 1.38 | 2.15 | ||||||||
Net income (loss) attributable to common | ||||||||||||||||
stockholders | $ | 0.35 | (0.14 | ) | (0.70 | ) | 1.76 | 2.72 | ||||||||
Other Information: | ||||||||||||||||
Common dividends declared per share | $ | 1.85 | 1.85 | 2.11 | 2.90 | 2.64 | ||||||||||
Common stock outstanding including | ||||||||||||||||
exchangeable operating partnership units | 89,760 | 81,717 | 81,670 | 70,091 | 69,653 | |||||||||||
Combined Portfolio GLA | 42,149 | 45,077 | 44,972 | 49,645 | 51,107 | |||||||||||
Combined Portfolio number of properties owned | 364 | 396 | 400 | 440 | 451 | |||||||||||
Ratio of earnings to fixed charges (2) | 1.4 | 1.2 | 0.9 | (3) | 1.5 | 1.9 | ||||||||||
Balance Sheet Data: | ||||||||||||||||
Real estate investments before accumulated | ||||||||||||||||
depreciation | $ | 4,488,794 | 4,417,746 | 4,259,990 | 4,425,895 | 4,367,191 | ||||||||||
Total assets | 3,987,071 | 3,994,539 | 3,992,228 | 4,158,568 | 4,137,069 | |||||||||||
Total debt | 1,982,440 | 2,094,469 | 1,886,380 | 2,135,571 | 2,007,975 | |||||||||||
Total liabilities | 2,117,417 | 2,250,137 | 2,061,621 | 2,416,824 | 2,249,200 | |||||||||||
Stockholders' equity | 1,808,355 | 1,685,177 | 1,862,380 | 1,676,323 | 1,810,401 | |||||||||||
Noncontrolling interests | 61,299 | 59,225 | 68,227 | 65,421 | 77,468 | |||||||||||
(1) As further described in Note 7 to Consolidated Financial Statements, historical amounts have been restated to reflect an immaterial adjustment relating to the Company's non-qualified deferred compensation plan.
(2) Historical amounts have been restated to conform to changes made to the 2011 calculation, which exclude from earnings distributions from equity investees for property disposals or refinancing.
(3) The Company's ratio of earnings to fixed charges was deficient in 2009 by $21.8 million, due to significant non-cash charges for impairment of real estate investments recorded in 2009 of $97.5 million.
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Operating Partnership
2011 | 2010 (1) | 2009 (1) | 2008 (1) | 2007 (1) | ||||||||||||
Operating Data: | ||||||||||||||||
Revenues | $ | 500,417 | 476,161 | 478,561 | 485,332 | 425,783 | ||||||||||
Operating expenses | 326,138 | 310,334 | 300,272 | 260,187 | 238,771 | |||||||||||
Other expense (income) | 135,273 | 151,751 | 190,729 | 109,286 | 29,280 | |||||||||||
Income (loss) before equity in income (loss) | ||||||||||||||||
of investments in real estate partnerships | 39,006 | 14,076 | (12,440 | ) | 115,859 | 157,732 | ||||||||||
Equity in income (loss) of investments in | ||||||||||||||||
real estate partnerships | 9,643 | (12,884 | ) | (26,373 | ) | 5,292 | 18,093 | |||||||||
Income (loss) from continuing operations | 48,649 | 1,192 | (38,813 | ) | 121,151 | 175,825 | ||||||||||
Income from discontinued operations | 7,139 | 11,809 | 9,777 | 26,333 | 38,300 | |||||||||||
Net income (loss) | 55,788 | 13,001 | (29,036 | ) | 147,484 | 214,125 | ||||||||||
Net income attributable to noncontrolling | ||||||||||||||||
interests | (590 | ) | (376 | ) | (452 | ) | (701 | ) | (990 | ) | ||||||
Net income (loss) attributable to controlling | ||||||||||||||||
interests | 55,198 | 12,625 | (29,488 | ) | 146,783 | 213,135 | ||||||||||
Preferred unit distributions | (23,400 | ) | (23,400 | ) | (23,400 | ) | (23,400 | ) | (23,400 | ) | ||||||
Net income (loss) attributable to | ||||||||||||||||
common unit holders | 31,798 | (10,775 | ) | (52,888 | ) | 123,383 | 189,735 | |||||||||
Income per common unit - diluted: | ||||||||||||||||
Income (loss) from continuing operations | $ | 0.27 | (0.28 | ) | (0.82 | ) | 1.38 | 2.15 | ||||||||
Net income (loss) attributable to | ||||||||||||||||
common unit holders | $ | 0.35 | (0.14 | ) | (0.70 | ) | 1.76 | 2.72 | ||||||||
Other Information: | ||||||||||||||||
Distributions per unit | $ | 1.85 | 1.85 | 2.11 | 2.90 | 2.64 | ||||||||||
Common units outstanding | 89,760 | 81,717 | 81,670 | 70,091 | 69,653 | |||||||||||
Preferred units outstanding | 500 | 500 | 500 | 500 | 500 | |||||||||||
Combined Portfolio GLA | 42,149 | 45,077 | 44,972 | 49,645 | 51,107 | |||||||||||
Combined Portfolio number of properties owned | 364 | 396 | 400 | 440 | 451 | |||||||||||
Ratio of earnings to fixed charges (2) | 1.4 | 1.2 | 0.9 | (3) | 1.5 | 1.9 | ||||||||||
Balance Sheet Data: | ||||||||||||||||
Real estate investments before accumulated | ||||||||||||||||
depreciation | $ | 4,488,794 | 4,417,746 | 4,259,990 | 4,425,895 | 4,367,191 | ||||||||||
Total assets | 3,987,071 | 3,994,539 | 3,992,228 | 4,158,568 | 4,137,069 | |||||||||||
Total debt | 1,982,440 | 2,094,469 | 1,886,380 | 2,135,571 | 2,007,975 | |||||||||||
Total liabilities | 2,117,417 | 2,250,137 | 2,061,621 | 2,416,824 | 2,249,200 | |||||||||||
Partners' capital | 1,856,550 | 1,733,573 | 1,918,859 | 1,733,764 | 1,869,478 | |||||||||||
Noncontrolling interests | 13,104 | 10,829 | 11,748 | 7,980 | 18,391 | |||||||||||
(1) As further described in Note 7 to Consolidated Financial Statements, historical amounts have been restated to reflect an immaterial adjustment relating to the Company's non-qualified deferred compensation plan.
(2) Historical amounts have been restated to conform to changes made to the 2011 calculation, which exclude from earnings distributions from equity investees for property disposals or refinancing.
(3) The Company's ratio of earnings to fixed charges was deficient in 2009 by $21.8 million, due to significant non-cash charges for impairment of real estate investments recorded in 2009 of $97.5 million.
36
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview of Our Strategy
Regency Centers Corporation began its operations as a REIT in 1993 and is the managing general partner in Regency Centers, L.P. We are focused on achieving total shareholder returns in excess of REIT shopping center averages, and sustaining growth in our net asset value and our earnings over an extended period of time. We work to achieve these goals through owning, operating, and investing in a high-quality portfolio of primarily grocery-anchored shopping centers that are leased by market-dominant grocers, category-leading anchors, specialty retailers, and restaurants located in areas with above average household incomes and population densities. 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, 2011, we directly owned 217 shopping centers (the “Consolidated Properties”) located in 24 states representing 23.8 million square feet of gross leasable area (“GLA”). Through co-investment partnerships, we own partial ownership interests in 147 shopping centers (the “Unconsolidated Properties”) located in 24 states and the District of Columbia representing 18.4 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, side-shop retailers, and restaurants, including 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. Increasing occupancy in our shopping centers to historical levels and achieving positive rental rate growth are key objectives of our strategic plan.
At December 31, 2011, the consolidated operating shopping centers were 93.1% leased, as compared to 92.6% at December 31, 2010. During the recession of 2009, we experienced occupancy declines in our shopping centers, which stabilized during 2010 as the economy continued its recovery, and increased during 2011. During 2011, we began replacing weaker tenants with financially stronger tenants that we expect will contribute to the overall success of our shopping centers. We continue to produce higher levels of new leasing activity and fewer tenant defaults as compared to 2010 and 2009, and move-outs of weaker tenants hurt by the recession appear to be on the decline. However, economic uncertainties arising in Europe could negatively impact the US economy, the operations of the tenants in our shopping centers, and consequently future operations and cash flows of our shopping centers.
Rental rate changes have varied by market during 2011 as certain markets continue to experience a decline in market rates due to previous tenant's rental rates being above market, while other markets' rates are stabilized or increasing. We expect this market variability to continue during 2012. During 2011 and 2010, average rental rates from new and renewal leasing in the Combined Portfolio for spaces vacant less than 12 months grew 1.2% in 2011 and declined -0.1% in 2010. We expect average 2012 rental rates from new and renewal leases to decline or grow in a range of -1.0% to 2.5%.
We continue to closely 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 effect our tenants.
We continue to monitor tenants who have co-tenancy clauses in their lease agreements. These tenants are typically located in larger format community shopping centers that contain multiple anchor tenants whose leases contain these types of clauses. Co-tenancy clauses have several variants: they may allow a tenant to postpone a store opening if certain other tenants fail to open their store; they may allow a tenant the opportunity to close their store prior to lease expiration if another tenant closes their 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. As economic weakness persists in geographic areas where we have centers that contain leases with these types of clauses, we could experience reductions in rent and occupancy related to tenants exercising their co-tenancy clauses.
We grow our shopping center portfolio through acquisitions of operating centers and new shopping center development. We will continue to use our unique combination of development capabilities, market presence, and anchor relationships to invest in value-added opportunities sourced from land owners and joint venture partners, the redevelopment of existing centers, and the development of land. Development is customer driven, meaning we generally have an executed lease
37
from the anchor before we start construction. Developments serve the growth needs of our anchors and specialty retailers, resulting in modern shopping centers with long-term anchor leases that produce attractive returns on our invested capital. This development process typically requires three to five years from initial land or redevelopment acquisition through construction, lease-up, and stabilization of rental income, but can take longer depending upon tenant demand for new stores and the size of the project. We fund our acquisition and development activity from various capital sources including new debt, equity and through capital recycling. Capital recycling involves identifying non-strategic assets from our real estate portfolio and selling those in the open market; and reinvesting the sale proceeds into new higher quality developments and acquisitions that will generate sustainable revenue growth and attractive returns.
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.
Shopping Center Portfolio
The following table summarizes general information related to the Consolidated Properties in our shopping center portfolio:
December 31, 2011 | December 31, 2010 | |||||
Number of Properties | 217 | 215 | ||||
Properties in Development | 7 | 25 | ||||
Gross Leasable Area | 23,750,107 | 23,266,987 | ||||
% Leased – Operating and Development | 92.2 | % | 91.6 | % | ||
% Leased – Operating | 93.1 | % | 92.6 | % | ||
The following table summarizes general information related to the Unconsolidated Properties owned in co-investment partnerships in our shopping center portfolio:
December 31, 2011 | December 31, 2010 | |||||
Number of Properties | 147 | 181 | ||||
Properties in Development | — | 1 | ||||
Gross Leasable Area | 18,398,810 | 21,809,665 | ||||
% Leased – Operating and Development | 94.8 | % | 93.6 | % | ||
% Leased – Operating | 94.8 | % | 93.8 | % | ||
We seek to reduce our operating and leasing risks through diversification which we achieve by geographically diversifying our shopping centers, avoiding dependence on any single property, market, or tenant, and owning a portion of our shopping centers through co-investment partnerships.
38
The following table summarizes our four largest tenants, each of which is a grocery tenant, occupying our shopping centers at December 31, 2011:
Grocery Anchor | Number of Stores (1) | Percentage of Company- owned GLA (2) | Percentage of Annualized Base Rent (2) | ||||||
Kroger | 51 | 7.0 | % | 4.2 | % | ||||
Publix | 56 | 6.8 | % | 4.4 | % | ||||
Safeway | 57 | 5.7 | % | 3.7 | % | ||||
Supervalu | 28 | 2.8 | % | 2.2 | % | ||||
(1) Includes stores owned by grocery anchors that are attached to our centers. | |||||||||
(2) Includes Regency's pro-rata share of Unconsolidated Properties and excludes those owned by anchors. | |||||||||
Although base 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 cancels its leases, we could experience a significant reduction in our revenues. We are closely monitoring industry trends and sales data to help us identify declines in retail categories or tenants who might be experiencing financial difficulties as a result of slowing sales, lack of credit, changes in retail formats or increased competition. As a result of our findings, we may reduce new leasing, suspend leasing, or curtail the allowance for the construction of leasehold improvements within a certain retail category or to a specific retailer.
We continuously monitor the financial condition of our tenants. We communicate often with those tenants who have announced store closings or filed bankruptcy. We are not currently aware of the pending bankruptcy or announced store closings of any tenants in our shopping centers that would individually cause a material reduction in our revenues, and no tenant represents more than 5% of our annual base rent on a pro-rata basis.
Blockbuster Video represents our largest tenant currently in bankruptcy. As of February 1, 2012 we had 17 leases with Blockbuster in the Combined Portfolio, 16 leases of which expire in 2012. Assuming these stores continue through their lease expiration date, we would expect to receive base rent of approximately $503,000 during 2012 including our pro rata share of those leases in the Unconsolidated Properties.
Liquidity and Capital Resources
Our Parent Company has no capital commitments other than its guarantees of the commitments of our Operating Partnership. The Parent Company will from time to time access the capital markets for the purpose of issuing new equity and will simultaneously contribute all of the offering proceeds to the Operating Partnership in exchange for additional partnership units. All debt is issued by our Operating Partnership or by our co-investment partnerships. Accordingly, the discussion below regarding liquidity and capital resources is presented on a pro-rata basis for the Company. The following table summarizes net cash flows related to operating, investing, and financing activities of the Company for the years ended December 31, 2011, 2010, and 2009 (in thousands):
2011 | 2010 | 2009 | |||||||
Net cash provided by operating activities | $ | 217,633 | 138,459 | 195,804 | |||||
Net cash (used in) provided by investing activities | (77,723 | ) | (184,457 | ) | 51,545 | ||||
Net cash used in financing activities | (145,569 | ) | (32,797 | ) | (164,279 | ) | |||
Net (decrease) increase in cash and cash equivalents | $ | (5,659 | ) | (78,795 | ) | 83,070 | |||
On December 31, 2011 our cash balance was $11.4 million. We operate our business such that we expect net cash provided by operating activities, before the effect of the derivative instruments settled in 2010 and 2009 and funded through financing activity, will provide the necessary funds to pay our scheduled mortgage loan principal payments, capital expenditures necessary to maintain our shopping centers, and distributions to our share and unit holders.
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The following table summarizes these amounts for the years ended December 31, 2011, 2010, and 2009 (in thousands):
2011 | 2010 | 2009 | |||||||
Cash flow from operations | $ | 217,633 | 138,459 | 195,804 | |||||
Settlement of derivative instruments | — | 63,435 | 19,953 | ||||||
Total | $ | 217,633 | 201,894 | 215,757 | |||||
Scheduled principal payments | $ | 5,699 | 5,024 | 5,214 | |||||
Capital expenditures to maintain shopping centers | 13,117 | 12,238 | 10,072 | ||||||
Dividend distributions to share and unit holders | 183,878 | 172,519 | 183,070 | ||||||
Total | $ | 202,694 | 189,781 | 198,356 | |||||
Our dividend distribution policy is set by our Board of Directors who monitor our financial position. Our Board of Directors recently declared our quarterly dividend of $0.4625 per share, payable February 29, 2012 to stock and unit holders of record as of February 15, 2012. Our dividend has remained unchanged since May 2009. We plan to continue paying an aggregate amount of distributions to our stock and unit holders that, at a minimum, meet the requirements to continue qualifying as a REIT for Federal income tax purposes.
We endeavor to maintain a high percentage of unencumbered assets. At December 31, 2011, 79.7% of our real estate assets were unencumbered. Such assets allow us to access the secured and unsecured debt markets and to maintain significant availability on our $600.0 million unsecured line of credit (“the Line”). Our debt to asset ratio (before the effect of accumulated depreciation), including our pro-rata share of the debt and assets of joint ventures, is 45.0% at December 31, 2011, a decline from our ratio at December 31, 2010 of 48.1%, due to the settlement of our forward sale agreements ("Forward Equity Offering") in March 2011. Our coverage ratio, including our pro-rata share of our partnerships, was 2.3 times for the year ended December 31, 2011 as compared to 2.1 times for the year ended December 31, 2010. We define our coverage ratio as earnings before interest, taxes, depreciation and amortization (“EBITDA”) divided by the sum of the gross interest and scheduled mortgage principal paid to our lenders plus dividends paid to our preferred stockholders.
At December 31, 2011, commitments available to us under the Line totaled $600.0 million, which had an outstanding balance of $40.0 million. The Line was renewed in September 2011, and now matures in September 2015. In February 2011, a $113.8 million revolving credit facility expired with no balance outstanding and we did not renew this facility. On November 17, 2011, the Company closed on a $250 million unsecured term loan agreement ("Term Loan"), which matures in December 2016, and had no outstanding balance as of December 31, 2011.
On January 15, 2011, $161.7 million of unsecured debt matured, and we repaid the maturity by borrowing on the Line. On March 9, 2011, we received net proceeds of $215.4 million from the settlement of the 8.0 million common share Forward Equity Offering and used a portion of the proceeds to payoff the balance of the Line. During 2012, we estimate that we will require approximately $302.2 million primarily to repay $192.4 million of maturing debt (excluding scheduled principal payments); and $109.8 million for in-process development costs and capital contributions to our co-investment partnerships for repayment of debt. To meet these cash requirements, we plan to use funds from our existing Line and Term Loan, and when the capital markets are favorable, by issuing long term fixed rate debt and common equity. In January 2012, we borrowed $150 million on the Term Loan and in combination with proceeds drawn on the Line, repaid $192.4 million unsecured debt maturing January 15, 2012. A more detailed schedule about our maturing loans is included below under Contractual Obligations.
During 2011, we acquired five shopping centers for $110.6 million, including our pro rata share of acquisitions completed by our co-investment partnerships. Although we may fund acquisitions from various capital sources, a primary source of funds would come from capital recycling by selling shopping centers that no longer meet our investment criteria. During 2011, we sold 13 shopping centers for $91.2 million, including our pro rata share of sales completed by our co-investment partnerships. Relying on property sales as a substantial capital source to fund our acquisition program is subject to numerous risks including the inherent difficulties in selling properties in the current market, or selling properties at higher initial returns than planned, thereby limiting our ability to source the necessary funds to acquire dominate infill shopping centers consistent with our capital recycling strategy. Capital recycling may also be dilutive to our earnings given that dominate infill shopping centers that we would target for acquisition may have lower initial returns than many of the properties that we would target for sale.
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At December 31, 2011, we had seven development properties that were either under construction or in lease up, which when completed, will represent a net investment of $161.3 million after projected sales of adjacent land and out-parcels. This compares to 26 development properties at December 31, 2010, representing an investment of $530.6 million upon completion. We estimate that we will earn an average return on investment from our current development projects of 7.6% when completed and fully leased. Costs necessary to complete in-process development projects, net of reimbursements and projected land sales, are estimated to be $72.6 million.
During 2011, the co-investment partnerships repaid $484.7 million of debt through new mortgage loan financings and partner capital contributions. At December 31, 2011, our joint ventures had $255.6 million of scheduled secured mortgage loans and credit lines maturing in 2012. These maturities will be repaid from proceeds from new mortgage loan financings of $128.0 million currently committed, $5.6 million expected refinancing and $122.0 million of partner capital contributions of which Regency's pro rata share is $44.6 million.
We believe that our joint venture partners are financially sound and have sufficient capital or access thereto to fund future capital requirements. We communicate with our co-investment partners regularly regarding the operating and capital budgets of our co-investment partnerships, and believe that we will successfully complete the refinancing of our joint venture debt as it matures in the future. In the event that a co-investment partner was unable to fund its share of the capital requirements of the co-investment partnership, we would have the right, but not the obligation, to loan the defaulting partner the amount of its capital call at an interest rate at the lesser of prime plus a pre-defined spread or the maximum rate allowed by law. A decision to loan to a defaulting joint venture partner, which would be secured by the defaulting partner's partnership interest, would be based on the fair value of the co-investment partnership assets, our joint venture partner's financial health, and would be subject to an evaluation of our own capital commitments and sources to fund those commitments. Alternatively, should we determine that our joint venture partners will not have sufficient capital to meet future capital needs, we could trigger liquidation of the partnership. For the co-investment partnerships that have distribution-in-kind (“DIK”) provisions, and own multiple properties, a liquidation of the co-investment partnership could be completed by either a DIK of the properties to each joint venture partner in proportion to its partnership interest, open market sale, or a combination of both methods. Our co-investment partnership properties have been financed with non-recourse loans that represent 100% of the total debt of the co-investment partnerships including lines of credit as of December 31, 2011. We and our partners have no guarantees related to these loans. In those co-investment partnerships which have DIK provisions, if we trigger liquidation by DIK, each partner would receive title to properties selected in a rotation process for distribution and would assume any related loans secured by the properties distributed. The loan agreements generally provide for assumption by either joint venture partner after obtaining any required lender consent. We would only be responsible for those loans we assume through the DIK and only to the extent of the value of the property we receive, since after assumption through the DIK the loans would remain non-recourse.
Although common or preferred equity raised in the public markets by the Parent Company is an option to fund future capital needs, access to these markets could be limited at times. When conditions for the issuance of securities are acceptable, we will evaluate issuing debt or equity to fund new acquisition opportunities, fund new developments, or repay maturing debt. At December 31, 2011, the Parent Company and the Operating Partnership have an existing universal shelf registration statement available for the issuance of new equity and debt securities. See Note 11, Equity and Capital, in the Notes to Consolidated Financial Statements, for further discussion of the Company's capital structure.
Our preferred stock and preferred units, though callable by us, are not redeemable in cash at the option of the holders. On February 6, 2012, the Company announced it would redeem all issued and outstanding shares of the Parent Company's Series 3 and Series 4 Cumulative Redeemable Preferred Stock on March 31, 2012. The Company expects to reduce net income available to common stockholders through a non-cash charge of $7.0 million at redemption. On February 9, 2012, the Operating Partnership purchased all of its issued and outstanding Series D Preferred Units, at 3.75% discount to par, resulting in an increase to net income available to common stockholders of approximately $842,000. On February 16, 2012, the Parent Company issued 10 million shares of 6.625% Series 6 Cumulative Redeemable Preferred Stock with a liquidation preference of $25 per share.
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Investments in Real Estate Partnerships
At December 31, 2011, we had investments in real estate partnerships of $386.9 million. The following table is a summary of unconsolidated combined assets and liabilities of these co-investment partnerships and our pro-rata share at December 31, 2011 and December 31, 2010 (dollars in thousands):
2011 | 2010 | |||||
Number of Co-investment Partnerships | 16 | 18 | ||||
Regency’s Ownership | 20%-50% | 16.35%-50% | ||||
Number of Properties | 148 | 181 | ||||
Combined Assets | $ | 3,501,775 | 3,983,122 | |||
Combined Liabilities | $ | 1,992,213 | 2,262,476 | |||
Combined Equity | $ | 1,509,562 | 1,720,646 | |||
Regency’s Share of (1)(2): | ||||||
Assets | $ | 1,160,954 | 1,263,400 | |||
Liabilities | $ | 648,533 | 706,026 | |||
(1) Pro-rata financial information is not, and is not intended to be, a presentation in accordance with GAAP. However, management believes that providing such information is useful to investors in assessing the impact of its investments in real estate partnership activities on the operations of Regency, which includes such items on a single line presentation under the equity method in its consolidated financial statements. | ||||||
(2) The difference between Regency's share of the net assets of the co-investment partnerships and the Company's investments in real estate partnerships per the accompanying Consolidated Balance Sheets relates primarily to differences in inside/outside basis as further described in Note 4 to Consolidated Financial Statements. | ||||||
Investments in real estate partnerships are primarily composed of co-investment partnerships in which we currently invest with five co-investment partners and a closed-end real estate fund (“Regency Retail Partners” or the “Fund”), as further summarized below. In addition to earning our pro-rata share of net income or loss in each of these co-investment partnerships, we receive recurring market-based fees for asset management, property management, and leasing as well as fees for investment and financing services, which were $29.0 million, $25.1 million and $29.1 million for the years ended December 31, 2011, 2010, and 2009 respectively. During the years ended December 31, 2011, 2010, and 2009 we received transaction fees from our co-investment partnerships of $5.0 million, $2.6 million and $7.8 million, respectively, which are non-recurring.
Our investments in real estate partnerships as of December 31, 2011 and December 31, 2010 consist of the following (in thousands):
Ownership | 2011 | 2010 | ||||||
GRI - Regency, LLC (GRIR) | 40.00 | % | $ | 262,018 | 277,235 | |||
Macquarie CountryWide-Regency III, LLC (MCWR III) | 24.95 | % | 195 | 63 | ||||
Macquarie CountryWide-Regency-DESCO, LLC (MCWR-DESCO) (1) | 16.35 | % | — | 20,050 | ||||
Columbia Regency Retail Partners, LLC (Columbia I) | 20.00 | % | 20,335 | 20,025 | ||||
Columbia Regency Partners II, LLC (Columbia II) | 20.00 | % | 9,686 | 9,815 | ||||
Cameron Village, LLC (Cameron) | 30.00 | % | 17,110 | 17,604 | ||||
RegCal, LLC (RegCal) | 25.00 | % | 18,128 | 15,340 | ||||
Regency Retail Partners, LP (the Fund) | 20.00 | % | 16,430 | 17,478 | ||||
US Regency Retail I, LLC (USAA) | 20.01 | % | 3,093 | 3,941 | ||||
Other investments in real estate partnerships | 50.00 | % | 39,887 | 47,041 | ||||
Total | $ | 386,882 | 428,592 | |||||
(1) At December 31, 2010, our ownership interest in MCWR-DESCO was 16.35%. The liquidation of MCWR-DESCO was complete effective May 4, 2011. | ||||||||
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On May 4, 2011, we entered into an agreement with the DESCO Group ("DESCO") to redeem our entire 16.35% interest in Macquarie CountryWide-Regency-DESCO, LLC ("MCWR-DESCO"). The agreement allowed for a DIK of the assets in the co-investment partnership. The assets were distributed as 100% ownership interests to DESCO and to Regency after a selection process, as provided for by the agreement. Regency selected four assets, all in the St. Louis market. The properties which we received through the DIK were recorded at the carrying value of our equity investment of $18.8 million. Additionally, as part of the agreement, we received a $5.0 million disposition fee at closing on May 4, 2011 to buyout our asset, property, and leasing management contracts, and received $1.0 million for transition services provided through 2011.
Contractual Obligations
We have debt obligations related to our mortgage loans, unsecured notes, and our unsecured credit facilities as described further below and in Note 9 to the Consolidated Financial Statements. We have shopping centers that are subject to non-cancelable long-term ground leases where a third party owns and has leased the underlying land to us to construct and/or operate a shopping center. In addition, we have non-cancelable operating leases pertaining to office space from which we conduct our business. The table excludes reserves for approximately $2.4 million related to environmental remediation as discussed below under Environmental Matters as the timing of the remediation is not currently known. The table also excludes obligations related to construction or development contracts, since payments are only due upon satisfactory performance under the contracts.
The following table of Contractual Obligations summarizes our debt maturities including interest, excluding recorded debt premiums or discounts that are not obligations, and our obligations under non-cancelable operating, sub, and ground leases as of December 31, 2011, including our pro-rata share of obligations within co-investment partnerships (in thousands):
Payments Due by Period | ||||||||||||||||||||||
Beyond 5 | ||||||||||||||||||||||
2012 | 2013 | 2014 | 2015 | 2016 | Years | Total | ||||||||||||||||
Notes Payable: | ||||||||||||||||||||||
Regency (1) | $ | 297,879 | 120,226 | 263,970 | 468,151 | 84,497 | 1,178,015 | 2,412,738 | ||||||||||||||
Regency's share of JV (1) | 132,499 | 42,495 | 55,072 | 72,628 | 123,136 | 370,680 | 796,510 | |||||||||||||||
Operating Leases: | ||||||||||||||||||||||
Regency | 4,801 | 4,505 | 3,703 | 3,616 | 3,014 | 1,597 | 21,236 | |||||||||||||||
Subleases: | ||||||||||||||||||||||
Regency | (528 | ) | (229 | ) | (117 | ) | (94 | ) | (32 | ) | — | (1,000 | ) | |||||||||
Ground Leases: | ||||||||||||||||||||||
Regency | 3,644 | 3,645 | 3,640 | 3,319 | 3,343 | 103,611 | 121,202 | |||||||||||||||
Regency's share of JV | 189 | 189 | 189 | 189 | 189 | 9,424 | 10,369 | |||||||||||||||
Total | $ | 438,484 | 170,831 | 326,457 | 547,809 | 214,147 | 1,663,327 | 3,361,055 | ||||||||||||||
(1) Amounts include interest payments. | ||||||||||||||||||||||
Off-Balance Sheet Arrangements
We do not have off-balance sheet arrangements, financings, or other relationships with other unconsolidated entities (other than our co-investment partnerships) or other persons, also known as variable interest entities not previously discussed. Our co-investment partnership properties have been financed with non-recourse loans. The Company has no guarantees related to these loans.
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Critical Accounting Policies and Estimates
Knowledge about our accounting policies is necessary for a complete understanding of our financial statements. The preparation of our financial statements requires that we make certain estimates that impact the balance of assets and liabilities at a financial statement date and the reported amount of income and expenses during a financial reporting period. These accounting estimates are based upon, but not limited to, our judgments about historical results, current economic activity, and industry accounting standards. They are considered to be critical because of their significance to the financial statements and the possibility that future events may differ from those judgments, or that the use of different assumptions could result in materially different estimates. We review these estimates on a periodic basis to ensure reasonableness; however, the amounts we may ultimately realize could differ from such estimates.
Accounts Receivable
Minimum rent, percentage rent, and expense recoveries from tenants for common area maintenance costs, insurance and real estate taxes are the Company's principal source of revenue. As a result of generating this revenue, we will routinely have accounts receivable due from tenants. We are subject to tenant defaults and bankruptcies that may affect the collection of outstanding receivables. To address the collectability of these receivables, we analyze historical write-off experience, tenant credit-worthiness and current economic trends when evaluating the adequacy of our allowance for doubtful accounts. Although we estimate uncollectible receivables and provide for them through charges against income, actual experience may differ from those estimates.
Real Estate and Long-Lived Assets
Acquisition of Real Estate Assets
Upon acquisition of real estate operating properties, the Company estimates the fair value of acquired tangible assets (consisting of land, building, building improvements and tenant improvements) and identified intangible assets and liabilities (consisting of above and below-market leases, in-place leases and tenant relationships), assumed debt, and any noncontrolling interest in the acquiree at the date of acquisition, based on evaluation of information and estimates available at that date. Based on these estimates, the Company allocates the estimated fair value to the applicable assets and liabilities. Fair value is determined based on an exit price approach, which contemplates the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. If, up to one year from the acquisition date, information regarding fair value of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments are made to the purchase price allocation on a retrospective basis. The Company expenses transaction costs associated with business combinations in the period incurred.
Cost Capitalization
We capitalize the acquisition of land, the construction of buildings and other specifically identifiable development costs incurred by recording them into properties in development in our accompanying Consolidated Balance Sheets. In summary, a project changes from non-operating to operating when it is substantially completed and held available for occupancy. At that time, costs are no longer capitalized. Other development costs include pre-development costs essential to the development of the property, as well as, interest, real estate taxes, and direct employee costs incurred during the development period. Pre-development costs are incurred prior to land acquisition during the due diligence phase and include contract deposits, legal, engineering, and other professional fees related to evaluating the feasibility of developing a shopping center. At December 31, 2011 and 2010, the Company had capitalized pre-development costs of $2.1 million and $899,000, respectively, of which $1.0 million and $840,000, respectively, were refundable deposits. If we determine that the development of a specific project undergoing due diligence is no longer probable, we immediately expense all related capitalized pre-development costs not considered recoverable. During the years ended December 31, 2011, 2010, and 2009, we expensed pre-development costs of approximately $241,000, $520,000, and $3.8 million, respectively, recorded in other expenses in the accompanying Consolidated Statements of Operations. Interest costs are capitalized into each development project based on applying our weighted average borrowing rate to that portion of the actual development costs expended. We cease interest cost capitalization when the property is no longer being developed or is available for occupancy upon substantial completion of tenant improvements, but in no event would we capitalize interest on the project beyond 12 months after substantial completion of the building shell. During the years ended December 31, 2011, 2010, and 2009, we capitalized interest of $1.5 million, $5.1 million, and $19.1 million, respectively, on our development projects. We have a staff of employees who directly support our development program. All direct internal costs attributable to these development activities are capitalized as part of each development project. During the years ended December 31, 2011, 2010, and 2009, we capitalized $5.5 million, $2.7 million, and $6.5 million, respectively, of direct internal costs incurred to support our development program. The capitalization of costs is directly related to the actual level of development activity occurring. If accounting standards issued in the future were to limit the amount of internal costs that may be capitalized we could incur additional increases in general and administrative
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expenses which would further reduce net income.
Valuation of Real Estate Assets
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 is based on several key assumptions, including rental rates, costs of tenant improvements, leasing commissions, anticipated hold period, 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. 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. 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.
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 such as 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 and 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.
Recent Accounting Pronouncements
See Note 1, Summary of Significant Accounting Policies, to Consolidated Financial Statements.
Results from Operations - 2011 vs. 2010
Comparison of the years ended December 31, 2011 to 2010:
Our revenues increased by $24.3 million or 5.1% to $500.4 million in 2011, as compared to 2010, as summarized in the following table (in thousands):
2011 | 2010 | Change | |||||||
Minimum rent | $ | 356,097 | 338,639 | 17,458 | |||||
Percentage rent | 2,996 | 2,540 | 456 | ||||||
Recoveries from tenants and other income | 107,344 | 105,582 | 1,762 | ||||||
Management, transaction, and other fees | 33,980 | 29,400 | 4,580 | ||||||
Total revenues | $ | 500,417 | 476,161 | 24,256 | |||||
Minimum rent increased due to the acquisition of two operating properties in the latter part of Q4 2010, the acquisition of three operating properties during 2011, and four properties received through the DESCO DIK in May 2011. The increase in percentage rent was due to increased tenant sales during the year ended December 31, 2011, as compared to 2010. Recoveries from tenants represent their pro-rata share of the operating, maintenance, and real estate tax expenses that we incur to operate our shopping centers. Recoveries increased as a result of an increase in our operating expenses. In addition, other income increased due to increased contingency income earned from prior year sales of $1.4 million.
We earn fees, at market-based rates, for asset management, disposition, property management, leasing, acquisition, and financing services that we provide to our co-investment partnerships and third parties as follows (in thousands):
2011 | 2010 | Change | |||||||
Asset management fees | $ | 6,705 | 6,695 | 10 | |||||
Property management fees | 14,910 | 15,599 | (689 | ) | |||||
Transaction fees | 5,000 | 2,594 | 2,406 | ||||||
Leasing commissions and other fees | 7,365 | 4,512 | 2,853 | ||||||
$ | 33,980 | 29,400 | 4,580 | ||||||
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The increase in transaction and other fees was due to the $5.0 million disposition fee and $1.0 million in consulting fees we received as a result of the DESCO DIK liquidation during the the year ended December 31, 2011 as compared to the $2.6 million disposition fee we received related to GRI's acquisition of Macquarie CountryWide's ("MCW") investment during the year ended December 31, 2010.
Our operating expenses increased by $15.8 million or 5.1% to $326.1 million in 2011, as compared to 2010. The following table summarizes our operating expenses (in thousands):
2011 | 2010 | Change | |||||||
Depreciation and amortization | $ | 132,129 | 120,450 | 11,679 | |||||
Operating and maintenance | 72,626 | 68,496 | 4,130 | ||||||
General and administrative | 56,117 | 61,502 | (5,385 | ) | |||||
Real estate taxes | 55,542 | 53,462 | 2,080 | ||||||
Provision for doubtful accounts | 3,075 | 3,928 | (853 | ) | |||||
Other expenses | 6,649 | 2,496 | 4,153 | ||||||
Total operating expenses | $ | 326,138 | 310,334 | 15,804 | |||||
Increases in depreciation and amortization expense along with operating, maintenance, and real estate tax expense are primarily related to the two operating properties acquired during 2010, the three operating properties acquired during 2011, and the four properties received through the DESCO DIK in May 2011. The majority of the operating, maintenance, and real estate tax cost increases are recoverable from our tenants and included in our revenues. General and administrative expenses declined $5.4 million as a result of decreasing incentive compensation and certain employee benefits during the year ended December 31, 2011, as compared to 2010. Provision for doubtful accounts decreased as a result of improvements in the collection of tenant's accounts receivable for the year ended December 31, 2011, as compared to 2010. The increase in other expenses is due to income tax expense of $2.7 million incurred in 2011, as compared to a $1.3 million income tax benefit incurred in 2010.
The following table presents the change in interest expense (in thousands):
2011 | 2010 | Change | |||||||
Interest on notes payable | $ | 116,343 | 125,788 | (9,445 | ) | ||||
Interest on line of credit | 1,746 | 1,430 | 316 | ||||||
Capitalized interest | (1,480 | ) | (5,099 | ) | 3,619 | ||||
Hedge interest | 9,478 | 5,576 | 3,902 | ||||||
Interest income | (2,442 | ) | (2,408 | ) | (34 | ) | |||
$ | 123,645 | 125,287 | (1,642 | ) | |||||
Interest on notes payable decreased during the year ended December 31, 2011, as compared to 2010, as a result of the repayment of $161.7 million and $20.0 million of unsecured debt in January 2011 and December 2011, respectively. Capitalized interest decreased as a result of reduced development activity during the year ended December 31, 2011, as compared to 2010. Hedge interest increased as a result of $36.7 million of hedges settled on September 30, 2010, with the realized loss being amortized over a ten year period beginning October 2010, resulting in increased hedge interest expense for the year ended December 31, 2011.
We evaluate our real estate investments for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable, which may result in a reduction in the carrying value of the asset to its fair value. A provision for impairment was recognized during the year ended December 31, 2011 of $13.8 million, related primarily to two operating properties. These properties exhibited weak operating fundamentals, including low economic occupancy for an extended period of time, which lead to the impairment.
During the year ended December 31, 2011, we sold eight out-parcels for net proceeds of $13.4 million and recognized no gain, whereas during the year ended December 31, 2010, we sold eleven out-parcels for net proceeds of $11.8 million and recognized a gain of approximately $661,000.
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Our equity in income (loss) of investments in real estate partnerships changed by approximately $22.5 million during 2011, as compared to 2010 as follows (in thousands):
Ownership | 2011 | 2010 | Change | ||||||||
GRI - Regency, LLC (GRIR) | 40.00 | % | $ | 7,266 | (6,672 | ) | 13,938 | ||||
Macquarie CountryWide-Regency III, LLC (MCWR III) | 24.95 | % | (150 | ) | (108 | ) | (42 | ) | |||
Macquarie CountryWide-Regency-DESCO, LLC (MCWR-DESCO)(1) | — | (318 | ) | (817 | ) | 499 | |||||
Columbia Regency Retail Partners, LLC (Columbia I) | 20.00 | % | 2,775 | (2,970 | ) | 5,745 | |||||
Columbia Regency Partners II, LLC (Columbia II) | 20.00 | % | 179 | (69 | ) | 248 | |||||
Cameron Village, LLC (Cameron) | 30.00 | % | 322 | (221 | ) | 543 | |||||
RegCal, LLC (RegCal) | 25.00 | % | 1,904 | 194 | 1,710 | ||||||
Regency Retail Partners, LP (the Fund) | 20.00 | % | 268 | (3,565 | ) | 3,833 | |||||
US Regency Retail I, LLC (USAA) | 20.01 | % | 243 | (88 | ) | 331 | |||||
Other investments in real estate partnerships | 50.00 | % | (2,846 | ) | 1,432 | (4,278 | ) | ||||
Total | $ | 9,643 | (12,884 | ) | 22,527 | ||||||
(1) At December 31, 2010, our ownership interest in MCWR-DESCO was 16.35%. The liquidation of MCWR-DESCO was complete effective May 4, 2011. | |||||||||||
The change in our equity in income (loss) in investments in real estate partnerships, compared to 2010, is related to our pro-rata share of the decrease in depreciation expense of $5.7 million, the decrease in interest expense of $5.9 million, the decrease in impairment provisions of $18.5 million, and the net gain on extinguishment of debt of $1.7 million, offset by a decrease in net operating income of $7.8 million and a gain on sale of properties by approximately $700,000 at the individual real estate partnerships.
If we sell a property or classify a property as held-for-sale, we are required to reclassify its operations into discontinued operations for all prior periods which results in a reclassification of amounts previously reported as continuing operations into discontinued operations. Income from discontinued operations was $7.1 million for the year ended December 31, 2011 and includes $5.9 million in gains, net of taxes, from the sale of seven operating properties for net proceeds of $66.0 million and the operations, including impairment, of the shopping centers sold. Income from discontinued operations was $11.8 million for the year ended December 31, 2010 and includes $7.6 million in gains from the sale of two operating properties and one property in development for net proceeds of $34.9 million and the operations of the shopping centers sold.
Related to our Parent Company's results, our net income attributable to common stockholders for the year ended December 31, 2011 was $31.7 million, an increase of $42.6 million as compared to net loss of $10.9 million for the year ended December 31, 2010. The higher net income was primarily related to the increase in revenue, offset partially by the increase in operating expenses, from 2010 to 2011 as discussed above, a decrease in impairment provisions of $12.8 million, the $4.2 million net loss on extinguishment of debt incurred in 2010, with no such loss incurred in 2011, and an increase in equity in income of investments in real estate partnerships of $22.5 million. Our diluted net income per share was $0.35 for the year ended December 31, 2011 as compared to diluted net loss per share of $0.14 for the year ended December 31, 2010.
Related to our Operating Partnership results, our net income attributable to common unit holders for the year ended December 31, 2011 was $31.8 million, an increase of $42.6 million as compared to net loss of $10.8 million for the year ended December 31, 2010 for the same reasons stated above. Our diluted net income per unit was $0.35 for the year ended December 31, 2011 as compared to net loss per unit of $0.14 for the year ended December 31, 2010.
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Comparison of the years ended December 31, 2010 to 2009:
Our revenues decreased by $2.4 million or 0.5% to $476.2 million in 2010, as compared to 2009, as summarized in the following table (in thousands):
2010 | 2009 | Change | |||||||
Minimum rent | $ | 338,639 | 337,516 | 1,123 | |||||
Percentage rent | 2,540 | 3,585 | (1,045 | ) | |||||
Recoveries from tenants and other income | 105,582 | 99,171 | 6,411 | ||||||
Management, transaction, and other fees | 29,400 | 38,289 | (8,889 | ) | |||||
Total revenues | $ | 476,161 | 478,561 | (2,400 | ) | ||||
Generally, leased percentages were unchanged between 2010 and 2009, and as such, minimum rent remained relatively consistent, only increasing slightly from 2009 to 2010. Declines in percentage rent were a result of the change in percentage rent lease terms due to the increase in minimum rent for certain leases, upon their renewal. The increase in recoveries from tenants and other income resulted from a significant increase in termination fees received during 2010 related to tenant operators negotiating an early end to their lease agreements, as well as, higher operating and real estate tax expenses.
We earn fees, at market-based rates, for asset management, disposition, property management, leasing, acquisition, and financing services that we provide to our co-investment partnerships and third parties as follows (in thousands):
2010 | 2009 | Change | |||||||
Asset management fees | $ | 6,695 | 9,671 | (2,976 | ) | ||||
Property management fees | 15,599 | 15,031 | 568 | ||||||
Transaction fees | 2,594 | 7,781 | (5,187 | ) | |||||
Leasing commissions and other fees | 4,512 | 5,806 | (1,294 | ) | |||||
$ | 29,400 | 38,289 | (8,889 | ) | |||||
Asset management fees, which are tied to the value of the real estate we manage for our co-investment partners, decreased in 2010 due to an overall decline in commercial real estate values, but was also a result of the liquidation of a joint venture with MCW that occurred in 2009, as well as, our increased ownership and revised agreements in the GRIR joint venture, which resulted in lower fees paid to us by our partner. Transaction fees decreased primarily as a result of the $7.8 million disposition fee we received from Charter Hall Retail REIT (“CHRR”) in 2009 equal to 1% of the gross sales price paid by GRI described below. Leasing commissions decreased as a result of our increased ownership in the GRIR joint venture, which resulted in a reduction of fee recognized.
Our operating expenses increased by $10.1 million or 3.4% to $310.3 million in 2010, as compared to 2009. The following table summarizes our operating expenses (in thousands):
2010 | 2009 | Change | |||||||
Depreciation and amortization | $ | 120,450 | 114,058 | 6,392 | |||||
Operating and maintenance | 68,496 | 64,030 | 4,466 | ||||||
General and administrative | 61,502 | 53,177 | 8,325 | ||||||
Real estate taxes | 53,462 | 52,375 | 1,087 | ||||||
Provision for doubtful accounts | 3,928 | 8,348 | (4,420 | ) | |||||
Other expenses | 2,496 | 8,284 | (5,788 | ) | |||||
Total operating expenses | $ | 310,334 | 300,272 | 10,062 | |||||
Increases in depreciation and amortization expense along with operating, maintenance, and real estate tax expense are primarily related to the recently completed developments commencing operations in the current year and general increases in expenses incurred by the operating properties. The majority of these cost increases are recoverable from our tenants and included in our revenues. General and administrative expenses increased as a result of higher levels of compensation earned in 2010 for higher levels of performance as compared to 2009. Provision for doubtful accounts decreased in 2010 as compared to 2009 due to significantly improved tenant collection rates and fewer tenant defaults. The decrease in other expenses is due to a $1.3 million tax benefit incurred in 2010, as compared to tax expense of $1.8 million incurred in 2009, as well as a reduction in
48
pre-development costs written off as a result of pursuing less new development activity during 2010.
The following table presents the change in interest expense (in thousands):
2010 | 2009 | Change | |||||||
Interest on notes payable | $ | 125,788 | 123,778 | 2,010 | |||||
Interest on line of credit | 1,430 | 5,985 | (4,555 | ) | |||||
Capitalized interest | (5,099 | ) | (19,062 | ) | 13,963 | ||||
Hedge interest | 5,576 | 2,305 | 3,271 | ||||||
Interest income | (2,408 | ) | (3,767 | ) | 1,359 | ||||
$ | 125,287 | 109,239 | 16,048 | ||||||
Interest on line of credit decreased as a result of lower outstanding balances during 2010 as compared to 2009. Capitalized interest decreased as a result of a reduced development activity as compared to 2009, and a higher level of shopping center completions during 2010.
A provision for impairment was recognized during the year ended December 31, 2010 of $26.6 million, which was a decrease of $70.9 million from the impairment provision recorded in 2009. The impairment provision recorded in 2010 was a result of identifying properties that had been previously considered held for long term investment and determining that they no longer met our long term investment strategy. As a result of this re-evaluation, we changed our expected investment holding period and reduced our carrying value to estimated fair value. During 2009, we recorded a provision for impairment of $104.4 million, of which $93.7 million related to land held for future development or sale. During 2009, a prospective anchor tenant for several development sites expressed considerable uncertainty about the timing and location of future stores given the recession occurring during that period. As a result, we reevaluated and reduced the probability of future development at these sites and accordingly reduced our carrying value in the land parcels to estimated fair value of the land. Included in the impairment provision recorded during 2009 were operating properties that were subjected to the same investment criteria evaluation that we applied during 2010, and we accordingly reduced our carrying value on those properties to estimated fair value based upon a change in expected holding periods. If we sell a property or classify a property as held-for-sale, we are required to reclassify its operations into discontinued operations for all prior periods which results in a reclassification of amounts previously reported as continuing operations into discontinued operations. All of the $26.6 million provision was recorded in continuing operations for the year ended December 31, 2010 and of the $104.4 million provision recorded during the year ended December 31, 2009, $6.9 million was reclassified into discontinued operations.
During the year ended December 31, 2010, we sold eleven out-parcels for net proceeds of $11.8 million and recognized a gain of approximately $661,000, as compared to 2009 where we sold 18 out-parcels for net proceeds of $27.8 million and recognized a gain of approximately $219,000. During 2010, we recognized approximately $332,000 in contingent gains related to three properties sold to the USAA partnership during 2009. During 2009, we sold eight operating properties to the USAA partnership for net proceeds of $103.3 million and recognized gains of $19.1 million recorded under the Restricted Gain Method (as further described in Note 1, Significant Accounting Policies, to the Consolidated Financial Statements).
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Our equity in income (loss) of investments in real estate partnerships changed by $13.5 million during the year ended December 31, 2010, as compared to 2009 as follows (in thousands):
Ownership | 2010 | 2009 | Change | ||||||||
Macquarie CountryWide-Regency (MCWR I)(1) | — | % | $ | — | 1,207 | (1,207 | ) | ||||
GRI - Regency, LLC (GRIR)(2) | 40.00 | % | (6,672 | ) | (28,308 | ) | 21,636 | ||||
Macquarie CountryWide-Regency III, LLC (MCWR III) | 24.95 | % | (108 | ) | 150 | (258 | ) | ||||
Macquarie CountryWide-Regency-DESCO, LLC (MCWR-DESCO) | 16.35 | % | (817 | ) | (883 | ) | 66 | ||||
Columbia Regency Retail Partners, LLC (Columbia I) | 20.00 | % | (2,970 | ) | 914 | (3,884 | ) | ||||
Columbia Regency Partners II, LLC (Columbia II) | 20.00 | % | (69 | ) | 28 | (97 | ) | ||||
Cameron Village, LLC (Cameron) | 30.00 | % | (221 | ) | (436 | ) | 215 | ||||
RegCal, LLC (RegCal) | 25.00 | % | 194 | 123 | 71 | ||||||
Regency Retail Partners, LP (the Fund) | 20.00 | % | (3,565 | ) | (464 | ) | (3,101 | ) | |||
US Regency Retail I, LLC (USAA) | 20.01 | % | (88 | ) | (6 | ) | (82 | ) | |||
Other investments in real estate partnerships | 50.00 | % | 1,432 | 1,302 | 130 | ||||||
Total | $ | (12,884 | ) | (26,373 | ) | 13,489 | |||||
(1) At December 31, 2008, our ownership interest in MCWR I was 25%. The liquidation of MCWR I was complete December 31, 2009. | |||||||||||
(2) At December 31, 2009, our ownership interest in GRIR (formerly Macquarie CountryWide-Regency II, LLC) was 25%. | |||||||||||
The change in our equity loss in investments in real estate partnerships, compared to 2009, is related to increasing our ownership interest in GRIR effective January 1, 2010 to 40% from our 24.95% ownership interest in 2009, combined with similar positive trends that we experienced in the Consolidated Properties as they relate to increases in base rent, reductions in provisions for doubtful accounts, higher termination fees and lower provisions for impairment. During 2010, our pro-rata share of the impairment reserves recorded in the real estate partnerships was $23.0 million as compared to $26.1 million in 2009. During 2009, impairment provisions were primarily incurred and recorded by GRIR; however, during 2010, impairment provisions, which were significantly lower in GRIR and contributed to GRIR’s reduction in equity loss, were higher in Columbia I and the Fund, which contributed to the equity losses reported by these two partnerships in 2010.
Income from discontinued operations was $11.8 million for the year ended December 31, 2010 and includes $7.6 million in gains, net of taxes, from the sale of two operating properties and one property in development for net proceeds of $34.9 million and the operations of the shopping centers sold or classified as held-for sale in 2010 and 2009. Income from discontinued operations was $9.8 million for the year ended December 31, 2009 and includes $5.8 million in gains from the sale of one operating property and four properties in development for net proceeds of $49.3 million and the operations of shopping centers sold or classified as held for sale in 2010 and 2009.
Related to our Parent Company’s results, our net loss attributable to common stockholders for the year ended December 31, 2010 was $10.9 million, an increase in net income of $41.8 million as compared with the net loss of $52.7 million for the year ended December 31, 2009. The higher net income was primarily related to a lower provision for impairment recorded during 2010 as compared to 2009, moderate improvement in our operating fundamentals impacting base rent, but partially offset by lower gains realized in 2010 on sales of operating properties, and higher interest expense. Our diluted net loss per share was $0.14 in 2010 as compared to diluted net loss per share of $0.69 in 2009.
Related to our Operating Partnership results, our net loss attributable to common unit holders for the year ended December 31, 2010 was $10.8 million, an increase in net income of $42.1 million as compared with the net loss of $52.9 million for the year ended December 31, 2009 for the same reasons stated above. Our diluted net loss per unit was $0.14 for the year ended December 31, 2010 as compared to net loss per unit of $0.69 for the year ended December 31, 2009.
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Environmental Matters
We are subject to numerous environmental laws and regulations as they apply to our shopping centers pertaining to chemicals used by the dry cleaning industry, the existence of asbestos in older shopping centers, and underground petroleum storage tanks. We believe that the tenants who currently operate dry cleaning plants or gas stations do so in accordance with current laws and regulations. Generally, we use all legal means to cause tenants to remove dry cleaning plants from our shopping centers or convert them to non-chlorinated solvent systems. Where available, we have applied and been accepted into state-sponsored environmental programs. We have a blanket environmental insurance policy for third-party liabilities and remediation costs on shopping centers that currently have no known environmental contamination. We have also placed environmental insurance, where possible, on specific properties with known contamination, in order to mitigate our environmental risk. We monitor the shopping centers containing environmental issues and in certain cases voluntarily remediate the sites. We also have legal obligations to remediate certain sites and we are in the process of doing so. We estimate the cost associated with these legal obligations to be $2.4 million and $2.9 million, all of which has been accrued as of December 31, 2011 and 2010, respectively. We believe that the ultimate disposition of currently known environmental matters will not have a material effect on our financial position, liquidity, or results of operations; however, we can give no assurance that existing environmental studies on our shopping centers have revealed all potential environmental liabilities; that any previous owner, occupant or tenant did not create any material environmental condition not known to us; that the current environmental condition of the shopping centers will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties; or that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to us.
Inflation/Deflation
Inflation has been historically low and has had a minimal impact on the operating performance of our shopping centers; however, more recent data suggests inflation will eventually become a greater concern as the economy continues to recover from the recent recession. Substantially all of our long-term leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions include clauses enabling us to receive percentage rent based on tenants' gross sales, which generally increase as prices rise; and/or escalation clauses, which generally increase rental rates during the terms of the leases. Such escalation clauses are often related to increases in the consumer price index or similar inflation indices. In addition, many of our leases are for terms of less than ten years, which permits us to seek increased rents upon re-rental at market rates. Most of our leases require tenants to pay their pro-rata share of operating expenses, including common-area maintenance, real estate taxes, insurance and utilities, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. However, during deflationary periods or periods of economic weakness, minimum rents and percentage rents will decline as the supply of available retail space exceeds demand and consumer spending declines. Occupancy declines resulting from a weak economic period will also likely result in lower recovery rates of our operating expenses.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Market Risk
We are exposed to two significant components of interest rate risk. We have a $600.0 million unsecured line of credit (the "Line") commitment and a $250.0 million unsecured term loan (the "Term Loan") commitment, as further described in Note 9 to the Consolidated Financial Statements. Our Line commitment has a variable interest rate that is based upon a variable interest rate of LIBOR plus 125 basis points and our Term Loan has a variable interest rate of LIBOR plus 145 basis points. LIBOR rates charged on our Line commitment and our Term Loan (collectively our "Unsecured credit facilities") change monthly. The spread on the Unsecured credit facilities is dependent upon maintaining specific credit ratings. If our credit ratings are downgraded, the spread on the Unsecured credit facilities would increase, resulting in higher interest costs. We are also exposed to changes in interest rates when we refinance our existing long-term fixed rate debt. The objective of our interest rate risk management is to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, we borrow primarily at fixed interest rates and may enter into derivative financial instruments such as interest rate swaps, caps, or treasury locks in order to mitigate our interest rate risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes. Our interest rate swaps are structured solely for the purpose of interest rate protection.
During 2006, we entered into four forward-starting interest rate swaps (the “Swaps”) totaling $396.7 million with fixed rates of 5.399%, 5.415%, 5.399%, and 5.415%. At inception, we designated these Swaps as cash flow hedges to lock in the underlying treasury rates on $400.0 million of fixed rate financing that was expected to occur in 2010 and 2011. During 2009, we paid $20.0 million to partially settle $106.0 million of the $396.7 Swaps in place to hedge the $106.0 million
51
mortgage loan issued on July 1, 2009. On June 1, 2010, we paid $26.8 million to partially settle $150.0 million of the remaining $290.7 million Swaps in place to hedge the $150.0 million ten-year senior unsecured notes issued on June 2, 2010. On September 30, 2010, we paid $36.7 million to settle the remaining $140.7 million of Swaps to hedge the $250.0 million ten-year senior unsecured notes issued on October 7, 2010. During 2011, the Company, through a consolidated co-investment partnership, entered an interest rate swap on a $9.0 million variable rate secured loan maturing on September 1, 2014 to fix the interest rate. For the years ended December 31, 2011 and 2010, we recognized expense of $54,000 and income of $1.4 million, respectively, for changes in hedge ineffectiveness.
We have $208.7 million of fixed rate debt maturing in 2012 and 2013 that has a weighted average fixed interest rate of 6.78%, which includes $192.4 million of unsecured long-term debt that matures in January 2012. We continuously monitor the capital markets and evaluate our ability to issue new debt to repay maturing debt or fund our commitments. Based upon the current capital markets, our current credit ratings, our current capacity under our Line and Term Loan, and the number of high quality, unencumbered properties that we own which could collateralize borrowings, we expect that we will be able to successfully issue new secured or unsecured debt to fund these debt obligations. In January 2012 we borrowed the on our Line and Term Loan to repay the $192.4 million unsecured debt maturing in January 2012.
Our interest rate risk is monitored using a variety of techniques. The table below presents the principal cash flows (in thousands), weighted average interest rates of remaining debt, and the fair value of total debt (in thousands) as of December 31, 2011, by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes. Although the average interest rate for variable rate debt is included in the table, those rates represent rates that existed at December 31, 2011 and are subject to change on a monthly basis.
The table below incorporates only those exposures that exist as of December 31, 2011 and does not consider exposures or positions that could arise after that date. Since firm commitments are not presented, the table has limited predictive value. As a result, our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, our hedging strategies at that time, and actual interest rates.
2012 | 2013 | 2014 | 2015 | 2016 | Thereafter | Total | Fair Value | |||||||||||||||||
Fixed rate debt | $ | 199,171 | 23,122 | 172,743 | 401,482 | 19,018 | 1,112,536 | 1,928,072 | 2,077,432 | |||||||||||||||
Average interest rate for all fixed rate debt (1) | 5.69 | % | 5.67 | % | 5.74 | % | 5.89 | % | 5.89 | % | 5.89 | % | — | — | ||||||||||
Variable rate LIBOR debt | $ | 204 | 204 | 12,257 | 40,000 | — | — | 52,665 | 52,907 | |||||||||||||||
Average interest rate for all variable rate debt (1) | 1.80 | % | 1.79 | % | 1.48 | % | — | — | — | — | — | |||||||||||||
(1) Average interest rates at the end of each year presented. | ||||||||||||||||||||||||
52
Item 8. Consolidated Financial Statements and Supplementary Data
Regency Centers Corporation and Regency Centers, L.P.
Index to Financial Statements
Regency Centers Corporation: | |
Regency Centers, L.P.: | |
Financial Statement Schedule | |
All other schedules are omitted because of the absence of conditions under which they are required, materiality or because information required therein is shown in the consolidated financial statements or notes thereto.
53
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Regency Centers Corporation:
We have audited the accompanying consolidated balance sheets of Regency Centers Corporation and subsidiaries (the Company) as of December 31, 2011 and 2010, and the related consolidated statements of operations, equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2011. In connection with our audits of the consolidated financial statements, we also have audited financial statement Schedule III. These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Regency Centers Corporation and subsidiaries as of December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Regency Centers Corporation's internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 29, 2012 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.
/s/ KPMG LLP
February 29, 2012
Jacksonville, Florida
Certified Public Accountants
54
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Regency Centers Corporation:
We have audited Regency Centers Corporation's (the Company's) internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Regency Centers Corporation's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Regency Centers Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Regency Centers Corporation and subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of operations, equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2011, and our report dated February 29, 2012 expressed an unqualified opinion on those consolidated financial statements.
/s/ KPMG LLP
February 29, 2012
Jacksonville, Florida
Certified Public Accountants
55
Report of Independent Registered Public Accounting Firm
The Unit Holders of Regency Centers, L.P. and
the Board of Directors and Stockholders of
Regency Centers Corporation:
We have audited the accompanying consolidated balance sheets of Regency Centers, L.P. and subsidiaries (the Partnership) as of December 31, 2011 and 2010, and the related consolidated statements of operations, capital and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2011. In connection with our audits of the consolidated financial statements, we also have audited financial statement Schedule III. These consolidated financial statements and financial statement schedule are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Regency Centers, L.P. and subsidiaries as of December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Regency Centers, L.P.'s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 29, 2012 expressed an unqualified opinion on the effectiveness of the Partnership's internal control over financial reporting.
/s/ KPMG LLP
February 29, 2012
Jacksonville, Florida
Certified Public Accountants
56
Report of Independent Registered Public Accounting Firm
The Unit Holders of Regency Centers, L.P. and
the Board of Directors and Stockholders of
Regency Centers Corporation:
We have audited Regency Centers, L.P.'s (the Partnership's) internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Regency Centers, L.P.'s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Partnership's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Regency Centers, L.P. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Regency Centers, L.P. and subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of operations, capital and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2011, and our report dated February 29, 2012 expressed an unqualified opinion on those consolidated financial statements.
/s/ KPMG LLP
February 29, 2012
Jacksonville, Florida
Certified Public Accountants
57
REGENCY CENTERS CORPORATION
Consolidated Balance Sheets
December 31, 2011 and 2010
(in thousands, except share data)
2011 | 2010 | |||||
Assets | ||||||
Real estate investments at cost (notes 2, 3, 4, and 15): | ||||||
Land | $ | 1,273,606 | 1,093,700 | |||
Buildings and improvements | 2,604,229 | 2,284,522 | ||||
Properties in development | 224,077 | 610,932 | ||||
4,101,912 | 3,989,154 | |||||
Less: accumulated depreciation | 791,619 | 700,878 | ||||
3,310,293 | 3,288,276 | |||||
Investments in real estate partnerships | 386,882 | 428,592 | ||||
Net real estate investments | 3,697,175 | 3,716,868 | ||||
Cash and cash equivalents | 11,402 | 17,061 | ||||
Restricted cash | 6,050 | 5,399 | ||||
Accounts receivable, net of allowance for doubtful accounts of $3,442 and $4,819 at December 31, 2011 and 2010, respectively | 37,733 | 36,600 | ||||
Straight-line rent receivable, net of reserve of $2,075 and $1,396 at December 31, 2011 and 2010, respectively | 48,132 | 45,241 | ||||
Notes receivable (note 5) | 35,784 | 35,931 | ||||
Deferred costs, less accumulated amortization of $71,265 and $69,158 at December 31, 2011 and 2010, respectively | 70,204 | 63,165 | ||||
Acquired lease intangible assets, less accumulated amortization of $15,588 and $13,996 at December 31, 2011 and 2010, respectively (note 6) | 27,054 | 18,219 | ||||
Trading securities held in trust, at fair value (note 7) | 21,713 | 20,891 | ||||
Other assets | 31,824 | 35,164 | ||||
Total assets | $ | 3,987,071 | 3,994,539 | |||
Liabilities and Equity | ||||||
Liabilities: | ||||||
Notes payable (note 9) | $ | 1,942,440 | 2,084,469 | |||
Unsecured line of credit (note 9) | 40,000 | 10,000 | ||||
Accounts payable and other liabilities (note 7) | 101,862 | 138,196 | ||||
Derivative instruments, at fair value (note 10) | 37 | — | ||||
Acquired lease intangible liabilities, less accumulated accretion of $4,750 and $11,010 at December 31, 2011 and 2010, respectively (note 6) | 12,662 | 6,682 | ||||
Tenants’ security and escrow deposits and prepaid rent | 20,416 | 10,790 | ||||
Total liabilities | 2,117,417 | 2,250,137 | ||||
Commitments and contingencies (notes 15 and 16) | ||||||
Equity: | ||||||
Stockholders’ equity (notes 12 and 13): | ||||||
Preferred stock, $0.01 par value per share, 30,000,000 shares authorized;11,000,000 Series 3-5 shares issued and outstanding at December 31, 2011 and 2010 with liquidation preferences of $25 per share | 275,000 | 275,000 | ||||
Common stock $0.01 par value per share,150,000,000 shares authorized; 89,921,858 and 81,886,872 shares issued at December 31, 2011 and 2010, respectively | 899 | 819 | ||||
Treasury stock at cost, 338,714 and 347,482 shares held at December 31, 2011 and 2010, respectively (note 7) | (15,197 | ) | (16,175 | ) | ||
Additional paid in capital (note 7) | 2,281,817 | 2,039,612 | ||||
Accumulated other comprehensive loss | (71,429 | ) | (80,885 | ) | ||
Distributions in excess of net income (note 7) | (662,735 | ) | (533,194 | ) | ||
Total stockholders’ equity | 1,808,355 | 1,685,177 | ||||
Noncontrolling interests (note 12): | ||||||
Series D preferred units, aggregate redemption value of $50,000 at December 31, 2011 and 2010 | 49,158 | 49,158 | ||||
Exchangeable operating partnership units, aggregate redemption value of $6,665 and $7,483 at December 31, 2011 and 2010, respectively | (963 | ) | (762 | ) | ||
Limited partners’ interests in consolidated partnerships | 13,104 | 10,829 | ||||
Total noncontrolling interests | 61,299 | 59,225 | ||||
Total equity | 1,869,654 | 1,744,402 | ||||
Total liabilities and equity | $ | 3,987,071 | 3,994,539 | |||
See accompanying notes to consolidated financial statements.
58
REGENCY CENTERS CORPORATION
Consolidated Statements of Operations
For the years ended December 31, 2011, 2010, and 2009
(in thousands, except per share data)
2011 | 2010 | 2009 | |||||||
Revenues: | |||||||||
Minimum rent | $ | 356,097 | 338,639 | 337,516 | |||||
Percentage rent | 2,996 | 2,540 | 3,585 | ||||||
Recoveries from tenants and other income | 107,344 | 105,582 | 99,171 | ||||||
Management, transaction, and other fees | 33,980 | 29,400 | 38,289 | ||||||
Total revenues | 500,417 | 476,161 | 478,561 | ||||||
Operating expenses: | |||||||||
Depreciation and amortization | 132,129 | 120,450 | 114,058 | ||||||
Operating and maintenance | 72,626 | 68,496 | 64,030 | ||||||
General and administrative | 56,117 | 61,502 | 53,177 | ||||||
Real estate taxes | 55,542 | 53,462 | 52,375 | ||||||
Provision for doubtful accounts | 3,075 | 3,928 | 8,348 | ||||||
Other expenses | 6,649 | 2,496 | 8,284 | ||||||
Total operating expenses | 326,138 | 310,334 | 300,272 | ||||||
Other expense (income): | |||||||||
Interest expense, net of interest income of $2,442, $2,408, and $3,767 in 2011, 2010, and 2009, respectively | 123,645 | 125,287 | 109,239 | ||||||
Gain on sale of real estate | (2,404 | ) | (993 | ) | (19,357 | ) | |||
Provision for impairment | 13,772 | 26,615 | 97,519 | ||||||
Early extinguishment of debt | — | 4,243 | 2,784 | ||||||
Loss (income) from deferred compensation plan (note 7) | 206 | (1,982 | ) | (2,750 | ) | ||||
Loss (income) on derivative instruments (note 10) | 54 | (1,419 | ) | 3,294 | |||||
Total other expense (income) | 135,273 | 151,751 | 190,729 | ||||||
Income (loss) before equity in income (loss) of investments in real estate partnerships | 39,006 | 14,076 | (12,440 | ) | |||||
Equity in income (loss) of investments in real estate partnerships (note 4) | 9,643 | (12,884 | ) | (26,373 | ) | ||||
Income (loss) from continuing operations | 48,649 | 1,192 | (38,813 | ) | |||||
Discontinued operations, net (note 3): | |||||||||
Operating income | 1,197 | 4,232 | 3,942 | ||||||
Gain on sale of operating properties, net | 5,942 | 7,577 | 5,835 | ||||||
Income from discontinued operations | 7,139 | 11,809 | 9,777 | ||||||
Net income (loss) | 55,788 | 13,001 | (29,036 | ) | |||||
Noncontrolling interests: | |||||||||
Preferred units | (3,725 | ) | (3,725 | ) | (3,725 | ) | |||
Exchangeable operating partnership units | (103 | ) | (84 | ) | 216 | ||||
Limited partners’ interests in consolidated partnerships | (590 | ) | (376 | ) | (452 | ) | |||
Income attributable to noncontrolling interests | (4,418 | ) | (4,185 | ) | (3,961 | ) | |||
Net income (loss) attributable to controlling interests | 51,370 | 8,816 | (32,997 | ) | |||||
Preferred stock dividends | (19,675 | ) | (19,675 | ) | (19,675 | ) | |||
Net income (loss) attributable to common stockholders | $ | 31,695 | (10,859 | ) | (52,672 | ) | |||
Income (loss) per common share - basic (note 14): | |||||||||
Continuing operations | $ | 0.27 | (0.29 | ) | (0.82 | ) | |||
Discontinued operations | 0.08 | 0.15 | 0.12 | ||||||
Net income (loss) attributable to common stockholders | $ | 0.35 | (0.14 | ) | (0.70 | ) | |||
Income (loss) per common share - diluted (note 14): | |||||||||
Continuing operations | $ | 0.27 | (0.28 | ) | (0.82 | ) | |||
Discontinued operations | 0.08 | 0.14 | 0.12 | ||||||
Net income (loss) attributable to common stockholders | $ | 0.35 | (0.14 | ) | (0.70 | ) | |||
See accompanying notes to consolidated financial statements.
59
REGENCY CENTERS CORPORATION Consolidated Statements of Equity and Comprehensive Income (Loss) For the years ended December 31, 2011, 2010, and 2009 (in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||
Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Treasury Stock | Additional Paid In Capital | Accumulated Other Comprehensive Loss | Distributions in Excess of Net Income | Total Stockholders’ Equity | Preferred Units | Exchangeable Operating Partnership Units | Limited Partners’ Interest in Consolidated Partnerships | Total Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||
Balance at December 31, 2008 (note 7) | $ | 275,000 | 756 | (133,046 | ) | 1,781,557 | (90,689 | ) | (157,255 | ) | 1,676,323 | 49,158 | 8,283 | 7,980 | 65,421 | 1,741,744 | ||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | (32,997 | ) | (32,997 | ) | 3,725 | (216 | ) | 452 | 3,961 | (29,036 | ) | ||||||||||||||||||||
Amortization of loss on derivative instruments | — | — | — | — | 2,292 | — | 2,292 | — | 13 | — | 13 | 2,305 | ||||||||||||||||||||||||
Change in fair value of derivative instruments | — | — | — | — | 38,424 | — | 38,424 | — | 221 | 221 | 38,645 | |||||||||||||||||||||||||
Total comprehensive income | 7,719 | 4,195 | 11,914 | |||||||||||||||||||||||||||||||||
Deferred compensation plan, net (note 7) | — | — | 5,123 | (1,079 | ) | — | — | 4,044 | — | — | — | — | 4,044 | |||||||||||||||||||||||
Amortization of restricted stock issued | — | 2 | — | 5,961 | — | — | 5,963 | — | — | — | — | 5,963 | ||||||||||||||||||||||||
Common stock redeemed for taxes withheld for stock based compensation, net | — | — | — | 343 | — | — | 343 | — | — | — | — | 343 | ||||||||||||||||||||||||
Common stock issued for dividend reinvestment plan | — | 1 | — | 3,222 | — | — | 3,223 | — | — | — | — | 3,223 | ||||||||||||||||||||||||
Tax benefit for issuance of stock options | — | — | — | 552 | — | — | 552 | — | — | — | — | 552 | ||||||||||||||||||||||||
Common stock issued for stock offerings, net of issuance costs | — | 112 | — | 345,685 | — | — | 345,797 | — | — | — | — | 345,797 | ||||||||||||||||||||||||
Treasury stock cancellation | — | (56 | ) | 111,414 | (111,358 | ) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||
Contributions from partners | — | — | — | — | — | — | — | — | — | 4,197 | 4,197 | 4,197 | ||||||||||||||||||||||||
Distributions to partners | — | — | — | — | — | — | — | — | — | (881 | ) | (881 | ) | (881 | ) | |||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||||
Preferred stock/unit | — | — | — | — | — | (19,675 | ) | (19,675 | ) | (3,725 | ) | — | — | (3,725 | ) | (23,400 | ) | |||||||||||||||||||
Common stock/unit ($2.11 per share) | — | — | — | — | — | (161,909 | ) | (161,909 | ) | — | (980 | ) | — | (980 | ) | (162,889 | ) | |||||||||||||||||||
Balance at December 31, 2009 | $ | 275,000 | 815 | (16,509 | ) | 2,024,883 | (49,973 | ) | (371,836 | ) | 1,862,380 | 49,158 | 7,321 | 11,748 | 68,227 | 1,930,607 | ||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 8,816 | 8,816 | 3,725 | 84 | 376 | 4,185 | 13,001 | ||||||||||||||||||||||||
Amortization of loss on derivative instruments | — | — | — | — | 5,563 | — | 5,563 | — | 12 | — | 12 | 5,575 | ||||||||||||||||||||||||
Change in fair value of derivative instruments | — | — | — | — | (36,475 | ) | — | (36,475 | ) | — | (81 | ) | — | (81 | ) | (36,556 | ) | |||||||||||||||||||
Total comprehensive income (loss) | (22,096 | ) | 4,116 | (17,980 | ) | |||||||||||||||||||||||||||||||
Deferred compensation plan, net (note 7) | — | — | 334 | (607 | ) | — | — | (273 | ) | — | — | — | — | (273 | ) | |||||||||||||||||||||
60
REGENCY CENTERS CORPORATION Consolidated Statements of Equity and Comprehensive Income (Loss) For the years ended December 31, 2011, 2010, and 2009 (in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||
Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Treasury Stock | Additional Paid In Capital | Accumulated Other Comprehensive Loss | Distributions in Excess of Net Income | Total Stockholders’ Equity | Preferred Units | Exchangeable Operating Partnership Units | Limited Partners’ Interest in Consolidated Partnerships | Total Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||
Amortization of restricted stock issued | — | — | — | 7,236 | — | — | 7,236 | — | — | — | — | 7,236 | ||||||||||||||||||||||||
Common stock redeemed for taxes withheld for stock based compensation, net | — | — | — | (1,374 | ) | — | — | (1,374 | ) | — | — | — | — | (1,374 | ) | |||||||||||||||||||||
Common stock issued for dividend reinvestment plan | — | 1 | — | 1,847 | — | — | 1,848 | — | — | — | — | 1,848 | ||||||||||||||||||||||||
Common stock issued for partnership units exchanged | — | 3 | — | 7,627 | — | — | 7,630 | — | (7,630 | ) | — | (7,630 | ) | — | ||||||||||||||||||||||
Contributions from partners | — | — | — | — | — | — | — | — | — | 161 | 161 | 161 | ||||||||||||||||||||||||
Distributions to partners | — | — | — | — | — | — | — | — | — | (1,456 | ) | (1,456 | ) | (1,456 | ) | |||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||||
Preferred stock/unit | — | — | — | — | — | (19,675 | ) | (19,675 | ) | (3,725 | ) | — | — | (3,725 | ) | (23,400 | ) | |||||||||||||||||||
Common stock/unit ($1.85 per share) | — | — | — | — | — | (150,499 | ) | (150,499 | ) | — | (468 | ) | — | (468 | ) | (150,967 | ) | |||||||||||||||||||
Balance at December 31, 2010 | $ | 275,000 | 819 | (16,175 | ) | 2,039,612 | (80,885 | ) | (533,194 | ) | 1,685,177 | 49,158 | (762 | ) | 10,829 | 59,225 | 1,744,402 | |||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 51,370 | 51,370 | 3,725 | 103 | 590 | 4,418 | 55,788 | ||||||||||||||||||||||||
Amortization of loss on derivative instruments | — | — | — | — | 9,447 | — | 9,447 | — | 20 | — | 20 | 9,467 | ||||||||||||||||||||||||
Change in fair value of derivative instruments | — | — | — | — | 9 | — | 9 | — | — | 9 | 9 | 18 | ||||||||||||||||||||||||
Total comprehensive income | 60,826 | 4,447 | 65,273 | |||||||||||||||||||||||||||||||||
Deferred compensation plan, net | — | — | 978 | 16,865 | — | — | 17,843 | — | — | — | — | 17,843 | ||||||||||||||||||||||||
Amortization of restricted stock issued | — | — | — | 10,659 | — | — | 10,659 | — | — | — | — | 10,659 | ||||||||||||||||||||||||
Common stock redeemed for taxes withheld for stock based compensation, net | — | — | — | (1,689 | ) | — | — | (1,689 | ) | — | — | — | — | (1,689 | ) | |||||||||||||||||||||
Common stock issued for dividend reinvestment plan | — | — | — | 1,081 | — | — | 1,081 | — | — | — | — | 1,081 | ||||||||||||||||||||||||
Common stock issued for stock offerings, net of issuance costs | — | 80 | — | 215,289 | — | — | 215,369 | — | — | — | — | 215,369 | ||||||||||||||||||||||||
Contributions from partners | — | — | — | — | — | — | — | — | — | 2,787 | 2,787 | 2,787 | ||||||||||||||||||||||||
Distributions to partners | — | — | — | — | — | — | — | — | — | (1,111 | ) | (1,111 | ) | (1,111 | ) | |||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||||
Preferred stock/unit | — | — | — | — | — | (19,675 | ) | (19,675 | ) | (3,725 | ) | — | — | (3,725 | ) | (23,400 | ) | |||||||||||||||||||
Common stock/unit ($1.85 per share) | — | — | — | — | — | (161,236 | ) | (161,236 | ) | — | (324 | ) | — | (324 | ) | (161,560 | ) | |||||||||||||||||||
Balance at December 31, 2011 | $ | 275,000 | 899 | (15,197 | ) | 2,281,817 | (71,429 | ) | (662,735 | ) | 1,808,355 | 49,158 | (963 | ) | 13,104 | 61,299 | 1,869,654 | |||||||||||||||||||
61
REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the years ended December 31, 2011, 2010, and 2009
(in thousands)
2011 | 2010 | 2009 | |||||||
Cash flows from operating activities: | |||||||||
Net income (loss) | $ | 55,788 | 13,001 | (29,036 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 133,756 | 123,933 | 117,979 | ||||||
Amortization of deferred loan cost and debt premium | 12,327 | 8,533 | 5,822 | ||||||
Amortization and (accretion) of above and below market lease intangibles, net | (931 | ) | (1,161 | ) | (1,867 | ) | |||
Stock-based compensation, net of capitalization | 9,824 | 6,615 | 4,668 | ||||||
Equity in (income) loss of investments in real estate partnerships | (9,643 | ) | 12,884 | 26,373 | |||||
Net gain on sale of properties | (8,346 | ) | (8,648 | ) | (25,192 | ) | |||
Provision for doubtful accounts | 3,166 | 3,954 | 9,078 | ||||||
Provision for impairment | 15,883 | 26,615 | 104,402 | ||||||
Early extinguishment of debt | — | 4,243 | 2,784 | ||||||
Distribution of earnings from operations of investments in real estate partnerships | 43,361 | 41,054 | 31,252 | ||||||
Settlement of derivative instruments | — | (63,435 | ) | (19,953 | ) | ||||
Loss (gain) on derivative instruments | 54 | (1,419 | ) | 3,294 | |||||
Deferred compensation (income) expense | (2,136 | ) | 5,068 | (247 | ) | ||||
Realized loss (gain) on trading securities held in trust | (383 | ) | (667 | ) | 1,447 | ||||
Unrealized loss (gain) on trading securities held in trust | 567 | (1,342 | ) | 4,226 | |||||
Changes in assets and liabilities: | |||||||||
Restricted cash | (651 | ) | (1,778 | ) | 5,126 | ||||
Accounts receivable | (6,274 | ) | (1,297 | ) | (2,995 | ) | |||
Straight-line rent receivables, net | (4,642 | ) | (6,202 | ) | (3,959 | ) | |||
Other receivables | — | — | 19,700 | ||||||
Deferred leasing costs | (15,013 | ) | (15,563 | ) | (9,799 | ) | |||
Other assets | (971 | ) | (4,681 | ) | (16,493 | ) | |||
Accounts payable and other liabilities | (17,892 | ) | (1,281 | ) | (30,352 | ) | |||
Tenants’ security and escrow deposits and prepaid rent | 9,789 | 33 | (454 | ) | |||||
Net cash provided by operating activities | 217,633 | 138,459 | 195,804 | ||||||
Cash flows from investing activities: | |||||||||
Acquisition of operating real estate | (70,629 | ) | (24,569 | ) | — | ||||
Development of real estate including acquisition of land | (82,069 | ) | (65,889 | ) | (142,989 | ) | |||
Proceeds from sale of real estate investments | 86,233 | 47,333 | 180,307 | ||||||
(Issuance) collection of notes receivable | (78 | ) | 883 | 13,572 | |||||
Investments in real estate partnerships | (198,688 | ) | (231,847 | ) | (28,709 | ) | |||
Distributions received from investments in real estate partnerships | 188,514 | 90,092 | 23,548 | ||||||
Dividends on trading securities held in trust | 225 | 297 | 247 | ||||||
Acquisition of trading securities held in trust | (19,377 | ) | (10,312 | ) | (12,220 | ) | |||
Proceeds from sale of trading securities held in trust | 18,146 | 9,555 | 17,789 | ||||||
Net cash (used in) provided by investing activities | (77,723 | ) | (184,457 | ) | 51,545 | ||||
Cash flows from financing activities: | |||||||||
Net proceeds from common stock issuance | 215,369 | — | 345,800 | ||||||
Proceeds from sale of treasury stock | 2,128 | 1,431 | (2,632 | ) | |||||
Acquisition of treasury stock | (14 | ) | — | — | |||||
Distributions to limited partners in consolidated partnerships, net | (735 | ) | (1,427 | ) | (872 | ) | |||
Distributions to exchangeable operating partnership unit holders | (324 | ) | (468 | ) | (980 | ) | |||
Distributions to preferred unit holders | (3,725 | ) | (3,725 | ) | (3,725 | ) | |||
Dividends paid to common stockholders | (160,154 | ) | (148,649 | ) | (158,690 | ) | |||
Dividends paid to preferred stockholders | (19,675 | ) | (19,675 | ) | (19,675 | ) | |||
Repayment of fixed rate unsecured notes | (181,691 | ) | (209,879 | ) | (116,053 | ) | |||
Proceeds from issuance of fixed rate unsecured notes, net | — | 398,599 | — | ||||||
Proceeds from line of credit | 455,000 | 250,000 | 135,000 | ||||||
Repayment of line of credit | (425,000 | ) | (240,000 | ) | (432,667 | ) | |||
Proceeds from notes payable | 1,940 | 6,068 | 106,992 | ||||||
Repayment of notes payable | (16,919 | ) | (51,687 | ) | (8,056 | ) | |||
Scheduled principal payments | (5,699 | ) | (5,024 | ) | (5,214 | ) | |||
Payment of loan costs | (6,070 | ) | (4,361 | ) | (1,195 | ) | |||
Payment of premium on tender offer | — | (4,000 | ) | (2,312 | ) | ||||
Net cash used in financing activities | (145,569 | ) | (32,797 | ) | (164,279 | ) | |||
Net (decrease) increase in cash and cash equivalents | (5,659 | ) | (78,795 | ) | 83,070 | ||||
Cash and cash equivalents at beginning of the year | 17,061 | 95,856 | 12,786 | ||||||
Cash and cash equivalents at end of the year | $ | 11,402 | 17,061 | 95,856 | |||||
62
REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the years ended December 31, 2011, 2010, and 2009
(in thousands)
2011 | 2010 | 2009 | |||||||
Supplemental disclosure of cash flow information: | |||||||||
Cash paid for interest (net of capitalized interest of $1,480, $5,099, and $19,062 in 2011, 2010, and 2009, respectively) | $ | 128,649 | 127,591 | 112,730 | |||||
Supplemental disclosure of non-cash transactions: | |||||||||
Common stock issued for partnership units exchanged | $ | — | 7,630 | — | |||||
Real estate received through distribution in kind | $ | 47,512 | — | 100,717 | |||||
Mortgage loans assumed through distribution in kind | $ | 28,760 | — | 70,541 | |||||
Mortgage loans assumed for the acquisition of real estate | $ | 31,292 | 58,981 | — | |||||
Real estate contributed for investments in real estate partnerships | $ | — | — | 26,410 | |||||
Notes receivable taken in connection with sales of properties in development | $ | — | — | 11,413 | |||||
Real estate received through foreclosure on notes receivable | $ | — | 990 | — | |||||
Change in fair value of derivative instruments | $ | 18 | 28,363 | 55,328 | |||||
Common stock issued for dividend reinvestment plan | $ | 1,081 | 1,847 | 3,219 | |||||
Stock-based compensation capitalized | $ | 1,104 | 852 | 1,574 | |||||
Contributions from limited partners in consolidated partnerships, net | $ | 2,411 | 132 | 4,188 | |||||
Common stock issued for dividend reinvestment in trust | $ | 631 | 640 | 808 | |||||
Contribution of stock awards into trust | $ | 1,132 | 1,142 | 1,823 | |||||
Distribution of stock held in trust | $ | — | 51 | 3,025 | |||||
See accompanying notes to consolidated financial statements.
63
REGENCY CENTERS, L.P.
Consolidated Balance Sheets
December 31, 2011 and 2010
(in thousands, except unit data)
2011 | 2010 | |||||
Assets | ||||||
Real estate investments at cost (notes 2, 3, 4, and 15): | ||||||
Land | $ | 1,273,606 | 1,093,700 | |||
Buildings and improvements | 2,604,229 | 2,284,522 | ||||
Properties in development | 224,077 | 610,932 | ||||
4,101,912 | 3,989,154 | |||||
Less: accumulated depreciation | 791,619 | 700,878 | ||||
3,310,293 | 3,288,276 | |||||
Investments in real estate partnerships | 386,882 | 428,592 | ||||
Net real estate investments | 3,697,175 | 3,716,868 | ||||
Cash and cash equivalents | 11,402 | 17,061 | ||||
Restricted cash | 6,050 | 5,399 | ||||
Accounts receivable, net of allowance for doubtful accounts of $3,442 and $4,819 at December 31, 2011 and 2010, respectively | 37,733 | 36,600 | ||||
Straight-line rent receivable, net of reserve of $2,075 and $1,396 at December 31, 2011 and 2010, respectively | 48,132 | 45,241 | ||||
Notes receivable (note 5) | 35,784 | 35,931 | ||||
Deferred costs, less accumulated amortization of $71,265 and $69,158 at December 31, 2011 and 2010, respectively | 70,204 | 63,165 | ||||
Acquired lease intangible assets, less accumulated amortization of $15,588 and $13,996 at December 31, 2011 and 2010, respectively (note 6) | 27,054 | 18,219 | ||||
Trading securities held in trust, at fair value (note 7) | 21,713 | 20,891 | ||||
Other assets | 31,824 | 35,164 | ||||
Total assets | $ | 3,987,071 | 3,994,539 | |||
Liabilities and Capital | ||||||
Liabilities: | ||||||
Notes payable (note 9) | $ | 1,942,440 | 2,084,469 | |||
Unsecured line of credit (note 9) | 40,000 | 10,000 | ||||
Accounts payable and other liabilities (note 7) | 101,862 | 138,196 | ||||
Derivative instruments, at fair value (note 10) | 37 | — | ||||
Acquired lease intangible liabilities, less accumulated accretion of $4,750 and $11,010 at December 31, 2011 and 2010, respectively (note 6) | 12,662 | 6,682 | ||||
Tenants’ security and escrow deposits and prepaid rent | 20,416 | 10,790 | ||||
Total liabilities | 2,117,417 | 2,250,137 | ||||
Commitments and contingencies (notes 15 and 16) | ||||||
Capital: | ||||||
Partners’ capital (notes 12 and 13): | ||||||
Series D preferred units, par value $100: 500,000 units issued and outstanding at December 31, 2011 and 2010 | 49,158 | 49,158 | ||||
Preferred units of general partner, $0.01 par value per unit, 11,000,000 units issued and outstanding at December 31, 2011 and 2010, liquidation preference of $25 per unit | 275,000 | 275,000 | ||||
General partner; 89,921,858 and 81,886,872 units outstanding at December 31, 2011 and 2010, respectively (note 7) | 1,604,784 | 1,491,062 | ||||
Limited partners; 177,164 units outstanding at December 31, 2011 and 2010 | (963 | ) | (762 | ) | ||
Accumulated other comprehensive loss | (71,429 | ) | (80,885 | ) | ||
Total partners’ capital | 1,856,550 | 1,733,573 | ||||
Noncontrolling interests (note 12): | ||||||
Limited partners’ interests in consolidated partnerships | 13,104 | 10,829 | ||||
Total noncontrolling interests | 13,104 | 10,829 | ||||
Total capital | 1,869,654 | 1,744,402 | ||||
Total liabilities and capital | $ | 3,987,071 | 3,994,539 | |||
See accompanying notes to consolidated financial statements.
64
REGENCY CENTERS, L.P.
Consolidated Statements of Operations
For the years ended December 31, 2011, 2010, and 2009
(in thousands, except per unit data)
2011 | 2010 | 2009 | |||||||
Revenues: | |||||||||
Minimum rent | $ | 356,097 | 338,639 | 337,516 | |||||
Percentage rent | 2,996 | 2,540 | 3,585 | ||||||
Recoveries from tenants and other income | 107,344 | 105,582 | 99,171 | ||||||
Management, transaction, and other fees | 33,980 | 29,400 | 38,289 | ||||||
Total revenues | 500,417 | 476,161 | 478,561 | ||||||
Operating expenses: | |||||||||
Depreciation and amortization | 132,129 | 120,450 | 114,058 | ||||||
Operating and maintenance | 72,626 | 68,496 | 64,030 | ||||||
General and administrative | 56,117 | 61,502 | 53,177 | ||||||
Real estate taxes | 55,542 | 53,462 | 52,375 | ||||||
Provision for doubtful accounts | 3,075 | 3,928 | 8,348 | ||||||
Other expenses | 6,649 | 2,496 | 8,284 | ||||||
Total operating expenses | 326,138 | 310,334 | 300,272 | ||||||
Other expense (income): | |||||||||
Interest expense, net of interest income of $2,442, $2,408, and $3,767 in 2011, 2010, and 2009, respectively | 123,645 | 125,287 | 109,239 | ||||||
Gain on sale of real estate | (2,404 | ) | (993 | ) | (19,357 | ) | |||
Provision for impairment | 13,772 | 26,615 | 97,519 | ||||||
Early extinguishment of debt | — | 4,243 | 2,784 | ||||||
Loss (income) from deferred compensation plan (note 7) | 206 | (1,982 | ) | (2,750 | ) | ||||
Loss (income) on derivative instruments (note 10) | 54 | (1,419 | ) | 3,294 | |||||
Total other expense (income) | 135,273 | 151,751 | 190,729 | ||||||
Income (loss) before equity in income (loss) of investments in real estate partnerships | 39,006 | 14,076 | (12,440 | ) | |||||
Equity in income (loss) of investments in real estate partnerships (note 4) | 9,643 | (12,884 | ) | (26,373 | ) | ||||
Income (loss) from continuing operations | 48,649 | 1,192 | (38,813 | ) | |||||
Discontinued operations, net (note 3): | |||||||||
Operating income | 1,197 | 4,232 | 3,942 | ||||||
Gain on sale of operating properties, net | 5,942 | 7,577 | 5,835 | ||||||
Income from discontinued operations | 7,139 | 11,809 | 9,777 | ||||||
Net income (loss) | 55,788 | 13,001 | (29,036 | ) | |||||
Noncontrolling interests: | |||||||||
Limited partners’ interests in consolidated partnerships | (590 | ) | (376 | ) | (452 | ) | |||
Income attributable to noncontrolling interests | (590 | ) | (376 | ) | (452 | ) | |||
Net income (loss) attributable to controlling interests | 55,198 | 12,625 | (29,488 | ) | |||||
Preferred unit distributions | (23,400 | ) | (23,400 | ) | (23,400 | ) | |||
Net income (loss) attributable to common unit holders | $ | 31,798 | (10,775 | ) | (52,888 | ) | |||
Income per common unit - basic (note 14): | |||||||||
Continuing operations | $ | 0.27 | (0.29 | ) | (0.82 | ) | |||
Discontinued operations | 0.08 | 0.15 | 0.12 | ||||||
Net income (loss) attributable to common unit holders | $ | 0.35 | (0.14 | ) | (0.70 | ) | |||
Income per common unit - diluted (note 14): | |||||||||
Continuing operations | $ | 0.27 | (0.28 | ) | (0.82 | ) | |||
Discontinued operations | 0.08 | 0.14 | 0.12 | ||||||
Net income (loss) attributable to common unit holders | $ | 0.35 | (0.14 | ) | (0.70 | ) | |||
See accompanying notes to consolidated financial statements.
65
REGENCY CENTERS, L.P. Consolidated Statements of Capital and Comprehensive Income (Loss) For the years ended December 31, 2011, 2010, and 2009 (in thousands) | ||||||||||||||||||||||
Preferred Units | General Partner Preferred and Common Units | Limited Partners | Accumulated Other Comprehensive Income (Loss) | Total Partners’ Capital | Noncontrolling Interests in Limited Partners’ Interest in Consolidated Partnerships | Total Capital | ||||||||||||||||
Balance at December 31, 2008 (note 7) | $ | 49,158 | 1,767,012 | 8,283 | (90,689 | ) | 1,733,764 | 7,980 | 1,741,744 | |||||||||||||
Comprehensive income: | ||||||||||||||||||||||
Net income | 3,725 | (32,997 | ) | (216 | ) | — | (29,488 | ) | 452 | (29,036 | ) | |||||||||||
Amortization of loss on derivative instruments | — | — | 13 | 2,292 | 2,305 | — | 2,305 | |||||||||||||||
Change in fair value of derivative instruments | — | — | 221 | 38,424 | 38,645 | — | 38,645 | |||||||||||||||
Total comprehensive income | 11,462 | 11,914 | ||||||||||||||||||||
Deferred compensation plan, net (note 7) | — | 4,044 | — | — | 4,044 | — | 4,044 | |||||||||||||||
Contributions from partners | — | — | — | — | — | 4,197 | 4,197 | |||||||||||||||
Distributions to partners | — | (161,909 | ) | (980 | ) | — | (162,889 | ) | (881 | ) | (163,770 | ) | ||||||||||
Preferred unit distributions | (3,725 | ) | (19,675 | ) | — | — | (23,400 | ) | — | (23,400 | ) | |||||||||||
Restricted units issued as a result of amortization of restricted stock issued by Parent Company | — | 5,963 | — | — | 5,963 | — | 5,963 | |||||||||||||||
Common units issued as a result of common stock issued by Parent Company, net of repurchases | — | 349,915 | — | — | 349,915 | — | 349,915 | |||||||||||||||
Balance at December 31, 2009 | $ | 49,158 | 1,912,353 | 7,321 | (49,973 | ) | 1,918,859 | 11,748 | 1,930,607 | |||||||||||||
Comprehensive income: | ||||||||||||||||||||||
Net income | 3,725 | 8,816 | 84 | — | 12,625 | 376 | 13,001 | |||||||||||||||
Amortization of loss on derivative instruments | — | — | 12 | 5,563 | 5,575 | — | 5,575 | |||||||||||||||
Change in fair value of derivative instruments | — | — | (81 | ) | (36,475 | ) | (36,556 | ) | — | (36,556 | ) | |||||||||||
Total comprehensive income | (18,356 | ) | (17,980 | ) | ||||||||||||||||||
Deferred compensation plan, net (note 7) | — | (273 | ) | — | — | (273 | ) | — | (273 | ) | ||||||||||||
Contributions from partners | — | — | — | — | — | 161 | 161 | |||||||||||||||
Distributions to partners | — | (150,499 | ) | (468 | ) | — | (150,967 | ) | (1,456 | ) | (152,423 | ) | ||||||||||
Preferred unit distributions | (3,725 | ) | (19,675 | ) | — | — | (23,400 | ) | — | (23,400 | ) | |||||||||||
Restricted units issued as a result of amortization of restricted stock issued by Parent Company | — | 7,236 | — | — | 7,236 | — | 7,236 | |||||||||||||||
Common units issued as a result of common stock issued by Parent Company, net of repurchases | — | 474 | — | — | 474 | — | 474 | |||||||||||||||
Common units exchanged for common stock of Parent Company | — | 7,630 | (7,630 | ) | — | — | — | — | ||||||||||||||
66
REGENCY CENTERS, L.P. Consolidated Statements of Capital and Comprehensive Income (Loss) For the years ended December 31, 2011, 2010, and 2009 (in thousands) | ||||||||||||||||||||||
Preferred Units | General Partner Preferred and Common Units | Limited Partners | Accumulated Other Comprehensive Income (Loss) | Total Partners’ Capital | Noncontrolling Interests in Limited Partners’ Interest in Consolidated Partnerships | Total Capital | ||||||||||||||||
Balance at December 31, 2010 | $ | 49,158 | 1,766,062 | (762 | ) | (80,885 | ) | 1,733,573 | 10,829 | 1,744,402 | ||||||||||||
Comprehensive income: | 1,869,654 | |||||||||||||||||||||
Net income | 3,725 | 51,370 | 103 | — | 55,198 | 590 | 55,788 | |||||||||||||||
Amortization of loss on derivative instruments | — | — | 20 | 9,447 | 9,467 | — | 9,467 | |||||||||||||||
Change in fair value of derivative instruments | — | — | — | 9 | 9 | 9 | 18 | |||||||||||||||
Total comprehensive income | 64,674 | 65,273 | ||||||||||||||||||||
Deferred compensation plan, net | — | 17,843 | — | — | 17,843 | — | 17,843 | |||||||||||||||
Contributions from partners | — | — | — | — | — | 2,787 | 2,787 | |||||||||||||||
Distributions to partners | — | (161,236 | ) | (324 | ) | — | (161,560 | ) | (1,111 | ) | (162,671 | ) | ||||||||||
Preferred unit distributions | (3,725 | ) | (19,675 | ) | — | — | (23,400 | ) | — | (23,400 | ) | |||||||||||
Restricted units issued as a result of amortization of restricted stock issued by Parent Company | — | 10,659 | — | — | 10,659 | — | 10,659 | |||||||||||||||
Common units issued as a result of common stock issued by Parent Company, net of repurchases | — | 214,761 | — | — | 214,761 | — | 214,761 | |||||||||||||||
Balance at December 31, 2011 | $ | 49,158 | 1,879,784 | (963 | ) | (71,429 | ) | 1,856,550 | 13,104 | 1,869,654 | ||||||||||||
See accompanying notes to consolidated financial statements.
67
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the years ended December 31, 2011, 2010, and 2009
(in thousands)
2011 | 2010 | 2009 | |||||||
Cash flows from operating activities: | |||||||||
Net income (loss) | $ | 55,788 | 13,001 | (29,036 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 133,756 | 123,933 | 117,979 | ||||||
Amortization of deferred loan cost and debt premium | 12,327 | 8,533 | 5,822 | ||||||
Amortization and (accretion) of above and below market lease intangibles, net | (931 | ) | (1,161 | ) | (1,867 | ) | |||
Stock-based compensation, net of capitalization | 9,824 | 6,615 | 4,668 | ||||||
Equity in (income) loss of investments in real estate partnerships | (9,643 | ) | 12,884 | 26,373 | |||||
Net gain on sale of properties | (8,346 | ) | (8,648 | ) | (25,192 | ) | |||
Provision for doubtful accounts | 3,166 | 3,954 | 9,078 | ||||||
Provision for impairment | 15,883 | 26,615 | 104,402 | ||||||
Early extinguishment of debt | — | 4,243 | 2,784 | ||||||
Distribution of earnings from operations of investments in real estate partnerships | 43,361 | 41,054 | 31,252 | ||||||
Settlement of derivative instruments | — | (63,435 | ) | (19,953 | ) | ||||
Loss (gain) on derivative instruments | 54 | (1,419 | ) | 3,294 | |||||
Deferred compensation (income) expense | (2,136 | ) | 5,068 | (247 | ) | ||||
Realized loss (gain) on trading securities held in trust | (383 | ) | (667 | ) | 1,447 | ||||
Unrealized loss (gain) on trading securities held in trust | 567 | (1,342 | ) | 4,226 | |||||
Changes in assets and liabilities: | |||||||||
Restricted cash | (651 | ) | (1,778 | ) | 5,126 | ||||
Accounts receivable | (6,274 | ) | (1,297 | ) | (2,995 | ) | |||
Straight-line rent receivables, net | (4,642 | ) | (6,202 | ) | (3,959 | ) | |||
Other receivables | — | — | 19,700 | ||||||
Deferred leasing costs | (15,013 | ) | (15,563 | ) | (9,799 | ) | |||
Other assets | (971 | ) | (4,681 | ) | (16,493 | ) | |||
Accounts payable and other liabilities | (17,892 | ) | (1,281 | ) | (30,352 | ) | |||
Tenants’ security and escrow deposits and prepaid rent | 9,789 | 33 | (454 | ) | |||||
Net cash provided by operating activities | 217,633 | 138,459 | 195,804 | ||||||
Cash flows from investing activities: | |||||||||
Acquisition of operating real estate | (70,629 | ) | (24,569 | ) | — | ||||
Development of real estate including acquisition of land | (82,069 | ) | (65,889 | ) | (142,989 | ) | |||
Proceeds from sale of real estate investments | 86,233 | 47,333 | 180,307 | ||||||
(Issuance) collection of notes receivable | (78 | ) | 883 | 13,572 | |||||
Investments in real estate partnerships | (198,688 | ) | (231,847 | ) | (28,709 | ) | |||
Distributions received from investments in real estate partnerships | 188,514 | 90,092 | 23,548 | ||||||
Dividends on trading securities held in trust | 225 | 297 | 247 | ||||||
Acquisition of trading securities held in trust | (19,377 | ) | (10,312 | ) | (12,220 | ) | |||
Proceeds from sale of trading securities held in trust | 18,146 | 9,555 | 17,789 | ||||||
Net cash (used in) provided by investing activities | (77,723 | ) | (184,457 | ) | 51,545 | ||||
Cash flows from financing activities: | |||||||||
Net proceeds from common units issued as a result of common stock issued by Parent Company | 215,369 | — | 345,800 | ||||||
Proceeds from sale of treasury stock | 2,128 | 1,431 | (2,632 | ) | |||||
Acquisition of treasury stock | (14 | ) | — | — | |||||
Distributions to limited partners in consolidated partnerships, net | (735 | ) | (1,427 | ) | (872 | ) | |||
Distributions to partners | (160,478 | ) | (149,117 | ) | (159,670 | ) | |||
Distributions to preferred unit holders | (23,400 | ) | (23,400 | ) | (23,400 | ) | |||
Repayment of fixed rate unsecured notes | (181,691 | ) | (209,879 | ) | (116,053 | ) | |||
Proceeds from issuance of fixed rate unsecured notes, net | — | 398,599 | — | ||||||
Proceeds from line of credit | 455,000 | 250,000 | 135,000 | ||||||
Repayment of line of credit | (425,000 | ) | (240,000 | ) | (432,667 | ) | |||
Proceeds from notes payable | 1,940 | 6,068 | 106,992 | ||||||
Repayment of notes payable | (16,919 | ) | (51,687 | ) | (8,056 | ) | |||
Scheduled principal payments | (5,699 | ) | (5,024 | ) | (5,214 | ) | |||
Payment of loan costs | (6,070 | ) | (4,361 | ) | (1,195 | ) | |||
Payment of premium on tender offer | — | (4,000 | ) | (2,312 | ) | ||||
Net cash used in financing activities | (145,569 | ) | (32,797 | ) | (164,279 | ) | |||
Net (decrease) increase in cash and cash equivalents | (5,659 | ) | (78,795 | ) | 83,070 | ||||
Cash and cash equivalents at beginning of the year | 17,061 | 95,856 | 12,786 | ||||||
Cash and cash equivalents at end of the year | $ | 11,402 | 17,061 | 95,856 | |||||
68
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the years ended December 31, 2011, 2010, and 2009
(in thousands)
2011 | 2010 | 2009 | |||||||
Supplemental disclosure of cash flow information: | |||||||||
Cash paid for interest (net of capitalized interest of $1,480, $5,099, and $19,062 in 2011, 2010, and 2009, respectively) | $ | 128,649 | 127,591 | 112,730 | |||||
Supplemental disclosure of non-cash transactions: | |||||||||
Common stock issued by Parent Company for partnership units exchanged | $ | — | 7,630 | — | |||||
Real estate received through distribution in kind | $ | 47,512 | — | 100,717 | |||||
Mortgage loans assumed through distribution in kind | $ | 28,760 | — | 70,541 | |||||
Mortgage loans assumed for the acquisition of real estate | $ | 31,292 | 58,981 | — | |||||
Real estate contributed for investments in real estate partnerships | $ | — | — | 26,410 | |||||
Notes receivable taken in connection with sales of properties in development | $ | — | — | 11,413 | |||||
Real estate received through foreclosure on notes receivable | $ | — | 990 | — | |||||
Change in fair value of derivative instruments | $ | 18 | 28,363 | 55,328 | |||||
Common stock issued by Parent Company for dividend reinvestment plan | $ | 1,081 | 1,847 | 3,219 | |||||
Stock-based compensation capitalized | $ | 1,104 | 852 | 1,574 | |||||
Contributions from limited partners in consolidated partnerships, net | $ | 2,411 | 132 | 4,188 | |||||
Common stock issued for dividend reinvestment in trust | $ | 631 | 640 | 808 | |||||
Contribution of stock awards into trust | $ | 1,132 | 1,142 | 1,823 | |||||
Distribution of stock held in trust | $ | — | 51 | 3,025 | |||||
See accompanying notes to consolidated financial statements.
69
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
1. | Summary of Significant Accounting Policies |
(a) Organization and Principles of Consolidation
General
Regency Centers Corporation (the “Parent Company”) began its operations as a Real Estate Investment Trust (“REIT”) in 1993 and is the general partner of Regency Centers, L.P. (the “Operating Partnership”). The Parent Company currently owns approximately 99.8% of the outstanding common Partnership Units of the Operating Partnership. The Parent Company engages in the ownership, management, leasing, acquisition, and development of retail shopping centers through the Operating Partnership, and has no other assets or liabilities other than through its investment in the Operating Partnership. At December 31, 2011, the Parent Company, the Operating Partnership and their controlled subsidiaries on a consolidated basis (“the Company” or “Regency”) directly owned 217 retail shopping centers and held partial interests in an additional 147 retail shopping centers through investments in real estate partnerships (also referred to as joint ventures or co-investment partnerships).
Estimates, Risks, and Uncertainties
The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates in the Company's financial statements relate to the carrying values of its investments in real estate including its shopping centers, properties in development and its investments in real estate partnerships, and accounts receivable, net. Although the U.S. economy is recovering, economic conditions remain challenging, and therefore, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change significantly, if economic conditions were to weaken.
Consolidation
The accompanying consolidated financial statements include the accounts of the Parent Company, the Operating Partnership, its wholly-owned subsidiaries, and consolidated partnerships in which the Company has a controlling interest. Investments in real estate partnerships not controlled by the Company are accounted for under the equity method. All significant inter-company balances and transactions are eliminated in the consolidated financial statements.
Ownership of the Parent Company
The Parent Company has a single class of common stock outstanding and three series of preferred stock outstanding (“Series 3, 4, and 5 Preferred Stock”). The dividends on the Series 3, 4, and 5 Preferred Stock are cumulative and payable in arrears on the last day of each calendar quarter. The Parent Company owns corresponding Series 3, 4, and 5 preferred unit interests (“Series 3, 4, and 5 Preferred Units”) in the Operating Partnership that entitle the Parent Company to income and distributions from the Operating Partnership in amounts equal to the dividends paid on the Parent Company's Series 3, 4, and 5 Preferred Stock.
Ownership of the Operating Partnership
The Operating Partnership's capital includes general and limited common Partnership Units, Series 3, 4, and 5 Preferred Units owned by the Parent Company, and Series D Preferred Units owned by institutional investors. At December 31, 2011, the Parent Company owned approximately 99.8% or 89,921,858 of the total 90,099,022 Partnership Units outstanding.
Net income and distributions of the Operating Partnership are allocable first to the Preferred Units and the remaining amounts to the general and limited common Partnership Units in accordance with their ownership percentages. The Series 3, 4, and 5 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.
70
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
Investments in Real Estate Partnerships
Investments in real estate partnerships not controlled by the Company are accounted for under the equity method. The accounting policies of the real estate partnerships are similar to the Company's accounting policies. Income or loss from these real estate partnerships, which includes all operating results (including impairment losses) and gains on sales of properties within the joint ventures, is allocated to the Company in accordance with the respective partnership agreements. Such allocations of net income or loss are recorded in equity in income (loss) of investments in real estate partnerships in the accompanying Consolidated Statements of Operations. The net difference in the carrying amount of investments in real estate partnerships and the underlying equity in net assets is either accreted to income and recorded in equity in income (loss) of investments in real estate partnerships in the accompanying Consolidated Statements of Operations over the expected useful lives of the properties and other intangible assets, which range in lives from 10 to 40 years, or recognized at liquidation if the joint venture agreement includes a unilateral right to elect to dissolve the real estate partnership and, upon such an election, receive a distribution in-kind, as discussed further below.
Cash distributions of earnings from operations from investments in real estate partnerships are presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows. Cash distributions from the sale of a property or loan proceeds received from the placement of debt on a property included in investments in real estate partnerships are presented in cash flows provided by investing activities in the accompanying Consolidated Statements of Cash Flows.
The Company evaluates the structure and the substance of its investments in the real estate partnerships to determine if they are variable interest entities. The Company has concluded that these partnership investments are not variable interest entities. Further, the joint venture partners in the real estate partnerships have significant ownership rights, including approval over operating budgets and strategic plans, capital spending, sale or financing, and admission of new partners. Upon formation of the joint ventures, the Company, through the Operating Partnership, also became the managing member, responsible for the day-to-day operations of the real estate partnerships. In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, the Company evaluated its investment in each real estate partnership and concluded that the other partners have kick-out rights and/or substantive participating rights and, therefore, the Company has concluded that the equity method of accounting is appropriate for these investments and they do not require consolidation. Under the equity method of accounting, investments in real estate partnerships are initially recorded at cost, subsequently increased for additional contributions and allocations of income, and reduced for distributions received and allocations of loss. These investments are included in the consolidated financial statements as investments in real estate partnerships.
Noncontrolling Interests
The Company consolidates all entities in which it has a controlling ownership interest. A controlling ownership interest is typically attributable to the entity with a majority voting interest. Noncontrolling interest is the portion of equity, in a subsidiary or consolidated entity, not attributable, directly or indirectly to the Company. Such noncontrolling interests are reported on the Consolidated Balance Sheets within equity or capital, but separately from stockholders' equity or partners' capital. On the Consolidated Statements of Operations, all of the revenues and expenses from less-than-wholly-owned consolidated subsidiaries are reported in net income (loss), including both the amounts attributable to the Company and noncontrolling interests. The amounts of consolidated net income (loss) attributable to the Company and to the noncontrolling interests are clearly identified on the accompanying Consolidated Statements of Operations.
Noncontrolling Interests of the Parent Company
The consolidated financial statements of the Parent Company include the following ownership interests held by owners other than the preferred and common stockholders of the Parent Company: the preferred units in the Operating Partnership held by third parties (“Series D preferred units”), the limited Partnership Units in the Operating Partnership held by third parties (“Exchangeable operating partnership units”), and the minority-owned interest held by third parties in consolidated partnerships (“Limited partners' interests in consolidated partnerships”). The Parent Company has included all of these noncontrolling interests in permanent equity, separate from the Parent Company's stockholders' equity, in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity and Comprehensive Income (Loss). The portion of net income (loss) or comprehensive income (loss) attributable to these
71
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
noncontrolling interests is included in net income (loss) and comprehensive income (loss) in the accompanying Consolidated Statements of Operations and Consolidated Statements of Equity and Comprehensive Income (Loss) of the Parent Company.
In accordance with the FASB ASC Topic 480, securities that are redeemable for cash or other assets at the option of the holder, not solely within the control of the issuer, are classified as redeemable noncontrolling interests outside of permanent equity in the Consolidated Balance Sheets. The Parent Company has evaluated the conditions as specified under the FASB ASC Topic 480 as it relates to Preferred Units and exchangeable operating partnership units outstanding and concluded that it has the right to satisfy the redemption requirements of the units by delivering unregistered preferred or common stock. Each outstanding Preferred Unit and exchangeable operating partnership unit is exchangeable for one share of preferred stock or common stock of the Parent Company, respectively, and the unit holder cannot require redemption in cash or other assets. Limited partners' interests in consolidated partnerships are not redeemable by the holders. The Parent Company also evaluated its fiduciary duties to itself, its shareholders, and, as the managing general partner of the Operating Partnership, to the Operating Partnership, and concluded its fiduciary duties are not in conflict with each other or the underlying agreements. Therefore, the Parent Company classifies such units and interests as permanent equity in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity and Comprehensive Income (Loss).
Noncontrolling Interests of the Operating Partnership
The Operating Partnership has determined that Limited partners' interests in consolidated partnerships are noncontrolling interests. The Operating Partnership has included these noncontrolling interests in permanent capital, separate from partners' capital, in the accompanying Consolidated Balance Sheets and Consolidated Statements of Capital and Comprehensive Income (Loss). The portion of net income (loss) or comprehensive income (loss) attributable to these noncontrolling interests is included in net income (loss) and comprehensive income (loss) in the accompanying Consolidated Statements of Operations and Consolidated Statements of Capital and Comprehensive Income (Loss) of the Operating Partnership.
(b) Revenues
The Company leases space to tenants under agreements with varying terms. Leases are accounted for as operating leases with minimum rent recognized on a straight-line basis over the term of the lease regardless of when payments are due. The Company estimates the collectibility of the accounts receivable related to base rents, straight-line rents, expense reimbursements, and other revenue taking into consideration the Company's historical write-off experience, tenant credit-worthiness, current economic trends, and remaining lease terms.
During the years ended December 31, 2011, 2010, and 2009, the Company recorded provisions for doubtful accounts of $3.2 million, $4.0 million, and $9.1 million, respectively, of which approximately $91,000, $26,000, and $730,000, respectively, is included in discontinued operations.
The following table represents the components of accounts receivable, net of allowance for doubtful accounts, as of December 31, 2011 and 2010 in the accompanying Consolidated Balance Sheets (in thousands):
2011 | 2010 | |||||
Tenant receivables | $ | 4,654 | 19,314 | |||
CAM and tax reimbursements | 26,355 | 13,629 | ||||
Other receivables | 10,166 | 8,476 | ||||
Less: allowance for doubtful accounts | (3,442 | ) | (4,819 | ) | ||
Total | $ | 37,733 | 36,600 | |||
Substantially all of the lease agreements with anchor tenants contain provisions that provide for additional rents based on tenants' sales volume (percentage rent). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. Substantially all lease agreements contain provisions for reimbursement of the tenants' share of real estate taxes, insurance and common area maintenance (“CAM”) costs. Recovery of real estate taxes, insurance, and CAM costs are recognized as the respective costs are incurred in
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
accordance with the lease agreements.
As part of the leasing process, the Company may provide the lessee with an allowance for the construction of leasehold improvements. These leasehold improvements are capitalized and recorded as tenant improvements, and depreciated over the shorter of the useful life of the improvements or the remaining lease term. If the allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements, the allowance is considered to be a lease incentive and is recognized over the lease term as a reduction of minimum rent. Factors considered during this evaluation include, among other things, who holds legal title to the improvements as well as other controlling rights provided by the lease agreement and provisions for substantiation of such costs (e.g. unilateral control of the tenant space during the build-out process). Determination of the appropriate accounting for the payment of a tenant allowance is made on a lease-by-lease basis, considering the facts and circumstances of the individual tenant lease. When the Company is the owner of the leasehold improvements, recognition of lease revenue commences when the lessee is given possession of the leased space upon completion of tenant improvements. However, when the leasehold improvements are owned by the tenant, the lease inception date is the date the tenant obtains possession of the leased space for purposes of constructing their leasehold improvements.
Profits from sales of real estate are recognized under the full accrual method by the Company when a sale is consummated; the buyer's initial and continuing investment is adequate to demonstrate a commitment to pay for the property; the Company's receivable, if applicable, is not subject to future subordination; the Company has transferred to the buyer the usual risks and rewards of ownership; and the Company does not have substantial continuing involvement with the property.
The Company sells shopping centers to joint ventures in exchange for cash equal to the fair value of the ownership interest of its partners. The Company accounts for those sales as “partial sales” and recognizes gains on those partial sales in the period the properties were sold to the extent of the percentage interest sold, and in the case of certain real estate partnerships, applies a more restrictive method of recognizing gains, as discussed further below. The gains and operations associated with properties sold to these real estate partnerships are not classified as discontinued operations because the Company continues to partially own and manage these shopping centers.
As of December 31, 2011, six of the Company's joint ventures (“DIK-JV”) give each partner the unilateral right to elect to dissolve the real estate partnership and, upon such an election, receive a distribution in-kind (“DIK”) of the assets of the real estate partnership equal to their respective capital account, which could include properties the Company previously sold to the real estate partnership. The liquidation provisions require that all of the properties owned by the real estate partnership be appraised to determine their respective fair values. As a general rule, if the Company initiates the liquidation process, its partner has the right to choose the first property that it will receive with the Company choosing the next property that it will receive in liquidation. If the Company's partner initiates the liquidation process, the order of the selection process is reversed. The process then continues with an alternating selection of properties by each partner until the balance of each partner's capital account, on a fair value basis, has been distributed. After the final selection, to the extent that the fair value of properties in the DIK-JV are not distributable in a manner that equals the balance of each partner's capital account, a cash payment would be made to the other partner by the partner receiving a property distribution in excess of its capital account. The partners may also elect to liquidate some or all of the properties through sales rather than through the DIK process.
The Company has concluded that these DIK dissolution provisions constitute in-substance call/put options and represent a form of continuing involvement with respect to property that the Company has sold to these real estate partnerships, limiting the Company's recognition of gain related to the partial sale. This more restrictive method of gain recognition (“Restricted Gain Method”) considers the Company's potential ability to receive property through a DIK on which partial gain has been recognized, and ensures, as discussed below, maximum gain deferral upon sale to a DIK-JV. The Company has applied the Restricted Gain Method to partial sales of property to real estate partnerships that contain unilateral DIK provisions.
Profit shall be recognized under a method determined by the nature and extent of the seller's continuing involvement and the profit recognized shall be reduced by the maximum exposure to loss. The Company has concluded that the Restricted Gain Method accomplishes this objective.
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
Under the Restricted Gain Method, for purposes of gain deferral, the Company considers the aggregate pool of properties sold into the DIK-JV as well as the aggregate pool of properties which will be distributed in the DIK process. As a result, upon the sale of properties to a DIK-JV, the Company performs a hypothetical DIK liquidation assuming that it would choose only those properties that it has sold to the DIK-JV in an amount equal to its capital account. For purposes of calculating the gain to be deferred, the Company assumes that it will select properties in a DIK liquidation that would otherwise have generated the highest gain to the Company when originally sold to the DIK-JV. The deferred gain, recorded by the Company upon the sale of a property to a DIK-JV, is calculated whenever a property is sold to a DIK-JV. During the periods when there are no property sales to a DIK-JV, the deferred gain is not recalculated.
Because the contingency associated with the possibility of receiving a particular property back upon liquidation, which forms the basis of the Restricted Gain Method, is not satisfied at the property level, but at the aggregate level, no deferred gain is recognized on property sold by the DIK-JV to a third party or received by the Company upon actual dissolution. Instead, the property received upon dissolution is recorded at the carrying value of the Company's investment in the DIK-JV on the date of dissolution.
The Company is engaged under agreements with its joint venture partners to provide asset management, property management, leasing, investing, and financing services for such joint ventures' shopping centers. The fees are market-based, generally calculated as a percentage of either revenues earned or the estimated values of the properties managed or the proceeds received, and are recognized as services are rendered, when fees due are determinable, and collectibility is reasonably assured. The Company also receives transaction fees, as contractually agreed upon with a joint venture, which include fees such as acquisition fees, disposition fees, “promotes”, or “earnouts”.
(c) Real Estate Investments
Land, buildings, and improvements are recorded at cost. All specifically identifiable costs related to development activities are capitalized into properties in development on the accompanying Consolidated Balance Sheets. Properties in development are defined as properties that are in the construction or initial lease-up phase and have not reached their initial full occupancy. In summary, a project changes from non-operating to operating when it is substantially completed and available for occupancy. At that time, costs are no longer capitalized. The capitalized costs include pre-development costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, and allocated direct employee costs incurred during the period of development. Interest costs are capitalized into each development project based upon applying the Company's weighted average borrowing rate to that portion of the actual development costs expended. The Company discontinues interest cost capitalization when the property is no longer being developed or is available for occupancy upon substantial completion of tenant improvements, but in no event would the Company capitalize interest on the project beyond 12 months after substantial completion of the building shell.
The following table represents the components of properties in development as of December 31, 2011 and 2010 in the accompanying Consolidated Balance Sheets (in thousands):
2011 | 2010 | |||||
Construction in process | $ | 50,903 | 41,611 | |||
Construction complete and in lease-up | 76,301 | 459,231 | ||||
Land held for future development | 96,873 | 110,090 | ||||
Total | $ | 224,077 | 610,932 | |||
Construction in process represents developments where the Company has not yet incurred at least 90% of the expected costs to complete and the anchor has not yet been open for at least two calendar years. Construction complete and in lease-up represents developments where the Company has incurred at least 90% of the estimated costs to complete and the anchor has not yet been open for at least two calendar years, but is still completing lease-up and final tenant build out. Land held for future development represents projects not in construction, but identified and available for future development if and when the market demand for a new shopping center exists.
The Company incurs costs prior to land acquisition including contract deposits, as well as legal, engineering, and other external professional fees related to evaluating the feasibility of developing a shopping center. These pre-
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
development costs are included in properties in development in the accompanying Consolidated Balance Sheets. At December 31, 2011 and 2010, the Company had capitalized pre-development costs of $2.1 million and $899,000, respectively, of which $1.0 million and $840,000, respectively, were refundable deposits. If the Company determines that the development of a particular shopping center is no longer probable, any related pre-development costs previously capitalized are immediately expensed in other expenses in the accompanying Consolidated Statements of Operations. During the years ended December 31, 2011, 2010, and 2009, the Company expensed pre-development costs of approximately $241,000, $520,000, and $3.8 million, respectively, in other expenses in the accompanying Consolidated Statements of Operations.
Maintenance and repairs that do not improve or extend the useful lives of the respective assets are recorded in operating and maintenance expense.
Depreciation is computed using the straight-line method over estimated useful lives of approximately 40 years for buildings and improvements, the shorter of the useful life or the remaining lease term subject to a maximum of 10 years for tenant improvements, and three to seven years for furniture and equipment.
The Company and the real estate partnerships account for business combinations using the acquisition method by recognizing and measuring the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at their acquisition date fair values. The Company expenses transaction costs associated with business combinations in the period incurred.
The Company's methodology includes estimating an “as-if vacant” fair value of the physical property, which includes land, building, and improvements. In addition, the Company determines the estimated fair value of identifiable intangible assets, considering the following three categories: (i) value of in-place leases, (ii) above and below-market value of in-place leases, and (iii) customer relationship value.
The value of in-place leases is estimated based on the value associated with the costs avoided in originating leases compared to the acquired in-place leases as well as the value associated with lost rental and recovery revenue during the assumed lease-up period. The value of in-place leases is recorded to amortization expense over the remaining initial term of the respective leases.
Above-market and below-market in-place lease values for acquired properties are recorded based on the present value of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management's estimate of fair market lease rates for comparable in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The value of above-market leases is amortized as a reduction of minimum rent over the remaining terms of the respective leases and the value of below-market leases is accreted to minimum rent over the remaining terms of the respective leases, including below-market renewal options, if applicable. The Company does not assign value to customer relationship intangibles if it has pre-existing business relationships with the major retailers at the acquired property since they do not provide incremental value over the Company's existing relationships.
The Company classifies an operating property or a property in development as held-for-sale when it determines that the property is available for immediate sale in its present condition, the property is being actively marketed for sale, and management believes it is probable that a sale will be consummated within one year. Given the nature of all real estate sales contracts, it is not unusual for such contracts to allow prospective buyers a period of time to evaluate the property prior to formal acceptance of the contract. In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance. As a result, properties under contract may not close within the expected time period, or may not close at all. Therefore, any properties categorized as held-for-sale represent only those properties that management has determined are probable to close within the requirements set forth above. Operating properties held-for-sale are carried at the lower of cost or fair value less costs to sell. The recording of depreciation and amortization expense is suspended during the held-for-sale period. If circumstances arise that previously were considered unlikely and, as a result, the Company decides not to sell a property previously classified as held-for-sale, the property is reclassified as held and used and is measured individually at the lower of its (i) carrying amount before the property was classified as held-for-sale, adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used or (ii) the fair value at the date of the subsequent decision not to sell. Any required adjustment to the carrying amount of the property reclassified as held and used is included in income from continuing
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
operations in the period of the subsequent decision not to sell and the results of operations previously reported in discontinued operations are reclassified and included in income from continuing operations for all periods presented.
When the Company sells a property or classifies a property as held-for-sale and will not have significant continuing involvement in the operation of the property, the operations of the property are eliminated from ongoing operations and classified in discontinued operations. Its operations, including any mortgage interest and gain on sale, are reported in discontinued operations so that the operations are clearly distinguished. Prior periods are also reclassified to reflect the operations of the property as discontinued operations. When the Company sells an operating property to a joint venture or to a third party, and will continue to manage the property, the operations and gain on sale are included in income from continuing operations.
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 period, 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 are not identified, management will not assess the recoverability of a property's carrying value. If a property previously classified as held and used is changed to held-for-sale, the Company estimates fair value, less expected costs to sell, which could cause the Company to determine that the property is impaired.
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 such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors, and therefore is subject to a significant degree of management judgment and 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.
During the years ended December 31, 2011, 2010, and 2009, the Company established a provision for impairment on Consolidated Properties of $15.9 million, $23.9 million, and $103.9 million, respectively, of which $2.1 million and $6.9 million was included in discontinued operations for 2011 and 2009, respectively. There was no impact to discontinued operations in 2010.
A loss in value of investments in real estate partnerships under the equity method of accounting, other than a temporary decline, must be recognized in the period in which the loss occurs. If management identifies indicators that the value of the Company's investment in real estate partnerships may be impaired, it evaluates the investment by calculating the fair value of the investment by discounting estimated future cash flows over the expected term of the investment. As a result of this evaluation, the Company established a provision for impairment of $4.6 million on one investment in real estate partnership and $2.7 million on one investment in real estate partnership for the years ended December 31, 2011 and 2010, respectively. No provision for impairment for investments in real estate partnerships was recorded during the year ended December 31, 2009.
The net tax basis of the Company's real estate assets exceeds the book basis by approximately $95.1 million and $71.5 million at December 31, 2011, and 2010, respectively, primarily due to the property impairments recorded for book purposes and the cost basis of the assets acquired and their carryover basis recorded for tax purposes.
(d) Cash and Cash Equivalents
Any instruments which have an original maturity of 90 days or less when purchased are considered cash equivalents. At December 31, 2011 and 2010, $6.0 million and $5.4 million, respectively, of cash was restricted through escrow agreements and certain mortgage loans.
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
(e) Notes Receivable
The Company records notes receivable at cost on the accompanying Consolidated Balance Sheets and interest income is accrued as earned and netted against interest expense in the accompanying Consolidated Statements of Operations. If a note receivable is past due, meaning the debtor is past due per contractual obligations, the Company ceases to accrue interest. However, in the event the debtor subsequently becomes current, the Company will resume accruing interest and record the interest income accordingly. The Company evaluates the collectibility of both interest and principal for all notes receivable to determine whether impairment exists using the present value of expected cash flows discounted at the note receivable's effective interest rate or, alternatively, at the observable market price of the loan or the fair value of the collateral if the loan is collateral dependent. In the event the Company determines a note receivable or a portion thereof is considered uncollectible, the Company records a provision for impairment. The Company estimates the collectibility of notes receivable taking into consideration the Company's experience in the retail sector, available internal and external credit information, payment history, market and industry trends, and debtor credit-worthiness.
(f) Deferred Costs
Deferred costs include leasing costs and loan costs, net of accumulated amortization. Such costs are amortized over the periods through lease expiration or loan maturity, respectively. If the lease is terminated early, or if the loan is repaid prior to maturity, the remaining leasing costs or loan costs are written off. Deferred leasing costs consist of internal and external commissions associated with leasing the Company's shopping centers. Net deferred leasing costs were $56.5 million and $52.9 million at December 31, 2011 and 2010, respectively. Deferred loan costs consist of initial direct and incremental costs associated with financing activities. Net deferred loan costs were $13.7 million and $10.2 million at December 31, 2011 and 2010, respectively.
(g) Derivative Financial Instruments
All derivative instruments, whether designated in hedging relationships or not, are recorded on the accompanying Consolidated Balance Sheets at their fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.
The Company's use of derivative financial instruments is intended to mitigate its interest rate risk on a related financial instrument or forecasted transaction through the use of interest rate swaps (the “Swaps”) and the Company designates these interest rate swaps as cash flow hedges. The gains or losses resulting from changes in fair value of derivatives that qualify as cash flow hedges are recognized in other comprehensive income (“OCI”) while the ineffective portion of the derivative's change in fair value is recognized in the Statements of Operations as a gain or loss on derivative instruments. Upon the settlement of a hedge, gains and losses remaining in OCI are amortized over the underlying term of the hedged transaction. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking various hedge transactions. The Company assesses, both at inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the cash flows and/or forecasted cash flows of the hedged items.
In assessing the valuation of the hedges, the Company uses standard market conventions and techniques such as discounted cash flow analysis, option pricing models, and termination costs at each balance sheet date. All methods
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
of assessing fair value result in a general approximation of value, and such value may never actually be realized.
The settlement of swap terminations is presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows.
(h) Income Taxes
The Parent Company believes it qualifies, and intends to continue to qualify, as a REIT under the Internal Revenue Code (the “Code”). As a REIT, the Parent Company will generally not be subject to federal income tax, provided that distributions to its stockholders are at least equal to REIT taxable income. Regency Realty Group, Inc. (“RRG”), a wholly-owned subsidiary of the Operating Partnership, is a Taxable REIT Subsidiary (“TRS”) as defined in Section 856(l) of the Code. RRG is subject to federal and state income taxes and files separate tax returns. As a pass through entity, the Operating Partnership's taxable income or loss is reported by its partners, of which the Parent Company as general partner and approximately 99.8% owner, is allocated its pro-rata share of tax attributes.
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which these temporary differences are expected to be recovered or settled.
Earnings and profits, which determine the taxability of dividends to stockholders, differs from net income reported for financial reporting purposes primarily because of differences in depreciable lives and cost bases of the shopping centers, as well as other timing differences.
Tax positions are initially recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open tax years (after 2009 for federal and state) based on an assessment of many factors including past experience and interpretations of tax laws applied to the facts of each matter.
(i) Earnings per Share and Unit
Basic earnings per share of common stock and unit are computed based upon the weighted average number of common shares and units, respectively, outstanding during the period. Diluted earnings per share and unit reflect the conversion of obligations and the assumed exercises of securities including the effects of shares issuable under the Company's share-based payment arrangements, if dilutive. Dividends paid on the Company's share-based compensation awards are not participating securities as they are forfeitable.
(j) Stock-Based Compensation
The Company grants stock-based compensation to its employees and directors. The Company recognizes stock-based compensation based on the grant-date fair value of the award and the cost of the stock-based compensation is expensed over the vesting period.
When the Parent Company issues common shares as compensation, it receives a like number of common units from the Operating Partnership. The Company is committed to contribute to the Operating Partnership all proceeds from the exercise of stock options or other share-based awards granted under the Parent Company's Long-Term Omnibus Plan (the “Plan”). Accordingly, the Parent Company's ownership in the Operating Partnership will increase based on the amount of proceeds contributed to the Operating Partnership for the common units it receives. As a result of the issuance of common units to the Parent Company for stock-based compensation, the Operating Partnership accounts for stock-based compensation in the same manner as the Parent Company.
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
(k) Segment Reporting
The Company's business is investing in retail shopping centers through direct ownership or through joint ventures. The Company actively manages its portfolio of retail shopping centers and may from time to time make decisions to sell lower performing properties or developments not meeting its long-term investment objectives. The proceeds from sales are reinvested into higher quality retail shopping centers, through acquisitions or new developments, which management believes will generate sustainable revenue growth and attractive returns. It is management's intent that all retail shopping centers will be owned or developed for investment purposes; however, the Company may decide to sell all or a portion of a development upon completion. The Company's revenues and net income are generated from the operation of its investment portfolio. The Company also earns fees for services provided to manage and lease retail shopping centers owned through joint ventures.
The Company's portfolio is located throughout the United States; however, management does not distinguish or group its operations on a geographical basis for purposes of allocating resources or capital. The Company reviews operating and financial data for each property on an individual basis; therefore, the Company defines an operating segment as its individual properties. The individual properties have been aggregated into one reportable segment based upon their similarities with regard to both the nature and economics of the centers, tenants and operational processes, as well as long-term average financial performance. In addition, no single tenant accounts for 5% or more of revenue and none of the shopping centers are located outside the United States.
(l) Assets and Liabilities Measured at Fair Value
Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement is determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the Company uses a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from independent sources (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the Company's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The three levels of inputs used to measure fair value are as follows:
• | Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. |
• | Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. |
• | Level 3 - Unobservable inputs for the asset or liability, which are typically based on the Company's own assumptions, as there is little, if any, related market activity. |
The Company also remeasures nonfinancial assets and nonfinancial liabilities, initially measured at fair value in a business combination or other new basis event, at fair value in subsequent periods.
(m) Recent Accounting Pronouncements
Recently Adopted
In 2010, the Company adopted FASB Accounting Standards Update (“ASU”) No. 2010-06, “Fair Value Measurements and Disclosures (820) - Improving Disclosures about Fair Value Measurements” (“ASU 2010-06”), which requires new disclosures for transfers in and out of Levels 1 and 2 and activity in Level 3 fair value measurements. ASU 2010-06 also clarifies existing disclosure requirements for the level of disaggregation for each class of assets and liabilities and for the inputs and valuation techniques used to measure fair value. In 2011, the Company adopted the deferred provision of ASU 2010-06 relating to disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. The adoption of this ASU had no impact to the Company's consolidated financial statements.
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
Recently Issued But Not Yet Adopted
In May 2011, the FASB issued ASU No. 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure requirements in U.S.GAAP and IFRSs" ("ASU 2011-04"). ASU 2011-04 provides new guidance concerning fair value measurements and disclosure. The new guidance is the result of joint efforts by the FASB and the International Accounting Standards Board ("IASB") to develop a single, converged fair value framework on how to measure fair value and the necessary disclosures concerning fair value measurements. The guidance is to be applied prospectively and is effective for interim and annual periods beginning after December 15, 2011. Early adoption is not permitted. The Company does not expect this ASU to have a material effect on the Company's consolidated financial statements.
In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (Topic 220): Presentation of Comprehensive Income" ("ASU 2011-05"). ASU 2011-05 revised guidance over the manner in which entities present comprehensive income in the financial statements. This guidance removes the previous presentation options and provides that entities must report comprehensive income in either a continuous statement of comprehensive income or two separate but consecutive statements. This guidance does not change the items that must be reported in other comprehensive income nor does it require incremental disclosures in addition to those previously required. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company does not expect this ASU to have a material effect on the Company's consolidated financial statements.
(n) Reclassifications and other
Certain reclassifications have been made to the 2010 and 2009 amounts to conform to classifications adopted in 2011. During 2011, the Company has separately disclosed restricted cash on the face of its balance sheet, and has presented the changes in this account, from period to period, in operating cash flows.
2. | Real Estate Investments |
Acquisitions
The following table provides a summary of shopping centers acquired during the year ended December 31, 2011 (in thousands):
Date Purchased | Property Name | City/State | Purchase Price | Debt Assumed, Net of Premiums | Intangible Assets | Intangible Liabilities | |||||
6/2/2011 | Ocala Corners | Tallahassee, FL | $ | 11,129 | 5,937 | 1,724 | 2,558 | ||||
8/18/2011 | Oak Shade Town Center | Davis, CA | 34,871 | 12,456 | 2,320 | 1,658 | |||||
9/26/2011 | Tech Ridge Center | Austin, TX | 55,400 | 12,899 | 4,519 | 936 | |||||
$ | 101,400 | 31,292 | 8,563 | 5,152 | |||||||
In addition to the above shopping center acquisitions, on May 4, 2011, the Company entered into an agreement with the DESCO Group ("DESCO") to redeem its entire 16.35% interest in Macquarie CountryWide-Regency-DESCO, LLC ("MCWR-DESCO"). The agreement allowed for a distribution-in-kind ("DIK") of the assets in the co-investment partnership. The assets were distributed as 100% ownership interests to DESCO and to Regency after a selection process, as provided for by the agreement. Regency selected four assets, all in the St. Louis market. The properties which the Company received through the DIK were recorded at the carrying value of the Company's equity investment of $18.8 million. Additionally, as part of the agreement, Regency received a $5.0 million disposition fee at closing on May 4, 2011 to buyout its asset, property, and leasing management contracts, and received $1.0 million for transition services provided through 2011.
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
The following table provides a summary of shopping centers acquired during the year ended December 31, 2010 (in thousands):
Date Purchased | Property Name | City/State | Purchase Price | Debt Assumed, Net of Premiums | Intangible Assets | Intangible Liabilities | |||||
9/1/2010 | Glen Oak Plaza | Glenview, IL | $ | 18,000 | 7,880 | 1,508 | 562 | ||||
12/15/2010 | Willow Festival | Northbrook, IL | 64,000 | 49,505 | 9,173 | 1,534 | |||||
$ | 82,000 | 57,385 | 10,681 | 2,096 | |||||||
The acquisitions were accounted for as purchase business combinations and the results are included in the consolidated financial statements from the date of acquisition. During the years ended December 31, 2011 and 2010, the Company expensed approximately $707,000 and $448,000, respectively, of acquisition-related costs in connection with these property acquisitions, which are included in other operating expenses in the accompanying Consolidated Statements of Operations. The Company had no acquisition activity, other than through its investments in real estate partnerships during 2009. The actual, or pro-forma, impact of these acquired properties is not considered significant to the Company's operating results for the years ended December 31, 2011 and 2010.
3. Discontinued Operations
Dispositions
During the year ended December 31, 2011, the Company sold 100% of its ownership interest in seven operating properties for net proceeds of $66.0 million. During the year ended December 31, 2010, the Company sold 100% of its ownership interest in two operating properties and one property in development for net proceeds of $34.9 million. During the year ended December 31, 2009, the Company sold 100% of its ownership interest in one operating property and four properties in development for proceeds of $73.0 million, net of notes receivable taken by the Company of $20.4 million of which $8.9 million was subsequently paid in full in May 2009. The combined operating income and gain on the sale of these properties and properties classified as held-for-sale were reclassified to discontinued operations. The revenues from properties included in discontinued operations were approximately $7.7 million, $11.4 million, and $19.3 million for the years ended December 31, 2011, 2010, and 2009, respectively. The operating income and gain on sales of properties included in discontinued operations are reported net of income taxes, if the property is sold by Regency Realty Group, Inc., a wholly-owned subsidiary of the Operating Partnership, which is a Taxable REIT Subsidiary as defined in Section 856(l) of the Internal Revenue Code. During the years ended December 31, 2011, 2010, and 2009, approximately $289,000, $166,000, and $2.1 million of income tax benefit were allocated to income from discontinued operations, respectively.
4. | Investments in Real Estate Partnerships |
The Company invests in real estate partnerships, which primarily include five co-investment partners and a closed-end real estate fund (“Regency Retail Partners” or the “Fund”). In addition to earning its pro-rata share of net income or loss in each of these real estate partnerships, the Company received recurring market-based fees for asset management, property management, and leasing as well as fees for investment and financing services, of $29.0 million, $25.1 million, and $29.1 million and transaction fees of $5.0 million, $2.6 million, and $7.8 million for the years ended December 31, 2011, 2010, and 2009, respectively.
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
Investments in real estate partnerships as of December 31, 2011 consist of the following (in thousands):
Ownership | Total Investment | Total Assets of the Partnership | Net Income (Loss) of the Partnership | The Company's Share of Net Income (Loss) of the Partnership | ||||||||||
GRI - Regency, LLC (GRIR)(1) | 40.00 | % | $ | 262,018 | 2,001,526 | 18,244 | 7,266 | |||||||
Macquarie CountryWide-Regency III, LLC (MCWR III)(1) | 24.95 | % | 195 | 61,867 | (493 | ) | (123 | ) | ||||||
Macquarie CountryWide-Regency-DESCO, LLC (MCWR-DESCO)(3) | — | % | — | — | (1,752 | ) | (293 | ) | ||||||
Columbia Regency Retail Partners, LLC (Columbia I)(2) | 20.00 | % | 20,335 | 259,225 | 14,554 | 2,775 | ||||||||
Columbia Regency Partners II, LLC (Columbia II)(2) | 20.00 | % | 9,686 | 317,720 | 910 | 179 | ||||||||
Cameron Village, LLC (Cameron) | 30.00 | % | 17,110 | 104,314 | 1,101 | 322 | ||||||||
RegCal, LLC (RegCal)(2) | 25.00 | % | 18,128 | 180,490 | 7,615 | 1,904 | ||||||||
Regency Retail Partners, LP (the Fund) | 20.00 | % | 16,430 | 333,013 | 265 | 268 | ||||||||
US Regency Retail I, LLC (USAA)(2) | 20.01 | % | 3,093 | 127,763 | 1,215 | 243 | ||||||||
Other investments in real estate partnerships | 50.00 | % | 39,887 | 115,857 | 3,601 | (2,898 | ) | |||||||
Total | $ | 386,882 | 3,501,775 | 45,260 | 9,643 | |||||||||
(1) Effective January 1, 2010, this partnership agreement was amended to include a unilateral right to elect to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company will apply the Restricted Gain Method for additional properties sold to this partnership on or after January 1, 2010. During 2011, the Company did not sell any properties to this real estate partnership.
(2) This partnership agreement has a unilateral right for election to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company has applied the Restricted Gain Method to determine the amount of gain recognized on property sales to this partnership. During 2011, the Company did not sell any properties to this real estate partnership.
(3) At December 31, 2010, the Company's ownership interest in MCWR-DESCO was 16.35%. The liquidation of MCWR-DESCO was complete effective May 4, 2011.
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
Investments in real estate partnerships as of December 31, 2010 consist of the following (in thousands):
Ownership | Total Investment | Total Assets of the Partnership | Net Income (Loss) of the Partnership | The Company's Share of Net Income (Loss) of the Partnership | ||||||||||
GRI - Regency, LLC (GRIR)(1)(3)(4) | 40.00 | % | $ | 277,235 | 2,077,240 | (15,113 | ) | (6,672 | ) | |||||
Macquarie CountryWide-Regency III, LLC (MCWR III)(1) | 24.95 | % | 63 | 63,575 | (432 | ) | (108 | ) | ||||||
Macquarie CountryWide-Regency-DESCO, LLC (MCWR-DESCO) | 16.35 | % | 20,050 | 366,766 | (4,913 | ) | (819 | ) | ||||||
Columbia Regency Retail Partners, LLC (Columbia I)(2) | 20.00 | % | 20,025 | 277,859 | (14,922 | ) | (2,970 | ) | ||||||
Columbia Regency Partners II, LLC (Columbia II)(2) | 20.00 | % | 9,815 | 302,394 | (330 | ) | (69 | ) | ||||||
Cameron Village, LLC (Cameron) | 30.00 | % | 17,604 | 105,953 | (708 | ) | (221 | ) | ||||||
RegCal, LLC (RegCal)(2) | 25.00 | % | 15,340 | 183,507 | 858 | 194 | ||||||||
Regency Retail Partners, LP (the Fund) | 20.00 | % | 17,478 | 341,109 | (18,942 | ) | (3,565 | ) | ||||||
US Regency Retail I, LLC (USAA)(2) | 20.01 | % | 3,941 | 134,294 | (441 | ) | (88 | ) | ||||||
Other investments in real estate partnerships | 50.00 | % | 47,041 | 130,425 | 3,180 | 1,434 | ||||||||
Total | $ | 428,592 | 3,983,122 | (51,763 | ) | (12,884 | ) | |||||||
(1) As noted above, effective January 1, 2010, this partnership agreement was amended to include a unilateral right to elect to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company will apply the Restricted Gain Method for additional properties sold to this partnership on or after January 1, 2010. During 2010, the Company did not sell any properties to this real estate partnership.
(2) As noted above, this partnership agreement has a unilateral right for election to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company has applied the Restricted Gain Method to determine the amount of gain recognized on property sales to this partnership. During 2010, the Company did not sell any properties to this real estate partnership.
(3) During March 2010, an amendment was filed with the state of Delaware to change the name of the real estate partnership from Macquarie CountryWide - Regency II, LLC (“MCWR II”) to GRI - Regency, LLC (“GRIR”).
(4) On April 30, 2010, GRIR prepaid $514.8 million of mortgage debt, without penalty, in order to minimize its future refinancing and interest rate risks. The Company contributed capital of $206.7 million to GRIR for its pro-rata share of the repayment funded from its unsecured line of credit and available cash balances. Simultaneously, GRI closed on the purchase of its remaining 15% interest from CHRR, increasing its total ownership in the real estate partnership to 60%. As a part of this transaction, the Company also received a disposition fee of $2.6 million equal to 1% of gross sales price paid by GRI. The Company retained asset management, property management, and leasing responsibilities. On June 2, 2010, GRIR closed on $202.0 million of new ten year secured mortgage loans. The Company received $79.6 million as its pro-rata share of the proceeds. On September 1, 2010, an additional $47.2 million of mortgage debt was repaid, which also required pro-rata contributions from each joint venture partner.
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
Summarized financial information for the investments in real estate partnerships on a combined basis, is as follows (in thousands):
December 31, 2011 | December 31, 2010 | |||||
Investment in real estate, net | $ | 3,263,704 | 3,686,565 | |||
Acquired lease intangible assets, net | 85,232 | 120,163 | ||||
Other assets | 152,839 | 176,394 | ||||
Total assets | $ | 3,501,775 | 3,983,122 | |||
Notes payable | $ | 1,874,780 | 2,117,695 | |||
Acquired lease intangible liabilities, net | 49,938 | 75,551 | ||||
Other liabilities | 67,495 | 69,230 | ||||
Capital - Regency | 512,421 | 557,374 | ||||
Capital - Third parties | 997,141 | 1,163,272 | ||||
Total liabilities and capital | $ | 3,501,775 | 3,983,122 | |||
The following table reconciles the Company's capital in unconsolidated partnerships to the Company's investments in real estate partnerships (in thousands):
December 31, 2011 | December 31, 2010 | |||||
Capital - Regency | $ | 512,421 | 557,374 | |||
less: Impairment | (5,880 | ) | (8,750 | ) | ||
less: Ownership percentage or Restricted Gain Method deferral | (41,456 | ) | (41,830 | ) | ||
less: Net book equity in excess of purchase price | (78,203 | ) | (78,202 | ) | ||
Investments in real estate partnerships | $ | 386,882 | 428,592 | |||
The Company’s proportionate share of notes payable of the investments in real estate partnerships was $610.4 million and $663.1 million, respectively. The Company does not guarantee these loans with the exception of an $8.8 million loan related to its 50% ownership interest in a single asset real estate partnership where the loan agreement contains “several” guarantees from each partner, which matured and was paid off in April 2011.
As of December 31, 2011, scheduled principal repayments on notes payable of the investments in real estate partnerships were as follows (in thousands):
Scheduled Principal Payments by Year: | Scheduled Principal Payments | Mortgage Loan Maturities | Unsecured Maturities | Total | Regency’s Pro-Rata Share | |||||||||||
2012 | $ | 13,876 | 234,838 | 20,798 | 269,512 | 101,896 | ||||||||||
2013 | 17,666 | 24,373 | — | 42,039 | 15,306 | |||||||||||
2014 | 18,505 | 77,369 | — | 95,874 | 28,582 | |||||||||||
2015 | 18,599 | 130,796 | — | 149,395 | 48,258 | |||||||||||
2016 | 15,730 | 329,757 | — | 345,487 | 104,233 | |||||||||||
Beyond 5 Years | 78,156 | 890,081 | — | 968,237 | 311,245 | |||||||||||
Unamortized debt premiums, net | — | 4,236 | — | 4,236 | 910 | |||||||||||
Total | $ | 162,532 | 1,691,450 | 1,691.45 | 20,798 | 1,874,780 | 610,430 | |||||||||
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
The revenues and expenses for the investments in real estate partnerships on a combined basis are summarized as follows (in thousands):
For the years ended December 31, | |||||||||
2011 | 2010 | 2009 | |||||||
Total revenues | $ | 399,091 | 437,029 | 434,050 | |||||
Operating expenses: | |||||||||
Depreciation and amortization | 134,236 | 155,146 | 160,484 | ||||||
Operating and maintenance | 62,442 | 67,541 | 63,855 | ||||||
General and administrative | 7,905 | 7,383 | 8,247 | ||||||
Real estate taxes | 49,103 | 55,926 | 59,339 | ||||||
Provision for doubtful accounts | 3,160 | 2,951 | 10,062 | ||||||
Other expenses | 317 | 715 | 2,098 | ||||||
Total operating expenses | 257,163 | 289,662 | 304,085 | ||||||
Other expense (income): | |||||||||
Interest expense, net | 112,099 | 129,581 | 137,794 | ||||||
Gain on sale of real estate | (7,464 | ) | (8,976 | ) | (6,141 | ) | |||
Gain on extinguishment of debt | (8,743 | ) | — | — | |||||
Provision for impairment | — | 78,908 | 104,416 | ||||||
Other expense (income) | 776 | (383 | ) | 72 | |||||
Total other expense | 96,668 | 199,130 | 236,141 | ||||||
Net income (loss) | $ | 45,260 | (51,763 | ) | (106,176 | ) | |||
Regency's share of net income (loss) | $ | 9,643 | (12,884 | ) | (26,373 | ) | |||
5. | Notes Receivable |
The Company had notes receivable outstanding of $35.8 million and $35.9 million at December 31, 2011 and 2010, respectively. The loans have fixed interest rates ranging from 6.0% to 9.0% with maturity dates through January 2019 and are secured by real estate held as collateral.
6. | Acquired Lease Intangibles |
The Company had acquired lease intangible assets, net of amortization, of $27.1 million and $18.2 million at December 31, 2011 and 2010, respectively, of which $21.9 million and $15.7 million, respectively relates to in-place leases. These in-place leases had a remaining weighted average amortization period of 13.0 years. The aggregate amortization expense recorded for these in-place leases was $3.4 million, $2.3 million and $2.7 million for the years ended December 31, 2011, 2010, and 2009, respectively. The Company had above-market lease intangible assets, net of amortization, of $3.4 million and $1.0 million at December 31, 2011 and 2010, respectively. The remaining weighted average amortization period was 6.8 years. The aggregate amortization expense recorded as a reduction to minimum rent for these above-market leases was approximately $319,000, $108,000 and $102,000 for the years ended December 31, 2011, 2010, and 2009, respectively. The Company had above-market ground rent lease intangible assets, net of amortization, of $1.7 million and $1.6 million at December 31, 2011 and 2010, respectively. The remaining weighted average amortization period was 85.5 years.
The Company had acquired lease intangible liabilities, net of accretion, of $12.7 million and $6.7 million as of December 31, 2011 and 2010, respectively. The remaining weighted average accretion period is 11.9 years. The aggregate amount recorded as an increase to minimum rent for these below-market rents was approximately $1.4 million, $1.3 million, and $1.9 million for the years ended December 31, 2011, 2010, and 2009, respectively.
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
The estimated aggregate amortization and net accretion amounts from acquired lease intangibles for the next five years are as follows (in thousands):
Year Ending December 31, | Amortization Expense | Minimum Rent, net | |||||
2012 | $ | 3,547 | 1,007 | ||||
2013 | 2,934 | 907 | |||||
2014 | 2,589 | 879 | |||||
2015 | 2,194 | 696 | |||||
2016 | 1,988 | 587 | |||||
7. Non-Qualified Deferred Compensation Plan
The Company maintains a non-qualified deferred compensation plan (“NQDCP”). This plan allows select employees and directors to defer part or all of their salary, cash bonus, and restricted stock awards. Restricted stock awards that are designated to be deferred into the NQDCP upon vesting are classified as liabilities from the grant date through the vesting date. All contributions into the participants' accounts are fully vested upon contribution to the NQDCP and are deposited in a Rabbi trust.
The Company accounts for the NQDCP in accordance with FASB Accounting Standards Codification ASC Topic 710 and the restricted stock awards under Topic 718. The assets in the Rabbi trust remain subject to the claims of creditors of the Company and are not the property of the participant. The NQDCP allows participants to allocate their account balance among various investments, including several mutual funds and the Company's common stock. Effective June 20, 2011, the Company amended its NQDCP such that participant account balances held in the Regency common stock fund, including future deferrals of Regency common stock, must remain allocated to the Regency common stock fund and may only be distributed to the participant in the form of Regency common stock upon termination from the plan. Additionally, participant account balances allocated to various diversified mutual funds are prohibited from being allocated into the Regency common stock fund. The assets of the Rabbi trust, exclusive of the shares of the Company's common stock, are classified as trading securities on the accompanying Consolidated Balance Sheets, and accordingly, realized and unrealized gains and losses are recognized within income from deferred compensation plan in the accompanying Consolidated Statements of Operations. Investments in shares of the Company's common stock are included, at cost, as treasury stock in the accompanying Consolidated Balance Sheets of the Parent Company and as a reduction of general partner capital in the accompanying Consolidated Balance Sheets of the Operating Partnership. The participants' deferred compensation liability, exclusive of the shares of the Company's common stock after the June 20, 2011 amendment, is included within accounts payable and other liabilities in the accompanying Consolidated Balance Sheets and was $21.1 million and $35.0 million at December 31, 2011 and December 31, 2010, respectively. Increases or decreases in the deferred compensation liability, exclusive of amounts attributable to participant investments in the shares of the Company's common stock, are recorded as general and administrative expense within the accompanying Consolidated Statements of Operations. Changes in participant account balances related to the Regency common stock fund are recorded directly within stockholders' equity rather than general and administrative expense.
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
During 2011, the Company determined that it had not properly accounted for the NQDCP or the unvested restricted stock awards which are deferred into the NQDCP in previously filed financial statements. The Company determined it should have been consolidating the assets, liabilities, and activities of the NQDCP and the unvested restricted stock awards which are deferred into the NQDCP should have been treated as liability-classified awards since they previously permitted settlement in assets other than Company stock. The liability-classified awards are included within accounts payable and other liabilities in the accompanying Consolidated Balance Sheet as of December 31, 2010. The Company reviewed the impact of these errors on the prior periods, and determined that the errors were not material. The effect of the correction, in the form of an increase (decrease), on each financial statement line item and per share amounts for each period presented are as follows (in thousands, except per share data):
2010 | 2009 | |||||
Statements of Operations: | ||||||
General and administrative expenses | $ | 5,180 | (956 | ) | ||
Income on deferred compensation plan, net | 1,982 | 2,750 | ||||
Net income (loss) attributable to common stockholders | $ | (3,198 | ) | 3,706 | ||
Diluted EPS impact | $ | (0.04 | ) | 0.05 | ||
Balance Sheet: | ||||||
Trading securities held in trust | $ | 20,891 | ||||
Accounts payables and other liabilities | 37,150 | |||||
Treasury stock | 16,175 | |||||
Additional paid in capital | 1,605 | |||||
Distributions in excess of net income | 1,689 | |||||
General partner's capital | (16,259 | ) | ||||
Cumulative effect of the change on opening retained earnings as of January 1, 2009 | $ | (20,538 | ) | |||
8. Income Taxes
The following summarizes the tax status of dividends paid during the respective years:
2011 | 2010 | 2009 | |||||||
Dividend per share | $ | 1.85 | 1.85 | 2.11 | |||||
Ordinary income | 33 | % | 40 | % | 54 | % | |||
Capital gain | 1 | % | 2 | % | 14 | % | |||
Return of capital | 66 | % | 58 | % | 32 | % | |||
RRG is subject to federal and state income taxes and files separate tax returns. Income tax expense is included in other expenses in the accompanying Consolidated Statements of Operations and consists of the following for the years ended December 31, 2011, 2010, and 2009 (in thousands):
2011 | 2010 | 2009 | |||||||
Income tax expense (benefit): | |||||||||
Current | $ | 283 | (639 | ) | 4,692 | ||||
Deferred | 2,422 | (860 | ) | (4,894 | ) | ||||
Total income tax expense (benefit) | $ | 2,705 | (1,499 | ) | (202 | ) | |||
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
Income tax expense (benefit) is included in either other expenses if the related income is from continuing operations or discontinued operations on the Consolidated Statements of Operations as follows for the years ended December 31, 2011, 2010, and 2009 (in thousands):
2011 | 2010 | 2009 | |||||||
Income tax expense (benefit) from: | |||||||||
Continuing operations | $ | 2,994 | (1,333 | ) | 1,883 | ||||
Discontinued operations | (289 | ) | (166 | ) | (2,085 | ) | |||
Total income tax expense (benefit) | $ | 2,705 | (1,499 | ) | (202 | ) | |||
Income tax expense (benefit) differed from the amounts computed by applying the U.S. Federal income tax rate of 34% to pretax income of RRG for the years ended December 31, 2011, 2010, and 2009, respectively as follows (in thousands):
2011 | 2010 | 2009 | |||||||
Computed expected tax expense (benefit) | $ | 1,089 | (3,368 | ) | (4,791 | ) | |||
Increase (decrease) in income tax resulting from state taxes | 126 | (392 | ) | (558 | ) | ||||
Valuation allowance | 1,438 | 286 | 4,755 | ||||||
All other items | 52 | 1,975 | 392 | ||||||
Total income tax expense (benefit) | $ | 2,705 | (1,499 | ) | (202 | ) | |||
For 2011, all other items principally represent permanent differences related to impairments and the effect of the change in state tax rate. For 2010, all other items principally represent straight line rents. For 2009, all other items principally represent the permanent differences related to prior year true-ups. Included in the income tax expense (benefit) disclosed above, the Company has approximately $600,000 of state income tax expense at the Operating Partnership for the Texas Gross Margin Tax recorded in other expenses in the accompanying Consolidated Statements of Operations for each of the years ended December 31, 2011, 2010, and 2009.
The following table represents the Company's net deferred tax assets as of December 31, 2011 and 2010 recorded in other assets in the accompanying Consolidated Balance Sheets (in thousands):
2011 | 2010 | |||||
Deferred tax assets | $ | 22,260 | 23,189 | |||
Deferred tax liabilities | (2,054 | ) | (1,999 | ) | ||
Valuation allowance | (6,479 | ) | (5,041 | ) | ||
Net deferred tax assets | $ | 13,727 | 16,149 | |||
During 2011, 2010, and 2009, a provision for valuation allowance of $1.4 million, approximately $286,000, and $4.8 million was recorded, respectfully. During 2011, the increase in valuation allowance is due primarily to an increase of $2.0 million for the valuation allowance established related to a property impairment which is not considered recoverable. The 2010 provision for valuation allowance of approximately $286,000 was recorded for 100% of the charitable contribution carryforward. The 2009 provision for valuation allowance of $4.8 million was recorded for 100% of the disallowed interest, under Section 163(j) of the Code.
In all cases, it was determined to be more likely than not that the asset would not be realized. Other deferred tax assets and deferred tax liabilities relate primarily to differences in the timing of the recognition of income or loss between U.S. GAAP and tax basis of accounting. As of December 31, 2011, excluding the provision for valuation allowance, significant portions of the deferred tax assets and deferred tax liabilities include a $4.0 million deferred tax asset for capitalized costs under Section 263A of the Code, a $9.7 million deferred tax asset related to the provision for impairment, an approximately $300,000 deferred tax asset related to a net operating loss (“NOL”) carryforward, and a $2.0 million
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
deferred tax liability related to straight line rents.
As of December 31, 2010, excluding the provision for valuation allowance, significant portions of the deferred tax assets and deferred tax liabilities include a $5.1 million deferred tax asset for capitalized costs under Section 263A of the Code, a $9.0 million deferred tax asset related to the provision for impairment, a $2.7 million deferred tax asset related to a NOL carryforward, and a $1.7 million deferred tax liability related to straight line rents. The Company assessed the components of the net deferred tax asset balance at December 31, 2011 and 2010, excluding the items for which a valuation allowance was provided, and determined that it is more likely than not that the assets will be utilized.
The Company accounts for uncertainties in income tax law in accordance with FASB ASC Topic 740. Under FASB ASC Topic 740, tax positions shall initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open tax years based on an assessment of many factors including past experience and interpretations of tax laws applied to the facts of each matter. Federal and state tax returns are open from 2008 and forward for the Company.
9. Notes Payable and Unsecured Credit Facilities
The Parent Company does not have any indebtedness, but guarantees all of the unsecured debt and 12.8% of the secured debt of the Operating Partnership.
Notes Payable
Notes payable consist of mortgage loans secured by properties and unsecured public debt. Mortgage loans may be prepaid, but could be subject to yield maintenance premiums. Mortgage loans are generally due in monthly installments of principal and interest or interest only, and mature over various terms through 2028, whereas, interest on unsecured public debt is payable semi-annually and the debt matures over various terms through 2021. Fixed interest rates on mortgage loans range from 5.22% to 8.40% with a weighted average rate of 6.43%. Fixed interest rates on unsecured public debt range from 4.80% to 6.75% with a weighted average rate of 5.59%. As of December 31, 2011, the Company had two variable rate mortgage loans, one in the amount of $3.7 million with a variable interest rate equal to LIBOR plus 380 basis points maturing on October 1, 2014 and one in the amount of $9.0 million with a variable interest rate of LIBOR plus 160 basis points maturing on September 1, 2014.
On January 18, 2011 and December 12, 2011, the Company repaid the maturing balances of $161.7 million of 7.95% and $20 million of 7.25% ten-year unsecured notes, respectively.
The Company is required to comply with certain financial covenants for its unsecured public debt as defined in the indenture agreements such as the following ratios: Consolidated Debt to Consolidated Assets, Consolidated Secured Debt to Consolidated Assets, Consolidated Income for Debt Service to Consolidated Debt Service, and Unencumbered Consolidated Assets to Unsecured Consolidated Debt. As of December 31, 2011, management of the Company believes it is in compliance with all financial covenants for its unsecured public debt.
Unsecured Credit Facilities
The Company has a $600.0 million unsecured line of credit (the “Line”) commitment under an agreement (the "Credit Agreement") with Wells Fargo Bank and a syndicate of other banks, which was amended on September 7, 2011 primarily to extend the maturity date to September 2015, and includes one, one year extension option. The Line has a variable interest rate of LIBOR plus 125 basis points and an annual facility fee of 25 basis points subject to Regency maintaining its corporate credit and senior unsecured ratings at BBB. In addition, the Company has the ability to increase the Line through an accordion feature to $1.0 billion. Borrowing capacity is reduced by the balance of outstanding borrowings and commitments under outstanding letters of credit. The balance on the Line was $40.0 million and $10.0 million at December 31, 2011 and 2010, respectively. The proceeds from the Line are used to finance the acquisition and development of real estate and for general working-capital purposes.
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
The Company is required to comply with certain financial covenants as defined in the Credit Agreement such as Minimum Tangible Net Worth, Ratio of Indebtedness to Total Asset Value ("TAV"), Ratio of Unsecured Indebtedness to Unencumbered Asset Value, Ratio of Adjusted Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) to Fixed Charges, Ratio of Secured Indebtedness to TAV, Ratio of Unencumbered Net Operating Income to Unsecured Interest Expense, and other covenants customary with this type of unsecured financing. As of December 31, 2011, management of the Company believes it is in compliance with all financial covenants for the Line.
The Company previously had a $113.8 million revolving credit facility under an agreement with Wells Fargo Bank and a syndicate of other banks that matured in February 2011. There was no balance outstanding at December 31, 2010 and the Company did not renew this facility when it matured in February 2011.
On November 17, 2011, the Company entered into a $250.0 million unsecured term loan (the "Term Loan") commitment under an agreement (the "Term Loan Agreement") with Wells Fargo Bank and a syndicate of other banks, which matures on December 15, 2016. The Term Loan has a variable interest rate of LIBOR plus 145 basis points subject to Regency maintaining its corporate credit and senior unsecured ratings at BBB. In addition, the Company has the ability to increase the Term Loan up to an amount not to exceed an additional $150.0 million subject to the provisions of the Term Loan Agreement. There was no balance outstanding as of December 31, 2011 under the Term Loan.
The Term Loan includes financial covenants relating to minimum tangible net worth, ratio of indebtedness to total asset value, ratio of unsecured indebtedness to unencumbered asset value, ratio of adjusted EBITDA to fixed charges, ratio of secured indebtedness to total asset value, and ratio of unencumbered NOI to unsecured interest expense. The Term Loan also includes customary events of default for agreements of this type (with customary grace periods, as applicable). As of December 31, 2011, management of the Company believes it is in compliance with all financial covenants for its Term Loan.
The Company’s outstanding debt at December 31, 2011 and 2010 consists of the following (in thousands):
2011 | 2010 | |||||
Notes payable: | ||||||
Fixed rate mortgage loans | $ | 439,880 | 402,151 | |||
Variable rate mortgage loans | 12,665 | 11,189 | ||||
Fixed rate unsecured loans | 1,489,895 | 1,671,129 | ||||
Total notes payable | 1,942,440 | 2,084,469 | ||||
Unsecured credit facilities | 40,000 | 10,000 | ||||
Total | $ | 1,982,440 | 2,094,469 | |||
As of December 31, 2011, scheduled principal payments and maturities on notes payable were as follows (in thousands):
Scheduled Principal Payments and Maturities by Year: | Scheduled Principal Payments | Mortgage Loan Maturities | Unsecured Maturities (1) | Total | ||||||||
2012 | $ | 6,998 | — | 192,377 | 199,375 | |||||||
2013 | 6,996 | 16,330 | — | 23,326 | ||||||||
2014 | 6,481 | 28,519 | 150,000 | 185,000 | ||||||||
2015 | 5,169 | 46,313 | 390,000 | 441,482 | ||||||||
2016 | 4,857 | 14,161 | — | 19,018 | ||||||||
Beyond 5 Years | 24,490 | 288,046 | 800,000 | 1,112,536 | ||||||||
Unamortized debt (discounts) premiums, net | — | 4,185 | (2,482 | ) | 1,703 | |||||||
Total | $ | 54,991 | 397,554 | 1,529,895 | 1,982,440 | |||||||
(1) Includes unsecured public debt and the Line. The Line is included in 2015 maturities and matures in September 2015. | ||||||||||||
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
10. | Derivative Financial Instruments |
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or future payment of known and uncertain cash amounts, the amount of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash payments principally related to the Company's borrowings.
Cash Flow Hedges of Interest Rate Risk
The Company's objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive loss and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Such derivatives are used to hedge the variable cash flows associated with forecasted issuances of debt (see “Objectives and Strategies” below for further discussion). The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings as a gain or loss on derivative instruments. During the years ended December 31, 2011, 2010 and 2009, the Company recognized a loss of approximately $54,000, a gain of $1.4 million, and a loss of $3.3 million, respectively, for changes in hedge ineffectiveness attributable to revised inputs used in the valuation models to estimate effectiveness.
On September 29, 2011, the Company entered into the following interest rate swap transaction (in thousands):
Effective Date | Notional Amount | Bank Pays Variable Rate of | Regency Pays Fixed Rate of | |||||
October 1, 2011 | $ | 9,000 | 1 Month LIBOR | 0.76 | % | |||
This interest rate swap is designated as a cash flow hedge and thus, qualifies for the accounting treatment discussed above.
On October 7, 2010, the Company paid $36.7 million to settle the remaining $140.7 million of interest rate swaps then outstanding. On October 7, 2010, the Company closed on $250.0 million of 4.80% ten-year senior unsecured notes. The Company began amortizing the $36.7 million loss realized from the swap settlement in October 2010 over a ten year period; therefore, the effective interest rate on these notes was 6.26%.
On June 1, 2010, the Company paid $26.8 million to settle and partially settle $150.0 million of its interest rate swaps then outstanding of $290.7 million. On June 2, 2010 the Company also closed on $150.0 million of ten-year senior unsecured notes with an interest rate of 6.00%. The Company began amortizing the $26.8 million loss realized from the swap settlement in June 2010 over a ten year period; therefore, the effective interest rate on these notes was 7.67%.
Realized gains and losses associated with the settled interest rate swaps have been included in accumulated other comprehensive loss in the accompanying Consolidated Statements of Equity and Comprehensive Income (Loss) of the Parent Company and the accompanying Consolidated Statements of Capital and Comprehensive Income (Loss) of the Operating Partnership and are amortized as the corresponding hedged interest payments are made in future periods.
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
The following table represents the effect of the derivative financial instruments on the accompanying consolidated financial statements for the years ended December 31, 2011, 2010, and 2009 (in thousands):
Derivatives in FASB ASC Topic 815 Cash Flow Hedging Relationships: | Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | ||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||
2011 | 2010 | 2009 | 2011 | 2010 | 2009 | 2011 | 2010 | 2009 | |||||||||||||||||||||||||
Interest rate products | $ | 18 | (36,556 | ) | 38,645 | Interest expense | $ | (9,467 | ) | (5,575 | ) | (2,305 | ) | Gain (loss) on derivative instruments | $ | (54 | ) | 1,419 | (3,294 | ) | |||||||||||||
The unamortized balance of the settled interest rate swaps at December 31, 2011 and 2010 was $72.0 million and $81.5 million, respectively, of which the Company expects to amortize $9.5 million during 2012.
The following table represents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of December 31, 2011 and 2010 (in thousands):
Liability Derivatives | ||||||||||
As of December 31, 2011 | As of December 31, 2010 | |||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||
Derivative instruments | $ | 37 | Derivative instruments | $ | — | |||||
Non-designated Hedges
The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges.
Objectives and Strategies
The Company continuously monitors the capital markets and evaluates its ability to issue new debt to repay maturing debt or fund its commitments. Based upon the current capital markets, the Company's current credit ratings, and the number of high quality, unencumbered properties that it owns which could collateralize borrowings, the Company expects that it will successfully issue new secured or unsecured debt to fund its obligations.
11. Fair Value Measurements
(a) Fair Value of Financial Instruments
The following provides information about the methods and assumptions used to estimate the fair value of the Company's financial instruments, including their estimated fair values.
Notes Receivable
The fair value of the Company's notes receivable is estimated based on the current market rates available for notes of the same terms and remaining maturities adjusted for customer specific credit risk. The fair value of notes receivable was determined using Level 3 inputs of the fair value hierarchy. Based on the estimates made by the Company, the fair value of notes receivable was $35.3 million at December 31, 2011.
Trading Securities Held in Trust
The Company has investments in marketable securities that are classified as trading securities held in trust on the accompanying Consolidated Balance Sheets. The fair value of the trading securities held in trust was determined
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
using quoted prices in active markets, considered Level 1 inputs of the fair value hierarchy. The fair value of the trading securities held in trust was $21.7 million and $20.9 million at December 31, 2011 and 2010, respectively. Changes in the value of trading securities are recorded within loss (income) from deferred compensation plan in the accompanying Consolidated Statements of Operations.
Notes Payable
The fair value of the Company's notes payable is estimated based on the current market rates available to the Company for debt of the same terms and remaining maturities. Fixed rate loans assumed in connection with real estate acquisitions are recorded in the accompanying consolidated financial statements at fair value at the time the property is acquired including those loans assumed in distribution-in-kind liquidations. The fair value of the notes payable was determined using Level 3 inputs of the fair value hierarchy. Based on the estimates used by the Company, the fair value of notes payable was $2.1 billion at December 31, 2011 and 2010.
Unsecured Line of Credit
The fair value of the Company's Line is estimated based on the interest rates currently offered to the Company by the Company's bankers. Based on the recent amendment to the Line, the Company has determined that fair value approximates carrying value.
Derivative Financial Instruments
The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties.
(b) Fair Value Measurements
The following are fair value measurements recorded on a recurring basis as of December 31, 2011 and 2010, respectively (in thousands):
Fair Value Measurements as of December 31, 2011 | ||||||||||||
December 31, 2011 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||
Assets | Balance | (Level 1) | (Level 2) | (Level 3) | ||||||||
Trading securities held in trust | $ | 21,713 | 21,713 | — | — | |||||||
Total | $ | 21,713 | 21,713 | — | — | |||||||
Liabilities: | ||||||||||||
Interest rate derivatives | $ | (37 | ) | (38 | ) | 1 | ||||||
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
Fair Value Measurements as of December 31, 2010 | ||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||
Assets | Balance | (Level 1) | (Level 2) | (Level 3) | ||||||||
Trading securities held in trust | 20,891 | 20,891 | — | — | ||||||||
Total | $ | 20,891 | 20,891 | — | — | |||||||
The following table presents fair value measurements of assets and liabilities that are measured at fair value on a nonrecurring basis at December 31, 2011:
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Total Gains (Losses) | ||||||||||||
Assets | Balance | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Long-lived assets held and used | |||||||||||||||
Operating and development properties (1) | $ | 5,520 | — | — | 5,520 | (11,843 | ) | ||||||||
Investment in real estate partnerships (1) | 1,893 | 1,893 | (4,580 | ) | |||||||||||
Total | $ | 7,413 | — | — | 7,413 | (16,423 | ) | ||||||||
(1) Represents real estate investments for which the Company has recorded a provision for impairment during 2011. | |||||||||||||||
Long-lived assets held and used are comprised primarily of real estate. The provision for impairment recognized during the year ended December 31, 2011 related to two operating properties. These properties exhibited weak operating fundamentals, including low economic occupancy for an extended period of time, which lead to the impairment. As a result, the Company evaluated the current fair value of the properties and recorded impairment losses.
Fair value was determined through the use of an income approach. The income approach estimates an income stream for a property (typically 10 years) and discounts this income plus a reversion (presumed sale) into a present value at a risk adjusted rate. Yield rates and growth assumptions utilized in this approach are derived from market transactions as well as other financial and industry data. The terminal cap rate and discount rate are significant inputs to this valuation. The Company has determined that the inputs used to value this long-lived asset falls within Level 3 of the fair value hierarchy.
94
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
12. Equity and Capital
Equity of the Parent Company
Preferred Stock
The Series 3, 4, and 5 preferred shares are perpetual, are not convertible into common stock of the Parent Company, and are redeemable at par upon the Company’s election beginning five years after the issuance date. None of the terms of the preferred stock contain any unconditional obligations that would require the Company to redeem the securities at any time or for any purpose. See Note 19, Subsequent Events.
Terms and conditions of the three series of preferred stock outstanding as of December 31, 2011 and 2010 are summarized as follows:
Series | Shares Outstanding | Liquidation Preference | Distribution Rate | Callable By Company | ||||||||
Series 3 | 3,000,000 | $ | 75,000,000 | 7.45 | % | 4/3/2008 | ||||||
Series 4 | 5,000,000 | 125,000,000 | 7.25 | % | 8/31/2009 | |||||||
Series 5 | 3,000,000 | 75,000,000 | 6.70 | % | 8/2/2010 | |||||||
11,000,000 | $ | 275,000,000 | ||||||||||
Common Stock
On March 9, 2011, the Parent Company settled its forward sale agreements dated December 4, 2009 (the "Forward Equity Offering") with J.P. Morgan and Wells Fargo Securities by delivering an aggregate 8.0 million shares of common stock. Upon physical settlement of the Forward Equity Offering, the Company received net proceeds of approximately $215.4 million. The Company used a portion of the proceeds to repay the Line, which had been drawn upon to repay unsecured notes of $161.7 million that matured in January 2011.
Noncontrolling Interest of Preferred Units
The Series D preferred units were callable at par beginning September 29, 2009, have no stated maturity or mandatory redemption and pay a cumulative, quarterly dividend at a fixed rate. The Series D preferred units may be exchanged by the holder for cumulative redeemable preferred stock of the Parent Company at an exchange rate of one unit for one share. The Series D preferred units and the related preferred stock are not convertible into common stock of the Parent Company. See Note 19, Subsequent Events.
Terms and conditions for the Series D preferred units outstanding as of December 31, 2011 and 2010 are summarized as follows:
Units Outstanding | Amount Outstanding | Distribution Rate | Callable by Company | Exchangeable by Unit holder | |||||||
500,000 | $ | 50,000,000 | 7.45 | % | 9/29/2009 | 1/1/2014 | |||||
Noncontrolling Interest of Exchangeable Operating Partnership Units
The Operating Partnership had 177,164 limited Partnership Units not owned by the Parent Company outstanding as of December 31, 2011 and 2010.
Noncontrolling Interests of Limited Partners’ Interests in Consolidated Partnerships
Limited partners’ interests in consolidated partnerships not owned by the Company are classified as noncontrolling interests on the accompanying Consolidated Balance Sheets of the Parent Company. Subject to certain conditions and pursuant to the conditions of the agreement, the Company has the right, but not the obligation, to purchase the other member’s interest or sell its own interest in these consolidated partnerships. At December 31, 2011 and 2010, the Company’s noncontrolling interest in these consolidated partnerships was $13.1 million and $10.8 million, respectively.
95
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
Capital of the Operating Partnership
Preferred Units
The Series D Preferred Units are owned by institutional investors. As of December 31, 2011 and 2010, the face value of the Series D Preferred Units was $50.0 million with a fixed distribution rate of 7.45% .
Preferred Units of General Partner
The Parent Company, as general partner, owns corresponding Series 3, 4, and 5 preferred unit interests (“Series 3, 4, and 5 Preferred Units”) in the Operating Partnership. See above for further discussion.
General Partner
As of December 31, 2011 and 2010, the Parent Company, as general partner, owned approximately 99.8% or 89,921,858 of the total 90,099,022 Partnership Units outstanding and approximately 99.8% or 81,886,872 of the total 82,064,036 Partnership Units outstanding, respectively.
Limited Partners
The Operating Partnership had 177,164 limited Partnership Units outstanding as of December 31, 2011 and 2010.
Noncontrolling Interests of Limited Partners’ Interests in Consolidated Partnerships
See above for further discussion.
13. Stock-Based Compensation
The Company recorded stock-based compensation in general and administrative expenses in the accompanying Consolidated Statements of Operations, the components of which are further described below for the years ended December 31, 2011, 2010, and 2009 (in thousands):
2011 | 2010 | 2009 | |||||||
Restricted stock | $ | 10,659 | 7,236 | 5,227 | |||||
Directors' fees paid in common stock | 269 | 231 | 279 | ||||||
Less: Amount capitalized | (1,104 | ) | (852 | ) | (1,574 | ) | |||
Total | $ | 9,824 | 6,615 | 3,932 | |||||
The recorded amounts of stock-based compensation expense represent amortization of the grant date fair value of restricted stock awards over the respective vesting periods. Compensation expense specifically identifiable to development and leasing activities is capitalized and included above.
The Company established the Plan under which the Board of Directors may grant stock options and other stock-based awards to officers, directors, and other key employees. The Plan allows the Company to issue up to approximately 4.1 million shares in the form of the Parent Company's common stock or stock options. At December 31, 2011, there were approximately 3.2 million shares available for grant under the Plan either through options or restricted stock.
Stock options are granted under the Plan with an exercise price equal to the Parent Company's stock's price at the date of grant. All stock options granted have ten-year lives, contain vesting terms of one to five years from the date of grant and some have dividend equivalent rights.
96
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton closed-form (“Black-Scholes”) option valuation model. The Company believes that the use of the Black-Scholes model meets the fair value measurement objectives of FASB ASC Topic 718 and reflects all substantive characteristics of the instruments being valued.
The following table reports stock option activity during the year ended December 31, 2011:
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||
Outstanding December 31, 2010 | 442,880 | $ | 51.85 | 3.5 | $ | (4,255 | ) | ||||
Less: Exercised | 12,561 | 35.61 | |||||||||
Less: Forfeited | 26,754 | 51.43 | |||||||||
Less: Expired | 17,416 | 58.28 | |||||||||
Outstanding December 31, 2011 | 386,149 | $ | 52.12 | 3.0 | $ | (5,598 | ) | ||||
Vested and expected to vest - December 31, 2011 | 386,149 | $ | 52.12 | 3.0 | $ | (5,598 | ) | ||||
Exercisable December 31, 2011 | 386,149 | $ | 52.12 | 3.0 | $ | (5,598 | ) | ||||
There were no stock options granted during 2011, 2010, or 2009. The total intrinsic value of options exercised during the years ended December 31, 2011, 2010, and 2009 was approximately $130,000, $1,000, and $40,000, respectively. The Company issues new shares to fulfill option exercises from its authorized shares available.
The following table presents information regarding non-vested option activity during the year ended December 31, 2011:
Non-vested Number of Options | Weighted Average Grant-Date Fair Value | ||||
Non-vested at December 31, 2010 | 2,185 | $ | 8.78 | ||
Less: 2011 Vesting | 2,185 | 8.78 | |||
Non-vested at December 31, 2011 | — | $ | — | ||
The Company grants restricted stock under the Plan to its employees as a form of long-term compensation and retention. The terms of each grant vary depending upon the participant's responsibilities and position within the Company. The Company's stock grants can be categorized as either time-based awards, performance-based awards, or market-based awards. All awards were valued at the fair market value on the date of grant, earn dividends throughout the vesting period, and have no voting rights. Compensation expense is measured at the grant date and recognized over the vesting period.
• | Time-based awards vest 25% per year beginning on the first anniversary following the grant date. These grants are subject only to continued employment and not dependent on future performance measures; and accordingly, if such vesting criteria are not met, compensation cost previously recognized would be reversed. During 2011, the Company granted 128,139 shares of time-based awards. |
• | Performance-based awards are earned subject to future performance measurements, including individual goals, annual growth in earnings, and compounded three-year growth in earnings. Once the performance criteria are achieved and the actual number of shares earned is determined, shares will vest over a required service period. If such performance criteria are not met, compensation cost previously recognized would be reversed. The Company considers the likelihood of meeting the performance criteria based upon managements' estimates from which it determines the amounts recognized as expense on a periodic basis. During 2011, the Company granted 18,246 shares of performance-based awards. |
• | Market-based awards are earned dependent upon the Company's total shareholder return in relation to the shareholder return of peer indices over a three-year period (“TSR Grant”). Once the market criteria are met and |
97
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
the actual number of shares earned is determined, 100% of the earned shares vest. The probability of meeting the market criteria is considered when calculating the estimated fair market value on the date of grant using a Monte Carlo simulation. These awards were accounted for as awards with market criteria, with compensation cost recognized over the service period, regardless of whether the market criteria are achieved and the awards are ultimately earned and vest. During 2011, the Company granted 165,689 shares of market-based awards.
The following table reports non-vested restricted stock activity during the year ended December 31, 2011:
Number of Shares | Intrinsic Value (in thousands) | Weighted Average Grant Price | ||||
Non-vested at December 31, 2010 | 436,559 | |||||
Add: Time-based awards granted | 128,139 | $ | 42.19 | |||
Add: Performance-based awards granted | 18,246 | $ | 41.54 | |||
Add: Market-based awards granted | 165,689 | $ | 41.54 | |||
Less: Vested and Distributed | 173,513 | $ | 43.06 | |||
Less: Forfeited | 12,861 | $ | 40.31 | |||
Non-vested at December 31, 2011 | 562,259 | $ | 21,152 | |||
The weighted-average grant price for restricted stock granted during the years ended December 31, 2011, 2010, and 2009 was $41.81, $35.65, and $38.91, respectively. The total intrinsic value of restricted stock vested during the years ended December 31, 2011, 2010, and 2009 was $7.5 million, $6.1 million, and $9.6 million, respectively.
As of December 31, 2011, there was $13.3 million of unrecognized compensation cost related to non-vested restricted stock granted under the Parent Company's Long-Term Omnibus Plan. When recognized, this compensation results in additional paid in capital in the accompanying Consolidated Statements of Equity and Comprehensive Income (Loss) of the Parent Company and in general partner preferred and common units in the accompanying Consolidated Statements of Capital and Comprehensive Income (Loss) of the Operating Partnership. This unrecognized compensation cost is expected to be recognized over the next three years, through 2014. The Company issues new restricted stock from its authorized shares available at the date of grant.
The Company maintains a 401(k) retirement plan covering substantially all employees, which permits participants to defer up to the maximum allowable amount determined by the IRS of their eligible compensation. This deferred compensation, together with Company matching contributions equal to 100% of employee deferrals up to a maximum of $4,000 of their eligible compensation, is fully vested and funded as of December 31, 2011. Costs related to matching portion of the plan were $1.2 million, $1.1 million, and $1.4 million for the years ended December 31, 2011, 2010, and 2009, respectively.
98
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
14. Earnings per Share and Unit
Parent Company Earnings per Share
The following summarizes the calculation of basic and diluted earnings per share for the years ended December 31, 2011, 2010, and 2009, respectively (in thousands except per share data):
Year to Date | |||||||||
2011 | 2010 | 2009 | |||||||
Numerator: | |||||||||
Income from continuing operations | $ | 48,649 | 1,192 | (38,813 | ) | ||||
Discontinued operations | 7,139 | 11,809 | 9,777 | ||||||
Net income | 55,788 | 13,001 | (29,036 | ) | |||||
Less: Preferred stock dividends | 19,675 | 19,675 | 19,675 | ||||||
Less: Noncontrolling interests | 4,418 | 4,185 | 3,961 | ||||||
Net income attributable to common stockholders | 31,695 | (10,859 | ) | (52,672 | ) | ||||
Less: Dividends paid on unvested restricted stock | 615 | 542 | 488 | ||||||
Net income attributable to common stockholders - basic | 31,080 | (11,401 | ) | (53,160 | ) | ||||
Add: Dividends paid on Treasury Method restricted stock | 18 | — | — | ||||||
Net income for common stockholders - diluted | $ | 31,098 | (11,401 | ) | (53,160 | ) | |||
Denominator: | |||||||||
Weighted average common shares outstanding for basic EPS | 87,825 | 81,068 | 76,440 | ||||||
Incremental shares under Forward Equity Offering | 424 | 1,534 | 67 | ||||||
Weighted average common shares outstanding for diluted EPS | 88,249 | 82,602 | 76,507 | ||||||
Income per common share – basic | |||||||||
Continuing operations | $ | 0.27 | (0.29 | ) | (0.82 | ) | |||
Discontinued operations | 0.08 | 0.15 | 0.12 | ||||||
Net income attributable to common stockholders | $ | 0.35 | (0.14 | ) | (0.70 | ) | |||
Income per common share – diluted | |||||||||
Continuing operations | $ | 0.27 | (0.28 | ) | (0.82 | ) | |||
Discontinued operations | 0.08 | 0.14 | 0.12 | ||||||
Net income attributable to common stockholders | $ | 0.35 | (0.14 | ) | (0.70 | ) | |||
Income (Loss) allocated to noncontrolling interests of the Operating Partnership has been excluded from the numerator and Exchangeable Operating Partnership units have been omitted from the denominator for the purpose of computing diluted earnings per share since the effect of including these amounts in the numerator and denominator would have no impact. Weighted average Exchangeable Operating Partnership units outstanding for the years ended December 31, 2011, 2010, and 2009 were 177,164, 270,706, and 468,211, respectively.
99
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
Operating Partnership Earnings per Unit
The following summarizes the calculation of basic and diluted earnings per unit for the periods ended December 31, 2011 and 2010, respectively (in thousands except per unit data):
2011 | 2010 | 2009 | |||||||
Numerator: | |||||||||
Income from continuing operations | $ | 48,649 | 1,192 | (38,813 | ) | ||||
Discontinued operations | 7,139 | 11,809 | 9,777 | ||||||
Net income | 55,788 | 13,001 | (29,036 | ) | |||||
Less: Preferred unit distributions | 23,400 | 23,400 | 23,400 | ||||||
Less: Noncontrolling interests | 590 | 376 | 452 | ||||||
Net income attributable to common unit holders | 31,798 | (10,775 | ) | (52,888 | ) | ||||
Less: Dividends paid on unvested restricted stock | 615 | 542 | 488 | ||||||
Net income attributable to common unit holders - basic | 31,183 | (11,317 | ) | (53,376 | ) | ||||
Add: Dividends paid on Treasury Method restricted stock | 18 | — | — | ||||||
Net income for common unit holders - diluted | $ | 31,201 | (11,317 | ) | (53,376 | ) | |||
Denominator: | |||||||||
Weighted average common units outstanding for basic EPU | 88,002 | 81,339 | 76,908 | ||||||
Incremental units under Forward Equity Offering | 424 | 1,534 | — | ||||||
Weighted average common units outstanding for diluted EPU | 88,426 | 82,873 | 76,908 | ||||||
Income per common unit – basic | |||||||||
Continuing operations | $ | 0.27 | (0.29 | ) | (0.82 | ) | |||
Discontinued operations | 0.08 | 0.15 | 0.12 | ||||||
Net income attributable to common unit holders | $ | 0.35 | (0.14 | ) | (0.70 | ) | |||
Income per common unit – diluted | |||||||||
Continuing operations | $ | 0.27 | (0.28 | ) | (0.82 | ) | |||
Discontinued operations | 0.08 | 0.14 | 0.12 | ||||||
Net income attributable to common unit holders | $ | 0.35 | (0.14 | ) | (0.70 | ) | |||
100
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
15. Operating Leases
The Company's properties are leased to tenants under operating leases with expiration dates extending to the year 2099. Future minimum rents under non-cancelable operating leases as of December 31, 2011, excluding both tenant reimbursements of operating expenses and additional percentage rent based on tenants' sales volume, are as follows (in thousands):
Year Ending December 31, | Amount | ||
2012 | $ | 348,317 | |
2013 | 312,298 | ||
2014 | 276,791 | ||
2015 | 241,593 | ||
2016 | 208,830 | ||
Thereafter | 1,079,349 | ||
Total | $ | 2,467,178 | |
The shopping centers' tenant base includes primarily national and regional supermarkets, drug stores, discount department stores and other retailers and, consequently, the credit risk is concentrated in the retail industry. There were no tenants that individually represented more than 5% of the Company's annualized future minimum rents.
The Company has shopping centers that are subject to non-cancelable long-term ground leases where a third party owns and has leased the underlying land to the Company to construct and/or operate a shopping center. Ground leases expire through the year 2058 and in most cases provide for renewal options. In addition, the Company has non-cancelable operating leases pertaining to office space from which it conducts its business. Office leases expire through the year 2018 and in most cases provide for renewal options. Leasehold improvements are capitalized, recorded as tenant improvements, and depreciated over the shorter of the useful life of the improvements or the lease term. Operating lease expense, including capitalized ground lease payments on properties in development, was $9.2 million, $8.1 million and $7.9 million for the years ended December 31, 2011, 2010, and 2009, respectively. The following table summarizes the future obligations under non-cancelable operating leases as of December 31, 2011, (in thousands):
Year Ending December 31, | Amount | ||
2012 | $ | 7,917 | |
2013 | 7,921 | ||
2014 | 7,226 | ||
2015 | 6,841 | ||
2016 | 6,325 | ||
Thereafter | 105,208 | ||
Total | $ | 141,438 | |
16. Commitments and Contingencies
The Company is involved in litigation on a number of matters and is subject to certain claims which arise in the normal course of business, none of which, in the opinion of management, is expected to have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity. The Company is also subject to numerous environmental laws and regulations as they apply to real estate pertaining to chemicals used by the dry cleaning industry, the existence of asbestos in older shopping centers, and underground petroleum storage tanks. The Company believes that the ultimate disposition of currently known environmental matters will not have a material effect on its financial position, liquidity, or operations; however, it can give no assurance that existing environmental studies with respect to the shopping centers have revealed all potential environmental liabilities; that any previous owner, occupant or tenant did not create any material environmental condition not known to it; that the current environmental condition of the shopping centers will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties; or that changes in applicable environmental laws and regulations or their interpretation will not result in additional
101
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
environmental liability to the Company.
The Company has the right to issue letters of credit under the Line up to an amount not to exceed $60.0 million which reduces the credit availability under the Line. The Company also has stand alone letters of credit with other banks. These letters of credit are primarily issued as collateral to facilitate the construction of development projects. As of December 31, 2011 and 2010, the Company had $17.4 million and $5.3 million letters of credit outstanding, respectively.
17. | Reorganization and Restructuring Charges |
During 2009, the Company announced restructuring plans designed to align employee headcount with projected workload. During 2009, the Company severed 103 employees with no future service requirement and recorded restructuring charges of $7.5 million for employee severance benefits. There were no restructuring plans or charges in 2011 or 2010. Restructuring charges are included in general and administrative expenses in the accompanying Consolidated Statements of Operations. All severance payouts were completed by January 2010 and funded using cash from operations. The component charges of the restructuring program for the years ended December 31, 2011, 2010, and 2009 follows (in thousands):
2011 | 2010 | 2009 | ||||
Severance | — | — | 5,966 | |||
Health insurance | — | — | 1,092 | |||
Placement services | — | — | 431 | |||
Total | — | — | 7,489 | |||
As of December 31, 2011 and 2010, there were no remaining accrued liabilities related to these restructuring activities.
102
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
18. Summary of Quarterly Financial Data (Unaudited)
The following table sets forth selected Quarterly Financial Data for the Company on a historical basis for each of the years ended December 31, 2011 and 2010 and has been derived from the accompanying consolidated financial statements as reclassified for discontinued operations (in thousands except per share and per unit data):
2011: | First | Second | Third | Fourth | ||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||
Operating Data: | ||||||||||||
Revenues as originally reported | $ | 127,114 | 128,382 | 125,747 | 125,322 | |||||||
Reclassified to discontinued operations | (2,217 | ) | (2,459 | ) | (1,472 | ) | — | |||||
Adjusted Revenues | $ | 124,897 | 125,923 | 124,275 | 125,322 | |||||||
Net income (loss) attributable to common stockholders | $ | 2,185 | 12,861 | 8,510 | 8,139 | |||||||
Net income (loss) of limited partners | 13 | 37 | 27 | 26 | ||||||||
Net income (loss) attributable to common unit holders | $ | 2,198 | 12,898 | 8,537 | 8,165 | |||||||
Net income (loss) attributable to common stock and unit holders per share and unit: | ||||||||||||
Basic | $ | 0.02 | 0.14 | 0.09 | 0.10 | |||||||
Diluted | $ | 0.02 | 0.14 | 0.09 | 0.10 | |||||||
2010: | ||||||||||||
Operating Data: | ||||||||||||
Revenues as originally reported | $ | 124,368 | 121,600 | 121,410 | 119,901 | |||||||
Reclassified to discontinued operations | (2,531 | ) | (4,077 | ) | (2,193 | ) | (2,317 | ) | ||||
Adjusted Revenues | $ | 121,837 | 117,523 | 119,217 | 117,584 | |||||||
Net income (loss) attributable to common stockholders | $ | 11,399 | 7,748 | 7,894 | (37,900 | ) | ||||||
Net income (loss) of limited partners | 94 | 27 | 34 | (71 | ) | |||||||
Net income (loss) attributable to common unit holders | $ | 11,493 | 7,775 | 7,928 | (37,971 | ) | ||||||
Net income (loss) attributable to common stock and unit holders per share and unit: | ||||||||||||
Basic | $ | 0.14 | 0.09 | 0.10 | (0.47 | ) | ||||||
Diluted | $ | 0.14 | 0.09 | 0.09 | (0.46 | ) | ||||||
103
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2011
19. Subsequent Events
Pursuant to FASB ASC Topic 855, Subsequent Events, the Company evaluated subsequent events and transactions that occurred after the December 31, 2011, audited consolidated balance sheet date for potential recognition or disclosure in its consolidated financial statements.
• | On January 15, 2012, the Company repaid the maturing balance of $192.4 million of 6.75% ten-year unsecured notes. |
• | The Company has drawn $150.0 million on its $250 million Term Loan since December 31, 2011 to repay the 6.75% ten-year unsecured notes that matured in January 2012. |
• | On February 6, 2012, the Company announced it would redeem all issued and outstanding shares of the Parent Company's Series 3 and Series 4 Cumulative Redeemable Preferred Stock on March 31, 2012. The Company expects to reduce net income available to common stockholders through a non-cash charge of $7 million at redemption. On February 9, 2012, the Operating Partnership purchased all of its issued and outstanding Series D Preferred Units, at 3.75% discount to par, resulting in an increase to net income available to common stockholders of approximately $842,000. On February 16, 2012, the Parent Company issued 10 million shares of 6.625% Series 6 Cumulative Redeemable Preferred Stock with a liquidation preference of $25 per share. |
104
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2011 (in thousands) | |||||||||||||||||||||||||||||||
Initial Cost | Total Cost | Total Cost | |||||||||||||||||||||||||||||
Shopping Centers (1) | Land | Building & Improvements | Cost Capitalized Subsequent to Acquisition (2) | Land | Building & Improvements | Properties held for Sale | Total | Accumulated Depreciation | Net of Accumulated Depreciation | Mortgages | |||||||||||||||||||||
4S COMMONS TOWN CENTER | $ | 30,760 | 35,830 | (253 | ) | 30,812 | 35,525 | — | 66,337 | 9,860 | 56,477 | 62,500 | |||||||||||||||||||
AIRPORT CROSSING | 1,748 | 1,690 | — | 1,748 | 1,690 | — | 3,438 | 305 | 3,133 | — | |||||||||||||||||||||
AMERIGE HEIGHTS TOWN CENTER | 10,109 | 11,288 | 179 | 10,109 | 11,467 | — | 21,576 | 1,348 | 20,228 | 17,000 | |||||||||||||||||||||
ANASTASIA PLAZA | 9,065 | — | (81 | ) | 3,329 | 5,656 | — | 8,985 | 479 | 8,506 | — | ||||||||||||||||||||
ANTHEM HIGHLANDS SHOPPING CTR | 8,643 | 11,981 | (20,624 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||
ANTHEM MARKETPLACE | 6,714 | 13,696 | 56 | 6,714 | 13,753 | — | 20,467 | 4,155 | 16,312 | — | |||||||||||||||||||||
APPLEGATE RANCH SHOPPING CTR | 12,971 | 26,652 | — | 12,971 | 26,652 | — | 39,623 | 3,622 | 36,001 | — | |||||||||||||||||||||
ASHBURN FARM MARKET CENTER | 9,835 | 4,812 | 26 | 9,835 | 4,838 | — | 14,673 | 2,662 | 12,011 | — | |||||||||||||||||||||
ASHFORD PLACE | 2,584 | 9,865 | 335 | 2,584 | 10,200 | — | 12,784 | 4,850 | 7,934 | — | |||||||||||||||||||||
AUGUSTA CENTER | 5,142 | 2,720 | (5,722 | ) | 1,326 | 815 | — | 2,141 | — | 2,141 | — | ||||||||||||||||||||
AVENTURA SHOPPING CENTER | 2,751 | 10,459 | 51 | 2,751 | 10,510 | — | 13,261 | 9,063 | 4,198 | — | |||||||||||||||||||||
BECKETT COMMONS | 1,625 | 10,960 | 692 | 1,625 | 11,651 | — | 13,276 | 3,767 | 9,509 | — | |||||||||||||||||||||
BELLEVIEW SQUARE | 8,132 | 9,756 | 185 | 8,132 | 9,941 | — | 18,073 | 3,618 | 14,455 | 7,620 | |||||||||||||||||||||
BENEVA VILLAGE SHOPS | 2,484 | 10,162 | 1,144 | 2,484 | 11,306 | — | 13,790 | 4,008 | 9,782 | — | |||||||||||||||||||||
BERKSHIRE COMMONS | 2,295 | 9,551 | 813 | 2,965 | 9,694 | — | 12,659 | 5,019 | 7,640 | 7,500 | |||||||||||||||||||||
BLOOMINGDALE SQUARE | 3,940 | 14,912 | 344 | 3,940 | 15,256 | — | 19,196 | 5,754 | 13,442 | — | |||||||||||||||||||||
BOULEVARD CENTER | 3,659 | 10,787 | 884 | 3,659 | 11,671 | — | 15,330 | 4,191 | 11,139 | — | |||||||||||||||||||||
BOYNTON LAKES PLAZA | 2,628 | 11,236 | (978 | ) | 2,628 | 10,258 | — | 12,886 | 3,799 | 9,087 | — | ||||||||||||||||||||
BRENTWOOD PLAZA | 2,788 | 3,473 | — | 2,788 | 3,473 | — | 6,261 | 105 | 6,156 | — | |||||||||||||||||||||
BRIARCLIFF LA VISTA | 694 | 3,292 | 149 | 694 | 3,442 | — | 4,136 | 1,919 | 2,217 | — | |||||||||||||||||||||
BRIARCLIFF VILLAGE | 4,597 | 24,836 | 946 | 4,597 | 25,783 | — | 30,380 | 12,310 | 18,070 | — | |||||||||||||||||||||
BRIDGETON | 3,033 | 8,137 | — | 3,033 | 8,137 | — | 11,170 | 224 | 10,946 | — | |||||||||||||||||||||
BUCKHEAD COURT | 1,417 | 7,432 | 198 | 1,417 | 7,630 | — | 9,047 | 4,032 | 5,015 | — | |||||||||||||||||||||
BUCKLEY SQUARE | 2,970 | 5,978 | 310 | 2,970 | 6,289 | — | 9,259 | 2,574 | 6,685 | — | |||||||||||||||||||||
BUCKWALTER PLACE SHOPPING CTR | 6,563 | 6,590 | 82 | 6,592 | 6,643 | — | 13,235 | 1,319 | 11,916 | — | |||||||||||||||||||||
CALIGO CROSSING | 2,459 | 4,897 | — | 2,459 | 4,897 | — | 7,356 | 884 | 6,472 | — | |||||||||||||||||||||
CAMBRIDGE SQUARE | 774 | 4,347 | 600 | 774 | 4,947 | — | 5,721 | 2,012 | 3,709 | — | |||||||||||||||||||||
CARMEL COMMONS | 2,466 | 12,548 | 321 | 2,466 | 12,868 | — | 15,334 | 5,048 | 10,286 | — | |||||||||||||||||||||
CARRIAGE GATE | 833 | 4,974 | 183 | 833 | 5,157 | — | 5,990 | 3,444 | 2,546 | — | |||||||||||||||||||||
105
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2011 (in thousands) | |||||||||||||||||||||||||||||||
Initial Cost | Total Cost | Total Cost | |||||||||||||||||||||||||||||
Shopping Centers (1) | Land | Building & Improvements | Cost Capitalized Subsequent to Acquisition (2) | Land | Building & Improvements | Properties held for Sale | Total | Accumulated Depreciation | Net of Accumulated Depreciation | Mortgages | |||||||||||||||||||||
CENTERPLACE OF GREELEY III | 6,661 | 11,502 | — | 6,661 | 11,502 | — | 18,163 | 1,736 | 16,427 | — | |||||||||||||||||||||
CHAPEL HILL CENTRE | 3,932 | 3,897 | (7,823 | ) | — | 6 | — | 6 | — | 6 | — | ||||||||||||||||||||
CHASEWOOD PLAZA | 4,612 | 20,829 | 302 | 4,663 | 21,080 | — | 25,743 | 11,508 | 14,235 | — | |||||||||||||||||||||
CHERRY GROVE | 3,533 | 15,862 | 376 | 3,533 | 16,239 | — | 19,772 | 6,007 | 13,765 | — | |||||||||||||||||||||
CHESHIRE STATION | 9,896 | 8,344 | 75 | 9,896 | 8,419 | — | 18,315 | 5,446 | 12,869 | — | |||||||||||||||||||||
CLAYTON VALLEY SHOPPING CENTER | 24,189 | 35,422 | 1,533 | 24,538 | 36,606 | — | 61,144 | 10,745 | 50,399 | — | |||||||||||||||||||||
CLOVIS COMMONS | 11,100 | 32,692 | 1,406 | 12,134 | 33,063 | — | 45,197 | 6,223 | 38,974 | — | |||||||||||||||||||||
COCHRAN'S CROSSING | 13,154 | 12,315 | 440 | 13,154 | 12,755 | — | 25,909 | 5,545 | 20,364 | — | |||||||||||||||||||||
COOPER STREET | 2,079 | 10,682 | (581 | ) | 1,954 | 10,226 | — | 12,180 | 3,485 | 8,695 | — | ||||||||||||||||||||
CORKSCREW VILLAGE | 8,407 | 8,004 | 52 | 8,407 | 8,056 | — | 16,463 | 1,433 | 15,030 | 8,670 | |||||||||||||||||||||
CORNERSTONE SQUARE | 1,772 | 6,944 | (6 | ) | 1,772 | 6,937 | — | 8,709 | 3,366 | 5,343 | — | ||||||||||||||||||||
CORVALLIS MARKET CENTER | 6,674 | 12,244 | 34 | 6,696 | 12,256 | — | 18,952 | 1,932 | 17,020 | — | |||||||||||||||||||||
COSTA VERDE CENTER | 12,740 | 26,868 | 664 | 12,798 | 27,474 | — | 40,272 | 10,706 | 29,566 | — | |||||||||||||||||||||
COURTYARD SHOPPING CENTER | 5,867 | 4 | 3 | 5,867 | 7 | — | 5,874 | 1 | 5,873 | — | |||||||||||||||||||||
CULPEPER COLONNADE | 15,944 | 10,601 | 39 | 15,947 | 10,637 | — | 26,584 | 3,223 | 23,361 | — | |||||||||||||||||||||
DARDENNE CROSSING | 4,194 | 4,005 | — | 4,194 | 4,005 | — | 8,199 | 142 | 8,057 | — | |||||||||||||||||||||
DEER SPRINGS TOWN CENTER | 41,031 | 42,841 | — | 41,031 | 42,841 | — | 83,872 | 6,300 | 77,572 | — | |||||||||||||||||||||
DELK SPECTRUM | 2,985 | 12,001 | 343 | 2,989 | 12,340 | — | 15,329 | 4,573 | 10,756 | — | |||||||||||||||||||||
DIABLO PLAZA | 5,300 | 8,181 | 587 | 5,300 | 8,768 | — | 14,068 | 3,006 | 11,062 | — | |||||||||||||||||||||
DICKSON TN | 675 | 1,568 | — | 675 | 1,568 | — | 2,243 | 479 | 1,764 | — | |||||||||||||||||||||
DUNWOODY VILLAGE | 3,342 | 15,934 | 954 | 3,342 | 16,888 | — | 20,230 | 8,321 | 11,909 | — | |||||||||||||||||||||
EAST POINTE | 1,730 | 7,189 | 200 | 1,730 | 7,389 | — | 9,119 | 3,145 | 5,974 | — | |||||||||||||||||||||
EAST PORT PLAZA | 3,257 | 10,051 | 4,502 | 3,774 | 14,036 | — | 17,810 | 3,913 | 13,897 | — | |||||||||||||||||||||
EAST TOWNE CENTER | 2,957 | 4,938 | (76 | ) | 2,957 | 4,861 | — | 7,818 | 1,988 | 5,830 | — | ||||||||||||||||||||
EL CAMINO SHOPPING CENTER | 7,600 | 11,538 | 93 | 7,600 | 11,631 | — | 19,231 | 4,071 | 15,160 | — | |||||||||||||||||||||
EL CERRITO PLAZA | 11,025 | 27,371 | 280 | 11,025 | 27,651 | — | 38,676 | 2,969 | 35,707 | 40,559 | |||||||||||||||||||||
EL NORTE PKWY PLAZA | 2,834 | 7,370 | 101 | 2,840 | 7,465 | — | 10,305 | 2,842 | 7,463 | — | |||||||||||||||||||||
ENCINA GRANDE | 5,040 | 11,572 | 10 | 5,040 | 11,582 | — | 16,622 | 4,190 | 12,432 | — | |||||||||||||||||||||
FAIRFAX SHOPPING CENTER | 15,239 | 11,367 | (5,596 | ) | 13,111 | 7,899 | — | 21,010 | 728 | 20,282 | — | ||||||||||||||||||||
FALCON | 1,340 | 4,168 | 16 | 1,340 | 4,184 | — | 5,524 | 795 | 4,729 | — | |||||||||||||||||||||
FENTON MARKETPLACE | 2,298 | 8,510 | (8,734 | ) | 512 | 1,563 | — | 2,075 | 74 | 2,001 | — | ||||||||||||||||||||
106
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2011 (in thousands) | |||||||||||||||||||||||||||||||
Initial Cost | Total Cost | Total Cost | |||||||||||||||||||||||||||||
Shopping Centers (1) | Land | Building & Improvements | Cost Capitalized Subsequent to Acquisition (2) | Land | Building & Improvements | Properties held for Sale | Total | Accumulated Depreciation | Net of Accumulated Depreciation | Mortgages | |||||||||||||||||||||
FIRST STREET VILLAGE | 4,161 | 8,103 | — | 4,161 | 8,103 | — | 12,264 | 1,720 | 10,544 | — | |||||||||||||||||||||
FLEMING ISLAND | 3,077 | 11,587 | 1,144 | 3,111 | 12,696 | — | 15,807 | 4,173 | 11,634 | 1,053 | |||||||||||||||||||||
FORT BEND CENTER | 2,594 | 3,175 | (5,768 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||
FORTUNA | 2,025 | — | 883 | 2,908 | — | — | 2,908 | — | 2,908 | — | |||||||||||||||||||||
FRANKFORT CROSSING SHPG CTR | 7,417 | 8,065 | 423 | 7,418 | 8,488 | — | 15,906 | 4,032 | 11,874 | — | |||||||||||||||||||||
FRENCH VALLEY VILLAGE CENTER | 11,924 | 16,856 | 7 | 11,822 | 16,965 | — | 28,787 | 5,185 | 23,602 | — | |||||||||||||||||||||
FRIARS MISSION CENTER | 6,660 | 28,021 | 350 | 6,660 | 28,371 | — | 35,031 | 9,282 | 25,749 | 506 | |||||||||||||||||||||
GARDENS SQUARE | 2,136 | 8,273 | 210 | 2,136 | 8,483 | — | 10,619 | 3,202 | 7,417 | — | |||||||||||||||||||||
GARNER TOWNE SQUARE | 5,591 | 21,866 | 104 | 5,591 | 21,970 | — | 27,561 | 7,447 | 20,114 | — | |||||||||||||||||||||
GATEWAY 101 | 24,971 | 9,113 | 21 | 24,971 | 9,134 | — | 34,105 | 1,247 | 32,858 | — | |||||||||||||||||||||
GATEWAY SHOPPING CENTER | 52,665 | 7,134 | 1,028 | 52,672 | 8,155 | — | 60,827 | 6,297 | 54,530 | 17,595 | |||||||||||||||||||||
GELSON'S WESTLAKE MARKET PLAZA | 3,157 | 11,153 | 261 | 3,157 | 11,414 | — | 14,571 | 3,227 | 11,344 | — | |||||||||||||||||||||
GLEN OAK PLAZA | 4,103 | 12,951 | 219 | 4,103 | 13,169 | — | 17,272 | 612 | 16,660 | 4,816 | |||||||||||||||||||||
GLENWOOD VILLAGE | 1,194 | 5,381 | 38 | 1,194 | 5,419 | — | 6,613 | 2,899 | 3,714 | — | |||||||||||||||||||||
GOLDEN HILLS PLAZA | 12,699 | 18,482 | — | 12,699 | 18,482 | — | 31,181 | 1,734 | 29,447 | — | |||||||||||||||||||||
GREENWOOD SPRINGS | 2,720 | 3,059 | (3,668 | ) | 889 | 1,222 | — | 2,111 | 92 | 2,019 | — | ||||||||||||||||||||
HANCOCK | 8,232 | 28,260 | 712 | 8,232 | 28,972 | — | 37,204 | 10,459 | 26,745 | — | |||||||||||||||||||||
HARPETH VILLAGE FIELDSTONE | 2,284 | 9,443 | 175 | 2,284 | 9,618 | — | 11,902 | 3,388 | 8,514 | — | |||||||||||||||||||||
HERITAGE LAND | 12,390 | — | — | 12,390 | — | — | 12,390 | — | 12,390 | — | |||||||||||||||||||||
HERITAGE PLAZA | — | 26,097 | 372 | — | 26,469 | — | 26,469 | 9,708 | 16,761 | — | |||||||||||||||||||||
HERSHEY | 7 | 808 | 5 | 7 | 813 | — | 820 | 228 | 592 | — | |||||||||||||||||||||
HIBERNIA PAVILION | 4,929 | 5,065 | 10 | 4,929 | 5,074 | — | 10,003 | 964 | 9,039 | — | |||||||||||||||||||||
HIBERNIA PLAZA | 267 | 230 | 1 | 267 | 231 | — | 498 | 16 | 482 | — | |||||||||||||||||||||
HICKORY CREEK PLAZA | 5,629 | 4,564 | — | 5,629 | 4,564 | — | 10,193 | 1,143 | 9,050 | — | |||||||||||||||||||||
HILLCREST VILLAGE | 1,600 | 1,909 | — | 1,600 | 1,909 | — | 3,509 | 640 | 2,869 | — | |||||||||||||||||||||
HINSDALE | 5,734 | 16,709 | 807 | 5,734 | 17,516 | — | 23,250 | 6,233 | 17,017 | — | |||||||||||||||||||||
HORTON'S CORNER | 3,137 | 2,779 | 29 | 3,216 | 2,729 | — | 5,945 | 523 | 5,422 | — | |||||||||||||||||||||
HOWELL MILL VILLAGE | 5,157 | 14,279 | 327 | 5,157 | 14,606 | — | 19,763 | 1,406 | 18,357 | — | |||||||||||||||||||||
HYDE PARK | 9,809 | 39,905 | 975 | 9,809 | 40,879 | — | 50,688 | 16,147 | 34,541 | — | |||||||||||||||||||||
INDIO TOWNE CENTER | 17,946 | 31,985 | — | 17,946 | 31,985 | — | 49,931 | 4,528 | 45,403 | — | |||||||||||||||||||||
INGLEWOOD PLAZA | 1,300 | 2,159 | 28 | 1,300 | 2,187 | — | 3,487 | 811 | 2,676 | — | |||||||||||||||||||||
107
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2011 (in thousands) | |||||||||||||||||||||||||||||||
Initial Cost | Total Cost | Total Cost | |||||||||||||||||||||||||||||
Shopping Centers (1) | Land | Building & Improvements | Cost Capitalized Subsequent to Acquisition (2) | Land | Building & Improvements | Properties held for Sale | Total | Accumulated Depreciation | Net of Accumulated Depreciation | Mortgages | |||||||||||||||||||||
JEFFERSON SQUARE | 5,167 | 6,445 | — | 5,167 | 6,445 | — | 11,612 | 742 | 10,870 | — | |||||||||||||||||||||
KELLER TOWN CENTER | 2,294 | 12,841 | 76 | 2,294 | 12,916 | — | 15,210 | 4,280 | 10,930 | — | |||||||||||||||||||||
KINGS CROSSING SUN CITY | 515 | 1,246 | 90 | 515 | 1,335 | — | 1,850 | 201 | 1,649 | — | |||||||||||||||||||||
KIRKWOOD COMMONS | 6,772 | 16,224 | — | 6,772 | 16,224 | — | 22,996 | 385 | 22,611 | 12,353 | |||||||||||||||||||||
KROGER NEW ALBANY CENTER | 3,844 | 6,599 | 252 | 3,844 | 6,851 | — | 10,695 | 3,523 | 7,172 | 3,665 | |||||||||||||||||||||
KULPSVILLE | 5,518 | 3,756 | 149 | 5,614 | 3,810 | — | 9,424 | 521 | 8,903 | — | |||||||||||||||||||||
LAKE PINE PLAZA | 2,008 | 7,632 | 65 | 2,029 | 7,676 | — | 9,705 | 2,748 | 6,957 | — | |||||||||||||||||||||
LEBANON/LEGACY CENTER | 3,913 | 7,874 | 82 | 3,913 | 7,956 | — | 11,869 | 3,604 | 8,265 | — | |||||||||||||||||||||
LEBANON CENTER | 3,865 | 5,751 | 4 | 3,865 | 5,755 | — | 9,620 | 1,144 | 8,476 | — | |||||||||||||||||||||
LEGACY WEST | 1,770 | — | (999 | ) | 770 | — | — | 770 | — | 770 | — | ||||||||||||||||||||
LITTLETON SQUARE | 2,030 | 8,859 | 179 | 2,030 | 9,038 | — | 11,068 | 3,038 | 8,030 | — | |||||||||||||||||||||
LLOYD KING CENTER | 1,779 | 10,060 | 181 | 1,779 | 10,241 | — | 12,020 | 3,612 | 8,408 | — | |||||||||||||||||||||
LOEHMANNS PLAZA | 3,983 | 18,687 | 373 | 3,983 | 19,060 | — | 23,043 | 8,398 | 14,645 | — | |||||||||||||||||||||
LOEHMANNS PLAZA CALIFORNIA | 5,420 | 9,450 | 409 | 5,420 | 9,860 | — | 15,280 | 3,479 | 11,801 | — | |||||||||||||||||||||
LOVELAND SHOPPING CENTER | 157 | — | — | 157 | — | — | 157 | — | 157 | — | |||||||||||||||||||||
LOWER NAZARETH COMMONS | 15,992 | 12,964 | — | 15,992 | 12,964 | — | 28,956 | 2,070 | 26,886 | — | |||||||||||||||||||||
MARKET AT OPITZ CROSSING | 9,902 | 9,248 | (5,916 | ) | 6,597 | 6,637 | — | 13,234 | 503 | 12,731 | — | ||||||||||||||||||||
MARKET AT PRESTON FOREST | 4,400 | 11,445 | 701 | 4,400 | 12,146 | — | 16,546 | 3,979 | 12,567 | — | |||||||||||||||||||||
MARKET AT ROUND ROCK | 2,000 | 9,676 | 3,752 | 2,000 | 13,428 | — | 15,428 | 3,852 | 11,576 | — | |||||||||||||||||||||
MARKETPLACE AT BRIARGATE | 1,706 | 4,885 | (7 | ) | 1,727 | 4,858 | — | 6,585 | 1,166 | 5,419 | — | ||||||||||||||||||||
MARKETPLACE SHOPPING CENTER | 1,287 | 5,509 | 3,986 | 1,287 | 9,495 | — | 10,782 | 2,510 | 8,272 | — | |||||||||||||||||||||
MARTIN DOWNS TOWN CENTER | 1,364 | 5,187 | 31 | 1,364 | 5,217 | — | 6,581 | 2,032 | 4,549 | — | |||||||||||||||||||||
MARTIN DOWNS VILLAGE CENTER | 2,438 | 9,142 | 941 | 2,442 | 10,078 | — | 12,520 | 5,778 | 6,742 | — | |||||||||||||||||||||
MARTIN DOWNS VILLAGE SHOPPES | 817 | 4,965 | 215 | 817 | 5,180 | — | 5,997 | 2,577 | 3,420 | — | |||||||||||||||||||||
MIDDLE CREEK COMMONS | 5,042 | 8,100 | 94 | 5,042 | 8,194 | — | 13,236 | 1,666 | 11,570 | — | |||||||||||||||||||||
MILLHOPPER SHOPPING CENTER | 1,073 | 5,358 | 4,501 | 1,796 | 9,136 | — | 10,932 | 4,485 | 6,447 | — | |||||||||||||||||||||
MOCKINGBIRD COMMON | 3,000 | 10,728 | 495 | 3,000 | 11,223 | — | 14,223 | 4,043 | 10,180 | 10,300 | |||||||||||||||||||||
MONUMENT JACKSON CREEK | 2,999 | 6,765 | 601 | 2,999 | 7,367 | — | 10,366 | 3,491 | 6,875 | — | |||||||||||||||||||||
MORNINGSIDE PLAZA | 4,300 | 13,951 | 264 | 4,300 | 14,215 | — | 18,515 | 4,915 | 13,600 | — | |||||||||||||||||||||
MURRAYHILL MARKETPLACE | 2,670 | 18,401 | 276 | 2,670 | 18,677 | — | 21,347 | 6,851 | 14,496 | 7,542 | |||||||||||||||||||||
NAPLES WALK | 18,173 | 13,554 | 55 | 18,173 | 13,608 | — | 31,781 | 2,313 | 29,468 | 16,441 | |||||||||||||||||||||
108
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2011 (in thousands) | |||||||||||||||||||||||||||||||
Initial Cost | Total Cost | Total Cost | |||||||||||||||||||||||||||||
Shopping Centers (1) | Land | Building & Improvements | Cost Capitalized Subsequent to Acquisition (2) | Land | Building & Improvements | Properties held for Sale | Total | Accumulated Depreciation | Net of Accumulated Depreciation | Mortgages | |||||||||||||||||||||
NASHBORO VILLAGE | 1,824 | 7,678 | — | 1,824 | 7,678 | — | 9,502 | 2,506 | 6,996 | — | |||||||||||||||||||||
NEWBERRY SQUARE | 2,412 | 10,150 | 255 | 2,412 | 10,404 | — | 12,816 | 5,862 | 6,954 | — | |||||||||||||||||||||
NEWLAND CENTER | 12,500 | 10,697 | 475 | 12,500 | 11,172 | — | 23,672 | 4,320 | 19,352 | — | |||||||||||||||||||||
NORTH HILLS | 4,900 | 19,774 | 609 | 4,900 | 20,384 | — | 25,284 | 6,739 | 18,545 | — | |||||||||||||||||||||
NORTHGATE PLAZA (MAXTOWN ROAD) | 1,769 | 6,652 | 40 | 1,769 | 6,692 | — | 8,461 | 2,565 | 5,896 | — | |||||||||||||||||||||
NORTHGATE SQUARE | 5,011 | 8,692 | 108 | 5,011 | 8,799 | — | 13,810 | 1,486 | 12,324 | 5,971 | |||||||||||||||||||||
NORTHLAKE VILLAGE | 2,662 | 11,284 | 334 | 2,662 | 11,619 | — | 14,281 | 3,707 | 10,574 | — | |||||||||||||||||||||
OAKBROOK PLAZA | 4,000 | 6,668 | 173 | 4,000 | 6,841 | — | 10,841 | 2,483 | 8,358 | — | |||||||||||||||||||||
OAKLEAF COMMONS | 3,503 | 11,671 | 8 | 3,503 | 11,679 | — | 15,182 | 2,174 | 13,008 | — | |||||||||||||||||||||
OAK SHADE TOWN CENTER | 6,591 | 28,966 | — | 6,591 | 28,966 | — | 35,557 | 353 | 35,204 | 10,978 | |||||||||||||||||||||
OCALA CORNERS | 1,816 | 10,515 | — | 1,816 | 10,515 | — | 12,331 | 269 | 12,062 | 5,549 | |||||||||||||||||||||
OLD ST AUGUSTINE PLAZA | 2,368 | 11,405 | 248 | 2,368 | 11,653 | — | 14,021 | 4,821 | 9,200 | — | |||||||||||||||||||||
ORANGEBURG & CENTRAL | 2,071 | 2,384 | (86 | ) | 2,071 | 2,298 | — | 4,369 | 416 | 3,953 | — | ||||||||||||||||||||
ORCHARDS MARKET CENTER II | 6,602 | 9,690 | (2,975 | ) | 5,497 | 7,819 | — | 13,316 | 401 | 12,915 | — | ||||||||||||||||||||
PACES FERRY PLAZA | 2,812 | 12,639 | 102 | 2,812 | 12,741 | — | 15,553 | 6,004 | 9,549 | — | |||||||||||||||||||||
PANTHER CREEK | 14,414 | 14,748 | 2,226 | 15,212 | 16,176 | — | 31,388 | 6,781 | 24,607 | — | |||||||||||||||||||||
PARK PLACE SHOPPING CENTER | 2,232 | 5,027 | (7,259 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||
PASEO DEL SOL | 9,477 | 1,331 | 13,706 | 11,393 | 13,121 | — | 24,514 | 3,104 | 21,410 | — | |||||||||||||||||||||
PEARTREE VILLAGE | 5,197 | 19,746 | 758 | 5,197 | 20,504 | — | 25,701 | 7,868 | 17,833 | 9,063 | |||||||||||||||||||||
PHENIX CROSSING | 1,544 | — | (500 | ) | 1,044 | — | — | 1,044 | — | 1,044 | — | ||||||||||||||||||||
PIKE CREEK | 5,153 | 20,652 | 163 | 5,153 | 20,815 | — | 25,968 | 7,778 | 18,190 | — | |||||||||||||||||||||
PIMA CROSSING | 5,800 | 28,143 | 919 | 5,800 | 29,062 | — | 34,862 | 10,204 | 24,658 | — | |||||||||||||||||||||
PINE LAKE VILLAGE | 6,300 | 10,991 | 536 | 6,300 | 11,527 | — | 17,827 | 3,880 | 13,947 | — | |||||||||||||||||||||
PINE TREE PLAZA | 668 | 6,220 | 36 | 668 | 6,256 | — | 6,924 | 2,324 | 4,600 | — | |||||||||||||||||||||
PLAZA HERMOSA | 4,200 | 10,109 | 258 | 4,200 | 10,367 | — | 14,567 | 3,407 | 11,160 | 13,800 | |||||||||||||||||||||
PLAZA RIO VISTA | 7,034 | 11,874 | — | 7,034 | 11,874 | — | 18,908 | 1,805 | 17,103 | — | |||||||||||||||||||||
POWELL STREET PLAZA | 8,248 | 30,716 | 1,171 | 8,248 | 31,888 | — | 40,136 | 8,258 | 31,878 | — | |||||||||||||||||||||
POWERS FERRY SQUARE | 3,687 | 17,965 | 346 | 3,687 | 18,312 | — | 21,999 | 8,873 | 13,126 | — | |||||||||||||||||||||
POWERS FERRY VILLAGE | 1,191 | 4,672 | 177 | 1,191 | 4,849 | — | 6,040 | 2,313 | 3,727 | — | |||||||||||||||||||||
PRAIRIE CITY CROSSING | 4,164 | 13,032 | 383 | 4,164 | 13,415 | — | 17,579 | 3,708 | 13,871 | — | |||||||||||||||||||||
PRESTON PARK | 6,400 | 54,817 | (337 | ) | 5,733 | 55,147 | — | 60,880 | 20,015 | 40,865 | — | ||||||||||||||||||||
109
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2011 (in thousands) | |||||||||||||||||||||||||||||||
Initial Cost | Total Cost | Total Cost | |||||||||||||||||||||||||||||
Shopping Centers (1) | Land | Building & Improvements | Cost Capitalized Subsequent to Acquisition (2) | Land | Building & Improvements | Properties held for Sale | Total | Accumulated Depreciation | Net of Accumulated Depreciation | Mortgages | |||||||||||||||||||||
PRESTONBROOK | 7,069 | 8,622 | 68 | 7,069 | 8,690 | — | 15,759 | 4,539 | 11,220 | 6,800 | |||||||||||||||||||||
PRESTONWOOD PARK | 7,399 | 9,012 | (16,412 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||
RED BANK | 10,336 | 9,505 | (203 | ) | 10,107 | 9,531 | — | 19,638 | 639 | 18,999 | — | ||||||||||||||||||||
REGENCY COMMONS | 3,917 | 3,616 | 43 | 3,917 | 3,659 | — | 7,576 | 1,257 | 6,319 | — | |||||||||||||||||||||
REGENCY SQUARE | 4,770 | 25,191 | 1,873 | 4,770 | 27,064 | — | 31,834 | 16,832 | 15,002 | — | |||||||||||||||||||||
RIVERMONT STATION | 2,887 | 10,648 | (13,535 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||
ROCKWALL TOWN CENTER | 4,438 | 5,140 | (73 | ) | 4,438 | 5,068 | — | 9,506 | 1,562 | 7,944 | — | ||||||||||||||||||||
RONA PLAZA | 1,500 | 4,917 | 117 | 1,500 | 5,035 | — | 6,535 | 1,876 | 4,659 | — | |||||||||||||||||||||
RUSSELL RIDGE | 2,234 | 6,903 | 503 | 2,234 | 7,406 | — | 9,640 | 3,201 | 6,439 | — | |||||||||||||||||||||
SAMMAMISH-HIGHLANDS | 9,300 | 8,075 | 370 | 9,300 | 8,445 | — | 17,745 | 2,879 | 14,866 | — | |||||||||||||||||||||
SAN LEANDRO PLAZA | 1,300 | 8,226 | 29 | 1,300 | 8,256 | — | 9,556 | 2,843 | 6,713 | — | |||||||||||||||||||||
SAUGUS | 19,201 | 17,984 | — | 19,201 | 17,984 | — | 37,185 | 2,734 | 34,451 | — | |||||||||||||||||||||
SEMINOLE SHOPPES | 8,593 | 7,523 | — | 8,593 | 7,523 | — | 16,116 | 369 | 15,747 | 9,000 | |||||||||||||||||||||
SEQUOIA STATION | 9,100 | 18,356 | 258 | 9,100 | 18,614 | — | 27,714 | 6,159 | 21,555 | 21,100 | |||||||||||||||||||||
SHERWOOD CROSSROADS | 2,731 | 6,360 | (52 | ) | 2,731 | 6,308 | — | 9,039 | 1,565 | 7,474 | — | ||||||||||||||||||||
SHERWOOD MARKET CENTER | 3,475 | 16,362 | 70 | 3,475 | 16,432 | — | 19,907 | 5,775 | 14,132 | — | |||||||||||||||||||||
SHOPPES @ 104 | 11,193 | — | (82 | ) | 6,652 | 4,459 | — | 11,111 | 426 | 10,685 | — | ||||||||||||||||||||
SHOPPES AT FAIRHOPE VILLAGE | 6,920 | 11,198 | — | 6,920 | 11,198 | — | 18,118 | 1,301 | 16,817 | — | |||||||||||||||||||||
SHOPPES AT MASON | 1,577 | 5,685 | 140 | 1,577 | 5,825 | — | 7,402 | 2,129 | 5,273 | — | |||||||||||||||||||||
SHOPPES OF GRANDE OAK | 5,091 | 5,985 | 86 | 5,091 | 6,070 | — | 11,161 | 2,930 | 8,231 | — | |||||||||||||||||||||
SHOPS AT ARIZONA | 3,063 | 3,243 | 44 | 3,063 | 3,287 | — | 6,350 | 1,332 | 5,018 | — | |||||||||||||||||||||
SHOPS AT COUNTY CENTER | 9,957 | 11,269 | 252 | 10,116 | 11,363 | — | 21,479 | 3,147 | 18,332 | — | |||||||||||||||||||||
SHOPS AT HIGHLAND VILLAGE | 33,145 | 66,926 | 210 | 33,145 | 67,136 | — | 100,281 | 16,632 | 83,649 | — | |||||||||||||||||||||
SHOPS AT JOHN'S CREEK | 1,863 | 2,014 | (325 | ) | 1,501 | 2,051 | — | 3,552 | 656 | 2,896 | — | ||||||||||||||||||||
SHOPS AT QUAIL CREEK | 1,487 | 7,717 | — | 1,487 | 7,717 | — | 9,204 | 852 | 8,352 | — | |||||||||||||||||||||
SIGNATURE PLAZA | 2,396 | 3,898 | 199 | 2,396 | 4,096 | — | 6,492 | 1,619 | 4,873 | — | |||||||||||||||||||||
SOUTH LOWRY SQUARE | 3,434 | 10,445 | 519 | 3,434 | 10,964 | — | 14,398 | 3,664 | 10,734 | — | |||||||||||||||||||||
SOUTH MOUNTAIN | 146 | — | 465 | 611 | — | — | 611 | — | 611 | — | |||||||||||||||||||||
SOUTHCENTER | 1,300 | 12,750 | 655 | 1,300 | 13,405 | — | 14,705 | 4,304 | 10,401 | — | |||||||||||||||||||||
SOUTHPOINT CROSSING | 4,412 | 12,235 | 48 | 4,412 | 12,283 | — | 16,695 | 4,151 | 12,544 | — | |||||||||||||||||||||
STARKE | 71 | 1,683 | — | 71 | 1,683 | — | 1,754 | 470 | 1,284 | — | |||||||||||||||||||||
110
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2011 (in thousands) | |||||||||||||||||||||||||||||||
Initial Cost | Total Cost | Total Cost | |||||||||||||||||||||||||||||
Shopping Centers (1) | Land | Building & Improvements | Cost Capitalized Subsequent to Acquisition (2) | Land | Building & Improvements | Properties held for Sale | Total | Accumulated Depreciation | Net of Accumulated Depreciation | Mortgages | |||||||||||||||||||||
STATE STREET CROSSING | 1,283 | 1,970 | — | 1,283 | 1,970 | — | 3,253 | 67 | 3,186 | — | |||||||||||||||||||||
STERLING RIDGE | 12,846 | 12,162 | 371 | 12,846 | 12,533 | — | 25,379 | 5,499 | 19,880 | 13,900 | |||||||||||||||||||||
STONEWALL | 27,511 | 22,123 | 5,162 | 28,108 | 26,688 | — | 54,796 | 5,055 | 49,741 | — | |||||||||||||||||||||
STRAWFLOWER VILLAGE | 4,060 | 8,084 | 259 | 4,060 | 8,343 | — | 12,403 | 3,042 | 9,361 | — | |||||||||||||||||||||
STROH RANCH | 4,280 | 8,189 | 196 | 4,280 | 8,386 | — | 12,666 | 4,056 | 8,610 | — | |||||||||||||||||||||
SUNCOAST CROSSING | 4,057 | 5,545 | — | 4,057 | 5,545 | — | 9,602 | 924 | 8,678 | — | |||||||||||||||||||||
SUNNYSIDE 205 | 1,200 | 9,459 | 591 | 1,200 | 10,050 | — | 11,250 | 3,390 | 7,860 | — | |||||||||||||||||||||
TANASBOURNE MARKET | 3,269 | 10,861 | (303 | ) | 3,269 | 10,558 | — | 13,827 | 1,758 | 12,069 | — | ||||||||||||||||||||
TASSAJARA CROSSING | 8,560 | 15,464 | 310 | 8,560 | 15,774 | — | 24,334 | 5,306 | 19,028 | 19,800 | |||||||||||||||||||||
TECH RIDGE CENTER | 12,945 | 37,169 | — | 12,945 | 37,169 | — | 50,114 | 404 | 49,710 | 12,060 | |||||||||||||||||||||
THOMAS LAKE | 6,000 | 10,628 | (16,628 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||
TOWN SQUARE | 883 | 8,132 | 84 | 883 | 8,216 | — | 9,099 | 3,373 | 5,726 | — | |||||||||||||||||||||
TRACE CROSSING | 279 | — | — | 279 | — | — | 279 | — | 279 | — | |||||||||||||||||||||
TROPHY CLUB | 2,595 | 11,023 | 29 | 2,595 | 11,052 | — | 13,647 | 3,615 | 10,032 | — | |||||||||||||||||||||
TWIN CITY PLAZA | 17,245 | 44,225 | 886 | 17,263 | 45,093 | — | 62,356 | 7,595 | 54,761 | 41,859 | |||||||||||||||||||||
TWIN PEAKS | 5,200 | 25,827 | 209 | 5,200 | 26,036 | — | 31,236 | 8,622 | 22,614 | — | |||||||||||||||||||||
VALENCIA CROSSROADS | 17,921 | 17,659 | 242 | 17,921 | 17,901 | — | 35,822 | 9,880 | 25,942 | — | |||||||||||||||||||||
VENTURA VILLAGE | 4,300 | 6,648 | 147 | 4,300 | 6,795 | — | 11,095 | 2,345 | 8,750 | — | |||||||||||||||||||||
VILLAGE CENTER | 3,885 | 14,131 | 461 | 3,885 | 14,591 | — | 18,476 | 5,951 | 12,525 | — | |||||||||||||||||||||
VINE AT CASTAIC | 4,799 | 5,884 | 1 | 4,799 | 5,885 | — | 10,684 | 1,209 | 9,475 | — | |||||||||||||||||||||
VISTA VILLAGE IV | 2,287 | 2,765 | (804 | ) | 2,287 | 1,960 | — | 4,247 | 772 | 3,475 | — | ||||||||||||||||||||
WADSWORTH CROSSING | 12,093 | 14,101 | 96 | 12,093 | 14,197 | — | 26,290 | 2,309 | 23,981 | — | |||||||||||||||||||||
WALKER CENTER | 3,840 | 7,232 | 216 | 3,840 | 7,448 | — | 11,288 | 2,678 | 8,610 | — | |||||||||||||||||||||
WALTON TOWNE CENTER | 3,872 | 3,298 | — | 3,872 | 3,298 | — | 7,170 | 484 | 6,686 | — | |||||||||||||||||||||
WATERSIDE MARKETPLACE | 2,135 | 3,900 | — | 2,135 | 3,900 | — | 6,035 | 571 | 5,464 | — | |||||||||||||||||||||
WELLEBY PLAZA | 1,496 | 7,787 | 368 | 1,496 | 8,154 | — | 9,650 | 4,661 | 4,989 | — | |||||||||||||||||||||
WELLINGTON TOWN SQUARE | 2,041 | 12,131 | 131 | 2,041 | 12,262 | — | 14,303 | 4,547 | 9,756 | 12,800 | |||||||||||||||||||||
WEST PARK PLAZA | 5,840 | 5,759 | 252 | 5,840 | 6,011 | — | 11,851 | 2,079 | 9,772 | — | |||||||||||||||||||||
WESTBROOK COMMONS | 3,366 | 11,751 | (1,102 | ) | 3,091 | 10,925 | — | 14,016 | 3,195 | 10,821 | — | ||||||||||||||||||||
WESTCHASE | 5,302 | 8,273 | 182 | 5,302 | 8,455 | — | 13,757 | 1,338 | 12,419 | 8,055 | |||||||||||||||||||||
WESTCHESTER PLAZA | 1,857 | 7,572 | 103 | 1,857 | 7,675 | — | 9,532 | 3,578 | 5,954 | — | |||||||||||||||||||||
111
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P. Schedule III - Consolidated Real Estate and Accumulated Depreciation December 31, 2011 (in thousands) | |||||||||||||||||||||||||||||||
Initial Cost | Total Cost | Total Cost | |||||||||||||||||||||||||||||
Shopping Centers (1) | Land | Building & Improvements | Cost Capitalized Subsequent to Acquisition (2) | Land | Building & Improvements | Properties held for Sale | Total | Accumulated Depreciation | Net of Accumulated Depreciation | Mortgages | |||||||||||||||||||||
WESTLAKE PLAZA AND CENTER | 7,043 | 27,195 | 1,240 | 7,043 | 28,435 | — | 35,478 | 9,828 | 25,650 | — | |||||||||||||||||||||
WESTRIDGE VILLAGE | 9,529 | 11,397 | 83 | 9,529 | 11,479 | — | 21,008 | 4,056 | 16,952 | — | |||||||||||||||||||||
WESTWOOD VILLAGE | 19,933 | 25,301 | (932 | ) | 19,933 | 24,370 | — | 44,303 | 4,714 | 39,589 | — | ||||||||||||||||||||
WHITE OAK - DOVER, DE | 2,144 | 3,069 | — | 2,144 | 3,069 | — | 5,213 | 1,732 | 3,481 | — | |||||||||||||||||||||
WILLOW FESTIVAL | 1,954 | 56,501 | 88 | 1,954 | 56,589 | — | 58,543 | 1,949 | 56,594 | 39,505 | |||||||||||||||||||||
WINDMILLER PLAZA PHASE I | 2,638 | 13,241 | 30 | 2,638 | 13,271 | — | 15,909 | 5,042 | 10,867 | — | |||||||||||||||||||||
WOODCROFT SHOPPING CENTER | 1,419 | 6,284 | 214 | 1,421 | 6,496 | — | 7,917 | 2,749 | 5,168 | — | |||||||||||||||||||||
WOODMAN VAN NUYS | 5,500 | 7,195 | 82 | 5,500 | 7,277 | — | 12,777 | 2,522 | 10,255 | — | |||||||||||||||||||||
WOODMEN PLAZA | 7,621 | 11,018 | 251 | 7,621 | 11,270 | — | 18,891 | 7,122 | 11,769 | — | |||||||||||||||||||||
WOODSIDE CENTRAL | 3,500 | 9,288 | 250 | 3,500 | 9,538 | — | 13,038 | 3,251 | 9,787 | — | |||||||||||||||||||||
Corporately held assets | — | — | — | — | 2,144 | — | 2,144 | 2,608 | (464 | ) | |||||||||||||||||||||
Properties in development | (200 | ) | 1,078,886 | (854,608 | ) | — | 224,077 | — | 224,077 | 2,964 | 221,113 | — | |||||||||||||||||||
$ | 1,325,982 | 3,669,911 | (896,125 | ) | 1,273,606 | 2,828,306 | — | 4,101,912 | 791,619 | 3,310,293 | 448,360 | ||||||||||||||||||||
(1) See Item 2. Properties for geographic location and year each operating property was acquired. | |||||||||||||||||||||||||||||||
(2) The negative balance for costs capitalized subsequent to acquisition could include out-parcels sold, provision for loss recorded and development transfers subsequent to the initial costs. | |||||||||||||||||||||||||||||||
See accompanying report of independent registered public accounting firm.
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REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation, continued
December 31, 2011
(in thousands)
Depreciation and amortization of the Company's investment in buildings and improvements reflected in the statements of operations is calculated over the estimated useful lives of the assets, which are up to 40 years. The aggregate cost for Federal income tax purposes was approximately $3.4 billion at December 31, 2011.
The changes in total real estate assets for the years ended December 31, 2011, 2010, and 2009 are as follows:
2011 | 2010 | 2009 | |||||
Balance, beginning of year | $ | 3,989,154 | 3,933,778 | 4,042,487 | |||
Developed or acquired properties | 198,836 | 93,759 | 180,346 | ||||
Improvements | 21,727 | 18,772 | 15,617 | ||||
Sale of properties | (92,872 | ) | (14,503 | ) | (150,792 | ) | |
Properties held for sale | — | — | (19,647 | ) | |||
Properties reclassed to held for use | — | — | (30,296 | ) | |||
Provision for impairment | (14,933 | ) | (42,652 | ) | (103,937 | ) | |
Balance, end of year | $ | 4,101,912 | 3,989,154 | 3,933,778 | |||
The changes in accumulated depreciation for the years ended December 31, 2011, 2010, and 2009 are as follows:
2011 | 2010 | 2009 | |||||
Balance, beginning of year | $ | 700,878 | 622,163 | 554,595 | |||
Depreciation for year | 107,932 | 99,554 | 97,019 | ||||
Sale of properties | (14,101 | ) | (2,052 | ) | (31,792 | ) | |
Accumulated depreciation related to properties held for sale | — | — | (3,066 | ) | |||
Accumulated depreciation related to properties reclassed to held for use | — | — | 5,407 | ||||
Provision for impairment | (3,090 | ) | (18,787 | ) | — | ||
Balance, end of year | $ | 791,619 | 700,878 | 622,163 | |||
See accompanying report of independent registered public accounting firm.
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Controls and Procedures (Regency Centers Corporation)
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of the Parent Company's management, including its chief executive officer and chief financial officer, the Parent Company conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on this evaluation, the Parent Company's chief executive officer and chief financial officer concluded that its disclosure controls and procedures were effective as of the end of the period covered by this annual report on Form 10-K to ensure information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Parent Company in the reports it files or submits is accumulated and communicated to management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management's Report on Internal Control over Financial Reporting
The Parent Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of its management, including its chief executive officer and chief financial officer, the Parent Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation under the framework in Internal Control - Integrated Framework, the Parent Company's management concluded that its internal control over financial reporting was effective as of December 31, 2011.
KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this annual report on Form 10-K and, as part of their audit, has issued a report, included herein, on the effectiveness of the Parent Company's internal control over financial reporting.
The Parent Company's system of internal control over financial reporting was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with accounting principles generally accepted in the United States. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Controls
There have been no changes in the Parent Company's internal controls over financial reporting identified in connection with this evaluation that occurred during the fourth quarter of 2011 and that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.
Controls and Procedures (Regency Centers, L.P.)
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of the Operating Partnership's management, including the chief executive officer and chief financial officer of its general partner, the Operating Partnership conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on this evaluation, the chief executive officer and chief financial officer of its general partner concluded that its disclosure controls and procedures were effective as of the end of the period covered by this annual report on Form 10-K to ensure information required to be disclosed in the reports filed or
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submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Operating Partnership in the reports it files or submits is accumulated and communicated to management, including the chief executive officer and chief financial officer of its general partner, as appropriate, to allow timely decisions regarding required disclosure.
Management's Report on Internal Control over Financial Reporting
The Operating Partnership's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of its management, including the chief executive officer and chief financial officer of its general partner, the Operating Partnership conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation under the framework in Internal Control - Integrated Framework, the Operating Partnership's management concluded that its internal control over financial reporting was effective as of December 31, 2011.
KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this annual report on Form 10-K and, as part of their audit, has issued a report, included herein, on the effectiveness of the Operating Partnership's internal control over financial reporting.
The Operating Partnership's system of internal control over financial reporting was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with accounting principles generally accepted in the United States. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Controls
There have been no changes in the Operating Partnership's internal controls over financial reporting identified in connection with this evaluation that occurred during the fourth quarter of 2011 and that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.
Item 9B. Other Information
Not applicable
PART III
Item 10. Directors, Executive Officers, and Corporate Governance
Information concerning the directors of Regency is incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to its 2012 Annual Meeting of Stockholders.
Information regarding executive officers is included in Part I of this Form 10-K as permitted by General Instruction G(3).
Audit Committee, Independence, Financial Experts. Incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10‑K with respect to its 2012 Annual Meeting of Stockholders.
Compliance with Section 16(a) of the Exchange Act. Information concerning filings under Section 16(a) of the Exchange Act by the directors or executive officers of Regency is incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to its 2012 Annual Meeting of Stockholders.
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Code of Ethics. We have adopted a code of ethics applicable to our Board of Directors, principal executive officers, principal financial officer, principal accounting officer and persons performing similar functions. The text of this code of ethics may be found on our web site at www.regencycenters.com. We intend to post notice of any waiver from, or amendment to, any provision of our code of ethics on our web site.
Item 11. Executive Compensation
Incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to its 2012 Annual Meeting of Stockholders.
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Equity Compensation Plan Information
(a) | (b) | (c) | ||||||||
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights(1) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (2) | |||||||
Equity compensation plans approved by security holders | 442,880 | $ | 51.85 | 735,297 | ||||||
Equity compensation plans not approved by security holders | N/A | N/A | N/A | |||||||
Total | 442,880 | $ | 51.85 | 735,297 | ||||||
(1) The weighted average exercise price excludes stock rights awards, which we sometimes refer to as unvested restricted stock.
(2) Our Long Term Omnibus Plan, as amended and approved by stockholders at our 2003 annual meeting, provides for the issuance of up to 5.0 million shares of common stock or stock options for stock compensation; however, outstanding unvested grants plus vested but unexercised options cannot exceed 12% of our outstanding common stock and common stock equivalents (excluding options and other stock equivalents outstanding under the plan). The plan permits the grant of any type of share-based award but limits restricted stock awards, stock rights awards, performance shares, dividend equivalents settled in stock and other forms of stock grants to 2.75 million shares, of which 735,297 shares were available at December 31, 2011 for future issuance.
Information about security ownership is incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to its 2012 Annual Meeting of Stockholders.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to its 2012 Annual Meeting of Stockholders.
Item 14. Principal Accountant Fees and Services
Incorporated herein by reference to Regency's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to its 2012 Annual Meeting of Stockholders.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) Financial Statements and Financial Statement Schedules:
Regency Centers Corporation and Regency Centers, L.P. 2011 financial statements and financial statement schedule, together with the reports of KPMG LLP are listed on the index immediately preceding the financial statements in Item 8, Consolidated Financial Statements and Supplemental Data.
(b) Exhibits:
In reviewing the agreements included as exhibits to this report, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company, its subsidiaries or other parties to the agreements. The Agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
• | should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; |
• | have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; |
• | may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and |
• | were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. |
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. We acknowledge that, notwithstanding the inclusion of the foregoing cautionary statements, we are responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this report not misleading. Additional information about the Company may be found elsewhere in this report and the Company's other public files, which are available without charge through the SEC's website at http://www.sec.gov.
Unless otherwise indicated below, the Commission file number to the exhibit is No. 001-12298.
3. Articles of Incorporation and Bylaws
(a) | Restated Articles of Incorporation of Regency Centers Corporation (incorporated by reference to Exhibit 3.1 of the Company's Form 8-K filed February 19, 2008) and the Amendment thereto designating the preferences, rights and limitations of 10,000,000 shares of 6.625% Series 6 Cumulative Preferred Stock (incorporated by reference to Exhibit 3.2 of the Company's Form 8-A filed on February 14, 2012). |
(b) | Amended and Restated Bylaws of Regency Centers Corporation (incorporated by reference to Exhibit 3.2(b) of the Company's Form 8-K filed November 7, 2008). |
(c) | Fourth Amended and Restated Certificate of Limited Partnership of Regency Centers, L.P. (incorporated by reference to Exhibit 3(a) to Regency Centers, L.P.'s Form 10-K filed March 17, 2009). |
(d) | Fourth Amended and Restated Agreement of Limited Partnership of Regency Centers, L.P., as amended (incorporated by reference to Exhibit 10(m) to the Company's Form 10-K filed March 12, 2004). |
(i) | Amendment to Fourth Amended and Restated Agreement of Limited Partnership of Regency Centers, L.P. relating to 6.70% Series 5 Cumulative Redeemable Preferred Units (incorporated by reference to Exhibit 3.3 to the Company's Form 8-K filed August 1, 2005). |
(ii) | Amended and Restated Amendment dated January 1, 2008 to Fourth Amended and Restated |
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Agreement of Limited Partnership of Regency Centers, L.P. relating to 7.45% Series 3 Cumulative Redeemable Preferred Units (incorporated by reference to Exhibit 3.1 to Regency Centers, L.P.'s Form 8-K filed January 7, 2008).
(iii) | Amended and Restated Amendment dated January 1, 2008 to Fourth Amended and Restated Agreement of Limited Partnership of Regency Centers, L.P. relating to 7.25% Series 4 Cumulative Redeemable Preferred Units (incorporated by reference to Exhibit 3.2 to Regency Centers, L.P.'s Form 8-K filed January 7, 2008). |
(iv) | Amendment to Fourth Amended and Restated Agreement of Limited Partnership relating to 6.625% Series 6 Cumulative Redeemable Preferred Units (incorporated by reference to Exhibit 3.2 to Form 8-K filed on February 16, 2012). |
4. Instruments Defining Rights of Security Holders
(a) | See Exhibits 3(a) and 3(b) for provisions of the Articles of Incorporation and Bylaws of the Company defining the rights of security holders. See Exhibit 3(d) for provisions of the Partnership Agreement of Regency Centers, L.P. defining rights of security holders. |
(b) | Indenture dated March 9, 1999 between Regency Centers, L.P., the guarantors named therein and First Union National Bank, as trustee (incorporated by reference to Exhibit 4.1 to the registration statement on Form S-3 of Regency Centers, L.P. filed February 24, 1999, No. 333-72899). |
(c) | Indenture dated December 5, 2001 between Regency Centers, L.P., the guarantors named therein and First Union National Bank, as trustee (incorporated by reference to Exhibit 4.4 of Form 8-K of Regency Centers, L.P. filed December 10, 2001). |
(i) | First Supplemental Indenture dated as of June 5, 2007 among Regency Centers, L.P., the Company as guarantor and U.S. Bank National Association, as successor to Wachovia Bank, National Association (formerly known as First Union National Bank), as trustee (incorporated by reference to Exhibit 4.1 of Form 8-K of Regency Centers, L.P. filed June 5, 2007). |
(d) | Indenture dated July 18, 2005 between Regency Centers, L.P., the guarantors named therein and Wachovia Bank, National Bank, as trustee (incorporated by reference to Exhibit 4.1 to the registration statement on Form S-4 of Regency Centers, L.P. filed August 5, 2005, No. 333-127274). |
10. Material Contracts (~ indicates management contract or compensatory plan)
~(a) | Regency Centers Corporation Long Term Omnibus Plan (incorporated by reference to Exhibit 10.9 to the Company's Form 10-Q filed May 8, 2008). |
~(i) | Form of Stock Rights Award Agreement pursuant to the Company's Long Term Omnibus Plan (incorporated by reference to Exhibit 10(b) to the Company's Form 10-K filed March 10, 2006). |
~(ii) | Form of 409A Amendment to Stock Rights Award Agreement (incorporated by reference to Exhibit 10(b)(i) to the Company's Form 10-K filed March 17, 2009). |
~(iii) | Form of Nonqualified Stock Option Agreement pursuant to the Company's Long Term Omnibus Plan (incorporated by reference to Exhibit 10(c) to the Company's Form 10-K filed March 10, 2006). |
~(iv) | Form of 409A Amendment to Stock Option Agreement (incorporated by reference to Exhibit 10(c)(i) to the Company's Form 10-K filed March 17, 2009). |
~(v) | Amended and Restated Deferred Compensation Plan dated May 6, 2003 |
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(incorporated by reference to Exhibit 10(k) to the Company's Form 10-K filed March 12, 2004).
~(vi) | Regency Centers Corporation 2005 Deferred Compensation Plan (incorporated by reference to Exhibit 10(s) to the Company's Form 8-K filed December 21, 2004). |
~(vii) | First Amendment to Regency Centers Corporation 2005 Deferred Compensation Plan dated December 2005 (incorporated by reference to Exhibit 10(q)(i) to the Company's Form 10-K filed March 10, 2006). |
~(viii) | Second Amendment to the Regency Centers Corporation Amended and Restated Deferred Compensation Plan (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on June 13, 2011). |
~(ix) | Third Amendment to the Regency Centers Corporation 2005 Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on June 13, 2011). |
~(b) | Regency Centers Corporation 2011 Omnibus Plan (incorporated by reference to Annex A to 2011 Annual Meeting Proxy Statement filed March 24, 2011). |
~(c) | Form of Director/Officer Indemnification Agreement (filed as an Exhibit to Pre-effective Amendment No. 2 to the Company registration statement on Form S-11 filed October 5, 1993 (33-67258), and incorporated by reference). |
~(d) | 2011 Amended and Restated Severance and Change of Control Agreement dated as of January 1, 2011 by and between the Company and Martin E. Stein, Jr. (incorporated by reference to Exhibit 10.1 of the Company's Form 8-K filed January 3, 2011). |
~(e) | 2011 Amended and Restated Severance and Change of Control Agreement dated as of January 1, 2011 by and between the Company and Bruce M. Johnson (incorporated by reference to Exhibit 10.3 of the Company's Form 8-K filed January 3, 2011). |
~(f) | 2011 Amended and Restated Severance and Change of Control Agreement dated as of January 1, 2011 by and between the Company and Brian M. Smith (incorporated by reference to Exhibit 10.4 of the Company's Form 8-K filed January 3, 2011). |
(g) | Third Amended and Restated Credit Agreement dated as of September 7, 2011 by and among Regency Centers, , L.P., the Company, each of the financial institutions party thereto, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed November 8, 2011). |
(h) | Term Loan Agreement dated as of November 17, 2011 by and among Regency Centers, L.P., the Company, each of the financial institutions party thereto and Wells Fargo Securities, LLC. |
(i) | Second Amended and Restated Limited Liability Company Agreement of Macquarie CountryWide-Regency II, LLC dated as of July 31, 2009 by and among Global Retail Investors, LLC, Regency Centers, L.P. and Macquarie CountryWide (US) No. 2 LLC (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed November 6, 2009). |
(i) | Amendment No. 1 to Second Amended and Restate Limited Liability Company Agreement of GRI-Regency, LLC (formerly Macquarie CountryWide-Regency II, LLC). |
(j) | Limited Partnership Agreement dated as of December 21, 2006 of RRP Operating, LP (incorporated by reference to Exhibit 10(u) to the Company's Form 10-K filed February 27, 2007). |
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12. Computation of ratios
12.1 Computation of Ratio of Earnings to Fixed Charges
21. Subsidiaries of Regency Centers Corporation.
23. Consents of Independent Accountants
23.1 Consent of KPMG LLP for Regency Centers Corporation.
23.2 Consent of KPMG LLP for Regency Centers, L.P.
23.3 Consent of PricewaterhouseCoopers LLP for GRI-Regency, LLC.
31. Rule 13a-14(a)/15d-14(a) Certifications.
31.1 Rule 13a-14 Certification of Chief Executive Officer for Regency Centers Corporation.
31.2 Rule 13a-14 Certification of Chief Financial Officer for Regency Centers Corporation.
31.3 Rule 13a-14 Certification of Chief Executive Officer for Regency Centers, L.P.
31.4 Rule 13a-14 Certification of Chief Financial Officer for Regency Centers, L.P.
32. Section 1350 Certifications.
The certifications in this exhibit 32 are being furnished solely to accompany this report pursuant to 18 U.S.C. § 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any of the Company's filings, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
32.1 | 18 U.S.C. § 1350 Certification of Chief Executive Officer for Regency Centers Corporation. |
32.2 | 18 U.S.C. § 1350 Certification of Chief Financial Officer for Regency Centers Corporation. |
32.3 18 U.S.C. § 1350 Certification of Chief Executive Officer for Regency Centers, L.P.
32.4 18 U.S.C. § 1350 Certification of Chief Financial Officer for Regency Centers, L.P.
99. Financial Statements under Rule 3-09 of Regulation S-X.
99.1 Financial Statements of GRI-Regency, LLC.
101. Interactive Data Files
101.INS**+ XBRL Instance Document
101.SCH**+ XBRL Taxonomy Extension Schema Document
101.CAL**+ XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**+ XBRL Taxonomy Definition Linkbase Document
101.LAB**+ XBRL Taxonomy Extension Label Linkbase Document
101.PRE**+ XBRL Taxonomy Extension Presentation Linkbase Document
__________________________
** | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability. |
+ Submitted electronically with this Annual Report
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
February 29, 2012 | REGENCY CENTERS CORPORATION | |
By: | /s/ Martin E. Stein, Jr. Martin E. Stein. Jr., Chairman of the Board and Chief Executive Officer | |
February 29, 2012 | REGENCY CENTERS, L.P. | |
By: | Regency Centers Corporation, General Partner | |
By: | /s/ Martin E. Stein, Jr. Martin E. Stein. Jr., Chairman of the Board and Chief Executive Officer | |
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
February 29, 2012 | /s/ Martin E. Stein, Jr. Martin E. Stein. Jr., Chairman of the Board and Chief Executive Officer | |
February 29, 2012 | /s/ Brian M. Smith Brian M. Smith, President, Chief Operating Officer and Director | |
February 29, 2012 | /s/ Bruce M. Johnson Bruce M. Johnson, Executive Vice President, Chief Financial Officer (Principal Financial Officer), and Director | |
February 29, 2012 | /s/ J. Christian Leavitt J. Christian Leavitt, Senior Vice President and Treasurer (Principal Accounting Officer) | |
February 29, 2012 | /s/ Raymond L. Bank Raymond L. Bank, Director | |
February 29, 2012 | /s/ C. Ronald Blankenship C. Ronald Blankenship, Director | |
February 29, 2012 | /s/ A.R. Carpenter A.R. Carpenter, Director | |
February 29, 2012 | /s/ J. Dix Druce J. Dix Druce, Director | |
February 29, 2012 | /s/ Mary Lou Fiala Mary Lou Fiala, Director | |
February 29, 2012 | /s/ David P. O'Connor David P. O'Connor, Director | |
February 29, 2012 | /s/ Douglas S. Luke Douglas S. Luke, Director | |
February 29, 2012 | /s/ John C. Schweitzer John C. Schweitzer, Director | |
February 29, 2012 | /s/ Thomas G. Wattles Thomas G. Wattles, Director | |
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EXHIBIT 10(j)
TERM LOAN AGREEMENT
Dated as of November 17, 2011
by and among
REGENCY CENTERS, L.P.,
as Borrower,
REGENCY CENTERS CORPORATION,
as Parent,
The financial institutions party hereto
and their assignees under Section 12.6.,
as Lenders,
WELLS FARGO SECURITIES, LLC,
as Lead Arranger and
Bookrunner,
WELLS FARGO Bank, National Association,
as Administrative Agent,
pnc bank, NATIONAL ASSOCIATION,
as Syndication Agent,
each of
REGIONS BANK,
SUNTRUST BANK,
and
U.S. BANK NATIONAL ASSOCIATION,
as a Documentation Agent,
and
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH,
as Senior Managing Agent
TABLE OF CONTENTS
Article I. Definitions | |
Section 1.1. Definitions. | |
Section 1.2. General; References to Eastern Time. | |
Section 1.3. Financial Attributes of Non-Wholly Owned Subsidiaries. | |
Article II. Credit Facility | |
Section 2.1. Term Loans. | |
Section 2.2. Requests for Term Loans. | |
Section 2.3. Funding of Term Loans. | |
Section 2.4. Termination of Commitments. | |
Section 2.5. Rates and Payment of Interest on Loans. | |
Section 2.6. Number of Interest Periods. | |
Section 2.7. Repayment of Loans. | |
Section 2.8. Prepayments. | |
Section 2.9. Continuation. | |
Section 2.10. Conversion. | |
Section 2.11. Notes. | |
Section 2.12. Amount Limitations. | |
Section 2.13. Additional Term Loans. | |
Section 2.14. Funds Transfer Disbursements. | |
Article III. Payments, Fees and Other General Provisions | |
Section 3.1. Payments. | |
Section 3.2. Pro Rata Treatment. | |
Section 3.3. Sharing of Payments, Etc. | |
Section 3.4. Several Obligations. | |
Section 3.5. Fees. | |
Section 3.6. Computations. | |
Section 3.7. Usury. | |
Section 3.8. Statements of Account. | |
Section 3.9. Defaulting Lenders. | |
Section 3.10. Taxes; Foreign Lenders. | |
Article IV. Yield Protection, Etc. | |
Section 4.1. Additional Costs; Capital Adequacy. | |
Section 4.2. Suspension of LIBOR Loans. | |
Section 4.3. Illegality. | |
Section 4.4. Compensation. | |
Section 4.5. Treatment of Affected Loans. | |
Section 4.6. Affected Lenders. | |
Section 4.7. Change of Lending Office. | |
Section 4.8. Assumptions Concerning Funding of LIBOR Loans. | |
Article V. Conditions Precedent | |
Section 5.1. Initial Conditions Precedent. | |
Section 5.2. Conditions Precedent to All Loans. | |
Article VI. Representations and Warranties | |
Section 6.1. Representations and Warranties. | |
Section 6.2. Survival of Representations and Warranties, Etc. | |
Article VII. Affirmative Covenants | |
Section 7.1. Preservation of Existence and Similar Matters. | |
Section 7.2. Compliance with Applicable Law and Material Contracts. | |
Section 7.3. Maintenance of Property. | |
Section 7.4. Conduct of Business. | |
Section 7.5. Insurance. | |
Section 7.6. Payment of Taxes and Claims. | |
Section 7.7. Books and Records; Inspections. | |
Section 7.8. Use of Proceeds. | |
Section 7.9. Environmental Matters. | |
Section 7.10. Further Assurances. | |
Section 7.11. REIT Status. | |
Section 7.12. Exchange Listing. | |
Section 7.13. Guarantors. | |
Article VIII. Information | |
Section 8.1. Quarterly Financial Statements. | |
Section 8.2. Year‑End Statements. | |
Section 8.3. Compliance Certificate. | |
Section 8.4. Other Information. | |
Section 8.5. Electronic Delivery of Certain Information. | |
Section 8.6. Public/Private Information. | |
Section 8.7. USA Patriot Act Notice; Compliance. | |
Article IX. Negative Covenants | |
Section 9.1. Financial Covenants. | |
Section 9.2. Liens. | |
Section 9.3. Restrictions on Intercompany Transfers. | |
Section 9.4. Merger, Consolidation, Sales of Assets and Other Arrangements. | |
Section 9.5. Plans. | |
Section 9.6. Fiscal Year. | |
Section 9.7. Modifications of Organizational Documents. | |
Section 9.8. Transactions with Affiliates. | |
Section 9.9. Environmental Matters. | |
Section 9.10. Derivatives Contracts. | |
Section 9.11. Non-Guarantors. | |
Article X. Default | |
Section 10.1. Events of Default. | |
Section 10.2. Remedies Upon Event of Default. | |
Section 10.3. Remedies Upon Default. | |
Section 10.4. Marshaling; Payments Set Aside. | |
Section 10.5. Allocation of Proceeds. | |
Section 10.6. Intentionally Omitted. | |
Section 10.7. Rescission of Acceleration by Requisite Lenders. | |
Section 10.8. Performance by Administrative Agent. | |
Section 10.9. Rights Cumulative. | |
Article XI. The Administrative Agent | |
Section 11.1. Appointment and Authorization. | |
Section 11.2. Wells Fargo as Lender. | |
Section 11.3. Approvals of Lenders. | |
Section 11.4. Notice of Events of Default. | |
Section 11.5. Administrative Agent’s Reliance. | |
Section 11.6. Indemnification of Administrative Agent. | |
Section 11.7. Lender Credit Decision, Etc. | |
Section 11.8. Successor Administrative Agent. | |
Section 11.9. Titled Agents. | |
Article XII. Miscellaneous | |
Section 12.1. Notices. | |
Section 12.2. Expenses. | |
Section 12.3. Stamp, Intangible and Recording Taxes. | |
Section 12.4. Setoff. | |
Section 12.5. Litigation; Jurisdiction; Other Matters; Waivers. | |
Section 12.6. Successors and Assigns. | |
Section 12.7. Amendments and Waivers. | |
Section 12.8. Nonliability of Administrative Agent and Lenders. | |
Section 12.9. Confidentiality. | |
Section 12.10. Indemnification. | |
Section 12.11. Termination; Survival. | |
Section 12.12. Severability of Provisions. | |
Section 12.13. GOVERNING LAW. | |
Section 12.14. Counterparts. | |
Section 12.15. Obligations with Respect to Loan Parties. | |
Section 12.16. Independence of Covenants. | |
Section 12.17. Limitation of Liability. | |
Section 12.18. Entire Agreement. | |
Section 12.19. Construction. | |
Section 12.20. Headings. | |
SCHEDULE I | ||
SCHEDULE 1.1.(B) | ||
SCHEDULE 6.1.(b) | ||
SCHEDULE 6.1.(f) | ||
SCHEDULE 6.1.(g) | ||
SCHEDULE 6.1.(h) | ||
EXHIBIT A | ||
EXHIBIT B | ||
EXHIBIT C | ||
EXHIBIT D | ||
EXHIBIT E | ||
EXHIBIT F | ||
EXHIBIT G | ||
EXHIBIT H | ||
EXHIBIT I | ||
THIS TERM LOAN AGREEMENT (this “Agreement”) dated as of November 17, 2011 by and among REGENCY CENTERS, L.P., a limited partnership formed under the laws of the State of Delaware (the “Borrower”), REGENCY CENTERS CORPORATION, a corporation formed under the laws of the State of Florida (the “Parent”), each of the financial institutions initially a signatory hereto together with their successors and assignees under Section 12.6. (the “Lenders”), WELLS FARGO SECURITIES, LLC, as Lead Arranger and Bookrunner (the “Lead Arranger”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent (the “Administrative Agent”), PNC BANK, NATIONAL ASSOCIATION, as Syndication Agent (the “Syndication Agent”), each of REGIONS BANK, SUNTRUST BANK, and U.S. BANK NATIONAL ASSOCIATION, as a Documentation Agent (each, a “Documentation Agent”) and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as Senior Managing Agent (the “Senior Managing Agent”).
WHEREAS, the Lenders desire to make available to the Borrower term loans in an initial principal amount of up to $250,000,000, on the terms and conditions contained herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
Section 1.1 Definitions.
In addition to terms defined elsewhere herein, the following terms shall have the following meanings for the purposes of this Agreement:
“Accession Agreement” means an Accession Agreement substantially in the form of Annex I to the Guaranty.
“Additional Costs” has the meaning given that term in Section 4.1.(b).
“Additional Term Loan” has the meaning giving that term in Section 2.13.
“Additional Term Loan Commitments” has the meaning given that term in Section 2.13.
“Additional Term Loan Lender” has the meaning giving that term in Section 2.13.
“Adjusted EBITDA” means, with respect to a Person for any given period, (a) EBITDA of such Person minus (b) Capital Reserves of all Properties of such Person.
“Administrative Agent” means Wells Fargo Bank, National Association as contractual representative of the Lenders under this Agreement, or any successor Administrative Agent appointed pursuant to Section 11.8.
“Administrative Questionnaire” means the Administrative Questionnaire completed by each Lender and delivered to the Administrative Agent in a form supplied by the Administrative Agent to the Lenders from time to time.
“Affected Lender” has the meaning given that term in Section 4.6.
“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. In no event shall the Administrative Agent or any Lender be deemed to be an Affiliate of the Parent or the Borrower.
“Agreement Date” means the date as of which this Agreement is dated.
“Applicable Law” means all applicable provisions of international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes, executive orders, and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority.
“Applicable Margin” means the percentage rate set forth in the table below corresponding to the level (each a “Level”) into which the Borrower’s Credit Rating then falls. As of the Agreement Date, the Applicable Margin would be determined based on Level 3. Any change in the Borrower’s Credit Rating which would cause it to move to a different Level shall be effective as of the first day of the first calendar month immediately following receipt by the Administrative Agent of written notice delivered by the Borrower in accordance with Section 8.4.(m) that the Borrower’s Credit Rating has changed; provided, however, if the Borrower has not delivered the notice required by such Section but the Administrative Agent becomes aware that the Borrower’s Credit Rating has changed, then the Administrative Agent may, in its sole discretion, adjust the Level effective as of the first day of the first calendar month following the date the Administrative Agent becomes aware that the Borrower’s Credit Rating has changed. During any period that the Borrower has received two Credit Ratings that are not equivalent, the Applicable Margin shall be determined based on the Level corresponding to the higher of such two Credit Ratings. During any period for which the Borrower has received a Credit Rating from only one Rating Agency, then the Applicable Margin shall be determined based on such Credit Rating. During any period that the Borrower has not received a Credit Rating from either Rating Agency, the Applicable Margin shall be determined based on Level 5.
Level | Borrower’s Credit Rating (S&P/Moody’s) | Applicable Margin for LIBOR Loans | Applicable Margin for Base Rate Loans |
1 | A-/A3 (or equivalent) or better | 1.20% | 1.20% |
2 | BBB+/Baa1 (or equivalent) | 1.30% | 1.30% |
3 | BBB/Baa2 (or equivalent) | 1.45% | 1.45% |
4 | BBB-/Baa3 (or equivalent) | 1.70% | 1.70% |
5 | Lower than BBB-/Baa3 (or equivalent) | 2.00% | 2.00% |
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of any entity that administers or manages a Lender.
“Assignment and Assumption” means an Assignment and Assumption Agreement among a Lender, an Eligible Assignee and the Administrative Agent, substantially in the form of Exhibit A.
“Bankruptcy Code” means the Bankruptcy Code of 1978, as amended.
“Base Rate” means the LIBOR Market Index Rate; provided, that if for any reason the LIBOR Market Index Rate is unavailable, Base Rate shall mean the per annum rate of interest equal to the Federal Funds Rate plus one and one-half of one percent (1.50%).
“Base Rate Loan” means a Loan (or any portion thereof) bearing interest at a rate based on the Base Rate.
“Benefit Arrangement” means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group.
“Borrower” has the meaning set forth in the introductory paragraph hereof and shall include the Borrower’s successors and permitted assigns.
“Business Day” means (a) a day of the week (but not a Saturday, Sunday or holiday) on which the offices of the Administrative Agent in San Francisco, California are open to the public for carrying on substantially all of the Administrative Agent’s business functions, and (b) if such day relates to a LIBOR Loan, any such day that is also a day on which dealings in Dollars are carried on in the London interbank market. Unless specifically referenced in this Agreement as a Business Day, all references to “days” shall be to calendar days.
“Capital Reserves” mean, for any period and with respect to a Property, an amount equal to (i) the aggregate square footage of all completed space of such Property times (ii) $0.15 per annum (pro rated for any partial period); provided, however, that no capital reserves shall be required with respect to any portion of such Property which is leased under a ground lease to a third party that owns the improvements on such ground leased portion of the Property. If the term Capital Reserves is used without reference to any specific Property, then the amount shall be determined on an aggregate basis with respect to all Properties of the Borrower and its Subsidiaries and the applicable Ownership Share of all Properties of all Unconsolidated Affiliates.
“Capitalization Rate” means 7.25%.
“Capitalized Third Party Net Income” means, with respect to a Person at a given time, (a) Third Party Net Income for the four fiscal quarters of such Person most recently ended divided by (b) the Capitalization Rate.
“Capitalized Lease Obligations” means obligations under a lease (to pay rent or other amounts under any lease or other arrangement conveying the right to use) that are required to be capitalized for financial reporting purposes in accordance with GAAP. Subject to Section 1.2., the amount of a Capitalized Lease Obligation is the capitalized amount of such obligation as would be required to be reflected on a balance sheet of the applicable Person prepared in accordance with GAAP as of the applicable date.
“Cash Equivalents” means: (a) securities issued, guaranteed or insured by the United States of America or any of its agencies with maturities of not more than one year from the date acquired; (b) certificates of deposit with maturities of not more than one year from the date acquired issued by a United States federal or state chartered commercial bank of recognized standing, or a commercial bank organized under the laws of any other country which is a member of the Organisation for Economic Cooperation and Development, or a political subdivision of any such country, acting through a branch or agency, which bank has capital and unimpaired surplus in excess of $500,000,000 and which bank or its holding company has a short‑term commercial paper rating of at least A‑2 or the equivalent by S&P or at least P‑2 or the equivalent by Moody’s; (c) reverse repurchase agreements with terms of not more than seven days from the date acquired, for securities of the type described in clause (a) above and entered into only with commercial banks having the qualifications described in clause (b) above; (d) commercial paper issued by any Person incorporated under the laws of the United States of America or any State thereof and rated at least A‑2 or the equivalent thereof
by S&P or at least P‑2 or the equivalent thereof by Moody’s, in each case with maturities of not more than one year from the date acquired; and (e) investments in money market funds registered under the Investment Company Act of 1940, as amended, which have net assets of at least $500,000,000 and at least 85% of whose assets consist of securities and other obligations of the type described in clauses (a) through (d) above.
“Commitment” means, as to each Lender, such Lender’s Initial Term Loan Commitment, Delayed Draw TL Commitment and any Additional Term Loan Commitment.
“Compliance Certificate” has the meaning given that term in Section 8.3.
“Consolidated Subsidiary” means, with respect to a Person at any date, any Subsidiary or other entity the accounts of which would be consolidated with those of such Person in its consolidated financial statements in accordance with GAAP, if such statements were prepared as of such date.
“Construction Budget” means, with respect to a Development Property, and at any time, (a) the total budgeted costs to complete the development of such Development Property, including without limitation, all amounts budgeted with respect to all of the following: (i) acquisition of land and any related improvements; (ii) a reasonable and appropriate reserve for construction interest; (iii) a reasonable and appropriate operating deficit reserve; (iv) tenant improvements; (v) leasing costs, including, without limitation, commissions, (vi) infrastructure costs and (vii) other hard and soft costs associated with the development of such Development Property minus (b) contributions to, or reimbursement of, any of the foregoing costs by a third party.
“Continue”, “Continuation” and “Continued” each refers to the continuation of a LIBOR Loan from one Interest Period to another Interest Period pursuant to Section 2.9.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Convert”, “Conversion” and “Converted” each refers to the conversion of a Loan of one Type into a Loan of another Type pursuant to Section 2.10.
“Credit Event” means any of the following: (a) the making of any Loan, (b) the Conversion of a Base Rate Loan into a LIBOR Loan and (c) the Continuation of a LIBOR Loan.
“Credit Rating” means the rating assigned by a Rating Agency to the senior unsecured long term Indebtedness of a Person.
“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar Applicable Laws relating to the relief of debtors in the United States of America or other applicable jurisdictions from time to time in effect.
“Default” means any of the events specified in Section 10.1., whether or not there has been satisfied any requirement for the giving of notice, the lapse of time, or both.
“Defaulting Lender” means, subject to Section 3.9.(f), any Lender that (a) has failed to (i) fund all or any portion of its Loans within 2 Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure
is the result of such Lender’s reasonable determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within 2 Business Days of the date when due, (b) has notified the Borrower or the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within 3 Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States of America or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 3.9.(f)) upon delivery of written notice of such determination to the Borrower and each Lender.
“Delayed Draw Availability Period” means the period from the Initial Funding Date until the earlier of (i) the date that is 180 days after the Initial Funding Date and (ii) the date that the aggregate amount of Delayed Draw Term Loans funded since the Initial Funding Date equal the initial aggregate amount of the Delayed Draw TL Commitments of all Lenders.
“Delayed Draw Term Loan” means each Loan made by the Lenders to the Borrower during the Delayed Draw Availability Period pursuant to Section 2.1.(b).
“Delayed Draw TL Commitment” means, as to each Lender, such Lender’s obligation to make Delayed Draw Term Loans during the Availability Period pursuant to Section 2.1.(b), in an amount up to, but not exceeding, the amount set forth for such Lender on Schedule I as such Lender’s “Delayed Draw TL Commitment Amount” or as set forth in any applicable Assignment and Assumption.
“Derivatives Contract” means (a) any transaction (including any master agreement, confirmation or other agreement with respect to any such transaction) now existing or hereafter entered into by the Borrower or any of its Subsidiaries (i) which is a rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending
transaction, weather index transaction or forward purchase or sale of a security, commodity or other financial instrument or interest (including any option with respect to any of these transactions) or (ii) which is a type of transaction that is similar to any transaction referred to in clause (i) above that is currently, or in the future becomes, recurrently entered into in the financial markets (including terms and conditions incorporated by reference in such agreement) and which is a forward, swap, future, option or other derivative on one or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, economic indices or measures of economic risk or value, or other benchmarks against which payments or deliveries are to be made, and (b) any combination of these transactions. For the avoidance of doubt, a forward equity sale with settlement to occur at a predetermined date and price shall not be deemed to constitute a Derivatives Contract for purposes hereof.
“Derivatives Support Document” means (i) any Credit Support Annex comprising part of (and as defined in) any Specified Derivatives Contract, and (ii) any document or agreement, other than a Security Document, pursuant to which cash, deposit accounts, securities accounts or similar financial asset collateral are pledged to or made available for set-off by, a Specified Derivatives Provider, including any banker’s lien or similar right, securing or supporting Specified Derivatives Obligation.
“Derivatives Termination Value” means, in respect of any one or more Derivatives Contracts, after taking into account the effect of any legally enforceable netting agreement or provision relating thereto, (a) for any date on or after the date such Derivatives Contracts have been terminated or closed out, the termination amount or value determined in accordance therewith, and (b) for any date prior to the date such Derivatives Contracts have been terminated or closed out, the then-current mark-to-market value for such Derivatives Contracts, determined based upon one or more mid-market quotations or estimates provided by any recognized dealer in Derivatives Contracts (which may include the Administrative Agent, any Lender, any Specified Derivatives Provider or any Affiliate of any of them).
“Development Property” means a Property currently under development that has not achieved an Occupancy Rate of 80.0% or more or, subject to the last sentence of this definition, on which the improvements (other than tenant improvements on unoccupied space) related to the development have not been completed. The term “Development Property” shall, without limitation, (a) include real property of the type described in the immediately preceding sentence that satisfies both of the following conditions: (i) it is to be (but has not yet been) acquired by the Borrower, any Subsidiary or any Unconsolidated Affiliate upon completion of construction pursuant to a contract in which the seller of such real property is required to develop or renovate prior to, and as a condition precedent to, such acquisition and (ii) a third party is developing such property using the proceeds of a loan that is Guaranteed by, or is otherwise recourse to, the Borrower, any Subsidiary or any Unconsolidated Affiliate but (b) exclude any Property undergoing ordinary course capital improvements or renovations. A Development Property on which all improvements (other than tenant improvements on unoccupied space) related to the development of such Property have been completed for at least 12 months shall cease to constitute a Development Property notwithstanding the fact that such Property has not achieved an Occupancy Rate of at least 80.0%.
“Dollars” or “$” means the lawful currency of the United States of America.
“EBITDA” means, with respect to a Person for any period and without duplication, the sum of: (a) net income (or loss) of such Person for such period determined on a consolidated basis, in accordance with GAAP, exclusive of the following (but only to the extent included in determination of such net income (or loss) for such period): (i) depreciation and amortization expense; (ii) Interest Expense; (iii) income tax expense; (iv) extraordinary or non-recurring gains, losses and reserves; (v) gains and losses associated with the sale of Properties; plus (b) such Person’s Ownership Share of EBITDA (as determined in a manner
consistent with the foregoing clause (a)) of its Unconsolidated Affiliates. EBITDA shall be adjusted to remove all impact of straight lining of rents required under GAAP and amortization of intangibles pursuant to FASB ASC 805.
“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund and (d) any other Person (other than a natural person) approved by the Administrative Agent (such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Parent, any of the Parent’s Affiliates or Subsidiaries or any Defaulting Lender.
“Eligible Property” means a Property which satisfies all of the following requirements: (a) such Property is fully developed as a retail Property and uses incidental thereto; (b) the Property is 100% owned, or leased under a Ground Lease, by the Borrower, a Wholly Owned Subsidiary of the Borrower and/or a Qualified Venture, or is owned under a nominee arrangement by the Borrower, a Wholly Owned Subsidiary of the Borrower, a Qualified Venture or a trust controlled by the Borrower, a Wholly Owned Subsidiary of the Borrower or a Qualified Venture (so long as the sole beneficiary of such trust is the Borrower, a Wholly Owned Subsidiary of the Borrower or a Qualified Venture); (c) neither such Property, nor any interest of the Borrower, any Subsidiary or Qualified Venture therein, is subject to any Lien (other than certain Permitted Liens) or a Negative Pledge; (d) if such Property is owned or leased by a Subsidiary or a Qualified Venture (i) none of the Borrower’s direct or indirect ownership interest in such Subsidiary or Qualified Venture is subject to any Lien (other than certain Permitted Liens) or to a Negative Pledge; and (ii) the Borrower directly, or indirectly through a Subsidiary, has the right to take the following actions without the need to obtain the consent of any Person: (x) to sell, transfer or otherwise dispose of such Property and (y) to create a Lien on such Property as security for Indebtedness of the Borrower or such Subsidiary, as applicable; and (e) such Property is free of all structural defects or major architectural deficiencies, title defects, environmental conditions or other adverse matters except for defects, deficiencies, conditions or other matters individually or collectively which are not material to the profitable operation of such Property.
“Environmental Laws” means any Applicable Law relating to environmental protection or the manufacture, storage, remediation, disposal or clean‑up of Hazardous Materials including, without limitation, the following: Clean Air Act, 42 U.S.C. § 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; National Environmental Policy Act, 42 U.S.C. § 4321 et seq.; regulations of the Environmental Protection Agency, any applicable rule of common law and any judicial interpretation thereof relating primarily to the environment or Hazardous Materials, and any analogous or comparable state or local laws, regulations or ordinances that concern Hazardous Materials or protection of the environment.
“Equity Interest” means, with respect to any Person, any share of capital stock of (or other ownership or profit interests in) such Person, any warrant, option or other right for the purchase or other acquisition from such Person of any share of capital stock of (or other ownership or profit interests in) such Person (whether or not certificated), any security convertible into or exchangeable for any share of capital stock of (or other ownership or profit interests in) such Person or warrant, right or option for the purchase or other acquisition from such Person of such shares (or such other interests), and any other ownership or profit interest in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such share, warrant, option, right or other interest is authorized or otherwise existing on any date of determination.
“Equity Issuance” means any issuance or sale by a Person of any Equity Interest in such Person and shall in any event include the issuance of any Equity Interest upon the conversion or exchange of any
security constituting Indebtedness that is convertible or exchangeable, or is being converted or exchanged, for Equity Interests.
“ERISA” means the Employee Retirement Income Security Act of 1974, as in effect from time to time.
“ERISA Event” means, with respect to the ERISA Group, (a) any “reportable event” as defined in Section 4043 of ERISA with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the withdrawal of a member of the ERISA Group from a Plan subject to Section 4063 of ERISA during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) the incurrence by a member of the ERISA Group of any liability with respect to the withdrawal or partial withdrawal from any Multiemployer Plan; (d) the incurrence by any member of the ERISA Group of any liability under Title IV of ERISA with respect to the termination of any Plan or Multiemployer Plan; (e) the institution of proceedings to terminate a Plan or Multiemployer Plan by the PBGC; (f) the failure by any member of the ERISA Group to make when due required contributions to a Multiemployer Plan or Plan unless such failure is cured within 30 days or the filing pursuant to Section 412(c) of the Internal Revenue Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard; (g) any other event or condition that might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan or the imposition of liability under Section 4069 or 4212(c) of ERISA; (h) the receipt by any member of the ERISA Group of any notice or the receipt by any Multiemployer Plan from any member of the ERISA Group of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent (within the meaning of Section 4245 of ERISA), in reorganization (within the meaning of Section 4241 of ERISA), or in “critical” status (within the meaning of Section 432 of the Internal Revenue Code or Section 305 of ERISA); (i) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any member of the ERISA Group or the imposition of any Lien in favor of the PBGC under Title IV of ERISA; or (j) a determination that a Plan is, or is reasonably expected to be, in “at risk” status (within the meaning of Section 430 of the Internal Revenue Code or Section 303 of ERISA).
“ERISA Group” means the Parent, the Borrower, any other Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control, which, together with the Parent, the Borrower or any other Subsidiary, are treated as a single employer under Section 414 of the Internal Revenue Code.
“Event of Default” means any of the events specified in Section 10.1., provided that any requirement for notice or lapse of time or any other condition has been satisfied.
“Excluded Subsidiary” means any Subsidiary (a) holding title to assets which are or are to become collateral for any Secured Indebtedness of such Subsidiary and (b) which is prohibited from Guarantying the Indebtedness of any other Person pursuant to (i) any document, instrument or agreement evidencing such Secured Indebtedness or (ii) a provision of such Subsidiary’s organizational documents which provision was included in such Subsidiary’s organizational documents as a condition to the extension of such Secured Indebtedness.
“Existing Credit Agreement” means that certain Third Amended and Restated Credit Agreement dated as of September 7, 2011 by and among the Borrower, the financial institutions party thereto, Wells Fargo Bank, as administrative agent, and the other parties thereto.
“Fair Market Value” means (a) with respect to a security listed on a national securities exchange or the NASDAQ National Market, the price of such security as reported on such exchange or market by any widely recognized reporting method customarily relied upon by financial institutions and (b) with respect to any other property, the price which could be negotiated in an arm’s-length free market transaction, for cash, between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction. Except as otherwise provided herein, Fair Market Value shall be determined by the Board of Directors of the Borrower (or an authorized committee thereof) acting in good faith conclusively evidenced by a board resolution thereof delivered to the Administrative Agent or, with respect to any asset valued at no more than $1,000,000, such determination may be made by the chief financial officer of the Borrower evidenced by an officer’s certificate delivered to the Administrative Agent.
“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.
“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent.
“Fee Letter” means that certain fee letter dated as of October 17, 2011, by and among the Borrower, the Administrative Agent and the Arranger.
“Fees” means the fees and commissions provided for or referred to in Section 3.5. and any other fees payable by the Borrower hereunder, under any other Loan Document or under the Fee Letter.
“Fixed Charges” means, for any period with respect to the Parent and its Consolidated Subsidiaries determined on a consolidated basis, the sum of (a) Interest Expense, (b) the aggregate of all regularly scheduled principal payments made with respect to Indebtedness of the Parent and its Consolidated Subsidiaries (including the Ownership Share of such payments made by an Unconsolidated Affiliate of the Parent) during such period, other than any balloon, bullet or similar principal payment which repays such Indebtedness in full, and (c) all Preferred Dividends paid by the Parent and its Consolidated Subsidiaries (including the Ownership Share of such dividends paid or accrued by any Unconsolidated Affiliate of the Parent) during such period (other than Preferred Dividends received and retained by the Parent, the Borrower or any of their respective Subsidiaries).
“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
“Funds From Operations” means, net income attributable to common stockholders (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciated property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis. Funds From Operations shall include the results of discontinued operations, non-recurring amounts (loss impairments, for example), except for those classified as extraordinary under GAAP, and may include certain gains and losses from the sale of undepreciated property. Funds From Operations shall also include gains from the sale of land or Development Properties. To the extent that development sales to co-investment partnerships are impacted by the “Restricted Gain Method”, Funds From Operations shall include the additional gain deferral except for that amount of the ownership it has retained in the development sold. Adjustments for unconsolidated entities will be calculated to reflect funds from operations on the same basis.
“GAAP” means generally accepted accounting principles in the United States of America set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (including Statement of Financial Accounting Standards No. 168, “The FASB Accounting Standards Codification”) or in such other statements by such other entity as may be approved by a significant segment of the accounting profession in the United States of America, which are applicable to the circumstances as of the date of determination.
“Governmental Approvals” means all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities.
“Governmental Authority” means any national, state or local government (whether domestic or foreign), any political subdivision thereof or any other governmental, quasi‑governmental, judicial, administrative, public or statutory instrumentality, authority, body, agency, bureau, commission, board, department or other entity (including, without limitation, the Federal Deposit Insurance Corporation, the Comptroller of the Currency or the Federal Reserve Board, any central bank or any comparable authority) or any arbitrator with authority to bind a party at law.
“Ground Lease” means a ground lease containing the following terms and conditions: (a) a remaining term (taking into account any unexercised extensions which at the time of the determination are exercisable by the lessee without the consent of the lessor) of 40 years or more from the Agreement Date; (b) the right of the lessee to mortgage and encumber its interest in the leased property without the consent of the lessor; (c) the obligation of the lessor to give the holder of any mortgage Lien on such leased property written notice of any defaults on the part of the lessee and agreement of such lessor that such lease will not be terminated until such holder has had a reasonable opportunity to cure or complete foreclosures, and fails to do so; (d) reasonable transferability of the lessee’s interest under such lease, including ability to sublease; and (e) such other rights customarily required by mortgagees making a loan secured by the interest of the holder of the leasehold estate demised pursuant to a ground lease.
“Guarantor” means any Person that is party to the Guaranty as a “Guarantor”.
“Guaranty”, “Guaranteed” or to “Guarantee” as applied to any obligation means and includes: (a) a guaranty (other than by endorsement of negotiable instruments for collection in the ordinary course of business), directly or indirectly, in any manner, of any part or all of such obligation, or (b) an agreement, direct or indirect, contingent or otherwise, and whether or not constituting a guaranty, the practical effect of which is to assure the payment or performance (or payment of damages in the event of nonperformance) of any part or all of such obligation whether by: (i) the purchase of securities or obligations, (ii) the purchase, sale or lease (as lessee or lessor) of property or the purchase or sale of services primarily for the purpose of enabling the obligor with respect to such obligation to make any payment or performance (or payment of damages in the event of nonperformance) of or on account of any part or all of such obligation, or to assure the owner of such obligation against loss, (iii) the supplying of funds to or in any other manner investing in the obligor with respect to such obligation, (iv) repayment of amounts drawn down by beneficiaries of letters
of credit, or (v) the supplying of funds to or investing in a Person on account of all or any part of such Person’s obligation under a Guaranty of any obligation or indemnifying or holding harmless, in any way, such Person against any part or all of such obligation. As the context requires, “Guaranty” shall also mean the guaranty executed and delivered pursuant to Section 5.1. or 7.13. and substantially in the form of Exhibit B.
“Hazardous Materials” means all or any of the following: (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable Environmental Laws as “hazardous substances”, “hazardous materials”, “hazardous wastes”, “toxic substances” or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, “TCLP” toxicity, or “EP toxicity”; (b) oil, petroleum or petroleum derived substances, natural gas, natural gas liquids or synthetic gas and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources; (c) any flammable substances or explosives or any radioactive materials; (d) asbestos in any form; (e) toxic mold; and (f) electrical equipment which contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of fifty parts per million.
“Indebtedness” means, with respect to a Person, at the time of computation thereof, all of the following (without duplication): (a) all obligations of such Person in respect of money borrowed; (b) all obligations of such Person, whether or not for money borrowed (i) represented by notes payable, or drafts accepted, in each case representing extensions of credit, (ii) evidenced by bonds, debentures, notes or similar instruments, or (iii) constituting purchase money indebtedness, conditional sales contracts, title retention debt instruments or other similar instruments, upon which interest charges are customarily paid or that are issued or assumed as full or partial payment for property or services rendered; (c) Capitalized Lease Obligations of such Person (including ground leases to the extent required under GAAP to be reported as a liability); (d) all reimbursement obligations of such Person under or in respect of any letters of credit or acceptances (whether or not the same have been presented for payment); (e) all Off-Balance Sheet Obligations of such Person; (f) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Mandatorily Redeemable Stock issued by such Person or any other Person, valued at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; (g) all obligations of such Person in respect of any purchase obligation, repurchase obligation, takeout commitment or forward equity commitment, in each case evidenced by a binding agreement (excluding any such obligation to the extent the obligation can be satisfied by the issuance of Equity Interests (other than Mandatorily Redeemable Stock)); (h) net obligations under any Derivatives Contract not entered into as a hedge against existing Indebtedness, in an amount equal to the Derivatives Termination Value thereof; (i) all Indebtedness of other Persons which such Person has guaranteed or is otherwise recourse to such Person (except for guaranties of customary exceptions for fraud, misapplication of funds, voluntary bankruptcy, collusive involuntary bankruptcy, environmental indemnities and other similar exceptions to nonrecourse liability); (j) all Indebtedness of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property or assets owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness or other payment obligation; and (k) such Person’s Ownership Share of the Indebtedness of any Unconsolidated Affiliate of such Person. Indebtedness of any Person shall include Indebtedness of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent of such Person’s Ownership Share of such partnership or joint venture (except if such Indebtedness, or portion thereof, is recourse to such Person, in which case the greater of such Person’s Ownership Share of such Indebtedness or the amount of the recourse portion of the Indebtedness, shall be included as Indebtedness of such Person). All Loans shall constitute Indebtedness of the Borrower.
“Initial Funding Date” means the date on which the Initial Term Loan is made by the Lenders
which date may not be earlier than the date on which all of the conditions precedent set forth in Section 5.1. shall have been fulfilled or waived by the Lenders in accordance with the terms of this Agreement and may not be later than January 31, 2012.
“Initial Term Loan” means the initial Loan made by the Lenders to the Borrower pursuant to Section 2.1.(a).
“Initial Term Loan Commitment” means, as to each Lender, such Lender’s obligation to make Initial Term Loans on the Initial Funding Date pursuant to Section 2.1.(a), in an amount up to, but not exceeding, the amount set forth for such Lender on Schedule I as such Lender’s “Initial Term Loan Commitment Amount”.
“Intellectual Property” has the meaning given that term in Section 6.1.(r).
“Interest Expense” means, for any period, without duplication, (a) total interest expense of the Parent and its Consolidated Subsidiaries determined on a consolidated basis in accordance with GAAP for such period, including capitalized interest not funded under a construction loan interest reserve account, determined on a consolidated basis in accordance with GAAP for such period, plus (b) the Parent’s Ownership Share of total interest expense of Unconsolidated Affiliates for such period, including capitalized interest not funded under a construction loan interest reserve account.
“Interest Period” means with respect to each LIBOR Loan, each period commencing on the date such LIBOR Loan is made, or in the case of the Continuation of a LIBOR Loan, the last day of the preceding Interest Period for such Loan, and ending on the numerically corresponding day in the first, third or sixth calendar month thereafter, as the Borrower may select in a Notice of Borrowing, Notice of Continuation or Notice of Conversion, as the case may be, except that each Interest Period that commences on the last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month. Notwithstanding the foregoing: (i) if any Interest Period for any Loan would otherwise end after the Maturity Date, such Interest Period shall end on the Maturity Date; and (ii) each Interest Period that would otherwise end on a day which is not a Business Day shall end on the immediately following Business Day (or, if such immediately following Business Day falls in the next calendar month, on the immediately preceding Business Day).
“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.
“Investment” means, with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, by means of any of the following: (a) the purchase or other acquisition of any Equity Interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, Guaranty of Indebtedness of, or purchase or other acquisition of any Indebtedness of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person. Any binding commitment to make an Investment in any other Person, as well as any option of another Person to require an Investment in such Person, shall constitute an Investment. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Loan Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.
“Investment Grade Rating” means a Credit Rating of BBB- (or equivalent) or higher from S&P and Baa3 (or equivalent) or higher from Moody’s.
“Lender” means each financial institution from time to time party hereto as a “Lender”, together with its respective successors and permitted assigns; provided that, from and after the date any Additional Term Lender acquires an Additional Term Loan Commitment, the term “Lender” shall include such Additional Term Loan Lender; provided further, that, except as otherwise expressly provided herein, the term “Lender” shall exclude any Lender (or its Affiliates) in its capacity as a Specified Derivatives Provider.
“Lender Fee Letter” means the Lender Fee Letter entered into on the date hereof by the Borrower and the Parent in favor of the Administrative Agent and the Lenders.
“Lending Office” means, for each Lender and for each Type of Loan, the office of such Lender specified in such Lender’s Administrative Questionnaire or in the applicable Assignment and Assumption, or such other office of such Lender as such Lender may notify the Administrative Agent in writing from time to time.
“Level” has the meaning given that term in the definition of the term “Applicable Margin.”
“LIBOR” means, for the Interest Period for any LIBOR Loan, the rate of interest, rounded up to the nearest whole multiple of one-hundredth of one percent (0.01%), obtained by dividing (i) the rate of interest, rounded upward to the nearest whole multiple of one-hundredth of one percent (0.01%), referred to as the BBA (British Bankers’ Association) LIBOR rate as set forth by any service selected by the Administrative Agent that has been nominated by the British Bankers’ Association as an authorized information vendor for the purpose of displaying such rate for deposits in Dollars at approximately 9:00 a.m. Pacific time, two (2) Business Days prior to the date of commencement of such Interest Period for purposes of calculating effective rates of interest for loans or obligations making reference thereto, for an amount approximately equal to the applicable LIBOR Loan and for a period of time approximately equal to such Interest Period by (ii) a percentage equal to 1 minus the stated maximum rate (stated as a decimal) of all reserves, if any, required to be maintained with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”) as specified in Regulation D of the Board of Governors of the Federal Reserve System (or against any other category of liabilities which includes deposits by reference to which the interest rate on LIBOR Loans is determined or any applicable category of extensions of credit or other assets which includes loans by an office of any Lender outside of the United States of America). Any change in such maximum rate shall result in a change in LIBOR on the date on which such change in such maximum rate becomes effective.
“LIBOR Loan” means a Loan (or any portion thereof) bearing interest at a rate based on LIBOR.
“LIBOR Market Index Rate” means, for any day, LIBOR as of that day that would be applicable for a LIBOR Loan having a one-month Interest Period determined at approximately 9:00 a.m. Pacific time for such day (or if such day is not a Business Day, the immediately preceding Business Day). The LIBOR Market Index Rate shall be determined on a daily basis.
“Lien” as applied to the property of any Person means: (a) any security interest, encumbrance, mortgage, deed to secure debt, deed of trust, assignment of leases and rents, pledge, lien, hypothecation, assignment, charge or lease constituting a Capitalized Lease Obligation, conditional sale or other title retention agreement, or other security title or encumbrance of any kind in respect of any property of such Person, or upon the income, rents or profits therefrom; (b) any arrangement, express or implied, under which any property of such Person is transferred, sequestered or otherwise identified for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to the payment of the general, unsecured creditors of such Person; and (c) the filing of any financing statement under the
UCC or its equivalent in any jurisdiction, other than any precautionary filing not otherwise constituting or giving rise to a Lien, including a financing statement filed (i) in respect of a lease not constituting a Capitalized Lease Obligation pursuant to Section 9-505 (or a successor provision) of the UCC or its equivalent as in effect in an applicable jurisdiction or (ii) in connection with a sale or other disposition of accounts or other assets not prohibited by this Agreement in a transaction not otherwise constituting or giving rise to a Lien.
“Loan” means a loan made by a Lender to the Borrower pursuant to Section 2.1. and/or Section 2.13., and shall include the Initial Term Loan, any Delayed Draw Term Loan and any Additional Term Loan.
“Loan Document” means this Agreement, each Note, the Guaranty, the Lender Fee Letter and each other document or instrument now or hereafter executed and delivered by a Loan Party in connection with, pursuant to or relating to this Agreement (other than the Fee Letter and any Specified Derivatives Contract).
“Loan Party” means each of the Borrower and each other Person who guarantees all or a portion of the Obligations. Schedule 1.1.(B) sets forth the Loan Parties in addition to the Borrower as of the Agreement Date.
“Mandatorily Redeemable Stock” means, with respect to any Person, any Equity Interest of such Person which by the terms of such Equity Interest (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable), upon the happening of any event or otherwise, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than an Equity Interest to the extent redeemable in exchange for common stock or other equivalent common Equity Interests at the option of the issuer of such Equity Interest), (b) is convertible into or exchangeable or exercisable for Indebtedness or Mandatorily Redeemable Stock, or (c) is redeemable at the option of the holder thereof, in whole or in part (other than an Equity Interest which is redeemable solely in exchange for common stock or other equivalent common Equity Interests), in each case on or prior to the date on which all Loans are scheduled to be due and payable in full.
“Material Adverse Effect” means a materially adverse effect on (a) the business, assets, liabilities, financial condition, or operations of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower or any other Loan Party to perform its obligations under any Loan Document to which it is a party, (c) the validity or enforceability of any of the Loan Documents, (d) the rights and remedies of the Lenders and the Administrative Agent under any of the Loan Documents or (e) the timely payment of the principal of or interest on the Loans or other amounts payable in connection therewith.
“Material Contract” means any contract or other arrangement (other than Loan Documents, the Fee Letter and Specified Derivatives Contracts), whether written or oral, to which the Borrower, any Subsidiary or any other Loan Party is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.
“Material Indebtedness” means any Indebtedness (other than the Loans) having an aggregate outstanding principal amount, individually or in the aggregate with all other Indebtedness for which there has been a failure to pay when due and payable, an acceleration of the maturity, or an event that would permit any holder or holders of such Indebtedness to accelerate the maturity of such Indebtedness, of $50,000,000 or more (or $25,000,000 or more, in the case of the Derivatives Termination Value (without regard to the effect of any close-out netting provision) of Derivatives Contracts, or $100,000,000 or more in the case of Nonrecourse Indebtedness).
“Material Subsidiary” means any Subsidiary to which more than 5.0% of Total Asset Value is attributable on an individual basis.
“Maturity Date” means December 15, 2016.
“Moody’s” means Moody’s Investors Service, Inc. and its successors.
“Mortgage” means a mortgage, deed of trust, deed to secure debt or similar security instrument made by a Person owning an interest in real estate granting a Lien on such interest in real estate as security for the payment of Indebtedness.
“Mortgage Receivable” means a promissory note secured by a Mortgage of which the Parent, the Borrower or any other Subsidiary is the holder and retains the rights of collection of all payments thereunder.
“Multiemployer Plan” means at any time a multiemployer plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding six plan years made contributions, including for these purposes any Person which ceased to be a member of the ERISA Group during such six-year period.
“Negative Pledge” means, with respect to a given asset, any provision of a document, instrument or agreement (other than any Loan Document) which prohibits or purports to prohibit the creation or assumption of any Lien on such asset as security for Indebtedness of the Person owning such asset or any other Person; provided, however, that an agreement that conditions a Person’s ability to encumber its assets upon the maintenance of one or more specified ratios that limit such Person’s ability to encumber its assets but that do not generally prohibit the encumbrance of its assets, or the encumbrance of specific assets, shall not constitute a Negative Pledge.
“Net Operating Income” means, for any Property and for a given period, the sum of the following (without duplication and determined on a consistent basis with prior periods): (a) rents and other revenues received in the ordinary course from such Property (including proceeds of rent loss or business interruption insurance but excluding pre-paid rents and revenues and security deposits except to the extent applied in satisfaction of tenants’ obligations for rent) minus (b) all expenses paid (excluding interest but including an appropriate accrual for property taxes and insurance) related to the ownership, operation or maintenance of such Property, including but not limited to property taxes, assessments and the like, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses, marketing expenses, legal and administrative expenses minus (c) the Capital Reserves for such Property as of the end of such period minus (d) the greater of (i) the actual property management fee paid during such period with respect to such Property and (ii) an imputed management fee in an amount equal to 3.0% of the gross revenues for such Property for such period. For purposes of determining Net Operating Income for Unencumbered Asset Value, Properties acquired or disposed of during the immediately preceding two fiscal quarters of the Parent shall be excluded.
“Net Proceeds” means with respect to an Equity Issuance by a Person, the aggregate amount of all cash and the Fair Market Value of all other property (other than securities of such Person being converted or exchanged in connection with such Equity Issuance) received by such Person in respect of such Equity Issuance net of investment banking fees, legal fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred by such Person in connection with such Equity Issuance.
“Non-Guarantor” means any RD Entity that is not a Guarantor.
“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.
“Nonrecourse Indebtedness” means, with respect to a Person, Indebtedness for borrowed money in respect of which recourse for payment (except for customary exceptions for fraud, misapplication of funds, environmental indemnities, voluntary bankruptcy, collusive involuntary bankruptcy and other similar customary exceptions to nonrecourse liability in a form reasonably acceptable to the Administrative Agent) is contractually limited to specific assets of such Person encumbered by a Lien securing such Indebtedness.
“Note” has the meaning given that term in Section 2.11.
“Notice of Borrowing” means a notice substantially in the form of Exhibit C (or such other form reasonably acceptable to the Administrative Agent and containing the information required in such Exhibit) to be delivered to the Administrative Agent pursuant to Section 2.2 evidencing the Borrower’s request for a borrowing of a Loan.
“Notice of Continuation” means a notice substantially in the form of Exhibit D (or such other form reasonably acceptable to the Administrative Agent and containing the information required in such Exhibit) to be delivered to the Administrative Agent pursuant to Section 2.9. evidencing the Borrower’s request for the Continuation of a LIBOR Loan.
“Notice of Conversion” means a notice substantially in the form of Exhibit E (or such other form reasonably acceptable to the Administrative Agent and containing the information required in such Exhibit) to be delivered to the Administrative Agent pursuant to Section 2.10. evidencing the Borrower’s request for the Conversion of a Loan from one Type to another Type.
“Obligations” means, individually and collectively: (a) the aggregate principal balance of, and all accrued and unpaid interest on, all Loans and (b) all other indebtedness, liabilities, obligations, covenants and duties of the Parent, the Borrower and the other Loan Parties owing to the Administrative Agent or any Lender of every kind, nature and description, under or in respect of this Agreement or any of the other Loan Documents, including, without limitation, the Fees and indemnification obligations, whether direct or indirect, absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any promissory note. For the avoidance of doubt, “Obligations” shall not include Specified Derivatives Obligations.
“Occupancy Rate” means, with respect to a Property at any time, the ratio, expressed as a percentage, of (a) the number of square feet of such Property actually occupied by tenants that are not affiliated with the Parent, the Borrower or any Subsidiary and paying rent at rates not materially less than rates generally prevailing at the time the applicable lease was entered into, pursuant to binding leases to (b) the aggregate number of square feet of such Property.
“Off-Balance Sheet Obligations” means liabilities and obligations of the Parent or any other Person in respect of “off-balance sheet arrangements” (as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act) which the Parent would be required to disclose in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the Parent’s report on Form 10‑Q or Form 10‑K (or their equivalents) which the Parent is required to file with the Securities and Exchange Commission (or any Governmental Authority substituted therefor).
“OFAC” has the meaning given that term in Section 6.1.(w).
“Ownership Share” means, with respect to any Subsidiary of a Person (other than a Wholly Owned Subsidiary) or any Unconsolidated Affiliate of a Person, the greatest of (a) such Person’s relative nominal
direct and indirect ownership interest (expressed as a percentage) in such Subsidiary or Unconsolidated Affiliate, (b) subject to compliance with Section 8.4.(l), such Person’s relative direct and indirect economic interest (calculated as a percentage) in such Subsidiary or Unconsolidated Affiliate determined in accordance with the applicable provisions of the declaration of trust, articles or certificate of incorporation, articles of organization, partnership agreement, joint venture agreement or other applicable organizational document of such Subsidiary or Unconsolidated Affiliate, and (c) the portion (calculated as a percentage) of the total Indebtedness of such Subsidiary or Unconsolidated Affiliate Guaranteed by such Person, or which is recourse to such Person. If the Parent, the Borrower or any their Subsidiaries are acting as a general partner of any partnership, the Ownership Share of the Parent, the Borrower or any such Subsidiary of such partnership shall be equal to one-hundred percent (100.0%).
“Participant” has the meaning given that term in Section 12.6.(d).
“PBGC” means the Pension Benefit Guaranty Corporation and any successor agency.
“Permitted Liens” means, with respect to any asset or property of a Person, (a)(i) Liens securing taxes, assessments and other charges or levies imposed by any Governmental Authority (excluding any Lien imposed pursuant to any of the provisions of ERISA or pursuant to any Environmental Laws) or (ii) the claims of materialmen, mechanics, carriers, warehousemen or landlords for labor, materials, supplies or rentals incurred in the ordinary course of business, which, in each case, are not at the time required to be paid or discharged under Section 7.6.; (b) Liens consisting of deposits or pledges made, in the ordinary course of business, in connection with, or to secure payment of, obligations under workers’ compensation, unemployment insurance or similar Applicable Laws; (c) Liens consisting of encumbrances in the nature of zoning restrictions, easements, and rights or restrictions of record on the use of real property, which do not materially detract from the value of such property or materially impair the intended use thereof in the business of such Person; (d) the rights of tenants under leases or subleases not interfering with the ordinary conduct of business of such Person; (e) Liens in favor of the Administrative Agent for its benefit and the benefit of the Lenders and each Specified Derivatives Provider; and (f) Liens in favor of the Borrower or a Guarantor securing obligations owing by a Subsidiary to the Borrower or a Guarantor.
“Person” means any natural person, corporation, limited partnership, general partnership, joint stock company, limited liability company, limited liability partnership, joint venture, association, company, trust, bank, trust company, land trust, business trust or other organization, whether or not a legal entity, or any other nongovernmental entity, or any Governmental Authority.
“Plan” means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (a) is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or (b) has at any time within the preceding six years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group.
“Post-Default Rate” means, in respect of any principal of any Loan, the rate otherwise applicable plus an additional four percent (4.0%) per annum and with respect to any other Obligation that is not paid when due (whether at stated maturity, by acceleration, by optional or mandatory prepayment or otherwise), a rate per annum equal to the Base Rate as in effect from time to time plus the Applicable Margin plus four percent (4.0%).
“Preferred Dividends” means, as to any Person, for any period and without duplication, all Restricted Payments paid during such period on Preferred Equity Interests issued by such Person. Preferred
Dividends shall not include dividends or distributions (a) paid or payable solely in Equity Interests (other than Mandatorily Redeemable Stock) payable to holders of such class of Equity Interests; (b) paid or payable to such Person; or (c) constituting or resulting in the redemption of Preferred Equity Interests, other than scheduled redemptions not constituting balloon, bullet or similar redemptions in full.
“Preferred Equity Interests” means, with respect to any Person, Equity Interests in such Person which are entitled to preference or priority over any other Equity Interest in such Person in respect of the payment of dividends or distribution of assets upon liquidation or both.
“Principal Office” means the office of the Administrative Agent located at 608 Second Avenue S., 11th Floor, Minneapolis, Minnesota 55402‑1916, or any other subsequent office that the Administrative Agent shall have specified as the Principal Office by written notice to the Borrower and the Lenders.
“Pro Rata Share” means, the ratio, expressed as a percentage, as of any date of (a) (i) the amount of such Lender’s remaining Commitments as of such date plus (ii) the outstanding principal balance of such Lender’s Loans as of such date to (b) (i) the aggregate remaining amount of the Commitments of all Lenders as of such date plus (ii) the outstanding principal balance of all Loans as of such date.
“Property” means any parcel (or group of related parcels) of real property that is owned or leased under a Ground Lease by the Borrower, any Subsidiary or any Unconsolidated Affiliate of the Borrower and located in a state of the United States of America or in the District of Columbia.
“Qualified Plan” means a Benefit Arrangement that is intended to be tax-qualified under Section 401(a) of the Internal Revenue Code.
“Qualified Venture” means any Subsidiary of the Borrower (other than an Excluded Subsidiary) which satisfies all of the following requirements: (a) such Subsidiary is a limited liability company or limited partnership, (b) such Subsidiary is a Consolidated Subsidiary of the Borrower, (c) such Subsidiary was formed for the purpose of developing a Development Property, (d) the Borrower or a wholly owned Subsidiary of the Borrower is the managing member or the general partner of such Subsidiary with authority to manage and control the day to day business and affairs of the Subsidiary, and with the right without the need to obtain the consent of any other Person, including any minority member or partner of such Subsidiary, to create a Lien on such Subsidiary's Property as security for Indebtedness of such Subsidiary and to sell, transfer or otherwise dispose of such Property, (e) such Subsidiary has a minority member or partner which has agreed to assist in the development of the Property owned by such Subsidiary in the manner described in the organizational documents of such Subsidiary and which is entitled to participate in distributions by such Subsidiary of cash flow and/or sale or refinancing proceeds, subject to an agreed upon preferred return on capital contributed to such Subsidiary, and (f) the amount reasonably estimated by the Borrower to be payable to such minority member or partner on account of such participation (i) is included as Unsecured Indebtedness.
“Rating Agency” means S&P or Moody’s.
“RD Entity” means any Person (other than the Borrower) in which the Parent or the Borrower directly or indirectly owns an Equity Interest and who (i) owns an Eligible Property and (ii) has incurred, acquired or suffered to exist any Indebtedness other than Nonrecourse Indebtedness.
“Recurring Funds From Operations” means Funds From Operations excluding the impact of gains from the sale of Development Properties and outparcels, net of related taxes and expenses associated with transactions that are not consummated, provisions for impairment, gains and losses from the early extinguishment of Indebtedness and Preferred Equity Interests, restructuring charges, non-recurring
transaction fees and promotes, and other one-time, non-recurring charges.
“Register” has the meaning given that term in Section 12.6.(c).
“Regulatory Change” means, with respect to any Lender, any change effective after the Agreement Date in Applicable Law (including without limitation, Regulation D of the Board of Governors of the Federal Reserve System) or the adoption or making after such date of any interpretation, directive or request applying to a class of banks, including such Lender, of or under any Applicable Law (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) by any Governmental Authority or monetary authority charged with the interpretation or administration thereof or compliance by any Lender with any request or directive regarding capital adequacy. Notwithstanding anything herein to the contrary, (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (b) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Regulatory Change”, regardless of the date enacted, adopted or issued.
“REIT” means a Person qualifying for treatment as a “real estate investment trust” under the Internal Revenue Code.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Requisite Lenders” means, as of any date, Lenders holding at least 51.0% of the sum of (a) the remaining aggregate amount of the Commitments of all Lenders plus (b) the principal amount of the aggregate outstanding Loans; provided that (i) in determining such percentage at any given time, all then existing Defaulting Lenders will be disregarded and excluded, and (ii) at all times when two or more Lenders (excluding Defaulting Lenders) are party to this Agreement, the term “Requisite Lenders” shall in no event mean less than two Lenders.
“Responsible Officer” means with respect to the Parent, the Borrower or any Subsidiary, each of the chief executive officer, the chief financial officer, the senior vice president–finance, and any treasurer of the Parent, the Borrower or such Subsidiary.
“Restricted Payment” means (a) any dividend or other distribution, direct or indirect, on account of any Equity Interest of the Parent, the Borrower, the other Loan Parties, if any, or any of the respective Subsidiaries of any of the foregoing now or hereafter outstanding, except a dividend payable solely in Equity Interests of identical class to the holders of that class; (b) any redemption, conversion, exchange, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Equity Interest of the Parent, the Borrower, the other Loan Parties, if any, or any of the respective Subsidiaries of any of the foregoing now or hereafter outstanding, except in the case of the Parent, for the conversion or exchange of partnership units in the Borrower solely for shares of Equity Interests in the Parent; and (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire any Equity Interests of Parent, the Borrower, the other Loan Parties, if any, or any of the respective Subsidiaries of any of the foregoing now or hereafter outstanding.
“Secured Indebtedness” means, with respect to a Person as of a given date, the aggregate principal amount of all Indebtedness of such Person outstanding on such date that is secured in any manner by any Lien on any property and, in the case of the Parent, shall include (without duplication) the Parent’s Ownership
Share of the Secured Indebtedness of any of its Unconsolidated Affiliates. Indebtedness of a Subsidiary which is secured solely by a pledge of Equity Interests of such Subsidiary and which also is recourse to the Borrower or a Guarantor shall not be treated as Secured Indebtedness.
“Securities Act” means the Securities Act of 1933, as amended from time to time, together with all rules and regulations issued thereunder.
“Solvent” means, when used with respect to any Person, that (a) the fair value and the fair salable value of its assets (excluding any Indebtedness due from any Affiliate of such Person) are each in excess of the fair valuation of its total liabilities (including all contingent liabilities computed at the amount which, in light of all facts and circumstances existing at such time, represents the amount that could reasonably be expected to become an actual and matured liability); (b) such Person is able to pay its debts or other obligations in the ordinary course as they mature; and (c) such Person has capital not unreasonably small to carry on its business and all business in which it proposes to be engaged.
“Specified Derivatives Contract” means any Derivatives Contract, together with any Derivatives Support Document relating thereto, that is made or entered into at any time, or in effect at any time now or hereafter, whether as a result of an assignment or transfer or otherwise, between the Borrower or any Subsidiary of the Borrower and any Specified Derivatives Provider.
“Specified Derivatives Obligations” means all indebtedness, liabilities, obligations, covenants and duties of the Borrower or its Subsidiaries under or in respect of any Specified Derivatives Contract, whether direct or indirect, absolute or contingent, due or not due, liquidated or unliquidated, and whether or not evidenced by any written confirmation.
“Specified Derivatives Provider” means any Lender, or any Affiliate of a Lender that is a party to a Derivatives Contract at the time the Derivatives Contract is entered into.
“S&P” means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. and its successors.
“Subsidiary” means, for any Person, any corporation, partnership, limited liability company or other entity of which at least a majority of the Equity Interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other individuals performing similar functions of such corporation, partnership, limited liability company or other entity (without regard to the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.
“Substantial Amount” means, at the time of determination thereof, an amount in excess of (a) thirty-five percent (35.0%) of total consolidated assets of the Parent and its Subsidiaries determined on a consolidated basis at such time plus (b) consolidated accumulated depreciation of the Parent and its Subsidiaries determined on a consolidated basis at such time.
“Tangible Net Worth” means, as of a given date, (a) the stockholders’ equity of the Parent and its Subsidiaries determined on a consolidated basis, plus (b) increases in accumulated depreciation and amortization accrued after the September 7, 2011, minus (c) the following (to the extent included when determining stockholders’ equity of the Parent and its Subsidiaries): (i) the amount of any write-up in the book value of any assets contained in any balance sheet resulting from revaluation thereof or any write‑up in excess of the cost of such assets acquired, and (ii) the aggregate of all amounts appearing on the assets side of any such balance sheet for assets which would be classified as intangible assets under GAAP, all
determined on a consolidated basis.
“Taxes” has the meaning given that term in Section 3.10.
“Tenant Lease” means any lease entered into by the Borrower, any Loan Party or any Subsidiary with respect to any portion of a Property.
“Third Party Net Income” means, with respect to a Person and for a given period (a) net income from fees, commissions and other compensation derived from (without duplication) (i) managing and/or leasing properties owned by third parties; (ii) developing properties for third parties; (iii) arranging for property acquisitions by third parties; (iv) arranging financing for third parties and (v) consulting and business services performed for third parties; minus (b) taxes paid or accrued in accordance with GAAP during such period by any “taxable REIT subsidiary” (as defined in Sec. 856(l) of the Internal Revenue Code) of such Person or any of its Subsidiaries; minus (c) the sum of (i) twenty percent (20.0%) of the net income derived from asset management fees, (ii) sixty percent (60.0%) of the net income derived from property management fees, and (iii) fifty percent (50.0%) of the net income derived from all of the other activities described in the forgoing clause (a). For purposes of this definition, the term “third parties” shall include Unconsolidated Affiliates of a Person.
“Total Asset Value” means, at a given time, the sum (without duplication) of all of the following of the Parent and its Consolidated Subsidiaries determined on a consolidated basis in accordance with GAAP applied on a consistent basis: (a) cash, Cash Equivalents, plus (b), the quotient of (i) EBITDA for the four fiscal quarters of the Parent most recently ended, divided by (ii) the Capitalization Rate, plus (c) the GAAP book value of Properties acquired during the period of two fiscal quarters most recently ended, plus (d) the GAAP book value of all Development Properties, plus (e) the GAAP book value of Unimproved Land plus (f) the GAAP book value of all Mortgage Receivables and other promissory notes and plus (g) Capitalized Third Party Net Income; provided, however that to the extent that the Total Asset Value attributable to Capitalized Third Party Net Income would exceed 5.0% of Total Asset Value, such excess shall be excluded. The Parent’s Ownership Share of assets held by Unconsolidated Affiliates (excluding assets of the type described in the immediately preceding clause (a)) will be included in Total Asset Value calculations consistent with the above described treatment for assets of the Parent and its Consolidated Subsidiaries. For purposes of determining Total Asset Value, EBITDA from Properties disposed of during the period of four fiscal quarters of the Parent most recently ended and Properties acquired during the period of two fiscal quarters of the Parent most recently ended shall be excluded, and EBITDA from Properties (other than those acquired during the period of two fiscal quarters of the Parent most recently ended) that have been owned for less than all of the period of four fiscal quarters of the Parent most recently ended shall be annualized for the actual period owned. For purposes of determining Total Asset Value, the calculation of EBITDA shall exclude Third Party Net Income.
“Transfer Authorizer Designation Form” means a form substantially in the form of Exhibit F to be delivered to the Administrative Agent pursuant to Section 5.1.(a), as the same may be amended, restated or modified from time to time with the prior written approval of the Administrative Agent.
“Type” with respect to any Loan, refers to whether such Loan or portion thereof is a LIBOR Loan or a Base Rate Loan.
“UCC” means the Uniform Commercial Code as in effect in any applicable jurisdiction.
“Unconsolidated Affiliate” means, with respect to any Person, any other Person in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person
on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person.
“Unencumbered Asset Value” means (a) the Unencumbered NOI (excluding Net Operating Income attributable to Development Properties and those Properties acquired during the period of two fiscal quarters most recently ended) for the period of four fiscal quarters of the Parent most recently ended divided by the Capitalization Rate, plus (b) the GAAP book value of all Eligible Properties (other than Development Properties) acquired during the period of two quarters most recently ended, plus (c) the GAAP book value of all Development Properties which are Eligible Properties. For purposes of this definition, to the extent that Unencumbered Asset Value attributable to (x) Properties subject to a Ground Lease in which the Parent, the Borrower or any of their respective Subsidiaries is the ground lessee would exceed 10.0% of Unencumbered Asset Value, (y) GAAP book value of all Development Properties would exceed 15.0% of Unencumbered Asset Value and (z) Properties owned or leased by Qualified Ventures would exceed 10.0% of Unencumbered Asset Value, then in the case of each of the foregoing clauses (x) through (z), such excess shall be excluded.
“Unencumbered NOI” means, for any period, Net Operating Income from all Eligible Properties.
“Unimproved Land” means land on which no development (other than improvements that are not material and/or are temporary in nature) has occurred and for which no development is scheduled in the following 12 months.
“Unfunded Liabilities” means, with respect to any Plan at any time, the amount (if any) by which (a) the value of all benefit liabilities under such Plan, determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (b) the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or any other Person under Title IV of ERISA.
“Unsecured Indebtedness” means Indebtedness which is not Secured Indebtedness. Indebtedness of a Subsidiary which is secured solely by a pledge of Equity Interests of such Subsidiary and which also is recourse to the Borrower or a Guarantor shall be treated as Unsecured Indebtedness.
“Unsecured Interest Expense” means, with respect to the Parent and its Consolidated Subsidiaries determined on a consolidated basis for a given period, all Interest Expense attributable to Unsecured Indebtedness of the Parent and its Consolidated Subsidiaries for such period.
“Wells Fargo” means Wells Fargo Bank, National Association, and its successors and assigns.
“Wholly Owned Subsidiary” means any Subsidiary of a Person in respect of which all of the Equity Interests (other than, in the case of a corporation, directors’ qualifying shares) are at the time directly or indirectly owned or controlled by such Person or one or more other Subsidiaries of such Person or by such Person and one or more other Subsidiaries of such Person.
“Withdrawal Liability” means any liability as a result of a complete or partial withdrawal from a Multiemployer Plan as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.2 General; References to Eastern Time.
Unless otherwise indicated, all accounting terms, ratios and measurements shall be interpreted or
determined in accordance with GAAP from time to time; provided that, if at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Requisite Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Requisite Lenders); provided further that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Notwithstanding the preceding sentence, (x) the calculation of liabilities shall not include any fair value adjustments to the carrying value of liabilities to record such liabilities at fair value pursuant to electing the fair value option election under FASB ASC 825-10-25 (formerly known as FAS 159, The Fair Value Option for Financial Assets and Financial Liabilities) or other FASB standards allowing entities to elect fair value option for financial liabilities, in which case, the amount of liabilities shall be the historical cost basis, which generally is the contractual amount owed adjusted for amortization or accretion of any premium or discount, and (y) for purposes of calculating the covenants under this Agreement or any other Loan Document, any obligations of a Person under a lease (whether existing on the Agreement Date or entered into thereafter) that is not (or would not be) required to be classified and accounted for as a capitalized lease on a balance sheet of such Person prepared in accordance with GAAP as in effect on the Agreement Date shall not be treated as a capitalized lease pursuant to this Agreement or the other Loan Documents solely as a result of (1) the adoption of changes in GAAP after the Agreement Date (including, for the avoidance of doubt, any changes in GAAP as set forth in the FASB exposure draft issued on August 17, 2010 (as the same may be amended from time to time)) or (2) changes in the application of GAAP after the Agreement Date (including the avoidance of doubt, any changes as set forth in the FASB exposure draft issued on August 17, 2010 (as the same may be amended from time to time)); provided, however, that upon the request of the Administrative Agent or any Lender the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to any such adoption of changes in, or the application of, GAAP. References in this Agreement to “Sections”, “Articles”, “Exhibits” and “Schedules” are to sections, articles, exhibits and schedules herein and hereto unless otherwise indicated. references in this Agreement to any document, instrument or agreement (a) shall include all exhibits, schedules and other attachments thereto, (b) shall include all documents, instruments or agreements issued or executed in replacement thereof, to the extent permitted hereby and (c) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, supplemented, restated or otherwise modified from time to time to the extent not otherwise stated herein or prohibited hereby and in effect at any given time. Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, the feminine and the neuter. Unless explicitly set forth to the contrary, a reference to “Subsidiary” means a Subsidiary of the Parent or a Subsidiary of such Subsidiary and a reference to an “Affiliate” means a reference to an Affiliate of the Parent. Titles and captions of Articles, Sections, subsections and clauses in this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement. Unless otherwise indicated, all references to time are references to Eastern time.
Section 1.3 Financial Attributes of Non-Wholly Owned Subsidiaries.
When determining the Applicable Margin and compliance by the Parent or the Borrower with any financial covenant contained in any of the Loan Documents (a) only the Ownership Share of the Parent or the Borrower, as applicable, of the financial attributes of a Subsidiary that is not a Consolidated Subsidiary
shall be included and (b) the Parent’s Ownership Share of the Borrower shall be deemed to be 100.0%.
ARTICLE II. CREDIT FACILITY
Section 2.1 Term Loans.
(a) Initial Term Loan. Subject to the terms and conditions hereof, on the Initial Funding Date, each Lender severally and not jointly agrees to make an Initial Term Loan to the Borrower in the aggregate principal amount equal to the amount of such Lender’s Initial Term Loan Commitment. Upon the funding of the Initial Term Loans on the Initial Funding Date, all Initial Term Loan Commitments shall terminate whether or not the full amount of the Initial Term Loan Commitments are funded on such date.
(b) Delayed Draw Term Loans. Subject to the terms and conditions hereof, during the Delayed Draw Availability Period, upon a request from the Borrower to the Administrative Agent pursuant to Section 2.2.(b), each Lender severally and not jointly agrees to make Delayed Draw Term Loans to the Borrower in the aggregate principal amount up to such Lender’s Delayed Draw TL Commitment. The Delayed Draw Term Loans made by the Lenders shall be in an aggregate minimum amount of $10,000,000 and integral multiples of $100,000 in excess thereof. The Borrower shall not request, and the Lenders shall not be obligated to fund, more than two (2) Delayed Draw Term Loans during the Delayed Draw Availability Period. Upon the funding of any Delayed Draw Term Loans, the Delayed Draw TL Commitments with respect to such funded Delayed Draw Term Loan shall terminate. In addition, at the close of business on the last day of the Delayed Draw Availability Period, any remaining amount of the Delayed Draw TL Commitment shall terminate whether or not drawn prior to such date.
Section 2.2 Requests for Term Loans.
(a) Initial Term Loan Requests. Not later than 12:00 noon Eastern time at least 3 Business Days prior to the anticipated Initial Funding Date, the Borrower shall give the Administrative Agent a Notice of Borrowing requesting that the Lenders make the Initial Term Loans on the Initial Funding Date, and if such Initial Term Loans are to be LIBOR Loans, the initial Interest Period for the Initial Term Loans. Such Notice of Borrowing shall be irrevocable once given and binding on the Borrower. Upon receipt of such Notice of Borrowing the Administrative Agent shall promptly notify each Lender.
(b) Delayed Draw Term Loan Requests. Not later than 12:00 noon Eastern time at least one (1) Business Day prior to a borrowing of Delayed Draw Term Loans that are to be Base Rate Loans and not later than 12:00 noon Eastern time at least three (3) Business Days prior to a borrowing of Delayed Draw Term Loans that are to be LIBOR Loans, the Borrower shall deliver to the Administrative Agent a Notice of Borrowing. Each Notice of Borrowing shall specify the aggregate principal amount of the Delayed Draw Term Loans to be borrowed (which shall be in an aggregate minimum amount of $10,000,000 and integral multiples of $100,000 in excess thereof), the date such Delayed Draw Term Loans are to be borrowed (which must be a Business Day), the Type of the requested Delayed Draw Term Loans, and if such Delayed Draw Loans are to be LIBOR Loans, the initial Interest Period for such Delay Draw Term Loans. Each Notice of Borrowing shall be irrevocable once given and binding on the Borrower. Prior to delivering a Notice of Borrowing, the Borrower may (without specifying whether a Delay Draw Loan will be a Base Rate Loan or a LIBOR Loan) request that the Administrative Agent provide the Borrower with the most recent LIBOR available to the Administrative Agent. The Administrative Agent shall provide such quoted rate to the Borrower on the date of such request or as soon as possible thereafter.
Section 2.3 Funding of Term Loans.
(a) Initial Term Loan Funding. Each Lender shall deposit an amount equal to the Initial Term
Loan to be made by such Lender to the Borrower with the Administrative Agent at the Principal Office, in immediately available funds, not later than 12:00 noon Eastern time on the Initial Funding Date. Subject to fulfillment of all applicable conditions set forth herein, the Administrative Agent shall make available to the Borrower in the account specified by the Borrower in the Transfer Authorizer Designation Form, not later than 3:00 p.m. Eastern time on the Initial Funding Date, the proceeds of such amounts received by the Administrative Agent. The Borrower may not reborrow any portion of the Initial Term Loans once repaid.
(b) Delayed Draw Term Loan Funding. Promptly after receipt of a Notice of Borrowing under Section 2.2.(b), the Administrative Agent shall notify each Lender of the proposed borrowing. Each Lender shall deposit an amount equal to the Delayed Draw Term Loan to be made by such Lender to the Borrower on such date with the Administrative Agent at the Principal Office, in immediately available funds not later than 12:00 noon Eastern time on the date of such proposed Delayed Draw Term Loan. Subject to fulfillment of all applicable conditions set forth herein, the Administrative Agent shall make available to the Borrower in the account specified in the Transfer Authorizer Designation Form, not later than 3:00 p.m. Eastern time on the date of the date of the requested borrowing of Delayed Draw Term Loans, the proceeds of such amounts received by the Administrative Agent. The Borrower may not reborrow any portion of the Delayed Draw Term Loans once repaid.
(c) Assumptions Regarding Funding by Lenders. Unless the Administrative Agent shall have been notified by any Lender that such Lender will not make available to the Administrative Agent a Loan to be made by such Lender in connection with any borrowing, the Administrative Agent may assume that such Lender will make the proceeds of such Loan available to the Administrative Agent in accordance with this Section, and the Administrative Agent may (but shall not be obligated to), in reliance upon such assumption, make available to the Borrower the amount of such Loan to be provided by such Lender. In such event, if such Lender does not make available to the Administrative Agent the proceeds of such Loan, then such Lender and the Borrower severally agree to pay to the Administrative Agent on demand the amount of such Loan with interest thereon, for each day from and including the date such Loan is made available to the Borrower but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the Federal Funds Rate and (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay the amount of such interest to the Administrative Agent for the same or overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays to the Administrative Agent the amount of such Loan, the amount so paid shall constitute such Lender’s Loan included in the borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make available the proceeds of a Loan to be made by such Lender.
Section 2.4 Termination of Commitments.
If the conditions precedent set forth in Article V hereof have not been satisfied prior to January 31, 2012, such that the Initial Term Loans have not been funded and the Initial Funding Date shall not have occurred on or prior to such date, all Commitments hereunder shall automatically terminate on and as of January 31, 2012, and this Agreement shall terminate in accordance with Section 12.11. For the avoidance of doubt, other than in accordance with the foregoing sentence, the Commitments hereunder may not be terminated by the Borrower.
Section 2.5 Rates and Payment of Interest on Loans.
(a) Rates. The Borrower promises to pay to the Administrative Agent for the account of each Lender interest on the unpaid principal amount of each Loan made by such Lender for the period from and
including the date of the making of such Loan to but excluding the date such Loan shall be paid in full, at the following per annum rates:
(i) during such periods as such Loan is a Base Rate Loan, at the Base Rate (as in effect from time to time), plus the Applicable Margin for Base Rate Loans; and
(ii) during such periods as such Loan is a LIBOR Loan, at LIBOR for such Loan for the Interest Period therefor, plus the Applicable Margin for LIBOR Loans.
Notwithstanding the foregoing, while an Event of Default exists, the Borrower shall pay to the Administrative Agent for the account of each Lender interest at the Post-Default Rate on the outstanding principal amount of any Loan made by such Lender and on any other amount payable by the Borrower hereunder or under the Note held by such Lender to or for the account of such Lender (including without limitation, accrued but unpaid interest to the extent permitted under Applicable Law).
(b) Payment of Interest. All accrued and unpaid interest on the outstanding principal amount of each Loan shall be payable (i) monthly in arrears on the first day of each month, commencing with the first full calendar month occurring after the Initial Funding Date and (ii) on any date on which the principal balance of such Loan is due and payable in full (whether at maturity, due to acceleration or otherwise). Interest payable at the Post-Default Rate shall be payable from time to time on demand. All determinations by the Administrative Agent of an interest rate hereunder shall be conclusive and binding on the Lenders and the Borrower for all purposes, absent manifest error.
Section 2.6 Number of Interest Periods.
There may be no more than 4 different Interest Periods for LIBOR Loans outstanding at the same time.
Section 2.7 Repayment of Loans.
The Borrower shall repay the entire outstanding principal amount of, and all accrued but unpaid interest on, the Loans on the Maturity Date. Once repaid, whether pursuant to this Section, Section 2.8., or otherwise, the principal amount of such Loan may not be reborrowed.
Section 2.8 Prepayments.
Except as otherwise provided in the immediately following subsection and subject to Section 4.4., the Borrower may prepay any Loan at any time without premium or penalty. The Borrower shall give the Administrative Agent at least three (3) Business Days prior written notice of the prepayment of any Loan. Each voluntary prepayment of Loans shall be in an aggregate minimum amount of $500,000 and integral multiples of $100,000 in excess thereof, or the outstanding principal balance of such Loan, if less.
Section 2.9 Continuation.
So long as no Default or Event of Default exists, the Borrower may on any Business Day, with respect to any LIBOR Loan, elect to maintain such LIBOR Loan or any portion thereof as a LIBOR Loan by selecting a new Interest Period for such LIBOR Loan. Each Continuation of a LIBOR Loan shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $100,000 in excess of that amount, and each new Interest Period selected under this Section shall commence on the last day of the immediately preceding Interest Period. Each selection of a new Interest Period shall be made by the Borrower giving to
the Administrative Agent a Notice of Continuation not later than 12:00 noon Eastern time on the third Business Day prior to the date of any such Continuation. Such notice by the Borrower of a Continuation shall be by telecopy, electronic mail or other similar form of communication in the form of a Notice of Continuation, specifying (a) the proposed date of such Continuation, (b) the LIBOR Loans and portions thereof subject to such Continuation and (c) the duration of the selected Interest Period, all of which shall be specified in such manner as is necessary to comply with all limitations on Loans outstanding hereunder. Each Notice of Continuation shall be irrevocable by and binding on the Borrower once given. Promptly after receipt of a Notice of Continuation, the Administrative Agent shall notify each Lender of the proposed Continuation. If the Borrower shall fail to select in a timely manner a new Interest Period for any LIBOR Loan in accordance with this Section, such Loan will automatically, on the last day of the current Interest Period therefor, Continue as a LIBOR Loan with an Interest Period of one month; provided, however that if a Default or Event of Default exists, such Loan will automatically, on the last day of the current Interest Period therefor, Convert into a Base Rate Loan notwithstanding the first sentence of Section 2.10. or the Borrower’s failure to comply with any of the terms of such Section.
Section 2.10 Conversion.
The Borrower may on any Business Day, upon the Borrower’s giving of a Notice of Conversion to the Administrative Agent by telecopy, electronic mail or other similar form of communication, Convert all or a portion of a Loan of one Type into a Loan of another Type; provided, however, a Base Rate Loan may not be Converted into a LIBOR Loan if a Default or Event of Default exists. Each Conversion of Base Rate Loans into LIBOR Loans shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $100,000 in excess of that amount. Each such Notice of Conversion shall be given not later than 12:00 noon Eastern time 3 Business Days prior to the date of any proposed Conversion. Promptly after receipt of a Notice of Conversion, the Administrative Agent shall notify each Lender of the proposed Conversion. Subject to the restrictions specified above, each Notice of Conversion shall be by telecopy, electronic mail or other similar form of communication in the form of a Notice of Conversion specifying (a) the requested date of such Conversion, (b) the Type of Loan to be Converted, (c) the portion of such Type of Loan to be Converted, (d) the Type of Loan such Loan is to be Converted into and (e) if such Conversion is into a LIBOR Loan, the requested duration of the Interest Period of such Loan. Each Notice of Conversion shall be irrevocable by and binding on the Borrower once given.
Section 2.11 Notes.
(a) Notes. Except in the case of a Lender that has requested not to receive a promissory note, the Loans made by each Lender shall, in addition to this Agreement, also be evidenced by a promissory note substantially in the form of Exhibit G (a “Note”), payable to the order of such Lender in a principal amount equal to the amount of its Commitment as originally in effect and otherwise duly completed.
(b) Records. The date, amount, interest rate, Type and duration of Interest Periods (if applicable) of the Loans made by each Lender to the Borrower, and each payment made on account of the principal thereof, shall be recorded by such Lender on its books and such entries shall be binding on the Borrower absent manifest error; provided, however, that (i) the failure of a Lender to make any such record shall not affect the obligations of the Borrower under any of the Loan Documents and (ii) if there is a discrepancy between such records of a Lender and the statements of accounts maintained by the Administrative Agent pursuant to Section 3.8., in the absence of manifest error, the statements of account maintained by the Administrative Agent pursuant to Section 3.8. shall be controlling.
(c) Lost, Stolen, Destroyed or Mutilated Notes. Upon receipt by the Borrower of (i) written notice from a Lender that the Note of such Lender has been lost, stolen, destroyed or mutilated, and (ii)(A) in
the case of loss, theft or destruction, an unsecured agreement of indemnity from such Lender in form reasonably satisfactory to the Borrower, or (B) in the case of mutilation, upon surrender and cancellation of such Note, the Borrower shall at its own expense execute and deliver to such Lender a new Note dated the date of such lost, stolen, destroyed or mutilated Note.
Section 2.12 Amount Limitations.
Notwithstanding any other term of this Agreement or any other Loan Document, no Lender shall be required to make a Delayed Draw Term Loan, if immediately after the making of such Delayed Draw Term Loan, the aggregate principal amount of all outstanding Delayed Draw Term Loans would exceed the aggregate amount of the Delayed Draw TL Commitments.
Section 2.13 Additional Term Loans.
The Borrower shall have the right at any time and from time to time during the period beginning on the last day of the Delayed Draw Availability Period to but excluding the Maturity Date to request the establishment of one or more term loan commitments (the “Additional Term Loan Commitments”) by providing written notice to the Administrative Agent, which notice shall be irrevocable once given; provided, however, that the aggregate amount of all Additional Term Loan Commitments shall not exceed $150,000,000. Each requested Additional Term Loan Commitment must be in an aggregate minimum amount of $25,000,000 and integral multiples of $5,000,000 in excess thereof. The Administrative Agent, in consultation with the Borrower, shall manage all aspects of the syndication of any such Additional Term Loan Commitments and the allocations thereof, including decisions as to the selection of the Lenders and/or other banks, financial institutions and other institutional lenders to be approached with respect to such Additional Term Loan Commitments among such existing Lenders and/or other banks, financial institutions and other institutional lenders. No existing Lender shall be obligated in any way whatsoever to provide an Additional Term Loan Commitment, and any new Lender becoming a party to this Agreement in connection with any such requested increase must be an Eligible Assignee. Effecting an Additional Term Loan Commitment under this Section is subject to the following conditions precedent: (x) no Default or Event of Default shall be in existence on the effective date of such Additional Term Loan Commitment, (y) the representations and warranties made or deemed made by the Parent, the Borrower or any other Loan Party in any Loan Document to which such Loan Party is a party shall be true and correct on the effective date of such Additional Term Loan Commitment except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct on and as of such earlier date) and except for changes in factual circumstances specifically and expressly permitted hereunder, and (z) the Administrative Agent shall have received each of the following, in form and substance satisfactory to the Administrative Agent: (i) if not previously delivered to the Administrative Agent, copies certified by the Secretary or Assistant Secretary of (A) all partnership or other necessary action taken by the Borrower to authorize such Additional Term Loan Commitment and the borrowing of loans thereunder and (B) all corporate, partnership, member or other necessary action taken by each Guarantor authorizing the guaranty of such Additional Term Loan Commitments; (ii) if requested by the Administrative Agent, an opinion of counsel to the Borrower and the Guarantors, and addressed to the Administrative Agent and the Lenders covering such matters as reasonably requested by the Administrative Agent; and (iii) new Notes executed by the Borrower, payable to any new or existing Lenders providing an Additional Term Loan Commitment executed by the Borrower, payable to such Additional Term Lender. In connection with providing any Additional Term Loan Commitment, any new Lender becoming a party hereto shall execute such documents and agreements as the Administrative Agent may reasonably request. On the effective date of any Additional Term Loan Commitment, subject to the satisfaction of the terms and conditions herein, (x) each Lender providing an Additional Term Loan Commitment (each, an “Additional Term Loan Lender”) shall make a loan to the Borrower (an “Additional
Term Loan”) in an amount equal to its Additional Term Loan Commitment, (y) each Additional Term Loan Lender shall become a Lender hereunder with respect to the Additional Term Loan Commitment and (z) each Additional Term Loan shall become a Loan hereunder.
Section 2.14 Funds Transfer Disbursements.
(a) Generally. The Borrower hereby authorizes the Administrative Agent to disburse the proceeds of any Loan made by the Lenders or any of their Affiliates pursuant to the Loan Documents as requested by an authorized representative of the Borrower to any of the accounts designated in the Transfer Authorizer Designation Form. The Borrower agrees to be bound by any transfer request: (i) authorized or transmitted by the Borrower; or (ii) made in the Borrower’s name and accepted by the Administrative Agent in good faith and in compliance with these transfer instructions, even if not properly authorized by the Borrower. The Borrower further agrees and acknowledges that the Administrative Agent may rely solely on any bank routing number or identifying bank account number or name provided by the Borrower to effect a wire or funds transfer even if the information provided by the Borrower identifies a different bank or account holder than named by the Borrower. The Administrative Agent is not obligated or required in any way to take any actions to detect errors in information provided by the Borrower. If the Administrative Agent takes any actions in an attempt to detect errors in the transmission or content of transfer requests or takes any actions in an attempt to detect unauthorized funds transfer requests, the Borrower agrees that no matter how many times the Administrative Agent takes these actions the Administrative Agent will not in any situation be liable for failing to take or correctly perform these actions in the future and such actions shall not become any part of the transfer disbursement procedures authorized under this provision, the Loan Documents, or any agreement between the Administrative Agent and the Borrower. The Borrower agrees to notify the Administrative Agent of any errors in the transfer of any funds or of any unauthorized or improperly authorized transfer requests within fourteen (14) days after the Administrative Agent’s confirmation to the Borrower of such transfer.
(b) Funds Transfer. The Administrative Agent will, in its sole discretion, determine the funds transfer system and the means by which each transfer will be made. The Administrative Agent may delay or refuse to accept a funds transfer request if the transfer would: (i) violate the terms of this authorization, (ii) require use of a bank unacceptable to the Administrative Agent or any Lender or prohibited by any Governmental Authority, (iii) cause the Administrative Agent or any Lender to violate any Federal Reserve or other regulatory risk control program or guideline or (iv) otherwise cause the Administrative Agent or any Lender to violate any Applicable Law or regulation.
(c) Limitation of Liability. Neither the Administrative Agent nor any Lender shall be liable to the Borrower or any other parties for (i) errors, acts or failures to act of others, including other entities, banks, communications carriers or clearinghouses, through which the Borrower’s transfers may be made or information received or transmitted, and no such entity shall be deemed an agent of the Administrative Agent or any Lender, (ii) any loss, liability or delay caused by fires, earthquakes, wars, civil disturbances, power surges or failures, acts of government, labor disputes, failures in communications networks, legal constraints or other events beyond Administrative Agent’s or any Lender’s control, or (iii) any special, consequential, indirect or punitive damages, whether or not (x) any claim for these damages is based on tort or contract or (y) the Administrative Agent, any Lender or the Borrower knew or should have known the likelihood of these damages in any situation. Neither the Administrative Agent nor any Lender makes any representations or warranties other than those expressly made in this Agreement.
ARTICLE III. PAYMENTS, FEES AND OTHER GENERAL PROVISIONS
Section 3.1 Payments.
(a) Payments by Borrower. Except to the extent otherwise provided herein, all payments of principal, interest, Fees and other amounts to be made by the Borrower under this Agreement, the Notes or any other Loan Document shall be made in Dollars, in immediately available funds, without setoff, deduction or counterclaim, to the Administrative Agent at the Principal Office, not later than 2:00 p.m. Eastern time on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). Subject to Section 10.5., the Borrower shall, at the time of making each payment under this Agreement or any other Loan Document, specify to the Administrative Agent the amounts payable by the Borrower hereunder to which such payment is to be applied. Each payment received by the Administrative Agent for the account of a Lender under this Agreement or any Note shall be paid to such Lender by wire transfer of immediately available funds in accordance with the wiring instructions provided by such Lender to the Administrative Agent from time to time, for the account of such Lender at the applicable Lending Office of such Lender. In the event the Administrative Agent fails to pay such amounts to such Lender within one Business Day of receipt of such amounts, the Administrative Agent shall pay interest on such amount until paid at a rate per annum equal to the Federal Funds Rate from time to time in effect. If the due date of any payment under this Agreement or any other Loan Document would otherwise fall on a day which is not a Business Day such date shall be extended to the next succeeding Business Day and interest shall continue to accrue at the rate, if any, applicable to such payment for the period of such extension.
(b) Presumptions Regarding Payments by Borrower. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may (but shall not be obligated to), in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agree to repay to the Administrative Agent on demand that amount so distributed to such Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Federal Funds Rate.
Section 3.2 Pro Rata Treatment.
Except to the extent otherwise provided herein: (a) the making of the Initial Term Loans under Section 2.1.(a) shall be made from the Lenders holding Initial Term Loan Commitments, pro rata according to the amounts of their respective Initial Term Loan Commitments, (b) each borrowing of the Delayed Draw Term Loans under Section 2.1.(b) shall be made by, and each payment of fees under Section 3.5.(b) shall be for the account of, the Lenders holding Delayed Draw TL Commitments, pro rata according to the amount of their respective Delayed Draw TL Commitments and (c) the making of any Additional Term Loans under Section 2.13. shall be made by the Additional Term Loan Lenders, pro rata according to the amount of their respective Additional Term Loan Commitments; (d) each payment or prepayment of principal of the Loans shall be made for the account of the Lenders pro rata in accordance with the respective unpaid principal amounts of the Loans held by them; (e) each payment of interest on the Loans shall be made for the account of the Lenders, as applicable, pro rata in accordance with the amounts of interest on such Loans then due and payable to the respective Lenders; and (f) the making, Conversion and Continuation of Loans of a particular Type (other than Conversions provided for by Sections 4.1.(c) and 4.5.) shall be made pro rata among the Lenders according to the amounts of their respective Loans and the then current Interest Period for each Lender’s portion of each Loan of such Type shall be coterminous.
Section 3.3 Sharing of Payments, Etc.
If a Lender shall obtain payment of any principal of, or interest on, any Loan made by it to the
Borrower under this Agreement or shall obtain payment on any other Obligation owing by the Borrower or any other Loan Party through the exercise of any right of set-off, banker’s lien, counterclaim or similar right or otherwise or through voluntary prepayments directly to a Lender or other payments made by or on behalf the Borrower or any other Loan Party to a Lender (other than any payment in respect of Specified Derivatives Obligations) not in accordance with the terms of this Agreement and such payment should be distributed to the Lenders in accordance with Section 3.2. or Section 10.5., as applicable, such Lender shall promptly purchase from the other Lenders participations in (or, if and to the extent specified by such Lender, direct interests in) the Loans made by the other Lenders or other Obligations owed to such other Lenders in such amounts, and make such other adjustments from time to time as shall be equitable, to the end that all the Lenders shall share the benefit of such payment (net of any reasonable expenses which may actually be incurred by such Lender in obtaining or preserving such benefit) in accordance with the requirements of Section 3.2. or Section 10.5., as applicable. To such end, all the Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be restored. The Borrower agrees that any Lender so purchasing a participation (or direct interest) in the Loans or other Obligations owed to such other Lenders may exercise all rights of set-off, banker’s lien, counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of Loans in the amount of such participation. Nothing contained herein shall require any Lender to exercise any such right or shall affect the right of any Lender to exercise and retain the benefits of exercising, any such right with respect to any other indebtedness or obligation of the Borrower.
Section 3.4 Several Obligations.
No Lender shall be responsible for the failure of any other Lender to make a Loan or to perform any other obligation to be made or performed by such other Lender hereunder, and the failure of any Lender to make a Loan or to perform any other obligation to be made or performed by it hereunder shall not relieve the obligation of any other Lender to make any Loan or to perform any other obligation to be made or performed by such other Lender.
Section 3.5 Fees.
(a) Closing Fee. On the Initial Funding Date (or such other date as may be specified therefor), the Borrower agrees to pay to the Administrative Agent and each Lender all loan fees as have been agreed to in writing by the Borrower and the Administrative Agent, including such fees payable pursuant to the Lender Fee Letter.
(b) Unused Fee. During the period from the Initial Funding Date to but excluding the last day of the Delayed Draw Availability Period, the Borrower agrees to pay to the Administrative Agent for the account of the Lenders with Delayed Draw TL Commitments, an unused facility fee equal to the remaining Delayed Draw TL Commitment multiplied by 0.25% per annum. Such fee shall be computed on a daily basis and payable monthly in arrears on the first day of each month, commencing with the first full calendar month occurring after the Initial Funding Date and on the last day of the Delayed Draw Availability Period or any earlier date of termination of the Delayed Draw TL Commitments.
(c) Administrative and Other Fees. The Borrower agrees to pay the administrative and other fees of the Administrative Agent as provided in the Fee Letter and as may be otherwise agreed to in writing from time to time by the Borrower and the Administrative Agent.
Section 3.6 Computations.
Unless otherwise expressly set forth herein, any accrued interest on any Loan, any Fees or any other
Obligations due hereunder shall be computed on the basis of a year of 360 days and the actual number of days elapsed.
Section 3.7 Usury.
In no event shall the amount of interest due or payable on the Loans or other Obligations exceed the maximum rate of interest allowed by Applicable Law and, if any such payment is paid by the Borrower or any other Loan Party or received by any Lender, then such excess sum shall be credited as a payment of principal, unless the Borrower shall notify the respective Lender in writing that the Borrower elects to have such excess sum returned to it forthwith. It is the express intent of the parties hereto that the Borrower not pay and the Lenders not receive, directly or indirectly, in any manner whatsoever, interest in excess of that which may be lawfully paid by the Borrower under Applicable Law. The parties hereto hereby agree and stipulate that the only charge imposed upon the Borrower for the use of money in connection with this Agreement is and shall be the interest specifically described in Section 2.5.(a)(i) and (ii). Notwithstanding the foregoing, the parties hereto further agree and stipulate that all agency fees, syndication fees, facility fees, closing fees, underwriting fees, default charges, late charges, funding or “breakage” charges, increased cost charges, attorneys’ fees and reimbursement for costs and expenses paid by the Administrative Agent or any Lender to third parties or for damages incurred by the Administrative Agent or any Lender, in each case, in connection with the transactions contemplated by this Agreement and the other Loan Documents, are charges made to compensate the Administrative Agent or any such Lender for underwriting or administrative services and costs or losses performed or incurred, and to be performed or incurred, by the Administrative Agent and the Lenders in connection with this Agreement and shall under no circumstances be deemed to be charges for the use of money. All charges other than charges for the use of money shall be fully earned and nonrefundable when due.
Section 3.8 Statements of Account.
The Administrative Agent will account to the Borrower monthly with a statement of Loans, accrued interest and Fees, charges and payments made pursuant to this Agreement and the other Loan Documents, and such account rendered by the Administrative Agent shall be deemed conclusive upon the Borrower absent manifest error. The failure of the Administrative Agent to deliver such a statement of accounts shall not relieve or discharge the Borrower from any of its obligations hereunder.
Section 3.9 Defaulting Lenders.
Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:
(a) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Requisite Lenders. The rights and remedies of the Borrower, the Administrative Agent and the other Lenders against a Defaulting Lender under this Section are in addition to any other rights and remedies such parties may have against such Defaulting Lender under this Agreement, any of the Loan Documents, Applicable Law or otherwise.
(b) Defaulting Lender Waterfall. Any payment of principal, interest, Fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article X. or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 3.3. shall be applied at such time or times as may be determined by
the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a time when the conditions set forth in Article V. were satisfied or waived, such payment shall be applied solely to pay the Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with their Commitment. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this subsection shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(c) Certain Fees. No Defaulting Lender shall be entitled to receive the Fee payable under Section 3.5.(b) for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such Fee to a Defaulting Lender that otherwise would have been required to have been paid to such Defaulting Lender).
(d) Defaulting Lender Cure. If the Borrower and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held pro rata by the Lenders in accordance with the initial amount of their respective Commitments, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to Fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
Section 3.10 Taxes; Foreign Lenders.
(a) Taxes Generally. All payments by the Borrower of principal of, and interest on, the Loans and all other Obligations shall be made free and clear of and without deduction for any present or future excise, stamp or other taxes, fees, duties, levies, imposts, charges, deductions, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding (i) franchise taxes, (ii) any taxes (other than withholding taxes) that would not be imposed but for a connection between the Administrative Agent or a Lender and the jurisdiction imposing such taxes (other than a connection arising solely by virtue of the activities of the Administrative Agent or such Lender pursuant to or in respect of this Agreement or
any other Loan Document), (iii) any taxes imposed on or measured by any Lender’s assets, net income, receipts or branch profits, (iv) any taxes arising after the Agreement Date solely as a result of or attributable to a Lender changing its designated Lending Office after the date such Lender becomes a party hereto, and (v) any taxes imposed by Sections 1471 through Section 1474 of the Internal Revenue Code (including any official interpretations thereof, collectively “FATCA”) on any “withholdable payment” payable to such recipient as a result of the failure of such recipient to satisfy the applicable requirements as set forth in FATCA after December 31, 2012 (such non‑excluded items being collectively called “Taxes”). If any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Taxes pursuant to any Applicable Law, then the Borrower will:
(i) pay directly to the relevant Governmental Authority the full amount required to be so withheld or deducted;
(ii) promptly forward to the Administrative Agent an official receipt or other documentation satisfactory to the Administrative Agent evidencing such payment to such Governmental Authority; and
(iii) pay to the Administrative Agent for its account or the account of the applicable Lender such additional amount or amounts as is necessary to ensure that the net amount actually received by the Administrative Agent or such Lender will equal the full amount that the Administrative Agent or such Lender would have received had no such withholding or deduction been required.
(b) Tax Indemnification. If the Borrower fails to pay any Taxes when due to the appropriate Governmental Authority or fails to remit to the Administrative Agent, for its account or the account of the respective Lender, the required receipts or other required documentary evidence, the Borrower shall indemnify the Administrative Agent and the Lenders for any incremental Taxes, interest or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure. For purposes of this Section, a distribution hereunder by the Administrative Agent or any Lender to or for the account of any Lender shall be deemed a payment by the Borrower.
(c) Tax Forms. Prior to the date that any Lender or Participant organized under the laws of a jurisdiction other than that in which the Borrower is a resident for tax purposes becomes a party hereto, such Person shall deliver to the Borrower and the Administrative Agent such certificates, documents or other evidence, as required by the Internal Revenue Code or Treasury Regulations issued pursuant thereto (including Internal Revenue Service Forms W-8ECI and W-8BEN, as applicable, or appropriate successor forms), properly completed, currently effective and duly executed by such Lender or Participant establishing that payments to it hereunder and under the Notes are (i) not subject to United States Federal backup withholding tax and (ii) not subject to United States Federal withholding tax under the Internal Revenue Code. Each such Lender or Participant shall, to the extent it may lawfully do so, (x) deliver further copies of such forms or other appropriate certifications on or before the date that any such forms expire or become obsolete and after the occurrence of any event requiring a change in the most recent form delivered to the Borrower or the Administrative Agent and (y) obtain such extensions of the time for filing, and renew such forms and certifications thereof, as may be reasonably requested by the Borrower or the Administrative Agent. The Borrower shall not be required to pay any amount pursuant to the last sentence of subsection (a) above to any Lender or Participant that is organized under the laws of a jurisdiction other than that in which the Borrower is a resident for tax purposes or the Administrative Agent, if it is organized under the laws of a jurisdiction other than that in which the Borrower is a resident for tax purposes, if such Lender, such Participant or the Administrative Agent, as applicable, fails to comply with the requirements of this
subsection. If any such Lender or Participant, to the extent it may lawfully do so, fails to deliver the above forms or other documentation, then the Administrative Agent may withhold from such payment to such Lender such amounts as are required by the Internal Revenue Code. If any Governmental Authority asserts that the Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, such Lender shall indemnify the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent under this Section, and costs and expenses (including all reasonable fees and disbursements of any law firm or other external counsel and the allocated cost of internal legal services and all disbursements of internal counsel) of the Administrative Agent. The obligation of the Lenders under this Section shall survive the termination of the Commitments, repayment of all Obligations and the resignation or replacement of the Administrative Agent.
(d) Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section (including by the payment of additional amounts pursuant to this Section 3.10.), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 3.10. with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this subsection (d) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection (d), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this subsection (d) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This subsection (d) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(e) USA Patriot Act Notice; Compliance. In order for the Administrative Agent to comply with the USA Patriot Act of 2001 (Public Law 107-56), prior to any Lender or Participant that is organized under the laws of a jurisdiction outside of the United States of America becoming a party hereto, the Administrative Agent may request, and such Lender or Participant shall provide to the Administrative Agent, its name, address, tax identification number and/or such other identification information as shall be necessary for the Administrative Agent to comply with federal law.
ARTICLE IV. YIELD PROTECTION, ETC.
Section 4.1 Additional Costs; Capital Adequacy.
(a) Capital Adequacy. If any Lender or any Participant determines that compliance with any law or regulation or with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law) issued or taking effect after the Agreement Date (including any Regulatory Change and, for the avoidance of doubt, giving effect to the last sentence of the definition thereof) affects or would affect the amount of capital required or expected to be maintained by such Lender or such Participant, or any corporation controlling such Lender or such Participant, as a consequence of, or with reference to, such Lender’s Commitments or its making or maintaining Loans below the rate which such Lender or such Participant or such corporation controlling such Lender or such Participant could have achieved but for such compliance (taking into account the policies of such Lender or such Participant or
such corporation with regard to capital), then the Borrower shall, from time to time, within thirty (30) days after written demand by such Lender or such Participant, pay to such Lender or such Participant additional amounts sufficient to compensate such Lender or such Participant or such corporation controlling such Lender or such Participant to the extent that such Lender or such Participant determines such increase in capital is allocable to such Lender’s or such Participant’s obligations hereunder.
(b) Additional Costs. In addition to, and not in limitation of the immediately preceding subsection, but without duplication, the Borrower shall promptly pay to the Administrative Agent for the account of a Lender from time to time such amounts as such Lender may determine to be necessary to compensate such Lender for any costs incurred by such Lender that it determines are attributable to its making or maintaining of any LIBOR Loans or its obligation to make any LIBOR Loans hereunder, any reduction in any amount receivable by such Lender under this Agreement or any of the other Loan Documents in respect of any of such LIBOR Loans or such obligation or the maintenance by such Lender of capital in respect of its LIBOR Loans or its Commitments (such increases in costs and reductions in amounts receivable being herein called “Additional Costs”), resulting from any Regulatory Change that: (i) changes the basis of taxation of any amounts payable to such Lender under this Agreement or any of the other Loan Documents in respect of any of such LIBOR Loans or its Commitments (other than taxes imposed on or measured by the overall net income of such Lender or of its Lending Office for any of such LIBOR Loans by the jurisdiction in which such Lender has its principal office or such Lending Office), or (ii) imposes or modifies any reserve, special deposit or similar requirements (other than Regulation D of the Board of Governors of the Federal Reserve System or other similar reserve requirement applicable to any other category of liabilities or category of extensions of credit or other assets by reference to which the interest rate on LIBOR Loans is determined to the extent utilized when determining LIBOR for such Loans) relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, or other credit extended by, or any other acquisition of funds by such Lender (or its parent corporation), or any commitment of such Lender (including, without limitation, the Commitments of such Lender hereunder) or (iii) has or would have the effect of reducing the rate of return on capital of such Lender to a level below that which such Lender could have achieved but for such Regulatory Change (taking into consideration such Lender’s policies with respect to capital adequacy).
(c) Lender’s Suspension of LIBOR Loans. Without limiting the effect of the provisions of the immediately preceding subsections (a) and (b), if by reason of any Regulatory Change, any Lender either (i) incurs Additional Costs based on or measured by the excess above a specified level of the amount of a category of deposits or other liabilities of such Lender that includes deposits by reference to which the interest rate on LIBOR Loans is determined as provided in this Agreement or a category of extensions of credit or other assets of such Lender that includes LIBOR Loans or (ii) becomes subject to restrictions on the amount of such a category of liabilities or assets that it may hold, then, if such Lender so elects by notice to the Borrower (with a copy to the Administrative Agent), the obligation of such Lender to make or Continue, or to Convert Base Rate Loans into, LIBOR Loans hereunder shall be suspended until such Regulatory Change ceases to be in effect (in which case the provisions of Section 4.5. shall apply).
(d) Notification and Determination of Additional Costs. Each of the Administrative Agent, each Lender, and each Participant, as the case may be, agrees to notify the Borrower of any event occurring after the Agreement Date entitling the Administrative Agent, such Lender or such Participant to compensation under any of the preceding subsections of this Section as promptly as practicable; provided, however, that the failure of the Administrative Agent, any Lender or any Participant to give such notice shall not release the Borrower from any of its obligations hereunder (and in the case of a Lender, to the Administrative Agent). The Administrative Agent, each Lender and each Participant, as the case may be, agrees to furnish to the Borrower a certificate setting forth the basis and amount of each request for compensation under this Section. Determinations by the Administrative Agent, such Lender, or such Participant, as the case may be, of the
effect of any Regulatory Change shall be conclusive and binding for all purposes, absent manifest error, provided that such determinations are made on a reasonable basis and in good faith. Notwithstanding anything to the contrary contained in the preceding subsections of this Section 4.1., the Borrower shall not be required to compensate any Lender for any such increased costs or reduced return incurred by such Lender more than one-hundred-eighty (180) days prior to such Lender’s written request to the Borrower for such compensation (except that if the event giving rise to the increased costs or reduced return is retroactive, then the one-hundred-eighty (180) day period referred to above shall be extended to include the period of retroactive effect thereof).
Section 4.2 Suspension of LIBOR Loans.
Anything herein to the contrary notwithstanding, if, on or prior to the determination of LIBOR for any Interest Period:
(a) the Administrative Agent reasonably determines (which determination shall be conclusive) that quotations of interest rates for the relevant deposits referred to in the definition of LIBOR are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for LIBOR Loans as provided herein or is otherwise unable to determine LIBOR; or
(b) the Administrative Agent reasonably determines (which determination shall be conclusive) that the relevant rates of interest referred to in the definition of LIBOR upon the basis of which the rate of interest for LIBOR Loans for such Interest Period is to be determined are not likely to adequately cover the cost to any Lender of making or maintaining LIBOR Loans for such Interest Period;
then the Administrative Agent shall give the Borrower and each Lender prompt notice thereof and, so long as such condition remains in effect, (i) the Lenders shall be under no obligation to, and shall not, make additional LIBOR Loans, Continue LIBOR Loans or Convert Loans into LIBOR Loans and the Borrower shall, on the last day of each current Interest Period for each outstanding LIBOR Loan, either prepay such Loan or Convert such Loan into a Base Rate Loan.
Section 4.3 Illegality.
Notwithstanding any other provision of this Agreement, (a) if any Lender shall determine (which determination shall be conclusive and binding) that it is unlawful for such Lender to honor its obligation to make or maintain LIBOR Loans hereunder, then such Lender shall promptly notify the Borrower thereof (with a copy of such notice to the Administrative Agent) and such Lender’s obligation to make or Continue, or to Convert Loans of any other Type into, LIBOR Loans shall be suspended, until such time as such Lender may again make and maintain LIBOR Loans (in which case the provisions of Section 4.5. shall be applicable).
Section 4.4 Compensation.
The Borrower shall pay to the Administrative Agent for the account of each Lender, upon the request of the Administrative Agent, such amount or amounts as the Administrative Agent shall determine in its sole discretion shall be sufficient to compensate such Lender for any loss, cost or expense attributable to:
(a) any payment or prepayment (whether mandatory or optional) of a LIBOR Loan, or Conversion of a LIBOR Loan, made by such Lender for any reason (including, without limitation, acceleration) on a date other than the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without limitation, the failure of any of the applicable conditions precedent specified in Article V. to be satisfied) to borrow a LIBOR Loan from such Lender on the date for such borrowing, or to Convert a Base Rate Loan into a LIBOR Loan or Continue a LIBOR Loan on the requested date of such Conversion or Continuation.
Not in limitation of the foregoing, such compensation shall include, without limitation, (i) in the case of a LIBOR Loan, an amount equal to the then present value of (A) the amount of interest that would have accrued on such LIBOR Loan for the remainder of the Interest Period at the rate applicable to such LIBOR Loan, less (B) the amount of interest that would accrue on the same LIBOR Loan for the same period if LIBOR were set on the date on which such LIBOR Loan was repaid, prepaid or Converted or the date on which the Borrower failed to borrow, Convert or Continue such LIBOR Loan, as applicable, calculating present value by using as a discount rate LIBOR quoted on such date. Upon the Borrower’s request, the Administrative Agent shall provide the Borrower with a statement setting forth the basis for requesting such compensation and the method for determining the amount thereof. Any such statement shall be conclusive absent manifest error.
Section 4.5 Treatment of Affected Loans.
(a) If the obligation of any Lender to make LIBOR Loans or to Continue, or to Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to Section 4.1.(c), Section 4.2. or Section 4.3. then such Lender’s LIBOR Loans shall be automatically Converted into Base Rate Loans on the last day(s) of the then current Interest Period(s) for LIBOR Loans (or, in the case of a Conversion required by Section 4.1.(c), Section 4.2., or Section 4.3. on such earlier date as such Lender may specify to the Borrower with a copy to the Administrative Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 4.1., Section 4.2. or Section 4.3. that gave rise to such Conversion no longer exist:
(i) to the extent that such Lender’s LIBOR Loans have been so Converted, all payments and prepayments of principal that would otherwise be applied to such Lender’s LIBOR Loans shall be applied instead to its Base Rate Loans; and
(ii) all Loans that would otherwise be made or Continued by such Lender as LIBOR Loans shall be made or Continued instead as Base Rate Loans, and all Base Rate Loans of such Lender that would otherwise be Converted into LIBOR Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Administrative Agent) that the circumstances specified in Section 4.1.(c) or 4.3. that gave rise to the Conversion of such Lender’s LIBOR Loans pursuant to this Section no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when LIBOR Loans made by other Lenders are outstanding, then such Lender’s Base Rate Loans shall be automatically Converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding LIBOR Loans, to the extent necessary so that, after giving effect thereto, all Loans held by the Lenders holding LIBOR Loans and by such Lender are held pro rata (as to principal amounts, Types and Interest Periods) in accordance with the unpaid principal amount of the Loans made by each Lender.
Section 4.6 Affected Lenders.
If (a) a Lender requests compensation pursuant to Section 3.10. or 4.1., and the Requisite Lenders are not also doing the same, or (b) the obligation of any Lender to make LIBOR Loans or to Continue, or to Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to Section 4.1.(b) or 4.3. but
the obligation of the Requisite Lenders shall not have been suspended under such Sections, then, so long as there does not then exist any Default or Event of Default, the Borrower may demand that such Lender (the “Affected Lender”), and upon such demand the Affected Lender shall promptly, assign its Commitment and/or Loan, as the case may be, to an Eligible Assignee subject to and in accordance with the provisions of Section 12.6.(b) for a purchase price equal to (x) the aggregate principal balance of all Loans then owing to the Affected Lender plus (y) any accrued but unpaid interest thereon and accrued but unpaid fees owing to the Affected Lender, or any other amount as may be mutually agreed upon by such Affected Lender and Eligible Assignee. Each of the Administrative Agent and the Affected Lender shall reasonably cooperate in effectuating the replacement of such Affected Lender under this Section, but at no time shall the Administrative Agent, such Affected Lender nor any other Lender nor any Titled Agent be obligated in any way whatsoever to initiate any such replacement or to assist in finding an Eligible Assignee. The exercise by the Borrower of its rights under this Section shall be at the Borrower’s sole cost and expense and at no cost or expense to the Administrative Agent, the Affected Lender or any of the other Lenders. The terms of this Section shall not in any way limit the Borrower’s obligation to pay to any Affected Lender compensation owing to such Affected Lender pursuant to this Agreement (including, without limitation, pursuant to Sections 3.10., 4.1. or 4.4.) with respect to any period up to the date of replacement.
Section 4.7 Change of Lending Office.
Each Lender agrees that it will use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate an alternate Lending Office with respect to any of its Loans affected by the matters or circumstances described in Sections 3.10., 4.1. or 4.3. to reduce the liability of the Borrower or avoid the results provided thereunder, so long as such designation is not disadvantageous to such Lender as determined by such Lender in its sole discretion, except that such Lender shall have no obligation to designate a Lending Office located in the United States of America.
Section 4.8 Assumptions Concerning Funding of LIBOR Loans.
Calculation of all amounts payable to a Lender under this Article shall be made as though such Lender had actually funded LIBOR Loans through the purchase of deposits in the relevant market bearing interest at the rate applicable to such LIBOR Loans in an amount equal to the amount of the LIBOR Loans and having a maturity comparable to the relevant Interest Period; provided, however, that each Lender may fund each of its LIBOR Loans in any manner it sees fit and the foregoing assumption shall be used only for calculation of amounts payable under this Article.
ARTICLE V. CONDITIONS PRECEDENT
Section 5.1 Initial Conditions Precedent.
The obligation of the Lenders to make the Initial Term Loan is subject to the satisfaction or waiver of the following conditions precedent:
(a) The Administrative Agent shall have received each of the following, in form and substance satisfactory to the Administrative Agent:
(i) counterparts of this Agreement executed by each of the parties hereto;
(ii) Notes executed by the Borrower, payable to each applicable Lender, other than any Lender that has requested that it not receive a Note, and complying with the terms of Section 2.11.(a);
(iii) the Guaranty executed by each of the Guarantors initially to be a party thereto;
(iv) an opinion of Foley & Lardner LLP, counsel to the Parent and the other Loan Parties, addressed to the Administrative Agent and the Lenders and covering the matters set forth in Exhibit H;
(v) the certificate or articles of incorporation or formation, articles of organization, certificate of limited partnership, declaration of trust or other comparable organizational instrument (if any) of each Loan Party certified as of a recent date by the Secretary of State of the state of formation of such Loan Party;
(vi) a certificate of good standing (or certificate of similar meaning) with respect to each Loan Party issued as of a recent date by the Secretary of State of the state of formation of each such Loan Party and certificates of qualification to transact business or other comparable certificates issued as of a recent date by each Secretary of State (and any state department of taxation, as applicable) of each state in which such Loan Party is required to be so qualified and where failure to be so qualified could reasonably be expected to have a Material Adverse Effect;
(vii) a certificate of incumbency signed by the Secretary or Assistant Secretary (or other individual performing similar functions) of each Loan Party with respect to each of the officers of such Loan Party authorized to execute and deliver the Loan Documents to which such Loan Party is a party, and in the case of the Borrower, authorized to execute and deliver on behalf of the Borrower Notices of Borrowing, Notices of Conversion and Notices of Continuation;
(viii) copies certified by the Secretary or Assistant Secretary (or other individual performing similar functions) of each Loan Party of (A) the by-laws of such Loan Party, if a corporation, the operating agreement, if a limited liability company, the partnership agreement, if a limited or general partnership, or other comparable document in the case of any other form of legal entity and (B) all corporate, partnership, member or other necessary action taken by such Loan Party to authorize the execution, delivery and performance of the Loan Documents to which it is a party;
(ix) a Compliance Certificate calculated on a pro forma basis for the Borrower’s fiscal quarter ending September 30, 2011;
(x) a Transfer Authorizer Designation Form effective as of the Initial Funding Date;
(xi) evidence that the Fees, if any, then due and payable under Section 3.5., together with all other fees, expenses and reimbursement amounts due and payable to the Administrative Agent and any of the Lenders, including without limitation, the fees and expenses of counsel to the Administrative Agent, have been paid; and
(xii) such other documents, agreements and instruments as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably request; and
(b) In the good faith judgment of the Administrative Agent:
(i) there shall not have occurred or become known to the Administrative Agent or any of the Lenders any event, condition, situation or status since the date of the information contained in the financial and business projections, budgets, pro forma data and forecasts concerning the Parent
and its Subsidiaries delivered to the Administrative Agent and the Lenders prior to the Initial Funding Date that has had or could reasonably be expected to result in a Material Adverse Effect;
(ii) no litigation, action, suit, investigation or other arbitral, administrative or judicial proceeding shall be pending or threatened which could reasonably be expected to (A) result in a Material Adverse Effect or (B) restrain or enjoin, impose materially burdensome conditions on, or otherwise materially and adversely affect, the ability of the Parent, the Borrower or any other Loan Party to fulfill its obligations under the Loan Documents to which it is a party;
(iii) the Parent and its Subsidiaries shall have received all approvals, consents and waivers, and shall have made or given all necessary filings and notices as shall be required to consummate the transactions contemplated hereby without the occurrence of any default under, conflict with or violation of (A) any Applicable Law or (B) any agreement, document or instrument to which any Loan Party is a party or by which any of them or their respective properties is bound, except for such approvals, consents, waivers, filings and notices the receipt, making or giving of which could not reasonably be likely to (1) have a Material Adverse Effect, or (2) restrain, enjoin or impose materially burdensome conditions on, or otherwise materially and adversely affect the ability of the Parent, the Borrower or any other Loan Party to fulfill its obligations under the Loan Documents to which it is a party;
(iv) the conditions set forth under Section 5.2. shall be satisfied; and
(v) the Parent, the Borrower and each other Loan Party shall have provided all information requested by the Administrative Agent and each Lender in order to comply with the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).
Section 5.2 Conditions Precedent to All Loans.
The obligations of the Lenders to make any Loans (including the Initial Term Loan) are subject to the further conditions precedent that: (a) no Default or Event of Default shall exist as of the date of the making of such Loan or would exist immediately after giving effect thereto; (b) the representations and warranties made or deemed made by the Parent, the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, shall be true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) on and as of the date of the making of such Loan with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall have been true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances specifically and expressly permitted hereunder and (c) the Administrative Agent shall have received a timely Notice of Borrowing. Each Credit Event shall constitute a certification by the Borrower to the effect set forth in the preceding sentence (both as of the date of the giving of notice relating to such Credit Event and, unless the Borrower otherwise notifies the Administrative Agent prior to the date of such Credit Event, as of the date of the occurrence of such Credit Event). In addition, the Borrower shall be deemed to have represented to the Administrative Agent and the Lenders at the time any Loan is made that all conditions to the making of such Loan contained in this Article V. that have not been waived in accordance with the terms of this Agreement have been satisfied. Unless set forth in writing to the contrary, the making of the Initial Term Loan by each Lender shall constitute a certification by such Lender to the Administrative Agent and the other Lenders that the conditions precedent for the Initial Term Loan set forth in Sections 5.1. and 5.2. that have not previously
been waived by the Lenders in accordance with the terms of this Agreement have been satisfied as of the Initial Funding Date.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
Section 6.1 Representations and Warranties.
In order to induce the Administrative Agent and each Lender to enter into this Agreement and to make the Loans, each of the Parent and the Borrower represents and warrants to the Administrative Agent and each Lender as follows:
(a) Organization; Power; Qualification. Each of the Parent, the Borrower, the other Loan Parties, if any, and the respective Subsidiaries of each of the foregoing is a corporation, partnership or other legal entity, duly organized or formed, validly existing and in good standing under the jurisdiction of its incorporation or formation, has the power and authority to own or lease its respective properties and to carry on its respective business as now being and hereafter proposed to be conducted and is duly qualified and is in good standing as a foreign corporation, partnership or other legal entity, and authorized to do business, in each jurisdiction in which the character of its properties or the nature of its business requires such qualification or authorization and where the failure to be so qualified or authorized could reasonably be expected to have, in each instance, a Material Adverse Effect.
(b) Ownership Structure. Part I of Schedule 6.1.(b) is, as of the Agreement Date, a complete and correct list of all Subsidiaries of the Parent, setting forth for each such Subsidiary, (i) the jurisdiction of organization of such Subsidiary, (ii) each Person holding any Equity Interest in such Subsidiary, (iii) the nature of the Equity Interests held by each such Person and (iv) the percentage of ownership of such Subsidiary represented by such Equity Interests. As of the Agreement Date, except as disclosed in such Schedule (A), each of the Parent and its Subsidiaries owns, free and clear of all Liens (other than Permitted Liens of the type described in clause (e) of the definition of the term “Permitted Liens”), and has the unencumbered right to vote, all outstanding Equity Interests in each Person shown to be held by it on such Schedule, (B) all of the issued and outstanding capital stock of each such Person organized as a corporation is validly issued, fully paid and nonassessable and (C) there are no outstanding subscriptions, options, warrants, commitments, preemptive rights or agreements of any kind (including, without limitation, any stockholders’ or voting trust agreements) for the issuance, sale, registration or voting of, or outstanding securities convertible into, any additional shares of capital stock of any class, or partnership or other ownership interests of any type in, any such Person. As of the Agreement Date, Part II of Schedule 6.1.(b) correctly sets forth all Unconsolidated Affiliates of the Parent, including the correct legal name of such Person, the type of legal entity which each such Person is, and all Equity Interests in such Person held directly or indirectly by the Parent.
(c) Authorization of Loan Documents and Borrowings. The Borrower has the right and power, and has taken all necessary action to authorize it, to borrow and obtain other extensions of credit hereunder. The Parent, the Borrower and each other Loan Party has the right and power, and has taken all necessary action to authorize it, to execute, deliver and perform each of the Loan Documents and the Fee Letter to which it is a party in accordance with their respective terms and to consummate the transactions contemplated hereby and thereby. The Loan Documents and the Fee Letter to which the Parent, the Borrower or any other Loan Party is a party have been duly executed and delivered by the duly authorized officers of such Person and each is a legal, valid and binding obligation of such Person enforceable against such Person in accordance with its respective terms, except as the same may be limited by bankruptcy, insolvency, and other similar laws affecting the rights of creditors generally and the availability of equitable remedies for the enforcement of certain obligations contained herein or therein and as may be limited by equitable principles generally.
(d) Compliance of Loan Documents with Laws. The execution, delivery and performance of this Agreement, the other Loan Documents to which any Loan Party is a party and of the Fee Letter in accordance with their respective terms and the borrowings and other extensions of credit hereunder do not and will not, by the passage of time, the giving of notice, or both: (i) require any Governmental Approval or violate any Applicable Law (including all Environmental Laws) relating to the Parent, the Borrower or any other Loan Party; (ii) conflict with, result in a breach of or constitute a default under (1) the organizational documents of any Loan Party, or (2) any indenture, agreement or other instrument to which the Parent, the Borrower or any other Loan Party is a party or by which it or any of its respective properties may be bound, the violation of which indenture, agreement or other instrument could reasonably be expected to have a Material Adverse Effect; or (iii) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by any Loan Party other than in favor of the Administrative Agent for its benefit and the benefit of the Lenders.
(e) Compliance with Law; Governmental Approvals. Each of the Parent, the Borrower, the other Loan Parties, if any, and the respective Subsidiaries of each of the foregoing is in compliance with each Governmental Approval and all other Applicable Laws relating to it except for noncompliances which, and Governmental Approvals the failure to possess which, could not, individually or in the aggregate, reasonably be expected to cause a Default or Event of Default or have a Material Adverse Effect.
(f) Properties; Liens. Schedule 6.1.(f) is, as of the Agreement Date, a complete and correct listing of all real estate assets of the Parent, the Borrower, the other Loan Parties, if any, and the respective Subsidiaries of each of the foregoing, setting forth, for each such Property, the current occupancy status of such Property and whether such Property is a Development Property and, if such Property is a Development Property, the status of completion of such Property. Each of the Parent, the Borrower, the other Loan Parties, if any, and the respective Subsidiaries of each of the foregoing has good, marketable and legal title to, or a valid leasehold interest in, its respective real estate assets and good title to its other assets. Each Property included in the calculations of Unencumbered Asset Value and Unencumbered NOI satisfies all requirements under the Loan Documents for being an Eligible Property.
(g) Existing Indebtedness. Schedule 6.1.(g) is, as of the Agreement Date, a complete and correct listing of all Indebtedness (including all Guarantees) of each of the Parent, the Borrower, the other Loan Parties, if any, and the respective Subsidiaries of each of the foregoing, and if such Indebtedness is secured by any Lien, a description of all of the property subject to such Lien. As of the Agreement Date, the Parent, the Borrower, the other Loan Parties, if any, and the respective Subsidiaries of each of the foregoing have performed and are in compliance with all of the terms of such Indebtedness and all instruments and agreements relating thereto, and no default or event of default, or event or condition which with the giving of notice, the lapse of time, or both, would constitute a default or event of default, exists with respect to any such Indebtedness, except for such non-compliance, default and/or event of default as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(h) Litigation. Except as set forth on Schedule 6.1.(h), there are no actions, suits or proceedings pending (nor, to the knowledge of any Loan Party, are there any actions, suits or proceedings threatened, nor, to the knowledge of any Loan Party, is there any basis therefor) against or in any other way relating adversely to or affecting the Parent, the Borrower, any other Loan Party, any other Subsidiary or any of their respective property in any court or before any arbitrator of any kind or before or by any other Governmental Authority which, (i) could reasonably be expected to have a Material Adverse Effect or (ii) in any manner draws into question the validity or enforceability of any Loan Document or the Fee Letter. There are no strikes, slow downs, work stoppages or walkouts or other labor disputes in progress or threatened relating to any Loan Party or any other Subsidiary.
(i) Taxes. All federal, state and other tax returns of the Parent, the Borrower, the other Loan Parties, if any, and the respective Subsidiaries of each of the foregoing required by Applicable Law to be filed have been duly filed, and all federal, state and other taxes, assessments and other governmental charges or levies upon each Loan Party, each other Subsidiary and their respective properties, income, profits and assets which are due and payable have been paid, except any such nonpayment or non-filing which is at the time permitted under Section 7.6. As of the Agreement Date, none of the United States income tax returns of the Parent, the Borrower, any other Loan Party, or any of the respective Subsidiaries of any of the foregoing is under audit. All charges, accruals and reserves on the books of the Parent, the Borrower, the other Loan Parties, if any, and the respective Subsidiaries of each of the foregoing in respect of any taxes or other governmental charges are in accordance with GAAP.
(j) Financial Statements. The Parent has furnished to each Lender copies of (i) the audited consolidated balance sheet of the Parent and its Consolidated Subsidiaries for the fiscal years ended December 31, 2009 and December 31, 2010, and the related audited consolidated statements of operations, shareholders’ equity and cash flow for the fiscal years ended on such dates, with the opinion thereon of KPMG LLP, and (ii) the unaudited consolidated balance sheet of the Parent and its Consolidated Subsidiaries for the fiscal quarter ended September 30, 2011, and the related unaudited consolidated statements of operations, shareholders’ equity and cash flow of the Parent and its Consolidated Subsidiaries for the two fiscal quarter period ended on such date. Such financial statements (including in each case related schedules and notes) are complete and correct in all material respects and present fairly, in accordance with GAAP consistently applied throughout the periods involved, the consolidated financial position of the Parent and its Consolidated Subsidiaries as at their respective dates and the results of operations and the cash flow for such periods (subject, as to interim statements, to lack of footnote disclosure and changes resulting from normal year‑end audit adjustments). Neither the Parent nor any of its Subsidiaries has on the Agreement Date any material contingent liabilities, liabilities, liabilities for taxes, unusual or long-term commitments or unrealized or forward anticipated losses from any unfavorable commitments that would be required in accordance with GAAP to be set forth in its financial statements or notes thereto, which are not referred to or reflected or provided for in said financial statements.
(k) No Material Adverse Change. Since December 31, 2010, there has been no event, change, circumstance or occurrence that could reasonably be expected to have a Material Adverse Effect. Each of the Parent, the Borrower, the other Loan Parties, if any, and the respective Subsidiaries of each of the foregoing is Solvent.
(l) ERISA.
(i) Each Benefit Arrangement is in compliance with the applicable provisions of ERISA, the Internal Revenue Code and other Applicable Laws in all material respects. Except with respect to Multiemployer Plans, each Qualified Plan (A) has received a favorable determination from the Internal Revenue Service applicable to such Qualified Plan’s current remedial amendment cycle (as defined in Revenue Procedure 2007-44 or “2007-44” for short), (B) has timely filed for a favorable determination letter from the Internal Revenue Service during its staggered remedial amendment cycle (as defined in 2007-44) and such application is currently being processed by the Internal Revenue Service, (C) had filed for a determination letter prior to its “GUST remedial amendment period” (as defined in 2007-44) and received such determination letter and the staggered remedial amendment cycle first following the GUST remedial amendment period for such Qualified Plan has not yet expired, or (D) is maintained under a prototype plan and may rely upon a favorable opinion letter issued by the Internal Revenue Service with respect to such prototype plan. To the
best knowledge of the Parent and the Borrower, nothing has occurred which would cause the loss of its reliance on each Qualified Plan’s favorable determination letter or opinion letter.
(ii) With respect to any Benefit Arrangement that is a retiree welfare benefit arrangement, all amounts have been accrued on the applicable ERISA Group’s financial statements in accordance with FASB ASC 715. As of the most recent valuation date, the “benefit obligation” of all Plans does not exceed the “fair market value of plan assets” for such Plans by more than $10,000,000 all as determined by and with such terms defined in accordance with FASB ASC 715.
(iii) Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect: (i) no ERISA Event has occurred or is expected to occur; (ii) there are no pending, or to the best knowledge of the Parent or the Borrower, threatened, claims, actions or lawsuits or other action by any Governmental Authority, plan participant or beneficiary with respect to a Benefit Arrangement; (iii) there are no violations of the fiduciary responsibility rules with respect to any Benefit Arrangement; and (iv) no member of the ERISA Group has engaged in a non-exempt “prohibited transaction,” as defined in Section 406 of ERISA and Section 4975 of the Internal Revenue Code, in connection with any Plan, that would subject any member of the ERISA Group to a tax on prohibited transactions imposed by Section 502(i) of ERISA or Section 4975 of the Internal Revenue Code.
(m) Absence of Default. None of the Loan Parties or any of the other Subsidiaries is in default under its certificate or articles of incorporation or formation, bylaws, partnership agreement or other similar organizational documents, and no event has occurred, which has not been remedied, cured or waived: (i) which constitutes a Default or an Event of Default; or (ii) which constitutes, or which with the passage of time, the giving of notice, or both, would constitute, a default or event of default by, any Loan Party or any other Subsidiary under any agreement (other than this Agreement) or judgment, decree or order to which any such Person is a party or by which any such Person or any of its respective properties may be bound where such default or event of default could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(n) Environmental Laws. Each of the Parent, the Borrower, other Loan Parties, if any, and the respective Subsidiaries of each of the foregoing: (i) is in compliance with all Environmental Laws applicable to its business, operations and the Properties, (ii) has obtained all Governmental Approvals which are required under Environmental Laws, and each such Governmental Approval is in full force and effect, and (iii) is in compliance with all terms and conditions of such Governmental Approvals, where with respect to each of the immediately preceding clauses (i) through (iii), the failure to obtain or to comply could reasonably be expected to have a Material Adverse Effect. Except for any of the following matters that could not reasonably be expected to have a Material Adverse Effect, neither the Parent nor the Borrower is aware of, nor has any Loan Party or any Subsidiary received notice of, any past or present events, conditions, circumstances, activities, practices, incidents, actions or plans which, with respect to any Loan Party or any of the respective Subsidiaries of any Loan Party, could reasonably be expected to unreasonably interfere with or prevent compliance or continued compliance with Environmental Laws, or could reasonably be expected to give rise to any common-law or legal liability, based on or related to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling or the emission, discharge, release or threatened release into the environment, or any Hazardous Material. There is no civil, criminal, or administrative action, suit, demand, claim, hearing, notice, or demand letter, notice of violation, investigation, or proceeding pending, or, to the Parent’s or the Borrower’s knowledge, threatened, against any Loan Party or any respective Subsidiary of any Loan Party relating in any way to Environmental Laws which, reasonably could be expected to have a Material Adverse Effect. None of the Properties is listed on or proposed for listing on the National
Priority List promulgated pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 and its implementing regulations, or any state or local priority list promulgated pursuant to any analogous state or local law. To the Parent’s and/or the Borrower’s knowledge, no Hazardous Materials generated at or transported from the Properties are or have been transported to, or disposed of at, any location that is listed or proposed for listing on the National Priority List or any analogous state or local priority list, or any other location that is or has been the subject of a clean-up, removal or remedial action pursuant to any Environmental Law, except to the extent that such transportation or disposal could not reasonably be expected to result in a Material Adverse Effect.
(o) Investment Company. None of the Parent, the Borrower, the other Loan Parties, if any, or any of the respective Subsidiaries of any of the foregoing is (i) an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or (ii) subject to any other Applicable Law which purports to regulate or restrict its ability to borrow money or obtain other extensions of credit or to consummate the transactions contemplated by this Agreement or to perform its obligations under any Loan Document to which it is a party.
(p) Margin Stock. None of the Parent, the Borrower, the other Loan Parties, if any, or any of the respective Subsidiaries of any of the foregoing is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System.
(q) Affiliate Transactions. None of the Parent, the Borrower, the other Loan Parties, if any, or any of the respective Subsidiaries of any of the foregoing is a party to or bound by any agreement or arrangement with any Affiliate except as permitted by Section 9.8.
(r) Intellectual Property. Each of the Loan Parties and each other Subsidiary owns or has the right to use, under valid license agreements or otherwise, all patents, licenses, franchises, trademarks, trademark rights, service marks, service mark rights, trade names, trade name rights, trade secrets and copyrights (collectively, “Intellectual Property”) necessary to the conduct of its businesses, without known conflict with any patent, license, franchise, trademark, trademark right, service mark, service mark right, trade secret, trade name, copyright, or other proprietary right of any other Person. All such Intellectual Property is fully protected and/or duly and properly registered, filed or issued in the appropriate office and jurisdictions for such registrations, filing or issuances. No material claim has been asserted by any Person with respect to the use of any such Intellectual Property by the Parent, the Borrower, any other Loan Party, or any of the respective Subsidiaries of any of the foregoing, or challenging or questioning the validity or effectiveness of any such Intellectual Property. The use of such Intellectual Property by the Parent, the Borrower, the other Loan Parties, if any, and the respective Subsidiaries of each of the foregoing does not infringe on the rights of any Person, subject to such claims and infringements as do not, in the aggregate, give rise to any liabilities on the part of the Parent, the Borrower, the other Loan Parties, if any, or any of the respective Subsidiaries of any of the foregoing that could reasonably be expected to have a Material Adverse Effect.
(s) Business. As of the Agreement Date, the Parent, the Borrower, the other Loan Parties, if any, and the respective Subsidiaries of each of the foregoing are engaged in the business of owning, managing and developing community and neighborhood shopping centers, together with other business activities incidental thereto.
(t) Broker’s Fees. No broker’s or finder’s fee, commission or similar compensation will be
payable with respect to the transactions contemplated hereby. No other similar fees or commissions will be payable by any Loan Party for any other services rendered to the Parent, the Borrower, the other Loan Parties, if any, or any of the respective Subsidiaries of any of the foregoing ancillary to the transactions contemplated hereby.
(u) Accuracy and Completeness of Information. None of the written information, reports and other papers and data (excluding financial projections and other forward looking statements), taken as a whole as of the delivery date thereof, furnished to the Administrative Agent or any Lender by, on behalf of, or at the direction of, the Parent, the Borrower, the other Loan Parties, if any, or any of the respective Subsidiaries of any of the foregoing, in connection with or relating in any way to this Agreement, contained any untrue statement of a fact material to the creditworthiness of the Parent, the Borrower, any other Loan Parties, if any, or any of the respective Subsidiaries of the foregoing, or omitted to state a material fact necessary in order to make such statements contained therein, in light of the circumstances under which they were made, not misleading. All financial statements furnished to the Administrative Agent or any Lender by, on behalf of, or at the direction of, the Parent, the Borrower, the other Loan Parties, if any, or any of the respective Subsidiaries of each of the foregoing in connection with or relating an any way to this Agreement present fairly, in accordance with GAAP consistently applied throughout the periods involved, the financial position of the Persons involved as at the date thereof and the results of operations for such periods (subject, as to interim statements, to changes resulting from normal year end audit adjustments and absence of full footnote disclosure). All financial projections and other forward looking statements prepared by or on behalf of the Parent, the Borrower, the other Loan Parties, if any, or any of the respective Subsidiaries of any of the foregoing that have been or may hereafter be made available to the Administrative Agent or any Lender were prepared in good faith based on reasonable assumptions, it being understood that projections as to future events are not viewed as facts and that the actual results may vary from such projections and such variances may be material. No fact is known to any Loan Party which has had, or could reasonably be expected to have (so far as any Loan Party can reasonably foresee), a Material Adverse Effect which has not been set forth in the financial statements referred to in Section 6.1.(j) or in such information, reports or other papers or data or otherwise disclosed in writing to the Administrative Agent and the Lenders, including, without limitation, pursuant to Section 8.4.(h).
(v) Not Plan Assets; No Prohibited Transactions. None of the assets of the Parent, the Borrower, any other Loan Party or any other Subsidiary constitutes “plan assets” within the meaning of ERISA, the Internal Revenue Code and the respective regulations promulgated thereunder. Assuming that no Lender funds any amount payable by it hereunder with “plan assets,” as that term is defined in 29 C.F.R. 2510.3-101, the execution, delivery and performance of this Agreement and the other Loan Documents, and the extensions of credit and repayment of amounts hereunder, do not and will not constitute “prohibited transactions” under ERISA or the Internal Revenue Code.
(w) OFAC. None of the Parent, the Borrower, any of the other Loan Parties, any of the other Subsidiaries, or any other Affiliate of the Parent: (i) is a person named on the list of Specially Designated Nationals or Blocked Persons maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) available at http://www.treas.gov/offices/enforcement/ofac/index.shtml or as otherwise published from time to time; (ii) is (A) an agency of the government of a country, (B) an organization controlled by a country, or (C) a person resident in a country that is subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/index.shtml, or as otherwise published from time to time, as such program may be applicable to such agency, organization or person; or (iii) derives any of its assets or operating income from investments in or transactions with any such country, agency, organization or person; and none of the proceeds from any Loan, will be used to finance any operations, investments or activities in, or make any payments to, any such country, agency, organization,
or person.
(x) REIT Status. The Parent qualifies as, and has elected to be treated as, a REIT and is in compliance with all requirements and conditions imposed under the Internal Revenue Code to allow the Parent to maintain its status as a REIT.
Section 6.2 Survival of Representations and Warranties, Etc.
All statements contained in any certificate, financial statement or other instrument delivered by or on behalf of any Loan Party or any other Subsidiary to the Administrative Agent or any Lender pursuant to or in connection with this Agreement or any of the other Loan Documents (including, but not limited to, any such statement made in or in connection with any amendment thereto or any statement contained in any certificate, financial statement or other instrument delivered by or on behalf of any Loan Party prior to the Initial Funding Date and delivered to the Administrative Agent or any Lender in connection with the underwriting or closing the transactions contemplated hereby) shall constitute representations and warranties made by the Borrower under this Agreement. All representations and warranties made under this Agreement and the other Loan Documents shall be deemed to be made at and as of the Agreement Date, the Initial Funding Date, and at and as of the date of the occurrence of each Credit Event, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall have been true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances expressly and specifically permitted hereunder. All such representations and warranties shall survive the effectiveness of this Agreement, the execution and delivery of the Loan Documents and the making of the Loans.
ARTICLE VII. AFFIRMATIVE COVENANTS
From and after the Agreement Date and for so long as this Agreement is in effect, unless the Requisite Lenders (or, if required pursuant to Section 12.7., all of the Lenders) shall otherwise consent in the manner provided for in Section 12.7., the Parent and the Borrower shall comply with the following covenants:
Section 7.1 Preservation of Existence and Similar Matters.
Except as otherwise permitted under Section 9.4., the Parent and the Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, preserve and maintain its respective existence, rights, franchises, licenses and privileges in the jurisdiction of its incorporation or formation and qualify and remain qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and authorization and where the failure to be so authorized and qualified could reasonably be expected to have a Material Adverse Effect.
Section 7.2 Compliance with Applicable Law and Material Contracts.
The Parent and the Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, comply with (a) all Applicable Law, including the obtaining of all Governmental Approvals, the failure with which to comply or obtain could reasonably be expected to have a Material Adverse Effect, and (b) all terms and conditions of all contracts and other written agreements to which it is a party if any such non-compliance could reasonably be expected to have a Material Adverse Effect.
Section 7.3 Maintenance of Property.
In addition to the requirements of any of the other Loan Documents, the Parent and the Borrower
shall, and shall cause each other Loan Party and each other Subsidiary to, (a) protect and preserve all of its respective material properties, including, but not limited to, all Intellectual Property necessary to the conduct of its respective business, and maintain in good repair, working order and condition all tangible properties, ordinary wear and tear and obsolescence excepted, and (b) from time to time make or cause to be made all needed and appropriate repairs, renewals, replacements and additions to such properties, so that the business carried on in connection therewith may be properly and advantageously conducted at all times.
Section 7.4 Conduct of Business.
The Parent and the Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, carry on its respective businesses as described in Section 6.1.(s) and not enter into any line of business not otherwise engaged in by such Person as of the Agreement Date.
Section 7.5 Insurance.
In addition to the requirements of any of the other Loan Documents, the Parent and the Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, maintain insurance (on a replacement cost basis) with financially sound and reputable insurance companies against such risks and in such amounts as is customarily maintained by Persons engaged in similar businesses or as may be required by Applicable Law. The Parent and the Borrower shall from time to time deliver to the Administrative Agent upon request a detailed list, together with copies of all policies of the insurance then in effect, stating the names of the insurance companies, the amounts and rates of the insurance, the dates of the expiration thereof and the properties and risks covered.
Section 7.6 Payment of Taxes and Claims.
The Parent and the Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, pay and discharge when due (a) all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or upon any properties belonging to it, and (b) all lawful claims of materialmen, mechanics, carriers, warehousemen and landlords for labor, materials, supplies and rentals which, if unpaid, might become a Lien on any properties of such Person; provided, however, that this Section shall not require the payment or discharge of any such tax, assessment, charge, levy or claim which is being contested in good faith by appropriate proceedings which operate to suspend the collection thereof and for which adequate reserves have been established on the books of such Person in accordance with GAAP.
Section 7.7 Books and Records; Inspections.
The Parent and the Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities. The Parent and the Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, permit representatives of the Administrative Agent or any Lender to visit and inspect any of their respective properties, to examine and make abstracts from any of their respective books and records and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants (in the presence of an officer of the Parent if an Event of Default does not then exist), all at such reasonable times during business hours and as often as may reasonably be requested and so long as no Event of Default exists, with reasonable prior notice. The Parent and the Borrower shall be obligated to reimburse the Administrative Agent and the Lenders for their costs and expenses incurred in connection with the exercise of their rights under this Section only if such exercise occurs while a Default or Event of Default exists. If requested by the Administrative Agent during the existence of a Default or Event of Default, the Parent and the Borrower shall execute an authorization
letter addressed to its accountants authorizing the Administrative Agent or any Lender to discuss the financial affairs of the Parent and the Borrower, any other Loan Party or any other Subsidiary with the Parent’s and the Borrower’s accountants.
Section 7.8 Use of Proceeds.
The Borrower will use the proceeds of Loans only (a) for the payment of pre-development and development costs incurred in connection with Properties owned by the Borrower or any Subsidiary; (b) to finance acquisitions otherwise permitted under this Agreement; (c) to finance capital expenditures and the repayment of Indebtedness of the Borrower and its Subsidiaries; and (d) to provide for the general working capital needs of the Borrower and its Subsidiaries and for other general corporate purposes of the Borrower and its Subsidiaries. The Borrower shall not, and shall not permit any other Loan Party or any other Subsidiary to, use any part of such proceeds to purchase or carry, or to reduce or retire or refinance any credit incurred to purchase or carry, any margin stock (within the meaning of Regulation U or Regulation X of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying any such margin stock.
Section 7.9 Environmental Matters.
The Parent and the Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, comply with all Environmental Laws the failure with which to comply could reasonably be expected to have a Material Adverse Effect. Nothing in this Section shall impose any obligation or liability whatsoever on the Administrative Agent or any Lender.
Section 7.10 Further Assurances.
At the Borrower’s cost and expense and upon request of the Administrative Agent, the Parent and the Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, duly execute and deliver or cause to be duly executed and delivered, to the Administrative Agent such further instruments, documents and certificates, and do and cause to be done such further acts that may be reasonably necessary or advisable in the reasonable opinion of the Administrative Agent to carry out more effectively the provisions and purposes of this Agreement and the other Loan Documents.
Section 7.11 REIT Status.
The Parent shall maintain its status as, and election to be treated as, a REIT under the Internal Revenue Code.
Section 7.12 Exchange Listing.
The Parent shall maintain at least one class of common shares of the Parent having trading privileges on the New York Stock Exchange or the American Stock Exchange or which is subject to price quotations on The NASDAQ Stock Market’s National Market System.
Section 7.13 Guarantors.
(a) Within 5 Business days following the date on which any of the following conditions applies to any Subsidiary or Unconsolidated Affiliate that is not already a Guarantor, the Parent and the Borrower shall cause such Subsidiary or Unconsolidated Affiliate to execute and deliver an Accession Agreement and the items that would have been delivered under subsections (iv) through (viii) and (xii) of Section 5.1.(a) if such Subsidiary or Unconsolidated Affiliate had been a Guarantor on the Agreement Date:
(i) such Person Guarantees, or otherwise becomes obligated in respect of, any Indebtedness of (1) the Parent; (2) the Borrower; (3) any other Subsidiary of the Parent or the Borrower (except in the case of an Unconsolidated Affiliate Guaranteeing, or otherwise becoming obligated in respect of, Indebtedness of another Unconsolidated Affiliate); or
(ii) such Person is an RD Entity, unless the Unencumbered Asset Value attributable to Eligible Properties owned by Non-Guarantors (including such RD Entity) does not exceed 10.0% of the Unencumbered Asset Value.
(b) The Borrower may request in writing that the Administrative Agent release, and upon receipt of such request the Administrative Agent shall release, a Guarantor from the Guaranty so long as: (i) such Guarantor is not the Parent; (ii) such Guarantor is not otherwise required to be a party to the Guaranty under the immediately preceding subsection (a); (iii) no Default or Event of Default shall then be in existence or would occur as a result of such release, including without limitation, a Default or Event of Default resulting from a violation of any of the covenants contained in Section 9.1.; (iv) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, shall be true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) on and as of the date of such release with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall have been true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances expressly permitted under the Loan Documents; and (v) the Administrative Agent shall have received such written request at least ten (10) days (or such shorter period as may be acceptable to the Administrative Agent) prior to the requested date of release. Delivery by the Borrower to the Administrative Agent of any such request shall constitute a representation by the Borrower that the matters set forth in the preceding sentence (both as of the date of the giving of such request and as of the date of the effectiveness of such request) are true and correct with respect to such request.
ARTICLE VIII. INFORMATION
From and after the Agreement Date and for so long as this Agreement is in effect, unless the Requisite Lenders (or, if required pursuant to Section 12.7., all of the Lenders) shall otherwise consent in the manner set forth in Section 12.7., the Parent or the Borrower, or the Parent and the Borrower, as applicable, shall furnish to the Administrative Agent for distribution to each of the Lenders:
Section 8.1 Quarterly Financial Statements.
As soon as available and in any event within 10 days after the same is required to be filed with the Securities and Exchange Commission (but in no event later than 50 days after the end of each of the first, second and third fiscal quarters of the Parent) commencing with the fiscal quarter ending September 30, 2011, the unaudited consolidated balance sheet of the Parent and its Consolidated Subsidiaries as at the end of such period and the related unaudited consolidated statements of operations, and cash flows of the Parent and its Consolidated Subsidiaries for such period, setting forth in each case in comparative form the figures as of the end of and for the corresponding periods of the previous fiscal year, all of which shall be certified by the chief executive officer or chief financial officer of the Parent, in his or her opinion, to present fairly, in accordance with GAAP and in all material respects, the consolidated financial position of the Parent and its Consolidated Subsidiaries as at the date thereof and the results of operations for such period (subject to
normal year‑end audit adjustments).
Section 8.2 Year‑End Statements.
As soon as available and in any event within 10 days after the same is required to be filed with the Securities and Exchange Commission (but in no event later than 90 days after the end of each fiscal year of the Parent) commencing with the fiscal year ending December 31, 2011, the audited consolidated balance sheet of the Parent and its Consolidated Subsidiaries as at the end of such fiscal year and the related audited consolidated statements of operations, stockholders’ equity and cash flows of the Parent and its Consolidated Subsidiaries for such fiscal year, setting forth in comparative form the figures as at the end of and for the previous fiscal year, all of which shall be (a) certified by the chief executive officer or chief financial officer of the Parent, in his or her opinion, to present fairly, in accordance with GAAP and in all material respects, the financial position of the Parent and its Consolidated Subsidiaries as at the date thereof and the result of operations for such period and (b) accompanied by the report thereon of KPMG LLP or any other independent certified public accountants of recognized national standing acceptable to the Administrative Agent, whose report shall be unqualified and in scope and substance satisfactory to the Requisite Lenders.
Section 8.3 Compliance Certificate.
At the time the financial statements are furnished pursuant to Sections 8.1. and 8.2., a certificate substantially in the form of Exhibit I (a “Compliance Certificate”) executed on behalf of the Parent by the chief financial officer of the Parent (a) setting forth in reasonable detail as of the end of such quarterly accounting period or fiscal year, as the case may be, the calculations required to establish whether the Parent was in compliance with the covenants contained in Section 9.1.; and (b) stating that no Default or Event of Default exists, or, if such is not the case, specifying such Default or Event of Default and its nature, when it occurred and the steps being taken by the Parent with respect to such event, condition or failure. Each Compliance Certificate shall include (i) a reasonably detailed list of all Properties included in the calculations of Unencumbered NOI and Unencumbered Asset Value for the fiscal period covered by such Compliance Certificate, (ii) statements of Funds From Operations and Recurring Funds From Operations for the fiscal period covered by such Compliance Certificate, (iii) a report listing Properties acquired in the most recently ended fiscal quarter setting forth for each such Property the purchase price and Net Operating Income for such Property and indicating whether such Property is collateral for any Indebtedness of the owner of such Property that is secured in any manner by any Lien and, if so, a description of such Indebtedness.
Section 8.4 Other Information.
(a) Promptly upon receipt thereof, copies of all reports, if any, submitted to the Parent or its Board of Directors by its independent public accountants including, without limitation, any management report;
(b) Within five (5) Business Days of the filing thereof, copies of all registration statements (excluding the exhibits thereto (unless requested by the Administrative Agent) and any registration statements on Form S‑8 or its equivalent), reports on Forms 10‑K, 10‑Q and 8‑K (or their equivalents) and all other periodic reports which any Loan Party or any other Subsidiary shall file with the Securities and Exchange Commission (or any Governmental Authority substituted therefor) or any national securities exchange;
(c) Promptly upon the mailing thereof to the shareholders of the Parent generally, copies of all financial statements, reports and proxy statements so mailed and promptly upon the issuance thereof copies of all press releases issued by the Parent, the Borrower, any other Subsidiary or any other Loan Party;
(d) If any ERISA Event shall occur that individually, or together with any other ERISA Event that has occurred, could reasonably be expected to have a Material Adverse Effect, a certificate of the chief executive officer or chief financial officer of the Parent setting forth details as to such occurrence and the action, if any, which the Parent or applicable member of the ERISA Group is required or proposes to take;
(e) As soon as available and in any event within 50 days after the end of the fourth fiscal quarter of the Parent, the annual plan of the Parent and its Consolidated Subsidiaries, which plan shall at least include capital and operating expense budgets, projections of sources and application of funds, a projected balance sheet, profit and loss projections of the Parent and its Consolidated Subsidiaries on a consolidated basis for each quarter of the next succeeding fiscal year, all itemized in reasonable detail. The annual plan shall be accompanied by pro forma calculations, together with detailed assumptions, required to establish whether or not the Parent, and when appropriate, its Consolidated Subsidiaries, will be in compliance with the covenants contained in Section 9.1. at the end of each fiscal quarter of the next succeeding fiscal year. 9.1.
(f) To the extent any Loan Party or any other Subsidiary is aware of the same, prompt notice of the commencement of any proceeding or investigation by or before any Governmental Authority and any action or proceeding in any court or other tribunal or before any arbitrator against or in any other way relating to, or affecting, any Loan Party or any other Subsidiary or any of their respective properties, assets or businesses which could reasonably be expected to have a Material Adverse Effect, and prompt notice of the receipt of notice that any United States income tax returns of any Loan Party or any other Subsidiary are being audited;
(g) A copy of any amendment to the certificate or articles of incorporation or formation, bylaws, partnership agreement or other similar organizational documents of the Parent or the Borrower promptly after the effectiveness thereof;
(h) Prompt notice of (i) any change in the senior management of the Parent, the Borrower, any other Loan Party, or any of the respective Subsidiaries of any of the foregoing, (ii) any change in the business, assets, liabilities, financial condition, results of operations or business prospects of any Loan Party or any other Subsidiary or (iii) the occurrence of any other event which, in the case of any of the immediately preceding clauses (i) through (iii), has had, or could reasonably be expected to have, a Material Adverse Effect;
(i) Promptly upon a Responsible Officer of the Parent or any Loan Party obtaining knowledge thereof, notice of the occurrence of any Default or Event of Default;
(j) Promptly upon a Responsible Officer of the Parent or any Loan Party obtaining knowledge thereof, notice of any order, judgment or decree for which the uninsured liability is in excess of $5,000,000 having been entered against any Loan Party or any other Subsidiary or any of their respective properties or assets;
(k) Prompt notice if the Parent, the Borrower, any other Loan Party, or any Subsidiary of any of the foregoing receives notification from any Governmental Authority alleging violation of any Applicable Law or any inquiry shall have been received by the Parent, the Borrower, any other Loan Party, or any Subsidiary of the foregoing from any Governmental Authority which, in either case, could reasonably be expected to have a Material Adverse Effect;
(l) Promptly upon the request of the Administrative Agent, evidence of the Borrower’s calculation of the Ownership Share with respect to a Subsidiary or an Unconsolidated Affiliate, such evidence to be in form and detail satisfactory to the Administrative Agent;
(m) Promptly, upon any change in the Borrower’s Credit Rating, a certificate stating that the Borrower’s Credit Rating has changed and the new Credit Rating that is in effect;
(n) Promptly, upon each request, information identifying the Borrower as a Lender may request in order to comply with the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001));
(o) Promptly, and in any event within 3 Business Days after the Parent or the Borrower obtains knowledge thereof, written notice of the occurrence of any of the following: (i) the Parent, the Borrower, any Loan Party or any other Subsidiary shall receive notice that any violation of or noncompliance with any Environmental Law has or may have been committed or is threatened; (ii) the Parent, the Borrower, any Loan Party or any other Subsidiary shall receive notice that any administrative or judicial complaint, order or petition has been filed or other proceeding has been initiated, or is about to be filed or initiated against any such Person alleging any violation of or noncompliance with any Environmental Law or requiring any such Person to take any action in connection with the release or threatened release of Hazardous Materials; (iii) the Parent, the Borrower, any Loan Party or any other Subsidiary shall receive any notice from a Governmental Authority or private party alleging that any such Person may be liable or responsible for any costs associated with a response to, or remediation or cleanup of, a release or threatened release of Hazardous Materials or any damages caused thereby; or (iv) the Parent, the Borrower, any Loan Party or any other Subsidiary shall receive notice of any other fact, circumstance or condition that could reasonably be expected to form the basis of an environmental claim, and the matters covered by notices referred to in any of the immediately preceding clauses (i) through (iv), whether individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect;
(p) Promptly upon the request of the Administrative Agent, the Derivatives Termination Value in respect of any Specified Derivatives Contract from time to time outstanding;
(q) Written notice not later than public disclosure of any material acquisitions, dispositions, disposals, divestitures or similar transactions involving Property, the raising of additional equity or the incurring or repayment of material Indebtedness by or with the Parent, the Borrower, any other Loan Party, or any of the respective Subsidiaries of any of the foregoing; and
(r) From time to time and promptly upon each request, such data, certificates, reports, statements, opinions of counsel, documents or further information regarding any Property or the business, assets, liabilities, financial condition, results of operations or business prospects of the Parent, the Borrower, any other Loan Party, or any of the respective Subsidiaries of the foregoing as the Administrative Agent or any Lender may reasonably request.
Section 8.5 Electronic Delivery of Certain Information.
(a) Documents required to be delivered pursuant to the Loan Documents shall be delivered by electronic communication and delivery, including, the Internet, e-mail or intranet websites to which the Administrative Agent and each Lender have access (including a commercial, third-party website such as www.sec.gov <http://www.sec.gov> or a website sponsored or hosted by the Administrative Agent or the Borrower) provided that the foregoing shall not apply to (i) notices to any Lender pursuant to Article II. and (ii) any Lender that has notified the Administrative Agent and the Borrower that it cannot or does not want to receive electronic communications. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic delivery pursuant to procedures approved by it for all or particular notices or communications. Documents or notices delivered electronically shall be deemed to have been delivered twenty-four (24) hours after the date and time on which the
Administrative Agent or the Borrower posts such documents or the documents become available on a commercial website and the Administrative Agent or Borrower notifies each Lender of said posting and provides a link thereto provided if such notice or other communication is not sent or posted during the normal business hours of the recipient, said posting date and time shall be deemed to have commenced as of 12:00 noon Eastern time on the opening of business on the next business day for the recipient. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the certificate required by Section 8.3. to the Administrative Agent and shall deliver paper copies of any documents to the Administrative Agent or to any Lender that requests such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender. Except for the certificates required by Section 8.3., the Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents delivered electronically, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery. Each Lender shall be solely responsible for requesting delivery to it of paper copies and maintaining its paper or electronic documents.
(b) Documents required to be delivered pursuant to Article II. may be delivered electronically to a website provided for such purpose by the Administrative Agent pursuant to the procedures provided to the Borrower by the Administrative Agent.
Section 8.6 Public/Private Information.
The Parent and the Borrower shall cooperate with the Administrative Agent in connection with the publication of certain materials and/or information provided by or on behalf of the Parent and/or the Borrower. Documents required to be delivered pursuant to the Loan Documents shall be delivered by or on behalf of the Parent and/or the Borrower to the Administrative Agent and the Lenders (collectively, “Information Materials”) pursuant to this Article and the Parent and/or the Borrower, as applicable, shall designate Information Materials (a) that are either available to the public or not material with respect to the Parent and its Subsidiaries or any of their respective securities for purposes of United States federal and state securities laws, as “Public Information” and (b) that are not Public Information as “Private Information”. The Administrative Agent, the Parent and the Borrower acknowledge and agree that the Parent is obligated to file reports under the Securities Act. All Information Materials filed with or furnished to the Securities and Exchange Commission pursuant to the Securities Act, or filed by, or on behalf of, the Parent with the Securities and Exchange Commission pursuant to the Securities Act, distributed by, or on behalf of, the Parent or the Borrower by press release through a widely disseminated news or wire service, or otherwise expressly designated by the Parent or the Borrower as Public Information are hereby designated as Public Information, and all other Information Materials are hereby designated as Private Information.
Section 8.7 USA Patriot Act Notice; Compliance.
The USA Patriot Act of 2001 (Public Law 107-56) and federal regulations issued with respect thereto require all financial institutions to obtain, verify and record certain information that identifies individuals or business entities which open an “account” with such financial institution. Consequently, a Lender (for itself and/or as Administrative Agent for all Lenders hereunder) may from time-to-time request, and the Parent and the Borrower shall, and shall cause the other Loan Parties to, provide to such Lender, such Loan Party’s name, address, tax identification number and/or such other identification information as shall be necessary for such Lender to comply with federal law. An “account” for this purpose may include, without limitation, a deposit account, cash management service, a transaction or asset account, a credit account, a loan or other extension of credit, and/or other financial services product.
ARTICLE IX. NEGATIVE COVENANTS
From and after the Agreement Date and for so long as this Agreement is in effect, unless the Requisite Lenders (or, if required pursuant to Section 12.7., all of the Lenders) shall otherwise consent in the manner set forth in Section 12.7., the Parent and the Borrower shall comply with the following covenants:
Section 9.1 Financial Covenants.
(a) Minimum Tangible Net Worth. The Parent shall not permit Tangible Net Worth at any time to be less than (i) $1,470,368,800 plus (ii) 75.0% of the Net Proceeds of all Equity Issuances effected at any time after June 30, 2011 by the Parent, the Borrower or any of their respective Subsidiaries to any Person other than the Parent, the Borrower or any of their respective Subsidiaries minus (iii) 75.0% of the Net Proceeds of Equity Issuances by the Parent, the Borrower or any of their respective Subsidiaries used to purchase or redeem any Equity Interests of the Parent (to the extent such purchases or redemptions are permitted by Section 9.1.(h)).
(b) Ratio of Indebtedness to Total Asset Value. The Parent shall not permit the ratio of (i) Indebtedness of the Parent and its Consolidated Subsidiaries to (ii) Total Asset Value to exceed 0.60 to 1.00 at any time.
(c) Ratio of Unsecured Indebtedness to Unencumbered Asset Value. The Parent shall not permit the ratio of (i) Unsecured Indebtedness of the Parent and its Consolidated Subsidiaries to (ii) Unencumbered Asset Value to exceed 0.60 to 1.00 at any time.
(d) Ratio of Adjusted EBITDA to Fixed Charges. The Parent shall not permit the ratio of (i) Adjusted EBITDA of the Parent and its Consolidated Subsidiaries for the period of four fiscal quarters most recently ended to (ii) Fixed Charges for the period of four fiscal quarters most recently ended, to be less than 1.50 to 1.00 as of the last day of such period of four fiscal quarters.
(e) Ratio of Secured Indebtedness to Total Asset Value. The Parent shall not permit the ratio of (i) Secured Indebtedness of the Borrower and its Consolidated Subsidiaries to (ii) Total Asset Value to exceed 0.35 to 1.00 at any time.
(f) Ratio of Unencumbered NOI to Unsecured Interest Expense. The Parent shall not permit the ratio of (i) Unencumbered NOI for the period of four fiscal quarters most recently ended to (ii) Unsecured Interest Expense for the period of four fiscal quarters most recently ended, to be less than 1.75 to 1.00 as of the last day of such period of four fiscal quarters.
(g) Permitted Investments. The Parent shall not, and shall not permit any Loan Party or other Subsidiary to, make an Investment in or otherwise own the following items which would cause the aggregate value of such holdings of such Persons to exceed 20.0% of Total Asset Value at any time:
(i) Unimproved Land;
(ii) Common stock, Preferred Equity, other capital stock, beneficial interest in trust, membership interest in limited liability companies and other equity interests in Persons (other than Consolidated Subsidiaries and Unconsolidated Affiliates);
(iii) Mortgage Receivables; and
(iv) Investments in Unconsolidated Affiliates.
In addition to the foregoing, the Parent shall not, and shall not permit any Loan Party or other
Subsidiary to, make any Investment in or otherwise own any Development Properties to the extent it would cause the Construction Budget for Development Properties in which the Parent either has a direct or indirect ownership interest to exceed 15.0% of Total Asset Value. If a Development Property is owned by an Unconsolidated Affiliate of the Parent, the Borrower or any other Subsidiary, the Construction Budget for such Development Property shall be equal to the product of (A) Construction Budget for Development Project times (B) the Parent’s, the Borrower’s or such Subsidiary’s Ownership Share in such Unconsolidated Affiliate.
(h) Dividends and Other Restricted Payments. Subject to the following sentence, if a Default or Event of Default exists, the Borrower may only declare and make cash distributions to the Parent and other holders of partnership interests in the Borrower with respect to any fiscal year to the extent necessary for the Parent to distribute, and the Parent may so distribute, an aggregate amount not to exceed the minimum amount necessary for the Parent to remain in compliance with Section 7.11. If a Default or Event of Default specified in Section 10.1.(a), Section 10.1.(e) or Section 10.1.(f) shall exist, or if as a result of the occurrence of any other Event of Default any of the Obligations have been accelerated pursuant to Section 10.2.(a), the Borrower shall not, and shall not permit any Subsidiary to, make any Restricted Payments to any Person other than to the Borrower or any Subsidiary.
Section 9.2 Liens.
(a) Neither the Parent nor the Borrower shall, and neither the Parent nor the Borrower shall permit any other Loan Party or any other Subsidiary (other than an Excluded Subsidiary) to, create, assume, or incur any Lien (other than Permitted Liens) upon any of its properties, assets, income or profits of any character whether now owned or hereafter acquired if immediately prior to the creation, assumption or incurring of such Lien, or immediately thereafter, a Default or Event of Default is or would be in existence, including without limitation, a Default or Event of Default resulting from a violation of any of the covenants contained in Section 9.1.
(b) Neither the Parent nor the Borrower shall, and neither the Parent nor the Borrower shall permit any other Loan Party or any other Subsidiary (other than an Excluded Subsidiary) to, enter into, assume or otherwise be bound by any Negative Pledge except for a Negative Pledge contained in (i) an agreement (x) evidencing Indebtedness which the Parent, the Borrower, such Loan Party or such other Subsidiary may create, incur, assume, or permit or suffer to exist under this Agreement, (y) which Indebtedness is secured by a Lien permitted to exist under the Loan Documents, and (z) which prohibits the creation of any other Lien on only the property securing such Indebtedness as of the date such agreement was entered into; or (ii) an agreement relating to the sale of a Subsidiary or assets pending such sale, provided that in any such case the Negative Pledge applies only to the Subsidiary or the assets that are the subject of such sale.
Section 9.3 Restrictions on Intercompany Transfers.
Neither the Parent nor the Borrower shall, and neither the Parent nor the Borrower shall permit any other Loan Party or any other Subsidiary (other than an Excluded Subsidiary) to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary to: (a) pay dividends or make any other distribution on any of such Subsidiary’s capital stock or other equity interests owned by the Borrower or any Subsidiary; (b) pay any Indebtedness owed to the Borrower or any Subsidiary; (c) make loans or advances to the Borrower or any Subsidiary; or (d) transfer any of its property or assets to the Borrower or any Subsidiary; other than (i) with respect to clauses (a) through (d) those encumbrances or restrictions contained in any Loan Document or, (ii) with respect to clause
(d), customary provisions restricting assignment of any agreement entered into by the Borrower, any other Loan Party or any Subsidiary in the ordinary course of business.
Section 9.4 Merger, Consolidation, Sales of Assets and Other Arrangements.
Neither the Parent nor the Borrower shall, and neither the Parent nor the Borrower shall permit any other Loan Party or any other Subsidiary to, (a) enter into any transaction of merger or consolidation; (b) liquidate, windup or dissolve itself (or suffer any liquidation or dissolution); (c) convey, sell, lease, sublease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of its business or assets, or the capital stock of or other Equity Interests in any of its Subsidiaries, whether now owned or hereafter acquired; or (d) acquire a Substantial Amount of the assets of, or make an Investment of a Substantial Amount in, any other Person; provided, however, that:
(i) any of the actions described in the immediately preceding clauses (a) through (c) (other than a merger that also constitutes an acquisition or Investment of the type described in the preceding clause (d)) may be taken with respect to any Subsidiary or any other Loan Party (other than the Borrower or the Parent) so long as immediately prior to the taking of such action, and immediately thereafter and after giving effect thereto, no Default or Event of Default is or would be in existence; notwithstanding the foregoing, any such Loan Party may enter into a transaction of merger that is not an acquisition or Investment of the type described in clause (d) above pursuant to which such Loan Party is not the survivor of such merger only if (A) the Borrower shall have given the Administrative Agent and the Lenders at least ten (10) Business Days’ prior written notice of such merger; (B) if the surviving entity is a Subsidiary and is required under Section 7.13. to become a Guarantor, within five (5) Business Days of consummation of such merger the survivor entity (if not already a Guarantor) shall have executed and delivered to the Administrative Agent an Accession Agreement, the other items required to be delivered under such Section, copies of all documents entered into by such Loan Party or the surviving entity to effectuate the consummation of such merger, including, but not limited to, articles of merger and the plan of merger, copies of any filings with the Securities and Exchange Commission in connection with such merger; and (C) such Loan Party and the surviving entity each takes such other action and delivers such other documents, instruments, opinions and agreements as the Administrative Agent may reasonably request;
(ii) during the term of this Agreement, (A) the Borrower may convey, sell, lease, sublease, transfer or otherwise dispose of assets (including capital stock or other securities of its Subsidiaries) to any other Person so long as the value of such assets does not in the aggregate together with the value of all other assets so conveyed, sold, leased, subleased, transferred or disposed up to such date, constitute a Substantial Amount and (B) the Parent may directly or indirectly convey, sell or transfer equity interests in the Borrower so long as, after giving effect to such conveyance, sale or transfer the Parent shall own and control at least sixty five percent (65.0%) of all partnership interests of the Borrower; provided that, (1) in the case of the foregoing clauses (A) and (B), immediately prior thereto, and immediately thereafter and after giving effect thereto, no Default or Event of Default is or would be in existence, including, without limitation, a Default or Event of Default resulting from a breach of Section 9.1. and (2)(x) in the case of the foregoing clause (A), if the Borrower conveys, sells, leases, subleases transfers or otherwise disposes of assets (including capital stock or other securities of its Subsidiaries) to any other Person the aggregate value of which, together with all other assets so conveyed, sold, leased, subleased, transferred or disposed in such calendar year, constitutes twenty percent (20.0%) or more of total consolidated assets of the Parent and its Subsidiaries determined on a consolidated basis at such time and (y) in the case of the foregoing clause (B), if the Parent directly or indirectly conveys, sells or transfers equity interests in the
Borrower the aggregate amount of which, together with all other equity interests in the Borrower so conveyed, sold or transferred in such calendar year, constitutes twenty percent (20.0%) or more of all partnership interests of the Borrower, then (I) the Borrower shall have given the Administrative Agent and the Lenders at least thirty (30) days prior written notice of such sale, lease, sublease, transfer or other disposition and (II) at the time the Borrower gives notice pursuant to clause (I) above, the Parent shall have delivered to the Administrative Agent for distribution to each of the Lenders a Compliance Certificate, calculated on a pro forma basis, evidencing the continued compliance by the Loan Parties with the terms and conditions of this Agreement and the other Loan Documents, including without limitation, the financial covenants contained in Section 9.1., after giving effect to such conveyance, sale, lease, sublease, transfer or other disposition;
(iii) a Person may merge with and into the Parent or the Borrower in the case of a merger that is not an acquisition or Investment of the type described in clause (d) above, so long as (A) the Parent or the Borrower, as the case may be, is the survivor of such merger, (B) immediately prior to such merger, and immediately thereafter and after giving effect thereto, no Default or Event of Default is or would be in existence, (C) the Borrower shall have given the Administrative Agent and the Lenders at least ten (10) Business Days’ prior written notice of such merger (except that such prior notice shall not be required in the case of the merger of a Subsidiary with and into the Borrower) and (D) the Borrower shall have delivered to the Administrative Agent such data, certificates, reports, statements, opinions of counsel, documents or further information as the Administrative Agent or any Lender may reasonably request;
(iv) any Loan Party and any other Subsidiary may, directly or indirectly, acquire (whether by purchase, acquisition of Equity Interests of a Person, or as a result of a merger or consolidation) a Substantial Amount of the assets of, or make an Investment of a Substantial Amount in, any other Person, so long as, in each case, (A) the Borrower shall have given the Administrative Agent and the Lenders at least thirty (30) days prior written notice of such consolidation, merger, acquisition, Investment; (B) immediately prior thereto, and immediately thereafter and after giving effect thereto, no Default or Event of Default is or would be in existence, including, without limitation, a Default or Event of Default resulting from a breach of Section 9.1.; (C) in the case of a consolidation or merger involving the Parent, the Borrower or a Loan Party that owns an Eligible Property, the Parent, the Borrower or such Loan Party shall be the survivor thereof and (D) at the time the Borrower gives notice pursuant to clause (A) of this subsection, the Parent shall have delivered to the Administrative Agent for distribution to each of the Lenders a Compliance Certificate, calculated on a pro forma basis, evidencing the continued compliance by the Loan Parties with the terms and conditions of this Agreement and the other Loan Documents, including without limitation, the financial covenants contained in Section 9.1., after giving effect to such consolidation, merger, acquisition, Investment;
(v) the Parent, the Borrower, the other Loan Parties, if any, and the other Subsidiaries may lease and sublease their respective assets, as lessor or sublessor (as the case may be), in the ordinary course of their business; and
(vi) the Parent, the Borrower, the other Loan Parties, if any, and the other Subsidiaries may sell, transfer or dispose of assets among themselves.
Further, no Loan Party nor any Subsidiary, shall enter into any sale‑leaseback transactions or other transaction by which such Person shall remain liable as lessee (or the economic equivalent thereof) of any real or personal property that it has sold or leased to another Person.
Section 9.5 Plans.
Neither the Parent nor the Borrower shall, and neither the Parent nor the Borrower shall permit any other Loan Party or any other Subsidiary to, permit any of its respective assets to become or be deemed to be “plan assets” within the meaning of ERISA, the Internal Revenue Code and the respective regulations promulgated thereunder. Neither the Parent nor the Borrower shall cause or permit to occur, and neither the Parent or the Borrower shall permit any other member of the ERISA Group to cause or permit to occur, any ERISA Event if such ERISA Event could reasonably be expected to have a Material Adverse Effect.
Section 9.6 Fiscal Year.
Neither the Parent nor the Borrower shall, and neither the Parent nor the Borrower shall permit any other Loan Party or other Subsidiary to, change its fiscal year from that in effect as of the Agreement Date.
Section 9.7 Modifications of Organizational Documents.
Neither the Parent nor the Borrower shall, and neither the Parent nor the Borrower shall permit any other Loan Party or any other Subsidiary to, amend, supplement, restate or otherwise modify its certificate or articles of incorporation or formation, by-laws, operating agreement, declaration of trust, partnership agreement or other applicable organizational document if such amendment, supplement, restatement or other modification could reasonably be expected to have a Material Adverse Effect.
Section 9.8 Transactions with Affiliates.
Neither the Parent nor the Borrower shall permit to exist or enter into, and neither the Parent nor the Borrower shall permit any other Loan Party or any other Subsidiary to permit to exist or enter into, any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate, except transactions in the ordinary course of and pursuant to the reasonable requirements of the business of the Parent, the Borrower, such other Loan Party or such other Subsidiary and upon fair and reasonable terms which are no less favorable to the Borrower, such other Loan Party or such other Subsidiary than would be obtained in a comparable arm’s length transaction with a Person that is not an Affiliate.
Section 9.9 Environmental Matters.
Neither the Parent nor the Borrower shall, and neither the Parent nor the Borrower shall permit any other Loan Party, any other Subsidiary or any other Person to, use, generate, discharge, emit, manufacture, handle, process, store, release, transport, remove, dispose of or clean up any Hazardous Materials on, under or from the Properties in violation of any Environmental Law or in a manner that could reasonably be expected to lead to any environmental claim or pose a risk to human health, safety or the environment, in each case, which violation, claim or risk could reasonably be expected to have a Material Adverse Effect. Nothing in this Section shall impose any obligation or liability whatsoever on the Administrative Agent or any Lender.
Section 9.10 Derivatives Contracts.
Neither the Parent nor the Borrower shall, and neither the Parent nor the Borrower shall permit any other Loan Party or any other Subsidiary to, enter into or become obligated in respect of Derivatives Contracts other than Derivatives Contracts entered into by the Parent, the Borrower, any such Loan Party or any such Subsidiary in the ordinary course of business and which establish an effective hedge in respect of liabilities, commitments or assets held or reasonably anticipated by the Parent, the Borrower, such other Loan Party or such other Subsidiary.
Section 9.11 Non-Guarantors.
Neither the Parent nor the Borrower shall permit the Unencumbered Asset Value attributable to Eligible Properties owned by Non-Guarantors to exceed 10.0% of the Unencumbered Asset Value.
ARTICLE X. DEFAULT
Section 10.1 Events of Default.
Each of the following shall constitute an Event of Default, whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of Applicable Law or pursuant to any judgment or order of any Governmental Authority:
(a) Default in Payment. (i) The Borrower shall fail to pay (A) the principal amount of any Loan when due (whether upon demand, at maturity, by reason of acceleration or otherwise) or (B) any interest on any Loans, Fees or other Obligations owing by it when due (whether upon demand, at maturity, by reason of acceleration or otherwise), solely in the case of this clause (B), within five (5) Business Days of the due date therefor, or (ii) any Loan Party (other than the Borrower) shall fail to pay within five (5) Business Days of when due any payment obligation owing by such Loan Party under any Loan Document to which it is a party.
(b) Default in Performance.
(i) Any Loan Party shall fail to perform or observe any term, covenant, condition or agreement on its part to be performed or observed and contained in Section 8.4.(i) or Article IX.; or
(ii) Any Loan Party shall fail to perform or observe any term, covenant, condition or agreement contained in this Agreement or any other Loan Document to which it is a party and not otherwise mentioned in this Section, and in the case of this subsection (b)(ii) only, such failure shall continue for a period of 30 days after the earlier of (x) the date upon which a Responsible Officer of the Parent or such other Loan Party obtains knowledge of such failure or (y) the date upon which the Borrower has received written notice of such failure from the Administrative Agent.
(c) Misrepresentations. Any written statement, representation or warranty made or deemed made by or on behalf of any Loan Party under this Agreement or under any other Loan Document, or any amendment hereto or thereto, or in any other writing or statement at any time furnished by, or at the direction of, any Loan Party to the Administrative Agent or any Lender, shall at any time prove to have been incorrect or misleading in any material respect when furnished or made or deemed made.
(d) Indebtedness Cross‑Default.
(i) The Parent, the Borrower, any other Loan Party or any other Subsidiary shall fail to make any payment when due and payable in respect of any Material Indebtedness; or
(ii) (x) The maturity of any Material Indebtedness shall have been accelerated in accordance with the provisions of any indenture, contract or instrument evidencing, providing for the creation of or otherwise concerning such Material Indebtedness or (y) any Material Indebtedness shall have been required to be prepaid or repurchased prior to the stated maturity thereof; or
(iii) Any other event shall have occurred and be continuing which would permit any holder or holders of any Material Indebtedness, any trustee or agent acting on behalf of such holder or holders or any other Person, to accelerate the maturity of any such Material Indebtedness or require
any such Material Indebtedness to be prepaid or repurchased prior to its stated maturity, provided that any requirement for notice or lapse of time or any other condition has been satisfied; or
(iv) There occurs an “Event of Default” under and as defined in any Derivatives Contract as to which the Parent, the Borrower, any Loan Party or any of other Subsidiary is a “Defaulting Party” (as defined therein), or there occurs an “Early Termination Date” (as defined therein) in respect of any Specified Derivatives Contract as a result of a “Termination Event” (as defined therein) as to which the Parent, the Borrower or any of its Subsidiaries is an “Affected Party” (as defined therein).
(v) An “Event of Default” under and as defined in the Existing Credit Agreement shall occur.
(e) Voluntary Bankruptcy Proceeding. The Parent, the Borrower, any other Loan Party or any other Material Subsidiary shall: (i) commence a voluntary case under the Bankruptcy Code or other federal bankruptcy laws (as now or hereafter in effect); (ii) file a petition seeking to take advantage of any other Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding‑up, or composition or adjustment of debts; (iii) consent to, or fail to contest in a timely and appropriate manner, any petition filed against it in an involuntary case under such bankruptcy laws or other Applicable Laws or consent to any proceeding or action described in the immediately following subsection (f); (iv) apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a receiver, custodian, trustee, or liquidator of itself or of a substantial part of its property, domestic or foreign; (v) admit in writing its inability to pay its debts as they become due; (vi) make a general assignment for the benefit of creditors; (vii) make a conveyance fraudulent as to creditors under any Applicable Law; or (viii) take any corporate or partnership action for the purpose of effecting any of the foregoing.
(f) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be commenced against the Parent, the Borrower, any other Loan Party or any other Material Subsidiary in any court of competent jurisdiction seeking: (i) relief under the Bankruptcy Code or other federal bankruptcy laws (as now or hereafter in effect) or under any other Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding‑up, or composition or adjustment of debts; or (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of such Person, or of all or any substantial part of the assets, domestic or foreign, of such Person, and in the case of either clause (i) or (ii) such case or proceeding shall continue undismissed or unstayed for a period of 60 consecutive days, or an order granting the remedy or other relief requested in such case or proceeding (including, but not limited to, an order for relief under such Bankruptcy Code or such other federal bankruptcy laws) shall be entered.
(g) Revocation of Loan Documents. Any Loan Party shall (or shall attempt to) disavow, revoke or terminate any Loan Document or the Fee Letter to which it is a party or shall otherwise challenge or contest in any action, suit or proceeding in any court or before any Governmental Authority the validity or enforceability of any Loan Document or the Fee Letter or any Loan Document or the Fee Letter shall cease to be in full force and effect (except as a result of the express terms thereof).
(h) Judgment. A judgment or order for the payment of money or for an injunction or other non-monetary relief shall be entered against the Parent, the Borrower, any other Loan Party, or any other Subsidiary by any court or other tribunal and (i) such judgment or order shall continue for a period of thirty (30) days without being paid, stayed or dismissed through appropriate appellate proceedings and (ii) either (A) the amount of such judgment or order for which insurance has not been acknowledged in writing by the applicable insurance carrier (or the amount as to which the insurer has denied liability) exceeds, individually
or together with all other such judgments or orders entered against the Loan Parties or any other Subsidiary, $25,000,000 or (B) in the case of an injunction or other non-monetary relief, such injunction or judgment or order could reasonably be expected to have a Material Adverse Effect.
(i) Attachment. A warrant, writ of attachment, execution or similar process shall be issued against any property of the Parent, the Borrower, any other Loan Party or any of the respective Subsidiaries of any of the foregoing, which exceeds, individually or together with all other such warrants, writs, executions and processes, $25,000,000 in amount and such warrant, writ, execution or process shall not be paid, discharged, vacated, stayed or bonded for a period of thirty (30) days; provided, however, that if a bond has been issued in favor of the claimant or other Person obtaining such warrant, writ, execution or process, the issuer of such bond shall execute a waiver or subordination agreement in form and substance satisfactory to the Administrative Agent pursuant to which the issuer of such bond subordinates its right of reimbursement, contribution or subrogation to the Obligations and waives or subordinates any Lien it may have on the assets of the Parent, the Borrower or any other Subsidiary.
(j) ERISA.
(i) Any ERISA Event shall have occurred that results or could reasonably be expected to result in liability to any member of the ERISA Group aggregating in excess of $25,000,000; or
(ii) As of the most recent valuation date, the “benefit obligation” of all Plans exceeds the “fair market value of plan assets” for such Plans by more than $25,000,000, all as determined, and with such terms defined, in accordance with FASB ASC 715.
(k) Loan Documents. An Event of Default (as defined therein) shall occur under any of the other Loan Documents, provided that any requirement for notice of lapse of time or any other condition has been satisfied.
(l) Change of Control/Change in Management.
(i) Any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person will be deemed to have “beneficial ownership” of all securities that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35.0% of the total voting power of the then outstanding voting stock of the Parent;
(ii) During any period of 12 consecutive months ending after the Agreement Date, individuals who at the beginning of any such 12‑month period constituted the Board of Directors of the Parent (together with any new directors whose election by such Board or whose nomination for election by the shareholders of the Parent was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved (but excluding any director whose initial nomination for, or assumption of office as, a director occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the Board of Directors)) cease for any reason to constitute a majority of the Board of Directors of the Parent then in office; or
(iii) If the Parent shall cease for any reason to be the general partner of the Borrower.
(m) Damage; Strike; Casualty. Any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than thirty (30) consecutive days beyond the coverage period of any applicable business interruption insurance, the cessation or substantial curtailment of revenue producing activities of the Parent, Borrower, the other Loan Parties, if any, and the respective Subsidiaries of the foregoing, taken as a whole, and only if any such event or circumstance could reasonably be expected to have a Material Adverse Effect.
Section 10.2 Remedies Upon Event of Default.
Upon the occurrence of an Event of Default the following provisions shall apply:
(a) Acceleration; Termination of Facilities.
(i) Automatic. Upon the occurrence of an Event of Default specified in Sections 10.1.(e) or 10.1.(f), (1)(A) the principal of, and all accrued interest on, the Loans and the Notes at the time outstanding and (B) all of the other Obligations, including, but not limited to, the other amounts owed to the Lenders and the Administrative Agent under this Agreement, the Notes or any of the other Loan Documents shall become immediately and automatically due and payable without presentment, demand, protest, or other notice of any kind, all of which are expressly waived by the Borrower on behalf of itself and the other Loan Parties, and (2) the Commitments shall immediately and automatically terminate.
(ii) Optional. If any other Event of Default shall exist, the Administrative Agent may, and at the direction of the Requisite Lenders shall: (1) declare (A) the principal of, and accrued interest on, the Loans and the Notes at the time outstanding and (B) all of the other Obligations, including, but not limited to, the other amounts owed to the Lenders and the Administrative Agent under this Agreement, the Notes or any of the other Loan Documents to be forthwith due and payable, whereupon the same shall immediately become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by the Borrower on behalf of itself and the other Loan Parties, and (2) terminate the Commitments.
(b) Loan Documents. The Requisite Lenders may direct the Administrative Agent to, and the Administrative Agent if so directed shall, exercise any and all of its rights under any and all of the other Loan Documents.
(c) Applicable Law. The Requisite Lenders may direct the Administrative Agent to, and the Administrative Agent if so directed shall, exercise all other rights and remedies it may have under any Applicable Law.
(d) Appointment of Receiver. To the extent permitted by Applicable Law, the Administrative Agent and the Lenders shall be entitled to the appointment of a receiver for the assets and properties of the Parent, the Borrower and their Subsidiaries, without notice of any kind whatsoever and without regard to the adequacy of any security for the Obligations or the solvency of any party bound for its payment, to take possession of all or any portion the property and/or the business operations of the Parent, the Borrower and their Subsidiaries and to exercise such power as the court shall confer upon such receiver.
(e) Specified Derivatives Contract Remedies. Notwithstanding any other provision of this Agreement or other Loan Document, each Specified Derivatives Provider shall have the right, with prompt notice to the Administrative Agent, but without the approval or consent of or other action by the Administrative
Agent or the Lenders, and without limitation of other remedies available to such Specified Derivatives Provider under contract or Applicable Law, to undertake any of the following: (a) to declare an event of default, termination event or other similar event under any Specified Derivatives Contract and to create an “Early Termination Date” (as defined therein) in respect thereof, (b) to determine net termination amounts in respect of any and all Specified Derivatives Contracts in accordance with the terms thereof, and to set off amounts among such contracts, (c) to set off or proceed against deposit account balances, securities account balances and other property and amounts held by such Specified Derivatives Provider pursuant to any Derivatives Support Document, including any “Posted Collateral” (as defined in any credit support annex included in any such Derivatives Support Document to which such Specified Derivatives Provider may be a party), and (d) to prosecute any legal action against the Parent, the Borrower, any other Loan Party or other Subsidiary to enforce or collect net amounts owing to such Specified Derivatives Provider pursuant to any Specified Derivatives Contract.
Section 10.3 Remedies Upon Default.
Upon the occurrence of a Default specified in Section 10.1.(f), the Commitments shall immediately and automatically terminate.
Section 10.4 Marshaling; Payments Set Aside.
None of the Administrative Agent, any Lender or any Specified Derivatives Provider shall be under any obligation to marshal any assets in favor of any Loan Party or any other party or against or in payment of any or all of the Obligations or the Specified Derivatives Obligations. To the extent that any Loan Party makes a payment or payments to the Administrative Agent, any Lender or any Specified Derivatives Provider, or the Administrative Agent, any Lender or any Specified Derivatives Provider enforces its respective security interests or exercises its respective rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such recovery, the Obligations or Specified Derivatives Obligations, or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
Section 10.5 Allocation of Proceeds.
If an Event of Default exists, all payments received by the Administrative Agent under any of the Loan Documents, in respect of any principal of or interest on the Obligations or any other amounts payable by the Borrower hereunder or thereunder, shall be applied in the following order and priority:
(a) amounts due to the Administrative Agent and the Lenders in respect of expenses due under Section 12.2. until paid in full, and then Fees;
(b) payments of interest on the Loans to be applied for the ratable benefit of the Lenders;
(c) payments of principal of the Loans to be applied for the ratable benefit of the Lenders in such order and priority as the Lenders may determine in their sole discretion;
(f) amounts due to the Administrative Agent and the Lenders pursuant to Sections 11.6. and 12.10.;
(g) payments of all other Obligations and other amounts due under any of the Loan Documents, if any, to be applied for the ratable benefit of the Lenders; and
(h) any amount remaining after application as provided above, shall be paid to the Borrower or whomever else may be legally entitled thereto.
Section 10.6 Intentionally Omitted.
Section 10.7 Rescission of Acceleration by Requisite Lenders.
If at any time after acceleration of the maturity of the Loans and the other Obligations, the Borrower shall pay all arrears of interest and all payments on account of principal of the Obligations which shall have become due otherwise than by acceleration (with interest on principal and, to the extent permitted by Applicable Law, on overdue interest, at the rates specified in this Agreement) and all Events of Default and Defaults (other than nonpayment of principal of and accrued interest on the Obligations due and payable solely by virtue of acceleration) shall become remedied or waived to the satisfaction of the Requisite Lenders, then by written notice to the Borrower, the Requisite Lenders may elect, in the sole discretion of such Requisite Lenders, to rescind and annul the acceleration and its consequences. The provisions of the preceding sentence are intended merely to bind all of the Lenders to a decision which may be made at the election of the Requisite Lenders, and are not intended to benefit the Borrower and do not give the Borrower the right to require the Lenders to rescind or annul any acceleration hereunder, even if the conditions set forth herein are satisfied.
Section 10.8 Performance by Administrative Agent.
If the Parent, the Borrower or any other Loan Party shall fail to perform any covenant, duty or agreement contained in any of the Loan Documents, the Administrative Agent may, after notice to the Borrower, perform or attempt to perform such covenant, duty or agreement on behalf of the Parent, the Borrower or such other Loan Party after the expiration of any cure or grace periods set forth herein. In such event, the Borrower shall, at the request of the Administrative Agent, promptly pay any amount reasonably expended by the Administrative Agent in such performance or attempted performance to the Administrative Agent, together with interest thereon at the applicable Post-Default Rate from the date of such expenditure until paid. Notwithstanding the foregoing, neither the Administrative Agent nor any Lender shall have any liability or responsibility whatsoever for the performance of any obligation of the Borrower under this Agreement or any other Loan Document.
Section 10.9 Rights Cumulative.
The rights and remedies of the Administrative Agent, the Lenders and the Specified Derivatives Providers under this Agreement, each of the other Loan Documents, the Fee Letter and Specified Derivatives Contracts shall be cumulative and not exclusive of any rights or remedies which any of them may otherwise have under Applicable Law. In exercising their respective rights and remedies the Administrative Agent, the Lenders and the Specified Derivatives Providers may be selective and no failure or delay by the Administrative Agent, any of the Lenders or any of the Specified Derivatives Providers in exercising any right shall operate as a waiver of it, nor shall any single or partial exercise of any power or right preclude its other or further exercise or the exercise of any other power or right.
ARTICLE XI. THE ADMINISTRATIVE AGENT
Section 11.1 Appointment and Authorization.
Each Lender hereby irrevocably appoints and authorizes the Administrative Agent to take such action
as contractual representative on such Lender’s behalf and to exercise such powers under this Agreement and the other Loan Documents as are specifically delegated to the Administrative Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. Not in limitation of the foregoing, each Lender authorizes and directs the Administrative Agent to enter into the Loan Documents for the benefit of the Lenders. Each Lender hereby agrees that, except as otherwise set forth herein, any action taken by the Requisite Lenders in accordance with the provisions of this Agreement or the Loan Documents, and the exercise by the Requisite Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. Nothing herein shall be construed to deem the Administrative Agent a trustee or fiduciary for any Lender or to impose on the Administrative Agent duties or obligations other than those expressly provided for herein. Without limiting the generality of the foregoing, the use of the terms “Agent”, “Administrative Agent”, “agent” and similar terms in the Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Applicable Law. Instead, use of such terms is merely a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. The Administrative Agent shall deliver to each Lender, promptly upon receipt thereof by the Administrative Agent, copies of each of the financial statements, certificates, notices and other documents delivered to the Administrative Agent pursuant to Article VIII. that neither the Parent nor the Borrower is otherwise required to deliver directly to the Lenders. The Administrative Agent will furnish to any Lender, upon the request of such Lender, a copy (or, where appropriate, an original) of any document, instrument, agreement, certificate or notice furnished to the Administrative Agent by the Parent, the Borrower, any other Loan Party or any other Affiliate of the Parent or the Borrower, pursuant to this Agreement or any other Loan Document not already delivered to such Lender pursuant to the terms of this Agreement or any such other Loan Document. As to any matters not expressly provided for by the Loan Documents (including, without limitation, enforcement or collection of any of the Obligations), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Requisite Lenders (or all of the Lenders if explicitly required under any other provision of this Agreement), and such instructions shall be binding upon all Lenders and all holders of any of the Obligations; provided, however, that, notwithstanding anything in this Agreement to the contrary, the Administrative Agent shall not be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement or any other Loan Document or Applicable Law. Not in limitation of the foregoing, the Administrative Agent may exercise any right or remedy it or the Lenders may have under any Loan Document upon the occurrence of a Default or an Event of Default unless the Requisite Lenders have directed the Administrative Agent otherwise. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of the Requisite Lenders, or where applicable, all the Lenders.
Section 11.2 Wells Fargo as Lender.
Wells Fargo, as a Lender or as a Specified Derivatives Provider, as the case may be, shall have the same rights and powers under this Agreement and any other Loan Document and under any Specified Derivatives Contract, as the case may be, as any other Lender or Specified Derivatives Provider and may exercise the same as though it were not the Administrative Agent; and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include Wells Fargo in each case in its individual capacity. Wells Fargo and its Affiliates may each accept deposits from, maintain deposits or credit balances for, invest in, lend money to, act as trustee under indentures of, serve as financial advisor to, and generally engage in any kind of business with the Parent, the Borrower, any other Loan Party or any other Affiliate thereof as if it were
any other bank and without any duty to account therefor to the other Lenders or any other Specified Derivatives Providers. Further, the Administrative Agent and any Affiliate may accept fees and other consideration from the Parent and the Borrower for services in connection with this Agreement or any Specified Derivatives Contract, or otherwise without having to account for the same to the other Lenders or any other Specified Derivatives Providers. The Lenders acknowledge that, pursuant to such activities, Wells Fargo or its Affiliates may receive information regarding the Parent, the Borrower, other Loan Parties, other Subsidiaries and other Affiliates (including information that may be subject to confidentiality obligations in favor of such Person) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them.
Section 11.3 Approvals of Lenders.
All communications from the Administrative Agent to any Lender requesting such Lender’s determination, consent, approval or disapproval (a) shall be given in the form of a written notice to such Lender, (b) shall be accompanied by a description of the matter or issue as to which such determination, approval, consent or disapproval is requested, or shall advise such Lender where information, if any, regarding such matter or issue may be inspected, or shall otherwise describe the matter or issue to be resolved, (c) shall include, if reasonably requested by such Lender and to the extent not previously provided to such Lender, written materials and, as appropriate, a brief summary of all oral information provided to the Administrative Agent by the Parent and/or the Borrower in respect of the matter or issue to be resolved, and (d) shall include the Administrative Agent’s recommended course of action or determination in respect thereof. Unless a Lender shall give written notice to the Administrative Agent that it specifically objects to the recommendation or determination of the Administrative Agent (together with a reasonable written explanation of the reasons behind such objection) within ten (10) Business Days (or such lesser or greater period as may be specifically required under the express terms of the Loan Documents) of receipt of such communication, such Lender shall be deemed to have conclusively approved of or consented to such recommendation or determination.
Section 11.4 Notice of Events of Default.
The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of a Default or Event of Default unless the Administrative Agent has received notice from a Lender, the Parent or the Borrower referring to this Agreement, describing with reasonable specificity such Default or Event of Default and stating that such notice is a “notice of default.” If any Lender (excluding the Lender which is also serving as the Administrative Agent) becomes aware of any Default or Event of Default, it shall promptly send to the Administrative Agent such a “notice of default”. Further, if the Administrative Agent receives such a “notice of default,” the Administrative Agent shall give prompt notice thereof to the Lenders.
Section 11.5 Administrative Agent’s Reliance.
Notwithstanding any other provisions of this Agreement or any other Loan Documents, neither the Administrative Agent nor any of its directors, officers, agents, employees or counsel shall be liable for any action taken or not taken by it under or in connection with this Agreement or any other Loan Document, except for its or their own gross negligence or willful misconduct in connection with its duties expressly set forth herein or therein as determined by a court of competent jurisdiction in a final non-appealable judgment. Without limiting the generality of the foregoing, the Administrative Agent may consult with legal counsel (including its own counsel or counsel for the Parent, the Borrower or any other Loan Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts. Neither the Administrative Agent nor any of its directors, officers, agents, employees or counsel: (a) makes any warranty or representation to any Lender or any other Person, or shall be responsible to any Lender or any
other Person for any statement, warranty or representation made or deemed made by the Parent, the Borrower, any other Loan Party or any other Person in or in connection with this Agreement or any other Loan Document; (b) shall have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any other Loan Document or the satisfaction of any conditions precedent under this Agreement or any Loan Document on the part of the Parent, the Borrower or other Persons, or to inspect the property, books or records of the Parent, the Borrower or any other Person; (c) shall be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document, any other instrument or document furnished pursuant thereto or any Collateral covered thereby or the perfection or priority of any Lien in favor of the Administrative Agent on behalf of the Lenders and the Specified Derivatives Providers in any such Collateral; (d) shall have any liability in respect of any recitals, statements, certifications, representations or warranties contained in any of the Loan Documents or any other document, instrument, agreement, certificate or statement delivered in connection therewith; and (e) shall incur any liability under or in respect of this Agreement or any other Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telephone, telecopy or electronic mail) believed by it to be genuine and signed, sent or given by the proper party or parties. The Administrative Agent may execute any of its duties under the Loan Documents by or through agents, employees or attorneys-in-fact and shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final non-appealable judgment.
Section 11.6 Indemnification of Administrative Agent.
Each Lender agrees to indemnify the Administrative Agent (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so) pro rata in accordance with such Lender’s Pro Rata Share, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, reasonable out-of-pocket costs and expenses of any kind or nature whatsoever which may at any time be imposed on, incurred by, or asserted against the Administrative Agent (in its capacity as Administrative Agent but not as a Lender) in any way relating to or arising out of the Loan Documents, any transaction contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under the Loan Documents (collectively, “Indemnifiable Amounts”); provided, however, that no Lender shall be liable for any portion of such Indemnifiable Amounts to the extent resulting from the Administrative Agent’s gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final, non-appealable judgment; provided, however, that no action taken in accordance with the directions of the Requisite Lenders (or all of the Lenders, if expressly required hereunder) shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section. Without limiting the generality of the foregoing, each Lender agrees to reimburse the Administrative Agent (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so) promptly upon demand for its ratable share of any out‑of‑pocket expenses (including the reasonable fees and expenses of the counsel to the Administrative Agent) incurred by the Administrative Agent in connection with the preparation, negotiation, execution, administration, or enforcement (whether through negotiations, legal proceedings, or otherwise) of, or legal advice with respect to the rights or responsibilities of the parties under, the Loan Documents, any suit or action brought by the Administrative Agent to enforce the terms of the Loan Documents and/or collect any Obligations, any “lender liability” suit or claim brought against the Administrative Agent and/or the Lenders, and any claim or suit brought against the Administrative Agent and/or the Lenders arising under any Environmental Laws. Such out‑of‑pocket expenses (including counsel fees) shall be advanced by the Lenders on the request of the Administrative Agent notwithstanding any claim or assertion that the Administrative Agent is not entitled to indemnification hereunder upon receipt of an undertaking by the Administrative Agent that the Administrative Agent will reimburse the Lenders if it is actually and finally determined by a court of competent jurisdiction that the Administrative Agent is not so
entitled to indemnification. The agreements in this Section shall survive the payment of the Loans and all other amounts payable hereunder or under the other Loan Documents and the termination of this Agreement. If the Borrower shall reimburse the Administrative Agent for any Indemnifiable Amount following payment by any Lender to the Administrative Agent in respect of such Indemnifiable Amount pursuant to this Section, the Administrative Agent shall share such reimbursement on a ratable basis with each Lender making any such payment.
Section 11.7 Lender Credit Decision, Etc.
Each of the Lenders expressly acknowledges and agrees that neither the Administrative Agent nor any of its officers, directors, employees, agents, counsel, attorneys‑in‑fact or other Affiliates has made any representations or warranties to such Lender and that no act by the Administrative Agent hereafter taken, including any review of the affairs of the Parent, the Borrower, the other Loan Parties, if any, or any of the respective Subsidiaries or Affiliates of the foregoing, shall be deemed to constitute any such representation or warranty by the Administrative Agent to any Lender. Each of the Lenders acknowledges that it has made its own credit and legal analysis and decision to enter into this Agreement and the transactions contemplated hereby, independently and without reliance upon the Administrative Agent, any other Lender or counsel to the Administrative Agent, or any of their respective officers, directors, employees, agents or counsel, and based on the financial statements of the Parent, the Borrower, the other Loan Parties, the other Subsidiaries and other Affiliates, and inquiries of such Persons, its independent due diligence of the business and affairs of the Parent, the Borrower, the other Loan Parties, the other Subsidiaries and other Persons, its review of the Loan Documents, the legal opinions required to be delivered to it hereunder, the advice of its own counsel and such other documents and information as it has deemed appropriate. Each of the Lenders also acknowledges that it will, independently and without reliance upon the Administrative Agent, any other Lender or counsel to the Administrative Agent or any of their respective officers, directors, employees and agents, and based on such review, advice, documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under the Loan Documents. The Administrative Agent shall not be required to keep itself informed as to the performance or observance by the Parent, the Borrower or any other Loan Party of the Loan Documents or any other document referred to or provided for therein or to inspect the properties or books of, or make any other investigation of, the Parent, the Borrower, the other Loan Parties, if any, or the respective Subsidiaries of any of the foregoing. Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by the Administrative Agent under this Agreement or any of the other Loan Documents, the Administrative Agent shall have no duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, financial and other condition or creditworthiness of the Parent, the Borrower, any other Loan Party or any other Affiliate thereof which may come into possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys‑in‑fact or other Affiliates. Each of the Lenders acknowledges that the Administrative Agent’s legal counsel in connection with the transactions contemplated by this Agreement is only acting as counsel to the Administrative Agent and is not acting as counsel to any Lender.
Section 11.8 Successor Administrative Agent.
The Administrative Agent may (a) resign at any time as Administrative Agent under the Loan Documents by giving written notice thereof to the Lenders and the Borrower or (b) be removed as administrative agent by all of the Lenders (other than the Lender then acting as Administrative Agent) and the Borrower upon 30 days’ prior written notice if the Administrative Agent (i) is found by a court of competent jurisdiction in a final, non-appealable judgment to have committed gross negligence or willful misconduct in the course of performing its duties hereunder or (ii) has become or is insolvent or has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment. Upon any such resignation or removal, the Requisite Lenders shall have the right to appoint a successor Administrative Agent which appointment shall, provided no Default or Event of Default exists, be subject to the Borrower’s approval, which approval shall not be unreasonably withheld or delayed (except that the Borrower shall, in all events, be deemed to have approved each Lender and any of its Affiliates as a successor Administrative Agent). If no successor Administrative Agent shall have been so appointed in accordance with the immediately preceding sentence, and shall have accepted such appointment, within 30 days after (a) the resigning Administrative Agent’s giving of notice of resignation, or (b) the Lenders’ giving of notice of removal, then the resigning or removed Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be a Lender, if any Lender shall be willing to serve, and otherwise shall be an Eligible Assignee. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the current Administrative Agent, and the current Administrative Agent shall be discharged from its duties and obligations under the Loan Documents. After any Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this Article XI. shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under the Loan Documents. Notwithstanding anything contained herein to the contrary, the Administrative Agent may assign its rights and duties under the Loan Documents to any of its Affiliates by giving the Borrower and each Lender prior written notice.
Section 11.9 Titled Agents.
Each of the Syndication Agent, the Documentation Agents, the Senior Managing Agent and the Lead Arranger (each a “Titled Agent”) in each such respective capacity, assumes no responsibility or obligation hereunder, including, without limitation, for servicing, enforcement or collection of any of the Loans, nor any duties as an agent hereunder for the Lenders. The titles given to the Titled Agents are solely honorific and imply no fiduciary responsibility on the part of the Titled Agents to the Administrative Agent, any Lender, the Borrower or any other Loan Party and the use of such titles does not impose on the Titled Agents any duties or obligations greater than those of any other Lender or entitle the Titled Agents to any rights other than those to which any other Lender is entitled.
ARTICLE XII. MISCELLANEOUS
Section 12.1 Notices.
Unless otherwise provided herein (including without limitation as provided in Section 8.5.), communications provided for hereunder shall be in writing and shall be mailed, telecopied, or delivered as follows:
If to the Parent or the Borrower:
Regency Centers Corporation
One Independent Drive, Suite 114
Jacksonville, Florida 32202-5019
Attention: Chief Financial Officer
Telecopy Number: (904) 354-1832
Telephone Number: (904) 598-7608
If to the Administrative Agent:
Wells Fargo Bank, National Association
2859 Paces Ferry Road, Suite 1200
Atlanta, Georgia 30339
Attn: Relationship Manager
Telecopier: (770) 435-2262
Telephone: (770) 435-3800
If to the Administrative Agent under Article II.:
Wells Fargo Bank, National Association
Minneapolis Loan Center
MAC N9303-110
608 Second Avenue S., 11th Floor
Minneapolis, Minnesota 55402-1916
Attn: Kimberly Perreault
Telecopier: (866) 495-8802
Telephone: (612) 316-3738
If to any other Lender:
To such Lender’s address or telecopy number as set forth in the applicable Administrative Questionnaire
or, as to each party at such other address as shall be designated by such party in a written notice to the other parties delivered in compliance with this Section; provided, a Lender shall only be required to give notice of any such other address to the Administrative Agent and the Borrower. All such notices and other communications shall be effective (i) if mailed, upon the first to occur of receipt or the expiration of three (3) days after the deposit in the United States Postal Service mail, postage prepaid and addressed to the address of the Borrower or the Administrative Agent and Lenders at the addresses specified; (ii) if telecopied, when transmitted; (iii) if hand delivered or sent by overnight courier, when delivered; or (iv) if delivered in accordance with Section 8.5. to the extent applicable; provided, however, that, in the case of the immediately preceding clauses (i), (ii) and (iii), non-receipt of any communication as of the result of any change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such communication. Notwithstanding the immediately preceding sentence, all notices or communications to the Administrative Agent or any Lender under Article II. shall be effective only when actually received. None of the Administrative Agent or any Lender shall incur any liability to any Loan Party (nor shall the Administrative Agent incur any liability to the Lenders) for acting upon any telephonic notice referred to in this Agreement which the Administrative Agent or such Lender, as the case may be, believes in good faith to have been given by a Person authorized to deliver such notice or for otherwise acting in good faith hereunder. Failure of a Person designated to get a copy of a notice to receive such copy shall not affect the validity of notice properly given to another Person.
Section 12.2 Expenses.
The Borrower agrees (a) to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses incurred in connection with the preparation, negotiation and execution of, and any amendment, supplement or modification to, any of the Loan Documents (including due diligence expenses and reasonable travel expenses related to closing), and the consummation of the transactions contemplated hereby and thereby, including the reasonable fees and disbursements of counsel to the
Administrative Agent and all costs and expenses of the Administrative Agent in connection with the use of IntraLinks, SyndTrak or other similar information transmission systems in connection with the Loan Documents, (b) to pay or reimburse the Administrative Agent and the Lenders for all their reasonable costs and expenses incurred in connection with the enforcement or preservation of any rights under the Loan Documents and the Fee Letter, including the reasonable fees and disbursements of their respective counsel (including the allocated fees and expenses of in-house counsel) and any payments in indemnification or otherwise payable by the Lenders to the Administrative Agent pursuant to the Loan Documents; provided, that the Borrower shall not be required to pay the expenses of more than one counsel to the Administrative Agent and one separate counsel for the Lenders (in addition to expenses for appropriate local or special counsel) in connection with such workout or enforcement or preservation unless the Lenders reasonably determine that joint representation is not appropriate under the circumstances, (c) to pay, and indemnify and hold harmless the Administrative Agent and the Lenders from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any failure to pay or delay in paying, documentary, stamp, excise and other similar taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of any of the Loan Documents, or consummation of any amendment, supplement or modification of, or any waiver or consent under or in respect of, any Loan Document and (d) to the extent not already covered by any of the preceding subsections, to pay or reimburse the fees and disbursements of counsel to the Administrative Agent and any Lender incurred in connection with the representation of the Administrative Agent or such Lender in any matter relating to or arising out of any bankruptcy or other proceeding of the type described in Sections 10.1.(e) or 10.1.(f), including, without limitation (i) any motion for relief from any stay or similar order, (ii) the negotiation, preparation, execution and delivery of any document relating to the Obligations and (iii) the negotiation and preparation of any debtor‑in‑possession financing or any plan of reorganization of the Parent, the Borrower or any other Loan Party, whether proposed by the Parent, the Borrower, such Loan Party, the Lenders or any other Person, and whether such fees and expenses are incurred prior to, during or after the commencement of such proceeding or the confirmation or conclusion of any such proceeding. If the Borrower shall fail to pay any amounts required to be paid by it pursuant to this Section, the Administrative Agent and/or the Lenders may pay such amounts on behalf of the Borrower and such amounts shall be deemed to be Obligations owing hereunder.
Section 12.3 Stamp, Intangible and Recording Taxes.
The Borrower will pay any and all stamp, excise, intangible, registration, recordation and similar taxes, fees or charges and shall indemnify the Administrative Agent and each Lender against any and all liabilities with respect to or resulting from any delay in the payment or omission to pay any such taxes, fees or charges, which may be payable or determined to be payable in connection with the execution, delivery, recording, performance or enforcement of this Agreement, the Notes and any of the other Loan Documents, the amendment, supplement, modification or waiver of or consent under this Agreement, the Notes or any of the other Loan Documents or the perfection of any rights or Liens under this Agreement, the Notes or any of the other Loan Documents.
Section 12.4 Setoff.
Subject to Section 3.3. and in addition to any rights now or hereafter granted under Applicable Law and not by way of limitation of any such rights, each of the Parent and the Borrower hereby authorizes the Administrative Agent, each Lender, each Affiliate of the Administrative Agent or any Lender, and each Participant, at any time or from time to time while an Event of Default exists, without notice to the Parent or the Borrower or to any other Person, any such notice being hereby expressly waived, but in the case of a Lender, an Affiliate of a Lender, or a Participant, subject to receipt of the prior written consent of the Requisite Lenders exercised in their sole discretion, to set off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness at any time held or owing by the Administrative Agent, such Lender, any Affiliate of the Administrative Agent or such Lender, or such Participant, to or for the credit or the account of the Borrower against and on account of any of the Obligations then due and payable, irrespective of whether or not any or all of the Loans and all other Obligations have been declared to be, or have otherwise become, due and payable as permitted by Section 10.2.
Section 12.5 Litigation; Jurisdiction; Other Matters; Waivers.
(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG THE PARENT AND/OR THE BORROWER, THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE ADMINISTRATIVE AGENT, THE PARENT AND THE BORROWER HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING OUT OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE FEE LETTER OR BY REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE PARENT, THE BORROWER, THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE RELATING TO ANY OF THE LOAN DOCUMENTS.
(b) THE PARENT, THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY, AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE AGENT OR ANY LENDER OR THE ENFORCEMENT BY THE ADMINISTRATIVE AGENT OR ANY
LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.
(c) THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS AND THE TERMINATION OF THIS AGREEMENT.
Section 12.6 Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that none of the Parent, the Borrower or any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of the immediately following subsection (b), (ii) by way of participation in accordance with the provisions of the immediately following subsection (d) or (iii) by way of pledge or assignment of a security interest subject to the restrictions of the immediately following subsection (f) (and, subject to the last sentence of the immediately following subsection (b), any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in the immediately following subsection (d) and, to the extent expressly contemplated hereby, the Related Parties of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i) Minimum Amounts.
(A) in the case of an assignment of the entire remaining amount of an assigning Lender’s Commitments and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in the immediately preceding subsection (A), the remaining amount of the Commitments and/or, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (in each case, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Default or Event of Default shall exist, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that if, after giving effect to such assignment, the assigned amount of the Commitment held by such assigning Lender or the outstanding principal balance of the Loans of such assigning Lender, as applicable, would be less than $5,000,000 in the case
of a Commitment or Loans, then such assigning Lender shall assign the entire amount of such Commitment or Loans at the time owing to it.
(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned.
(iii) Required Consents. No consent shall be required for any assignment except to the extent required by clause (i)(B) of this subsection (b) and, in addition:
(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed with it being understood that the Borrower’s withholding of consent to any assignment which could result in the Borrower having to pay amounts under Section 3.10. in an amount that the Borrower reasonably deems to be a significant amount would be deemed reasonable) shall be required unless (x) a Default or Event of Default shall exist at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within 5 Business Days after having received notice thereof; and
(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (x) a Commitment if such assignment is to a Person that is not already a Lender with a Commitment, an Affiliate of such a Lender or an Approved Fund with respect to such a Lender or (y) a Loan to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund.
(iv) Assignment and Acceptance; Notes. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $4,500 (or, $7,500, in the case of an assignment by a Defaulting Lender) for each assignment, and the assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire. If requested by the transferor Lender or the Eligible Assignee, upon the consummation of any assignment, the transferor Lender, the Administrative Agent and the Borrower shall make appropriate arrangements so that new Notes are issued to the Eligible Assignee and such transferor Lender, as appropriate.
(v) No Assignment to Certain Persons. No such assignment shall be made to (A) the Parent, the Borrower or any of the Parent or the Borrower’s Affiliates or Subsidiaries or (B) any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).
(vi) No Assignment to Natural Persons. No such assignment shall be made to a natural person.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to the immediately following subsection (c), from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption
covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 4.4., 12.2. and 12.10. and the other provisions of this Agreement and the other Loan Documents as provided in Section 12.11. with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with the immediately following subsection (d).
(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Principal Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitments and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to (v) reduce or forgive the principal amount of such Lender’s Loan to the extent subject to such participation, (w) increase such Lender’s Commitment to the extent subject to such participation, (x) extend the date fixed for the payment of principal on the Loans or portions thereof owing to such Lender to the extent subject to the participation, (y) reduce the rate at which interest is payable thereon or (z) release any Guarantor from its Obligations under the Guaranty (except as otherwise permitted under Section 7.13.(b)). Subject to the immediately following subsection (e), the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.10., 4.1., and 4.4. to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by Applicable Law, each Participant also shall be entitled to the benefits of Section 12.4. as though it were a Lender, provided such Participant agrees to be subject to Section 3.3. as though it were a Lender.
(e) Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Sections 3.10. and 4.1. than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.10. unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower and the Administrative Agent, to comply with Section 3.10.(c) as though it were a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(g) No Registration. Each Lender agrees that, without the prior written consent of the Borrower and the Administrative Agent, it will not make any assignment hereunder in any manner or under any circumstances that would require registration or qualification of, or filings in respect of, any Loan or Note under the Securities Act or any other securities laws of the United States of America or of any other jurisdiction.
Section 12.7 Amendments and Waivers.
(a)Generally. Except as otherwise expressly provided in this Agreement, (i) any consent or approval required or permitted by this Agreement or any other Loan Document to be given by the Lenders may be given, (ii) any term of this Agreement or of any other Loan Document may be amended, (iii) the performance or observance by the Borrower, any other Loan Party or any other Subsidiary of any terms of this Agreement or such other Loan Document may be waived, and (iv) the continuance of any Default or Event of Default may be waived (either generally or in a particular instance and either retroactively or prospectively) with, but only with, the written consent of the Requisite Lenders (or the Administrative Agent at the written direction of the Requisite Lenders), and, in the case of an amendment to any Loan Document, the written consent of each Loan Party which is party thereto.
(b) Consent of Lenders Directly Affected. In addition to the foregoing requirements, no amendment, waiver or consent shall, unless in writing, and signed by each of the Lenders directly and adversely affected thereby (or the Administrative Agent at the written direction of such Lenders), do any of the following:
(i) increase the Commitment of such Lenders (excluding any increase as a result of an assignment of Commitments permitted under Section 12.6. and any increases contemplated under Section 2.13.) or subject such Lenders to any additional obligations;
(ii) reduce the principal of, or interest that has accrued or the rates of interest that will be charged on the outstanding principal amount of, any Loans or other Obligations owing to such Lenders;
(iii) reduce the amount of any Fees payable to such Lenders hereunder;
(iv) modify the definition of “Maturity Date”, otherwise postpone any date fixed for any payment of principal of, or interest on, any Loans or for the payment of Fees or any other Obligations;
(v) modify the definition of “Pro Rata Share” or amend or otherwise modify the provisions of Section 3.2.;
(vi) amend this Section or amend the definitions of the terms used in this Agreement or the other Loan Documents insofar as such definitions affect the substance of this Section;
(vii) modify the definition of the term “Requisite Lenders” or modify in any other manner
the number or percentage of the Lenders required to make any determinations or waive any rights hereunder or to modify any provision hereof;
(viii) release any Guarantor from its obligations under the Guaranty except as contemplated by Section 7.13.(b);
(ix) waive a Default or Event of Default under Section 10.1.(a), except as provided in Section 10.7.; or
(x) amend, or waive the Borrower’s compliance with, Section 2.12.
(c) Amendment of Administrative Agent’s Duties, Etc. No amendment, waiver or consent unless in writing and signed by the Administrative Agent, in addition to the Lenders required hereinabove to take such action, shall affect the rights or duties of the Administrative Agent under this Agreement or any of the other Loan Documents. No waiver shall extend to or affect any obligation not expressly waived or impair any right consequent thereon and any amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose set forth therein. No course of dealing or delay or omission on the part of the Administrative Agent or any Lender in exercising any right shall operate as a waiver thereof or otherwise be prejudicial thereto. Any Event of Default occurring hereunder shall continue to exist until such time as such Event of Default is waived in writing in accordance with the terms of this Section, notwithstanding any attempted cure or other action by the Borrower, any other Loan Party or any other Person subsequent to the occurrence of such Event of Default. Except as otherwise explicitly provided for herein or in any other Loan Document, no notice to or demand upon the Borrower shall entitle the Borrower to other or further notice or demand in similar or other circumstances.
Section 12.8 Nonliability of Administrative Agent and Lenders.
The relationship between the Borrower, on the one hand, and the Lenders and the Administrative Agent, on the other hand, shall be solely that of borrower and lender. Neither the Administrative Agent nor any Lender shall have any fiduciary responsibilities to the Borrower and no provision in this Agreement or in any of the other Loan Documents, and no course of dealing between or among any of the parties hereto, shall be deemed to create any fiduciary duty owing by the Administrative Agent or any Lender to any Lender, the Borrower, any Subsidiary or any other Loan Party. Neither the Administrative Agent nor any Lender undertakes any responsibility to the Parent or the Borrower to review or inform the Parent or the Borrower of any matter in connection with any phase of the Parent’s or the Borrower’s business or operations.
Section 12.9 Confidentiality.
Except as otherwise provided by Applicable Law, the Administrative Agent and each Lender shall maintain the confidentiality of all Information (as defined below) in accordance with its customary procedure for handling confidential information of this nature and in accordance with safe and sound banking practices but in any event may make disclosure: (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and other representatives (it being understood that the Persons to whom such disclosure is made will be bound by the confidentiality provisions of this Agreement or will otherwise agree to keep the Information confidential in accordance with the provisions of this Section 12.9.); (b) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any actual or proposed Eligible Assignee, Participant or other transferee in connection with a potential transfer of any Commitment or participation therein as permitted hereunder, or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations; (c) as required or requested by any Governmental Authority or representative thereof or pursuant to legal
process or in connection with any legal proceedings, or as otherwise required by Applicable Law; (d) to the Administrative Agent’s or such Lender’s independent auditors and other professional advisors (provided they shall be notified of the confidential nature of the information); (e) in connection with the exercise of any remedies under any Loan Document (or any Specified Derivatives Contract) or any action or proceeding relating to any Loan Document (or any such Specified Derivatives Contract) or the enforcement of rights hereunder or thereunder; (f) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section actually known by the Administrative Agent or such Lender to be a breach of this Section or (ii) becomes available to the Administrative Agent, any Lender or any Affiliate of the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Parent, the Borrower or any Affiliate of the Parent or the Borrower, unless the Administrative Agent or such Lender has actual knowledge that such Information became nonconfidential as a result of a breach of a confidential arrangement with any Loan Party or any of its respective Subsidiaries; (g) to the extent requested by, or required to be disclosed to, any nationally recognized rating agency or regulatory or similar authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners) having or purporting to have jurisdiction over it; (h) to bank trade publications, such information to consist of deal terms and other information customarily found in such publications; (i) to any other party hereto; and (j) with the consent of the Borrower. Notwithstanding the foregoing, the Administrative Agent and each Lender may disclose any such confidential information, without notice to the Borrower or any other Loan Party, to Governmental Authorities in connection with any regulatory examination of the Administrative Agent or such Lender or in accordance with the regulatory compliance policy of the Administrative Agent or such Lender. As used in this Section, the term “Information” means all information received from the Borrower, any other Loan Party, any other Subsidiary or Affiliate relating to any Loan Party or any of their respective operations, businesses, affairs and financial condition, not generally available or furnished to the public, that is available or furnished to the Administrative Agent or any Lender pursuant to the provisions of this Agreement or any other Loan Document. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
Section 12.10 Indemnification.
(a) The Borrower shall and hereby agrees to indemnify, defend and hold harmless the Administrative Agent, the Lenders, all of the Affiliates of each of the Administrative Agent or any of the Lenders, and their respective directors, officers, shareholders, agents, employees and counsel (each referred to herein as an “Indemnified Party”) from and against any and all of the following (collectively, the “Indemnified Costs”): losses, costs, claims, penalties, damages, liabilities, deficiencies, judgments or expenses of every kind and nature (including, without limitation, amounts paid in settlement, court costs and the fees and disbursements of counsel incurred in connection with any litigation, investigation, claim or proceeding or any advice rendered in connection therewith, but excluding Indemnified Costs indemnification in respect of which is specifically covered by Section 3.10. or 4.1. or expressly excluded from the coverage of such Sections) incurred by an Indemnified Party in connection with, arising out of, or by reason of, any suit, cause of action, claim, arbitration, investigation or settlement, consent decree or other proceeding (the foregoing referred to herein as an “Indemnity Proceeding”) which is in any way related directly or indirectly to: (i) this Agreement or any other Loan Document or the transactions contemplated thereby; (ii) the making of any Loans hereunder; (iii) any actual or proposed use by the Borrower of the proceeds of the Loans; (iv) the Administrative Agent’s or any Lender’s entering into this Agreement; (v) the fact that the Administrative Agent and the Lenders have established the credit facility evidenced hereby in favor of the Borrower; (vi) the fact that the Administrative Agent and the Lenders are creditors of the Borrower and have or are alleged to have information regarding the financial condition, strategic plans or business
operations of the Parent, the Borrower and their Subsidiaries; (vii) the fact that the Administrative Agent and the Lenders are material creditors of the Borrower and are alleged to influence directly or indirectly the business decisions or affairs of the Parent, the Borrower and their Subsidiaries or their financial condition; (viii) the exercise of any right or remedy the Administrative Agent or the Lenders may have under this Agreement or the other Loan Documents; (ix) any civil penalty or fine assessed by the OFAC against, and all costs and expenses (including counsel fees and disbursements) incurred in connection with defense thereof by, the Administrative Agent or any Lender as a result of conduct of the Parent, the Borrower, the other Loan Parties, if any, or any of the respective Subsidiaries of the foregoing that violates a sanction administered or enforced by the OFAC; or (x) any violation or non‑compliance by the Parent, the Borrower or any other Subsidiary of any Applicable Law (including any Environmental Law) including, but not limited to, any Indemnity Proceeding commenced by (A) the Internal Revenue Service or state taxing authority or (B) any Governmental Authority or other Person under any Environmental Law, including any Indemnity Proceeding commenced by a Governmental Authority or other Person seeking remedial or other action to cause the Parent, the Borrower or their Subsidiaries (or their respective properties) (or the Administrative Agent and/or the Lenders as successors to the Borrower) to be in compliance with such Environmental Laws; provided, however, that the Borrower shall not be obligated to indemnify any Indemnified Party for (1) any acts or omissions of such Indemnified Party in connection with matters described in this subsection to the extent arising from the gross negligence or willful misconduct of such Indemnified Party, as determined by a court of competent jurisdiction in a final, non-appealable judgment or (2) Indemnified Costs to the extent arising directly out of or resulting directly from claims of one or more Indemnified Parties against another Indemnified Party (other than claims of the Indemnified Parties against the Administrative Agent in its capacity as such).
(b) The Borrower’s indemnification obligations under this Section shall apply to all Indemnity Proceedings arising out of, or related to, the foregoing whether or not an Indemnified Party is a named party in such Indemnity Proceeding. In this connection, this indemnification shall cover all Indemnified Costs of any Indemnified Party in connection with any deposition of any Indemnified Party or compliance with any subpoena (including any subpoena requesting the production of documents). This indemnification shall, among other things, apply to any Indemnity Proceeding commenced by other creditors of the Parent, the Borrower or any other Subsidiary, any shareholder of the Parent, the Borrower or any other Subsidiary (whether such shareholder(s) are prosecuting such Indemnity Proceeding in their individual capacity or derivatively on behalf of the Parent or the Borrower, as applicable), any account debtor of the Parent, the Borrower or any other Subsidiary or by any Governmental Authority. If indemnification is to be sought hereunder by an Indemnified Party, then such Indemnified Party shall promptly notify the Borrower of the commencement of any Indemnity Proceeding; provided, however, that the failure to notify the Borrower shall not otherwise relieve the Borrower from any liability that it may have to such Indemnified Party pursuant to this Section 12.10.
(c) This indemnification shall apply to any Indemnity Proceeding arising during the pendency of any bankruptcy proceeding filed by or against the Parent, the Borrower and/or any Subsidiary.
(d) All out‑of‑pocket fees and expenses of, and all amounts paid to third‑persons by, an Indemnified Party shall be advanced by the Borrower at the request of such Indemnified Party notwithstanding any claim or assertion by the Borrower that such Indemnified Party is not entitled to indemnification hereunder upon receipt of an undertaking by such Indemnified Party that such Indemnified Party will reimburse the Borrower if it is actually and finally determined by a court of competent jurisdiction that such Indemnified Party is not so entitled to indemnification hereunder.
(e) An Indemnified Party may conduct its own investigation and defense of, and may formulate
its own strategy with respect to, any Indemnity Proceeding covered by this Section and, as provided above, all Indemnified Costs incurred by such Indemnified Party shall be reimbursed by the Borrower. No action taken by legal counsel chosen by an Indemnified Party in investigating or defending against any such Indemnity Proceeding shall vitiate or in any way impair the obligations and duties of the Borrower hereunder to indemnify and hold harmless each such Indemnified Party; provided, however, that if (i) the Borrower is required to indemnify an Indemnified Party pursuant hereto and (ii) the Borrower has provided evidence reasonably satisfactory to such Indemnified Party that the Borrower has the financial wherewithal to reimburse such Indemnified Party for any amount paid by such Indemnified Party with respect to such Indemnity Proceeding, such Indemnified Party shall not settle or compromise any such Indemnity Proceeding without the prior written consent of the Borrower (which consent shall not be unreasonably withheld or delayed). Notwithstanding the foregoing, an Indemnified Party may settle or compromise any such Indemnity Proceeding without the prior written consent of the Borrower where (x) no monetary relief is sought against such Indemnified Party in such Indemnity Proceeding, or (y) there is an allegation of a violation of law by such Indemnified Party.
(f) If and to the extent that the obligations of the Borrower under this Section are unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under Applicable Law.
(g) The Borrower’s obligations under this Section shall survive any termination of this Agreement and the other Loan Documents and the payment in full in cash of the Obligations, and are in addition to, and not in substitution of, any of the other obligations set forth in this Agreement or any other Loan Document to which it is a party.
References in this Section 12.10. to “Lender” or “Lenders” shall be deemed to include such Persons (and their Affiliates) in their capacity as Specified Derivatives Providers.
Section 12.11 Termination; Survival.
This Agreement shall terminate at such time as (a) all of the remaining Commitments have been terminated, (b) none of the Lenders is obligated any longer under this Agreement to make any Loans, and (c) all Obligations (other than obligations which survive as provided in the following sentence) have been paid and satisfied in full. The indemnities to which the Administrative Agent and the Lenders are entitled under the provisions of Sections 3.10., 4.1., 4.4., 11.6., 12.2. and 12.10. and any other provision of this Agreement and the other Loan Documents, and the provisions of Section 12.5., shall continue in full force and effect and shall protect the Administrative Agent and the Lenders (i) notwithstanding any termination of this Agreement, or of the other Loan Documents, against events arising after such termination as well as before and (ii) at all times after any such party ceases to be a party to this Agreement with respect to all matters and events existing on or prior to the date such party ceased to be a party to this Agreement.
Section 12.12 Severability of Provisions.
If any provision of this Agreement or the other Loan Documents shall be determined by a court of competent jurisdiction to be invalid or unenforceable, that provision shall be deemed severed from the Loan Documents, and the validity, legality and enforceability of the remaining provisions shall remain in full force as though the invalid, illegal, or unenforceable provision had never been part of the Loan Documents.
Section 12.13 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
Section 12.14 Counterparts.
To facilitate execution, this Agreement and any amendments, waivers, consents or supplements may be executed in any number of counterparts as may be convenient or required (which may be effectively delivered by facsimile, in portable document format (“PDF”) or other similar electronic means). It shall not be necessary that the signature of, or on behalf of, each party, or that the signature of all persons required to bind any party, appear on each counterpart. All counterparts shall collectively constitute a single document. It shall not be necessary in making proof of this document to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, each of the parties hereto.
Section 12.15 Obligations with Respect to Loan Parties.
The obligations of the Parent or the Borrower, or the Parent and the Borrower, to direct or prohibit the taking of certain actions by the other Loan Parties as specified herein shall be absolute and not subject to any defense the Parent, the Borrower may have that the Parent or Borrower, as applicable, does not control such Loan Parties.
Section 12.16 Independence of Covenants.
All covenants hereunder shall be given in any jurisdiction independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.
Section 12.17 Limitation of Liability.
Neither the Administrative Agent nor any Lender, nor any Affiliate, officer, director, employee, attorney, or agent of the Administrative Agent nor any Lender shall have any liability with respect to, and the Parent and the Borrower hereby waive, release, and agree not to sue any of them upon, any claim for any special, indirect, incidental, or consequential damages suffered or incurred by the Parent and/or the Borrower in connection with, arising out of, or in any way related to, this Agreement, any of the other Loan Documents or the Fee Letter, or any of the transactions contemplated by this Agreement or any of the other Loan Documents. Each of the Parent and the Borrower hereby waives, releases, and agrees not to sue the Administrative Agent or any Lender or any of the Administrative Agent’s or any Lender’s Affiliates, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Agreement, any of the other Loan Documents, the Fee Letter, or any of the transactions contemplated by this Agreement or financed hereby.
Section 12.18 Entire Agreement.
This Agreement, the Notes, the other Loan Documents and the Fee Letter embody the final, entire agreement among the parties hereto and supersede any and all prior commitments, agreements, representations, and understandings, whether written or oral, relating to the subject matter hereof and thereof and may not be contradicted or varied by evidence of prior, contemporaneous, or subsequent oral agreements or discussions of the parties hereto. There are no oral agreements among the parties hereto.
Section 12.19 Construction.
The Administrative Agent, the Borrower and each Lender acknowledge that each of them has had
the benefit of legal counsel of its own choice and has been afforded an opportunity to review this Agreement and the other Loan Documents with its legal counsel and that this Agreement and the other Loan Documents shall be construed as if jointly drafted by the Administrative Agent, the Borrower and each Lender.
Section 12.20 Headings.
The paragraph and section headings in this Agreement are provided for convenience of reference only and shall not affect its construction or interpretation.
[Signatures on Following Pages]
IN WITNESS WHEREOF, the parties hereto have caused this Term Loan Agreement to be executed by their authorized officers all as of the day and year first above written.
BORROWER:
Regency Centers, L.P.
By: Regency Centers Corporation,
its sole general partner
By:
Name:
Title:
PARENT:
Regency Centers Corporation,
By:
Name:
Title:
[Signatures Continued on Next Page]
[Signature Page to Term Loan Agreement with Regency Centers, L.P.]
Wells Fargo Bank, National Association, as Administrative Agent and as a Lender
By:
Name:
Title:
[Signatures Continued on Next Page]
[Signature Page to Term Loan Agreement with Regency Centers, L.P.]
[LENDER]
By:
Name:
Title:
SCHEDULE I
Commitments
Lender | Initial Term Loan Commitment Amount | Delayed Draw TL Commitment Amount | Aggregate Commitments |
Wells Fargo Bank, National Association | $33,000,000 | $22,000,000 | $55,000,000 |
PNC Bank, National Association | $24,000,000 | $16,000,000 | $40,000,000 |
Regions Bank | $15,000,000 | $10,000,000 | $25,000,000 |
SunTrust Bank | $15,000,000 | $10,000,000 | $25,000,000 |
US Bank National Association | $15,000,000 | $10,000,000 | $25,000,000 |
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch | $12,000,000 | $8,000,000 | $20,000,000 |
Bank of America, N.A. | $9,000,000 | $6,000,000 | $15,000,000 |
JPMorgan Chase Bank, N.A. | $9,000,000 | $6,000,000 | $15,000,000 |
Royal Bank of Canada | $9,000,000 | $6,000,000 | $15,000,000 |
Sumitomo Mitsui Banking Corporation | $6,000,000 | $4,000,000 | $10,000,000 |
Comerica Bank | $3,000,000 | $2,000,000 | $5,000,000 |
Total: | $150,000,000 | $100,000,000 | $250,000,000 |
List of Loan Parties
Schedule 1.1 (B)
Regency Centers, L.P. | |
Regency Centers Corporation | |
Ownership Structure
Schedule 6.1(b), Part I
Subsidiaries
Entity | Jurisdiction | Owner(s) | Nature of Interest | % of Ownership | |
Regency Centers, L.P. | Delaware | Regency Centers Corporation | General Partner | 99.00 | % |
Outside Investors | Limited Partners | 1.00 | % | ||
MCW-RD Brentwood Plaza, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
MCW-RD Bridgeton, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
MCW-RD Dardenne Crossing, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
MCW-RD Kirkwood Commons Member, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
MCW-RD Kirkwood Commons, LLC | Delaware | MCW-RD Kirkwood Commons Member, LLC | Member | 100 | % |
MCW-RC FL-Anastasia, LLC | Delaware | Recency Center, L.P. | Member | 100 | % |
MCW-RC FL-King’s, LLC (fka MCW-RC Florida, LLC) | Delaware | Regency Centers, L.P. | Member | 100 | % |
MCW-RC FL-Shoppes at 104, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
MCW-RC GA-Howell Mill Village, LLC | Delaware | Regency Centers, LLC | Member | 100 | % |
MCD-RC CA-Amerige, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
MCD-RC El Cerrito Holdings, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
MCD-RC CA-El Cerrito, LLC | Delaware | MCD-RC El Cerrito Holdings, LLC | Member | 100 | % |
REG8 Member, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
REG8 Tassajara Crossing, LLC | Delaware | REG8 Member, LLC | Member | 100 | % |
REG8 Plaza Hermosa, LLC | Delaware | REG8 Member, LLC | Member | 100 | % |
REG8 Sequoia Station, LLC | Delaware | REG8 Member, LLC | Member | 100 | % |
REG8 Mockingbird Commons, LLC | Delaware | REG8 Member, LLC | Member | 100 | % |
REG8 Sterling Ridge, LLC | Delaware | REG8 Member, LLC | Member | 100 | % |
REG8 Prestonbrook Crossing, LLC | Delaware | REG8 Member, LLC | Member | 100 | % |
REG8 Wellington, LLC | Delaware | REG8 Member, LLC | Member | 100 | % |
REG8 Berkshire Commons, LLC | Delaware | REG8 Member, LLC | Member | 100 | % |
FL-Corkscrew Village Member, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
FL-Corkscrew Village, LLC | Delaware | FL-Corkscrew Village Member, LLC | Member | 100 | % |
FL-Crossroads Shopping Center Member, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
FL-Crossroads Shopping Center, LLC | Delaware | FL-Crossroads Shopping Center Member, LLC | Member | 100 | % |
FL-Naples Walk Shopping Center Member, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
FL-Naples Walk Shopping Center, LLC | Delaware | FL-Naples Walk Shopping Center Member, LLC | Member | 100 | % |
FL-Northgate Square Member, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
FL-Northgate Square, LLC | Delaware | FL-Northgate Square Member, LLC | Member | 100 | % |
4S Regency Partners, LLC | Delaware | Regency Centers, L.P. | Member | 80 | % |
4S Ranch Company 1700, L.P. | Member | 20 | % | ||
Applegate Ranch, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Belleview Square, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Buckwalter Bluffton, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Clayton Valley Shopping Center, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Colonnade Regency, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Corvallis Market Center, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Deer Springs Town Center, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Fairfax Regency, LLC | Delaware | Regency Centers, L.P. | Member | Varies | |
J. Donegan Company | Member | ||||
Fairhope, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Fortuna Regency Phase II, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
FV Commons, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Gateway Azco GP, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Gateway Azco LP, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
AZCO Partners | Pennsylvania | Gateway Azco Partners GP, LLC | General Partner | 1 | % |
Gateway Azco LP, LLC | Limited Partner | 99 | % | ||
Gateway Azco Manager, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Glen Oak Glenview, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Hasley Canyon Village, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Hibernia North, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Hickory Creek Plaza, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Hoadly Regency, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Indian Springs GP, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Indio Jackson, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Kent Place Regency, LLC | Delaware | Regency Centers, L.P. | Member | Varies | |
Kent Place Investors, LLC | Member | ||||
Lee Regency, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
The Marketplace at Briargate, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Menifee Marketplace, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Merrimack Shopping Center, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Murfreesboro North, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Murieta Gardens Shopping Center, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
NSHE Winnebago, LLC | Arizona | Regency Centers, L.P. | Member | 100 | % |
NTC-REG, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
New Smyrna Regency, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
New Windsor Marketplace, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Northlake Village Shopping Center, LLC | Florida | Regency Centers, L.P. | Member | 100 | % |
Oakshade Regency, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Ocala Corners, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Otay Mesa Crossing, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Parmer Tech Ridge, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Regency Centers Acquisition, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Regency Centers Advisors, LLC | Florida | Regency Centers, L.P. | Member | 100 | % |
RC CA Santa Barbara, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Red Bank Village, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Regency-Alliance Santa Rosa, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Regency Centers Georgia, L.P. | Georgia | RC Georgia Holdings, LLC | General Partner | 1 | % |
Regency Centers, L.P. | Limited Partner | 99 | % | ||
Regency Blue Ash, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Regency Cahan Clovis, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Regency Magi, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Regency Marinta-LaQuinta, LLC | Delaware | Regency Centers, L.P. | Member | Interests Vary | |
Marinita Development Co. | Member | ||||
Regency Opitz, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Regency Petaluma, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Regency Remediation, LLC | Florida | Regency Centers, L.P. | Member | 100 | % |
Shops at Saugus, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Signature Plaza, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Spring Hill Town Center, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
T&M Shiloh Development Company | Texas | Regency Centers, L.P. | General Partner | 100 | % |
T&R New Albany Development Company, LLC | Ohio | Regency Centers, L.P. | Member | 50 | % |
Topvalco | Member | 50 | % | ||
Twin City Plaza Member, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Twin City Plaza, LLC | Delaware | Twin City Plaza Member, LLC | Member | 100 | % |
Valleydale, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Vista Village, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Wadsworth, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
DJB No. 23, L.P. | Texas | Wadsworth, LLC | General Partner | 1 | % |
Regency Centers, L.P. | Limited Partner | 99 | % | ||
WFC-Purnell, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Walton Town Center, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Waterside Marketplace, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
RRG Holdings, LLC | Florida | Regency Centers, L.P. | Member | 100 | % |
Regency Realty Group, Inc. | Florida | Regency Centers, L.P. | Preferred Stock | 100 | % |
Common Stock | 7 | % | |||
RRG Holdings, LLC | Common Stock | 93 | % | ||
1488-2978 SC GP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
1488-2978 SC, L.P. | Texas | 1488-2978 SC GP, LLC | General Partner | 1 | % |
Regency Realty Group, Inc. | Limited Partner | 99 | % | ||
Accokeek Regency South, LLC | Delaware | Regency Realty Group, Inc. | Member | Interests Vary | |
Accokeek South, LLC | Member | ||||
Alameda Bridgeside Shopping Center, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Amherst Street Shopping Center, LLC | Delaware | Regency Realty Group | Member | 100 | % |
Bordeaux Development, LLC | Florida | Regency Realty Group, Inc. | Member | 100 | % |
Caligo Crossing, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Castaic Vine, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Cathedral City Rio Vista Town Centre, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Chestnut Powder, LLC | Georgia | Regency Realty Group, Inc. | Member | 100 | % |
Clarksburg Retail Partners, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Culpeper Regency, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Dixon, LLC | Florida | Regency Realty Group, Inc. | Member | 100 | % |
East Towne Center, LLC | Delaware | Regency Realty Group, Inc. | Member | Interests Vary | |
Lake McLeod, LLC | Member | ||||
Edmunson Orange Corp. | Tennessee | Regency Realty Group, Inc. | Common Stock | 100 | % |
Edmunson Orange North Carolina, LLC | Delaware | Edmunson Orange Corp. | Member | 100 | % |
VP101, LLC | Delaware | Edmunson Orange Corp. | Member | 100 | % |
Gateway 101, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Hanover Northampton GP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Hanover Northampton LP Holding, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Hanover Northampton Partner, LP | Delaware | Hanover Northampton LP Holding, LLC | General Partner | — | % |
Regency Realty Group, Inc. | Limited Partner | 100 | % | ||
Hanover Northampton Retail, LP | Delaware | Hanover Northampton GP, LLC | General Partner | 0.5 | % |
Hanover Northampton Partner, LP | Limited Partner | 99.5 | % | ||
Hermitage Development II, LLC | Florida | Regency Realty Group, Inc. | Member | 100 | % |
Kulpsville Village Center LP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Kulpsville Village Center, LP | Delaware | Kulpsville Village Center LP, LLC | General Partner | 0.5 | % |
Regency Realty Group, Inc. | Limited Partner | 99.5 | % | ||
Lonestar Retail, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Loveland Shopping Center, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Lower Nazareth LP Holding, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Lower Nazareth Partner, LP | Delaware | Regency Realty Group, Inc. | Limited Partner | 100 | % |
Lower Nazareth LP Holding, LLC | General Partner | — | % | ||
Lower Nazareth GP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Lower Nazareth Commons, LP | Delaware | Lower Nazareth GP, LLC | General Partner | 0.5 | % |
Lower Nazareth Partner, LP | Limited Partner | 99.5 | % | ||
Lower Nazareth II LP Holding, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Lower Nazareth II Partner, LP | Delaware | Lower Nazareth II LP Holding, LLC | General Partner | — | % |
Regency Realty Group, Inc. | Limited Partner | 100 | % | ||
Lower Nazareth II GP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Lower Nazareth Commons II, LP | Delaware | Lower Nazareth II GP, LLC | General Partner | 0.5 | % |
Lower Nazareth II Partner, LP | Limited Partner | 99.5 | % | ||
Luther Properties, Inc. | Tennessee | Regency Realty Group, Inc. | Common Stock | 100 | % |
Marietta Outparcel, Inc. | Georgia | Regency Realty Group, Inc. | Common Stock | 100 | % |
Middle Creek Commons, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Mitchell Service, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
NorthGate Regency, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Paso Golden Hill, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
R2 Media, LLC | Florida | Regency Realty Group, Inc. | Member | 100 | % |
RB Airport Crossing, LLC | Delaware | Regency Realty Group, Inc. | Member | Interests Vary | |
Airport 6, LLC | Member | ||||
RB Augusta, LLC | Delaware | Regency Realty Group, Inc. | Member | Interests Vary | |
P-6, LLC | Member | ||||
RB Schererville Crossings, LLC | Delaware | Regency Realty Group, Inc. | Member | Interests Vary | |
WH41, LLC | Member | ||||
RB Schererville 101, LLC | Indiana | RB Schererville Crossings, LLC | Member | 100 | % |
RB Schererville 102, LLC | Indiana | RB Schererville Crossings, LLC | Member | 100 | % |
RB Schererville 103, LLC | Indiana | RB Schererville Crossings, LLC | Member | 100 | % |
RB Schererville 104, LLC | Indiana | RB Schererville Crossings, LLC | Member | 100 | % |
RB Schererville 105, LLC | Indiana | RB Schererville Crossings, LLC | Member | 100 | % |
RB Schererville 106, LLC | Indiana | RB Schererville Crossings, LLC | Member | 100 | % |
RRG Net, LLC | Florida | Regency Realty Group, Inc. | Member | 100 | % |
Regency/PGM-Burkitt, LLC | Delaware | Regency Realty Group, Inc. | Member | Interests Vary | |
PGM-Burkitt, LLC | Member | ||||
Regency Realty Colorado, Inc. | Florida | Regency Realty Group, Inc | Common Stock | 80 | % |
Snowden Leftwich | Common Stock | 20 | % | ||
(see Note 1) | |||||
Regency Realty Group-NE, Inc. | Florida | Regency Realty Group, Inc. | Common Stock | 100 | % |
Regency Solar, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
SS Harbour GP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
SS Harbour, L.P. | Texas | SS Harbour GP, LLC | General Partner | 1 | % |
Regency Realty Group, Inc. | Limited Partner | 99 | % | ||
Seminole Shoppes, LLC | Delaware | Regency Reatly Group, Inc. | Member | 50 | % |
M&P Shopping Centers | Member | 50 | % | ||
Shops at Highland Village GP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Shops at Highland Village Development, Ltd. | Texas | Shops at Highland Village GP, LLC | General Partner | 1 | % |
Regency Realty Group, Inc. | Limited Partner | 99 | % | ||
Shops at Quail Creek, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Slausen Central, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
State Street Crossing, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Stonewall Regency, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
Summerville-Orangeburg, LLC | Delaware | Regency Realty Group, Inc. | Member | 100 | % |
RRG Pennsylvania GP, Inc. | Florida | Regency Realty Group, Inc. | Common Stock | 100 | % |
Swatara Marketplace LP | Delaware | RRG Pennsylvania GP, Inc. | General Partner | 0.5 | % |
Regency Realty Group, Inc. | Limited Partner | 99.5 | % | ||
West End Properties, LLC | Florida | Regency Realty Group, Inc. | Member | 100 | % |
Note 1: Snowden Leftwich is a Regency employee who is the licensed broker for this entity. Colorado requires that the broker must own a minimum of 20% of the equity in a licensed entity. | |||||
Ownership Structure
Schedule 6.1(b), Part II
REGENCY CENTERS CORPORATION
Unconsolidated Affiliates
Entity | Jurisdiction | Owner(s) | Nature of Interest | % of Ownership | |
Columbia Cameron Village SPE, LLC | Delaware | Regency Centers, L.P. | Member | 30 | % |
Columbia Perfco Partners, L.P. | Member | 70 | % | ||
Columbia Cameron Village, LLC | Delaware | Columbia Cameron Village SPE, LLC | Member | 100 | % |
Columbia Regency Retail Partners, LLC | Delaware | Regency Centers, L.P. | Member | 20 | % |
Columbia Perfco Partners, L.P. | Member | 80 | % | ||
Columbia Retail Baker Hill, LLC | Delaware | Columbia Regency Retail Partners, LLC | Member | 100 | % |
Columbia Retail Deer Grove, LLC | Delaware | Columbia Regency Retail Partners, LLC | Member | 100 | % |
Columbia Retail Deer Grove Center, LLC | Delaware | Columbia Retail Deer Grove, LLC | Member | 100 | % |
Columbia Retail Dulles, LLC | Delaware | Columbia Regency Retail Partners, LLC | Member | 100 | % |
Columbia Retail Geneva Crossing, LLC | Delaware | Columbia Regency Retail Partners, LLC | Member | 100 | % |
Columbia Retail Shorewood Crossing, LLC | Delaware | Columbia Regency Retail Partners, LLC | Member | 100 | % |
Columbia Retail Special Member (GLP), LLC | Delaware | Columbia Perfco, L.P. | Member | 80 | % |
Regency Centers, L.P. | 20 | % | |||
Columbia Retail Stearns Crossing, LLC | Delaware | Columbia Regency Retail Partners, LLC | Member | 100 | % |
Columbia Retail Texas 3, LLC | Delaware | Columbia Regency Retail Partners, LLC | Member | 100 | % |
Columbia Retail Sweetwater Plaza, LP | Delaware | Columbia Retail Texas 3, LLC | General Partner | 1 | % |
Columbia Regency Retail Partners, LLC | Limited Partner | 99 | % | ||
Columbia Retail Washington 1, LLC | Delaware | Columbia Regency Retail Partners, LLC | Member | 100 | % |
Columbia Cascade Plaza, LLC | Delaware | Columbia Retail Washington 1, LLC | Member | 100 | % |
Columbia Julington Village, LLC | Delaware | Columbia Regency Retail Partners, LLC | Member | 100 | % |
Columbia Palm Valley Marketplace, LLC | Delaware | Columbia Regency Retail Partners, LLC | Member | 100 | % |
Columbia Park Plaza Member, LLC | Delaware | Columbia Regency Retail Partners, LLC | Member | 100 | % |
Columbia Park Plaza, LLC | Delaware | Columbia Park Plaza Member, LLC | Member | 100 | % |
Columbia Regency Partners II, LLC | Delaware | Regency Centers, L.P. | Member | 20 | % |
Columbia Perfco Partners, L.P. | Member | 80 | % | ||
Columbia Cochran Commons, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Hollymead Town Center, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Columbia II Hollymead, LLC | Delaware | Hollymead Town Center, LLC | Member | 100 | % |
Columbia II Johns Creek, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Columbia Lorton Station Marketplace Member, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Columbia Lorton Station Marketplace, LLC | Delaware | Columbia Lorton Station Marketplace Member, LLC | Member | 100 | % |
Columbia Lorton Station Town Center, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Columbia II Marina Shores, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Columbia Plantation Plaza Member, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Columbia Plantation Plaza, LLC | Delaware | Columbia Plantation Plaza Member, LLC | Member | 100 | % |
Columbia II Rockridge Center, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Columbia Shorewood Crossing Phase 2 Member, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Columbia Shorewood Crossing Phase 2, LLC | Delaware | Columbia Shorewood Crossing Phase 2 Member, LLC | Member | 100 | % |
Columbia Shorewood Crossing Phase 3, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Signal Hill Two, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Columbia II Signal Hill, LLC | Delaware | Signal Hill Two, LLC | Member | 100 | % |
Columbia Speedway Plaza Member, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Columbia Speedway Plaza, LLC | Delaware | Columbia Speedway Plaza Member, LLC | Member | 100 | % |
Columbia Sutton Square, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Columbia II Highland Knolls, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Columbia II Holding, LLC | Delaware | Columbia Regency Partners II, LLC | Member | 100 | % |
Columbia II Island Crossing, LLC | Delaware | Columbia II Holding, LLC | Member | 100 | % |
Columbia II King Plaza, LLC | Delaware | Columbia II Holding, LLC | Member | 100 | % |
Columbia II Lost Mountain, LLC | Delaware | Columbia II Holding, LLC | Member | 100 | % |
Columbia II Raley’s Center, LLC | Delaware | Columbia II Holding, LLC | Member | 100 | % |
Columbia II Surfside Beach Commons, LLC | Delaware | Columbia II Holding, LLC | Member | 100 | % |
GRI-Regency, LLC | Delaware | Global Retail Investors, LLC | Member | 60 | % |
Regency Centers, L.P. | Member | 40 | % | ||
FW PA-Mercer Square, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
FW PA-Newtown Square, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
FW PA-Warwick Plaza, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
MCW-RC SC-Merchant’s, LLC (fka MCW-RC South Carolina, LLC) | Delaware | GRI-Regency, LLC | Member | 100 | % |
MCW-RC SC-Merchant’s Village Member, LLC | Delaware | MCW-RC SC-Merchant’s, LLC | Member | 100 | % |
MCW-RC SC-Merchant’s Village, LLC | Delaware | MCW-RC SC-Merchant’s Village Member, LLC | Member | 100 | % |
FW CA-Brea Marketplace Member, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
FW CA-Brea Marketplace, LLC | Delaware | FW CA-Brea Marketplace Member, LLC | Member | 100 | % |
U.S. Retail Partners Holding, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
U.S. Retail Partners Member, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
U.S. Retail Partners, LLC | Delaware | U.S. Retail Partners Holding, LLC | Member | 1 | % |
U.S. Retail Partners Member, LLC | Member | 99 | % | ||
FW CO-Arapahoe Village, LLC | Delaware | U.S. Retail Partners, LLC | Member | 100 | % |
FW CO-Cherrywood Square, LLC | Delaware | U.S. Retail Partners, LLC | Member | 100 | % |
FW CO-Ralston Square, LLC | Delaware | U.S. Retail Partners, LLC | Member | 100 | % |
FW MN-Colonial Square, LLC | Delaware | U.S. Retail Partners, LLC | Member | 100 | % |
USRP I Holding, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
USRP I Member, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
USRP I, LLC | Delaware | USRP I Holding, LLC | Member | 1 | % |
USRP I Member, LLC | Member | 99 | % | ||
FW NJ-Plaza Square, LLC | Delaware | USRP I, LLC | Member | 100 | % |
FW VA-Greenbriar Town Center, LLC | Delaware | USRP I, LLC | Member | 100 | % |
FW VA-Festival at Manchester, LLC | Delaware | USRP I, LLC | Member | 100 | % |
FW-Reg II Holdings, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
FW CA-Auburn Village, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW CA-Bay Hill Shopping Center, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW CA-Five Points Shopping Center, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW CA-Mariposa Gardens Shopping Center, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW CA-Navajo Shopping Center, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW CA-Point Loma Plaza, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW CA-Rancho San Diego Village, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW CA-Silverado Plaza, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW CA-Snell & Branham Plaza, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW CA-Stanford Ranch Village, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW CA-Twin Oaks Shopping Center, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW CA-Ygnacio Plaza, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW CT-Corbins Corner Shopping Center, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW DC-Spring Valley Shopping Center, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW The Oaks Holding, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
FW IL-The Oaks Shopping Center, LLC | Delaware | FW The Oaks Holding, LLC | Member | 100 | % |
FW IL-Brentwood Commons, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW IL-Riverside/Rivers Edge, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW IL-Riverview Plaza, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW IL-Stonebrook Plaza, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
USRP Willow East, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
USRP Willow West, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
Parkville Shopping Center, L.L.C. | Maryland | FW-Reg II Holdings, LLC | Member | 100 | % |
FW Parkville Borrower, LLC | Delaware | Parkville Shopping Center, L.L.C. | Member | 100 | % |
FW-Reg II Holding Company Two, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
FW CA-Granada Village, LLC | Delaware | FW-Reg II Holding Company Two, LLC | Member | 100 | % |
FW CA-Laguna Niguel Plaza, LLC | Delaware | FW-Reg II Holding Company Two, LLC | Member | 100 | % |
FW CA-Pleasant Hill Shopping Center, LLC | Delaware | FW-Reg II Holding Company Two, LLC | Member | 100 | % |
FW IL-Civic Center Plaza, LLC | Delaware | FW-Reg II Holding Company Two, LLC | Member | 100 | % |
FW IL-McHenry Commons Shopping Center, LLC | Delaware | FW-Reg II Holding Company Two, LLC | Member | 100 | % |
FW NJ-Westmont Shopping Center, LLC | Delaware | FW-Reg II Holding Company Two, LLC | Member | 100 | % |
FW NC-Shoppes of Kildaire, LLC | Delaware | FW-Reg II Holding Company Two, LLC | Member | 100 | % |
FW OR-Greenway Town Center, LLC | Delaware | FW-Reg II Holding Company Two, LLC | Member | 100 | % |
FW WI Racine Centre, LLC | Delaware | FW-Reg II Holding Company Two, LLC | Member | 100 | % |
USRP LP, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
USRP GP, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
US Retail Partners Limited Partnership | Delaware | USRP GP, LLC | General Partner | 1 | % |
USRP LP, LLC | Limited Partner | 99 | % | ||
Preferred Partners | Limited Partners | profit sharing | |||
FW MD Woodmoor Borrower, LLC | Delaware | US Retail Partners Limited Partnership | Member | 100 | % |
Enterprise Associates | Maryland | USRP GP, LLC | General Partner | ||
US Retail Partners Limited Partnership | General Partner | ||||
FW Bowie Plaza GP, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
Capitol Place I Investment Limited Partnership | Maryland | FW Bowie Plaza GP, LLC | General Partner | 1 | % |
Eastern Shopping Centers I, LLC | Limited Partner | 99 | % | ||
FW Elkridge Corners GP, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
L and M Development Company Limited Partnership | Maryland | FW Elkridge Corners GP, LLC | General Partner | 1 | % |
Eastern Shopping Centers I, LLC | Limited Partner | 99 | % | ||
FW Woodholme GP, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
Woodholme Properties Limited Partnership | Maryland | FW Woodholm GP, LLC | General Partner | 1 | % |
Eastern Shopping Centers I, LLC | Limited Partner | 99 | % | ||
FW Woodholme Borrower, LLC | Delaware | Woodholme Properties Limited Partnership | Member | 100 | % |
FW Southside Marketplace GP, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
Southside Marketplace Limited Partnership | Maryland | FW Southside Marketplace GP, LLC | General Partner | 1 | % |
Eastern Shopping Centers I, LLC | Limited Partner | 99 | % | ||
FW Valley Centre GP, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
Greenspring Associates Limited Partnership | Maryland | FW Valley Centre GP, LLC | General Partner | 1 | % |
Eastern Shopping Centers I, LLC | Limited Partner | 99 | % | ||
FW MD-Greenspring Borrower, LLC | Delaware | Greenspring Associates Limited Partnership | Member | 100 | % |
Eastern Shopping Centers I, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
Cloppers Mill Village Center, LLC | Maryland | GRI-Regency, LLC | Member | 100 | % |
Eastern Shopping Centers I, LLC | |||||
City Line Shopping Center Associates | Pennsylvania | US Retail Partners Limited Partnership | General Partner | 1 | % |
City Line LP, LLC | Limited Partner | 99 | % | ||
City Line LP, LLC | Delaware | USRP LP, LLC | Member | 100 | % |
FW Allenbeth GP, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
Allenbeth Associates Limited Partnership | Maryland | FW Allenbeth GP, LLC | General Partner | 1 | % |
Eastern Shopping Centers I, LLC | Limited Partner | 99 | % | ||
FW Memorial GP, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
FW TX-Memorial Collection, L.P. | Delaware | FW Memorial GP, LLC | General Partner | 1 | % |
FW Texas LP, LLC | Limited Partner | 99 | % | ||
FW Weslyan GP, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
FW TX-Weslyan Plaza, L.P. | Delaware | FW Weslyan GP, LLC | General Partner | 1 | % |
FW Texas LP, LLC | Limited Partner | 99 | % | ||
FW Woodway GP, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
FW TX-Woodway Collection, L.P. | Delaware | FW Woodway GP, LLC | General Partner | 1 | % |
FW Texas LP, LLC | Limited Partner | 99 | % | ||
FW VA-601 Kings Street, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW VA-Ashburn Farm Village Center, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW VA-Centre Ridge Marketplace, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW VA-Fox Mill Shopping Center, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW VA-Kings Park Shopping Center, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW VA-Saratoga Shopping Center, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW VA-The Village Shopping Center, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW Gayton Crossing Holding, LLC | Delaware | GRI-Regency, LLC | Member | 100 | % |
FW VA-Gayton Crossing Shopping Center, LLC | Delaware | FW Gayton Crossing Holding, LLC | Member | 100 | % |
FW WA-Aurora Marketplace, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW WA-Eastgate Plaza, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW WA-Overlake Fashion Plaza, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
FW WI-Whitnall Square, LLC | Delaware | FW-Reg II Holdings, LLC | Member | 100 | % |
Macquarie CountryWide-Regency III, LLC | Delaware | Macquarie CountryWide (US) No. 2 LLC | Member | 75 | % |
Macquarie-Regency Management, LLC | Member | 0.01 | % | ||
Regency Centers, L.P. | Member | 24.99 | % | ||
Macquarie-Regency Management, LLC | Delaware | Macquarie Real Estate Inc. | Member | 50 | % |
Regency Centers, L.P. | Member | 50 | % | ||
MCW RC III Hilltop Village Member, LLC | Delaware | Macquarie CountryWide-Regency III, LLC | Member | 100 | % |
MCW RC III Hilltop Village, LLC | Delaware | MCW RC III Hilltop Village Member, LLC | Member | 100 | % |
MCW-RC III Kleinwood GP, LLC | Delaware | Macquarie CountryWide-Regency III, LLC | Member | 100 | % |
MCW-RC III Kleinwood Center, LP | Delaware | MCW-RC III Kleinwood GP, LLC | General Partner | 0.05 | % |
Macquarie CountryWide-Regency III, LLC | Limited Partner | 99.95 | % | ||
MCW-RC III Murray Landing Member, LLC | Delaware | Macquarie CountryWide-Regency III, LLC | Member | 100 | % |
MCW-RC III Murray Landing, LLC | Delaware | MCW-RC III Murray Landing Member, LLC | Member | 100 | % |
MCW-RC III Vineyard Member, LLC | Delaware | Macquarie CountryWide-Regency III, LLC | Member | 100 | % |
MCW-RC III Vineyard Shopping Center, LLC | Delaware | MCW RC III Vineyard Member, LLC | Member | 100 | % |
RegCal, LLC | Delaware | California State Teachers Retirement System | Member | 75 | % |
Regency Centers, L.P. | Member | 25 | % | ||
RegCal Holding, LLC | Delaware | RegCal, LLC | Member | 100 | % |
CAR Apple Valley Square Member, LLC | Delaware | RegCal, LLC | Member | 100 | % |
CAR Apple Valley Square, LLC | Delaware | CAR Apple Valley Square Member, LLC | Member | 100 | % |
CAR Apple Valley Land, LLC | Delaware | RegCal, LLC | |||
CAR Braemar Village, LLC | Delaware | RegCal, LLC | Member | 100 | % |
CAR Calhoun Commons, LLC | Delaware | RegCal, LLC | Member | 100 | % |
CAR Corral Hollow, LLC | Delaware | RegCal Holding, LLC | Member | 100 | % |
CAR Five Corners Plaza, LLC | Delaware | Five Corners Plaza Member, LLC | Member | 100 | % |
Five Corners Plaza Member, LLC | Delaware | RegCal, LLC | Member | 100 | % |
CAR Fuquay Holding, LLC | Delaware | RegCal, LLC | Member | 100 | % |
CAR Fuquay Crossing, LLC | Delaware | CAR Fuquay Holding, LLC | Member | 100 | % |
CAR Fuquay Property, LLC | Delaware | RegCal, LLC | Member | 100 | % |
CAR Providence Commons, LLC | Delaware | RegCal, LLC | Member | 100 | % |
CAR Providence Commons Two, LLC | Delaware | RegCal, LLC | Member | 100 | % |
CAR Shops at the Columbia, LLC | Delaware | RegCal, LLC | Member | 100 | % |
KF-REG Holding, LLC | Delaware | RegCal, LLC | Member | 100 | % |
KF-REG Associates, LLC | Delaware | KF-REG Holding, LLC | Member | 100 | % |
King Farm Center, LLC | Delaware | KF-REG Associates, LLC | Member | 100 | % |
Regency Retail GP, LLC | Delaware | Regency Centers, L.P. | Member | 100 | % |
Regency Retail Partners, LP | Delaware | Regency Retail GP, LLC | General Partner | 34.12 | % |
Metropolitan Tower Life Insurance Company | Limited Partner | 3.04 | % | ||
General American Life Insurance Company | Limited Partner | 3.04 | % | ||
Metropolitan Life Insurance Company | Limited Partner | 6.07 | % | ||
STRS Ohio Opportunity Real Estate Investments, LLC | Limited Partner | 42.98 | % | ||
NLI Properties East, Inc. (Nippon Life Insurance Company) | Limited Partner | 10.75 | % | ||
RRP Parent REIT, Inc. | Maryland | Regency Retail Partners, LP | Common Stock | 100 | % |
RRP GIC Feeder, LP | Delaware | Regency Retail GP, LLC | General Partner | 0.002 | % |
RGNCY Retail Trust | Limited Partner | 99.998 | % | ||
RRP German Feeder, LP | Delaware | Regency Retail GP, LLC | General Partner | 0.004 | % |
RRP GmbH & Co. KG | Limited Partner | 99.996 | % | ||
RRP Subsidiary REIT, LP | Delaware | Regency Retail GP, LLC | General Partner | — | % |
Regency Retail Partners, LP | Limited Partner | 0.001 | % | ||
RRP Parent REIT, Inc, | Limited Partner | 41.702 | % | ||
RRP German Feeder, LP | Limited Partner | 18.89 | % | ||
RRP GIC Feeder, LP | Limited Partner | 39.407 | % | ||
RRP Operating, LP | Delaware | Regency Retail GP, LLC | General Partner | 8.8 | % |
RRP Subsidiary REIT, LP | Common LP | 91.2 | % | ||
RRP Falcon Ridge GP, LLC | Delaware | RRP Operating, LP | Member | 100 | % |
RRP Falcon Ridge Town Center, LP | Delaware | RRP Falcon Ridge GP, LLC | General Partner | 0.5 | % |
RRP Operating, LP | Limited Partner | 99.5 | % | ||
RRP Falcon Ridge Phase II GP, LLC | Delaware | RRP Operating, LP | Member | 100 | % |
RRP Falcon Ridge Town Center Phase II, LP | Delaware | RRP Falcon Ridge Phase II GP, LLC | General Partner | 0.5 | % |
RRP Operating, LP | Limited Partner | 99.5 | % | ||
Fortuna Regency, LLC | Delaware | RRP Operating, LP | Member | 100 | % |
RRP Fortuna GP, LLC | Delaware | RRP Operating, LP | Member | 100 | % |
RRP Fortuna, LP | Delaware | RRP Fortuna GP, LLC | General Partner | 0.5 | % |
Fortuna Regency, LLC | Limited Partner | 99.5 | % | ||
RRP Indian Springs GP, LLC | Delaware | RRP Operating, LP | Member | 100 | % |
RRP Indian Springs, LP | Delaware | RRP Indian Springs GP, LLC | General Partner | 0.5 | % |
RRP Operating, LP | Limited Partner | 99.5 | % | ||
RRP Orchard Park GP, LLC | Delaware | RRP Operating, LP | Member | 100 | % |
RRP Orchard Park, LP | Delaware | RRP Orchard Park GP, LLC | General Partner | 0.5 | % |
RRP Operating, LP | Limited Partner | 99.5 | % | ||
RRP Silver Spring GP, LLC | Delaware | RRP Operating, LP | Member | 100 | % |
Silver Spring Square II, L.P. | Delaware | RRP Silver Spring GP, LLC | General Partner | 0.5 | % |
RRP Operating, LP | Limited Partner | 99.5 | % | ||
RRP Sycamore Plaza GP, LLC | Delaware | RRP Operating, LP | Member | 100 | % |
RRP Sycamore Plaza, LP | Delaware | RRP Sycamore Plaza GP, LLC | General Partner | 0.5 | % |
RRP Operating, LP | Limited Partner | 99.5 | % | ||
RRP Vista Village Phase I GP, LLC | Delaware | RRP Operating, LP | Member | 100 | % |
RRP Vista Village Phase I, LP | Delaware | RRP Vista Village Phase I GP, LLC | General Partner | 0.5 | % |
RRP Operating, LP | Limited Partner | 99.5 | % | ||
RRP Vista Village Phase II GP, LLC | Delaware | RRP Operating, LP | Member | 100 | % |
RRP Vista Village Phase II, LP | Delaware | RRP Vista Village Phase II GP, LLC | General Partner | 0.5 | % |
RRP Operating, LP | Limited Partner | 99.5 | % | ||
US Regency Retail REIT I | Texas | US Southern Retail, LLC | Common Stock | 57.27 | % |
US Republic Core Fund, L.P. | Common Stock | 23.53 | % | ||
Regency Centers, L.P. | Common Stock | 19.2 | % | ||
US Regency Retail I, LLC | Delaware | US Regency Retail REIT I | Member | 99 | % |
Regency Centers, L.P. | Member | 1 | % | ||
Alba Village Regency, LLC | Delaware | Regency Centers, L.P. | Member | Varies | |
Northgate Center Phase I, LLC | Member | ||||
Bammel North Houston Center, Ltd. | Texas | Regency Centers, L.P. | General Partner | Varies | |
HEB Grocery Company, LP | Limited Partner | ||||
Bartram Park Center, LLC | Delaware | Regency Centers, L.P. | Member | Varies | |
Real Sub, LLC | Member | ||||
Conroe/White Oak Marketplace, Ltd. | Texas | Regency Centers, L.P. | General Partner | Varies | |
HEB Grocery Co., L.P. | Limited Partner | ||||
Indian Springs at Woodlands, Ltd. | Texas | Indian Springs GP, LLC | General Partner | 0.1 | % |
Regency Woodlands/Kuykendahl Retail, Ltd. | Limited Partner | 99.9 | % | ||
Langston Center, LLC | Delaware | Regency Centers, L.P. | Member | 50 | % |
Real Sub, LLC | Member | 50 | % | ||
Ocala Retail Partners, LLC | Delaware | Regency Centers, L.P. | Member | 50 | % |
Real Sub, LLC | Member | 50 | % | ||
Queensboro Associates, L.P. | Georgia | Regency Centers, L.P. | General Partner | 50 | % |
Real Sub, LLC | Limited Partner | 50 | % | ||
Regency Woodlands/Kuykendahl Retail, Ltd. | Texas | Regency Centers, L.P. | General Partner | 50 | % |
HEB Grocery Company, LP | Limited Partner | 50 | % | ||
Tinwood, LLC | Delaware | Regency Centers, L.P. | Member | 50 | % |
Real Sub, LLC | Member | 50 | % | ||
Tinwood-Lynn Haven, LLC | Delaware | Tinwood, LLC | Member | 100 | % |
Tinwood-Pebblebrooke, LLC | Delaware | Tinwood, LLC | Member | 100 | % |
Regency I-45/Spring Cypress Retail, L.P. | Delaware | Regency Realty Group, Inc. | General Partner | Interests Vary | |
HEB Grocery Company, L.P. | Limited Partner | ||||
Properties; Liens
Schedule 6.1(f)
Regency Centers, L.P.
Unencumbered Pool Properties
11/XX/2011
Property name | Pool Type | Development Status (% funded) | % Occupied | ||
Airport Crossing | Property | 77.8 | % | ||
Anastasia Plaza | Property | 95.3 | % | ||
Anthem Marketplace | Property | 88.1 | % | ||
Applegate Ranch Shopping Center | Property | 82.4 | % | ||
Ashburn Farm Market Center | Property | 100.0 | % | ||
Ashford Place | Property | 98.1 | % | ||
Augusta Center | Property | 100.0 | % | ||
Aventura Shopping Center | Property | 87.3 | % | ||
Beckett Commons | Property | 87.0 | % | ||
Beneva Village Shops | Property | 88.0 | % | ||
Bloomingdale Square | Property | 96.3 | % | ||
Boulevard Center | Property | 90.0 | % | ||
Boynton Lakes Plaza | Property | 78.4 | % | ||
Briarcliff La Vista | Property | 100.0 | % | ||
Briarcliff Village | Property | 93.2 | % | ||
Buckhead Court | Property | 97.5 | % | ||
Buckley Square | Property | 95.0 | % | ||
Buckwalter Village | Property | 97.6 | % | ||
Caligo Crossing | Property | 100.0 | % | ||
Cambridge Square | Property | 100.0 | % | ||
Carmel Commons | Property | 90.5 | % | ||
Carriage Gate | Property | 86.8 | % | ||
Centerplace of Greeley III Phase I | Property | 81.5 | % | ||
Centerplace of Greeley III Phase II | Property | 100.0 | % | ||
Chasewood Plaza | Property | 95.0 | % | ||
Cherry Grove | Property | 97.0 | % | ||
Cheshire Station | Property | 97.8 | % | ||
Clayton Valley Shopping Center | Property | 94.2 | % | ||
Clovis Commons | Property | 99.3 | % | ||
Cochran's Crossing | Property | 93.4 | % | ||
Colonnade Center | Property | 85.4 | % | ||
Cooper Street | Property | 91.4 | % | ||
Cornerstone Square | Property | 74.4 | % | ||
Corvallis Market Center | Property | 100.0 | % | ||
Costa Verde Center | Property | 96.9 | % | ||
Courtyard Shopping Center | Property | 100.0 | % | ||
Culpeper Colonnade | Property | 97.1 | % | ||
Deer Springs Town Center | Property | 89.3 | % | ||
Delk Spectrum | Property | 77.4 | % | ||
Diablo Plaza | Property | 98.5 | % | ||
Dickson Tn | Property | 100.0 | % | ||
Dunwoody Village | Property | 88.5 | % | ||
East Pointe | Property | 98.4 | % | ||
East Port Plaza | Property | 90.4 | % | ||
East Towne Center | Property | 86.0 | % | ||
El Camino Shopping Center | Property | 92.4 | % | ||
El Norte Pkwy Plaza | Property | 91.9 | % | ||
Encina Grande | Property | 98.3 | % | ||
Fairfax Shopping Center | Property | 80.0 | % | ||
Falcon Marketplace | Property | 72.5 | % | ||
Fenton Marketplace | Property | 34.7 | % | ||
First Street Village | Property | 94.7 | % | ||
Folsom Prairie City Crossing | Property | 94.2 | % | ||
Frankfort Crossing Shpg Ctr | Property | 84.8 | % | ||
French Valley Village Center | Property | 96.8 | % | ||
Garden Square | Property | 95.7 | % | ||
Garner Towne Square | Property | 92.1 | % | ||
Gateway 101 | Property | 100.0 | % | ||
Gelson's Westlake Market Plaza | Property | 91.7 | % | ||
Glenwood Village | Property | 96.8 | % | ||
Golden Hills Promenade | Property | 91.6 | % | ||
Grande Oak | Property | 94.7 | % | ||
Greenwood Springs | Property | 70.0 | % | ||
Hancock | Property | 97.9 | % | ||
Harpeth Village Fieldstone | Property | 97.7 | % | ||
Harris Crossing | Property | 91.1 | % | ||
Heritage Plaza | Property | 97.5 | % | ||
Hershey | Property | 100.0 | % | ||
Hibernia Pavilion | Property | 97.4 | % | ||
Hibernia Plaza | Property | 16.7 | % | ||
Hickory Creek Plaza | Development | 98.0 | % | 77.6 | % |
Hillcrest Village | Property | 100.0 | % | ||
Hinsdale | Property | 93.8 | % | ||
Horton's Corner | Property | 100.0 | % | ||
Hyde Park | Property | 98.4 | % | ||
Indio Towne Center | Development | 98.0 | % | 74.7 | % |
Indio Towne Center Phase II | Property | 100.0 | % | ||
Inglewood Plaza | Property | 100.0 | % | ||
Jefferson Square | Development | 97.0 | % | 74.7 | % |
Keller Town Center | Property | 90.8 | % | ||
Kings Crossing Sun City | Property | 95.5 | % | ||
Kulpsville Village Center | Property | 100.0 | % | ||
Lake Pine Plaza | Property | 94.4 | % | ||
Lebanon Center | Property | 89.0 | % | ||
Lebanon/Legacy Center | Property | 83.4 | % | ||
Littleton Square | Property | 73.4 | % | ||
Lloyd King Center | Property | 91.6 | % | ||
Loehmanns Plaza California | Property | 94.2 | % | ||
Loehmanns Plaza Georgia | Property | 93.3 | % | ||
Lower Nazareth Commons | Property | 98.2 | % | ||
Market at Opitz Crossing | Property | 79.1 | % | ||
Market at Preston Forest | Property | 100.0 | % | ||
Marketplace at Briargate | Property | 94.7 | % | ||
Martin Downs Village Center | Property | 89.1 | % | ||
Martin Downs Village Shoppes | Property | 87.9 | % | ||
Maxtown Road (Northgate) | Property | 98.4 | % | ||
Middle Creek Commons | Property | 98.4 | % | ||
Millhopper Shopping Center | Property | 98.1 | % | ||
Monument Jackson Creek | Property | 100.0 | % | ||
Morningside Plaza | Property | 93.8 | % | ||
Nashboro Village | Property | 95.2 | % | ||
Newberry Square | Property | 94.7 | % | ||
Newland Center | Property | 98.8 | % | ||
Nocatee Town Center | Property | 90.8 | % | ||
North Hills | Property | 94.9 | % | ||
Northlake Village | Property | 87.6 | % | ||
Oakbrook Plaza | Property | 90.1 | % | ||
Oakleaf Commons | Property | 84.8 | % | ||
Old St Augustine Plaza | Property | 98.3 | % | ||
Orangeburg | Property | 100.0 | % | ||
Orchards Market Center II | Property | 89.9 | % | ||
Panther Creek | Property | 100.0 | % | ||
Pike Creek | Property | 89.8 | % | ||
Pima Crossing | Property | 88.9 | % | ||
Pine Lake Village | Property | 100.0 | % | ||
Pine Tree Plaza | Property | 96.8 | % | ||
Powell Street Plaza | Property | 100.0 | % | ||
Powers Ferry Square | Property | 85.1 | % | ||
Powers Ferry Village | Property | 82.9 | % | ||
Preston Park | Property | 87.7 | % | ||
Red Bank Village | Property | 97.4 | % | ||
Regency Commons | Property | 86.2 | % | ||
Regency Square | Property | 92.0 | % | ||
Rio Vista Town Center | Property | 83.5 | % | ||
Rivermont Station | Property | 83.3 | % | ||
Rockwall Town Center | Property | 93.5 | % | ||
Rona Plaza | Property | 100.0 | % | ||
Russell Ridge | Property | 87.3 | % | ||
Sammamish-Highlands | Property | 95.5 | % | ||
San Leandro Plaza | Property | 100.0 | % | ||
Sherwood Crossroads | Property | 92.1 | % | ||
Sherwood Market Center | Property | 97.8 | % | ||
Shoppes @ 104 | Property | 98.8 | % | ||
Shoppes at Fairhope Village | Property | 86.2 | % | ||
Shoppes at Mason | Property | 92.6 | % | ||
Shops at Arizona | Property | 80.6 | % | ||
Shops at County Center | Property | 93.4 | % | ||
Shops at John's Creek | Property | 73.5 | % | ||
Shops at Quail Creek | Development | 95.0 | % | 79.7 | % |
Shops at Saugus | Property | 94.6 | % | ||
Shops at Stonewall | Property | 96.6 | % | ||
Shops at Stonewall Phase II | Property | 100.0 | % | ||
Signature Plaza | Property | 80.0 | % | ||
South Lowry Square | Property | 87.7 | % | ||
Southcenter | Property | 92.8 | % | ||
Southpoint Crossing | Property | 88.4 | % | ||
Starke | Property | 100.0 | % | ||
State Street Crossing | Property | 60.0 | % | ||
Strawflower Village | Property | 98.3 | % | ||
Stroh Ranch | Property | 97.0 | % | ||
Suncoast Crossing Phase I | Property | 93.5 | % | ||
Suncoast Crossing Phase II | Development | 95.0 | % | 59.3 | % |
Sunnyside 205 | Property | 89.9 | % | ||
Tanasbourne Market | Property | 100.0 | % | ||
Thomas Lake | Property | 89.5 | % | ||
Town Center at Martin Downs | Property | 100.0 | % | ||
Town Square | Property | 90.1 | % | ||
Trophy Club | Property | 90.8 | % | ||
Twin Peaks | Property | 98.1 | % | ||
Valencia Crossroads | Property | 98.2 | % | ||
Ventura Village | Property | 90.7 | % | ||
Village at Lee Airpark | Property | 100.0 | % | ||
Village Center | Property | 93.8 | % | ||
Vine at Castaic | Property | 72.9 | % | ||
Vista Village IV | Property | 100.0 | % | ||
Wadsworth Crossing | Property | 96.5 | % | ||
Walker Center | Property | 97.4 | % | ||
Walton Towne Center | Property | 87.9 | % | ||
Waterside Marketplace | Property | 88.0 | % | ||
Welleby Plaza | Property | 86.7 | % | ||
West Park Plaza | Property | 82.7 | % | ||
Westbrook Commons | Property | 90.2 | % | ||
Westchester Plaza | Property | 97.0 | % | ||
Westlake Village Plaza and Center | Property | 90.0 | % | ||
Westridge Village | Property | 100.0 | % | ||
Westwood Village | Property | 98.2 | % | ||
White Oak - Dover, DE | Property | 100.0 | % | ||
Windmiller Plaza Phase I | Property | 98.5 | % | ||
Woodcroft Shopping Center | Property | 95.4 | % | ||
Woodman Van Nuys | Property | 95.9 | % | ||
Woodmen Plaza | Property | 86.3 | % | ||
Woodside Central | Property | 95.9 | % | ||
Total Pool Value | 92.5 | % | |||
Indebtedness and Guaranties
Schedule 6.1(g)
Regency Centers, L.P.
Summary of Outstanding Debt
As of October 31, 2011
Lender | Secured Property | Rate | Maturity | 10/31/2011 | |||
Fixed Rate Secured Loans: | |||||||
PNC Bank | Gateway Shopping Center | 7.110 | % | 5/1/2013 | $ | 17,745,753 | |
TIAA | Northgate Square | 5.640 | % | 1/10/2014 | 6,005,454 | ||
Northwestern Mutual Life Insurance Co. | Belleview Square | 6.200 | % | 7/1/2014 | 7,675,300 | ||
Glenview State Bank | Glen Oak Plaza | 5.750 | % | 10/1/2014 | 6,085,712 | ||
Aid Association of Lutherans | Murryhill Marketplace | 5.220 | % | 1/1/2015 | 7,583,591 | ||
United of Omaha Life Insurance Co. | Fleming Island | 7.400 | % | 2/5/2015 | 1,102,291 | ||
Escrow Bank, USA | Twin City Plaza | 5.650 | % | 4/6/2015 | 41,965,917 | ||
Municipal Tax Bonds Payable | Friars Mission Center | 7.600 | % | 9/2/2015 | 609,058 | ||
GMAC | Naples Walk | 6.150 | % | 8/11/2016 | 16,512,175 | ||
Jefferson Pilot | Peartree Village | 8.400 | % | 6/1/2017 | 9,141,062 | ||
Allianz Life Insurance Company of N. A. | 4S Commons Town Center | 6.000 | % | 6/10/2017 | 62,500,000 | ||
Metropolitan Life Insurance Company | Corkscrew Village | 6.170 | % | 8/1/2017 | 8,707,332 | ||
TIAA | Westchase | 5.520 | % | 7/10/2018 | 8,096,232 | ||
Guardian Life Insurance Company | Amerige Heights Town Center | 6.130 | % | 12/1/2018 | 17,000,000 | ||
Guardian Life Insurance Company | El Cerrito Plaza | 6.380 | % | 12/1/2018 | 40,652,462 | ||
Allianz Life Insurance Company of N. A. | Tassajara Crossing | 7.750 | % | 7/10/2019 | 19,800,000 | ||
Allianz Life Insurance Company of N. A. | Plaza Hermosa | 7.750 | % | 7/10/2019 | 13,800,000 | ||
Allianz Life Insurance Company of N. A. | Sequoia Station | 7.750 | % | 7/10/2019 | 21,100,000 | ||
Allianz Life Insurance Company of N. A. | Mockingbird Common | 7.750 | % | 7/10/2019 | 10,300,000 | ||
Allianz Life Insurance Company of N. A. | Sterling Ridge | 7.750 | % | 7/10/2019 | 13,900,000 | ||
Allianz Life Insurance Company of N. A. | Frisco Prestonbrook | 7.750 | % | 7/10/2019 | 6,800,000 | ||
Allianz Life Insurance Company of N. A. | Wellington Town Square | 7.750 | % | 7/10/2019 | 12,800,000 | ||
Allianz Life Insurance Company of N. A. | Berkshire Commons | 7.750 | % | 7/10/2019 | 7,500,000 | ||
Allianz Life Insurance Company of N. A. | Willow Festival | 5.750 | % | 1/10/2020 | 39,505,285 | ||
CUNA Mutal Insurance Society | Ocala Corners | 6.450 | % | 4/1/2020 | 5,575,771 | ||
NorthMarq Capital Inc. | Kirkwood Commons | 7.680 | % | 10/1/2022 | 12,417,116 | ||
State Farm Life Insurance Company | Tech Ridge Center | 5.830 | % | 6/1/2023 | 12,181,315 | ||
New York Life | Oak Shade | 6.050 | % | 5/10/2028 | 11,043,371 | ||
Unamortized (discounts)/premiums on assumed debt of acquired properties | 4,180,115 | ||||||
Total Fixed Rate Secured Loans | $ | 442,285,312 | |||||
Fixed Rate Unsecured Debt Offerings: | |||||||
Debt Offering | Unsecured | 7.250 | % | 12/12/2011 | $ | 19,997,930 | |
Debt Offering | Unsecured | 6.750 | % | 1/15/2012 | 192,369,789 | ||
Debt Offering | Unsecured | 4.950 | % | 4/15/2014 | 149,908,317 | ||
Debt Offering | Unsecured | 5.250 | % | 8/1/2015 | 349,816,654 | ||
Debt Offering | Unsecured | 5.875 | % | 6/15/2017 | 398,942,600 | ||
Debt Offering | Unsecured | 6.000 | % | 6/15/2020 | 149,097,463 | ||
Debt Offering | Unsecured | 4.800 | % | 4/15/2021 | 249,686,111 | ||
Total Fixed Rate Unsecured Debt Offerings | $ | 1,509,818,864 | |||||
Variable Rate Secured and Unsecured Loans: | |||||||
PNC Bank | Seminole Shoppes | LIBOR + 1.60% | 9/1/2014 | $ | 9,000,000 | ||
US Bank | Kroger New Albany Center | LIBOR + 3.80% | 10/1/2014 | 3,759,000 | |||
Wells Fargo Bank | $600 Million Line of Credit | LIBOR + 1.25% | 9/4/2015 | 60,000,000 | |||
Total Variable Rate Secured and Unsecured Loans | $ | 72,759,000 | |||||
Total | 2,024,863,176 | ||||||
Litigation
Schedule 6.1(h)
None
EXHIBIT A
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each]1 Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each]2 Assignee identified in item 2 below ([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees]3 hereunder are several and not joint.]4 Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by [the][each] Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including without limitation any guarantees included in such facilities), and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.
____________________
1For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.
2For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.
3Select as appropriate.
4Include bracketed language if there are either multiple Assignors or multiple Assignees.
1. Assignor[s]: _____________________________
______________________________
[Assignor [is] [is not] a Defaulting Lender]
2. | Assignee[s]: ______________________________ |
______________________________
[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]
3. | Borrower(s): Regency Centers, L.P. |
4. | Administrative Agent: Wells Fargo Bank, National Association, as the administrative agent under the Credit Agreement |
5. | Credit Agreement: Term Loan Agreement dated as of November 17, 2011 among Regency Centers, L.P. (the “Borrower”), Regency Centers Corporation, the Lenders parties thereto, Wells Fargo Bank, National Association, as Administrative Agent, and the other parties thereto. |
6. | Assigned Interest[s]: |
Assignor[s]5 | Assignee[s]6 | Facility Assigned7 | Aggregate Amount of Commitment/Loans for all Lenders8 | Amount of Commitment/Loans Assigned | Percentage Assigned of Commitment/ Loans9 | CUSIP Number |
$ | $ | % | ||||
$ | $ | % | ||||
$ | $ | % | ||||
[7. Trade Date: ______________]10
____________________
5List each Assignor, as appropriate.
6List each Assignee, as appropriate.
7Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g., "Initial Term Loan Commitment," "Delayed Draw TL Commitment", etc.)
8Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.
9Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.
10To be completed if the Assignor(s) and the Assignee(s) intend that the minimum assignment amount is to be determined as of the Trade Date.
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR[S]11
[NAME OF ASSIGNOR]
By:______________________________
Name: _________________________
Title: __________________________
[NAME OF ASSIGNOR]
By:______________________________
Name: _________________________
Title: __________________________
ASSIGNEE[S]12
[NAME OF ASSIGNEE]
By:______________________________
Name: _________________________
Title: __________________________
[NAME OF ASSIGNEE]
By:______________________________
Name: _________________________
Title: __________________________
____________________
11Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).
12Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).
[Consented to and]13 Accepted:
WELLS FARGO BANK, NATIONAL ASSOCATION, as
Administrative Agent
By: _________________________________
Name: _____________________________
Title: ______________________________
[Consented to:] 14
REGENCY CENTERS, L.P.
By: Regency Centers Corporation,
its sole general partner
By: _________________________________
Name: ___________________________
Title: ____________________________
____________________
13To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.
14To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.
ANNEX 1
[__________________]15
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor[s]. [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (iv) it is [not] a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2. Assignee[s]. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an Eligible Assignee as defined in the Credit Agreement (subject to such consents, if any, as may be required under such definition), (iii) from and after the Effective Date specified for this Assignment and Assumption, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the financial statements referenced in Section 6.1(j) thereof or of the most recent financial statements delivered pursuant to Section 8.1 or 8.2 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent, the Assignor or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
____________________
15Describe Credit Agreement at option of Administrative Agent.
2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignee whether such amounts have accrued prior to, on or after the Effective Date specified for this Assignment and Assumption. The Assignor[s] and the Assignee[s] shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to such Effective Date or with respect to the making of this assignment directly between themselves.
3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts executed, and to be fully performed, in such state.
Annex 1-2
EXHIBIT B
FORM OF GUARANTY
THIS GUARANTY dated as of November __, 2011 (the “Guaranty”) executed and delivered by each of the undersigned and the other Persons from time to time party hereto pursuant to the execution and delivery of an Accession Agreement in the form of Annex I hereto (all of the undersigned, together with such other Persons each a “Guarantor” and collectively, the “Guarantors”) in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the “Administrative Agent”) for the Lenders under that certain Term Loan Agreement dated as of November 17, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Regency Centers, L.P. (the “Borrower”), Regency Centers Corporation (the “Parent”), the financial institutions party thereto and their assignees under Section 12.6. thereof (the “Lenders”), the Administrative Agent, and the other parties thereto, for its benefit and the benefit of the Lenders (the Administrative Agent and the Lenders, each individually a “Guarantied Party” and collectively, the “Guarantied Parties”).
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make available to the Borrower certain financial accommodations on the terms and conditions set forth in the Credit Agreement;
WHEREAS, the Borrower and each of the Guarantors, though separate legal entities, are mutually dependent on each other in the conduct of their respective businesses as an integrated operation and have determined it to be in their mutual best interests to obtain financing from the Lenders through their collective efforts;
WHEREAS, each Guarantor acknowledges that it will receive direct and indirect benefits from the Guarantied Parties making such financial accommodations available to the Borrower under the Credit Agreement and, accordingly, each Guarantor is willing to guarantee the Borrower’s obligations to the Guarantied Parties on the terms and conditions contained herein; and
WHEREAS, each Guarantor’s execution and delivery of this Guaranty is a condition to the Lenders making such financial accommodations to the Borrower.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Guarantor, each Guarantor agrees as follows:
Section 1. Guaranty. Each Guarantor hereby absolutely, irrevocably and unconditionally guaranties the due and punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of all of the following (collectively referred to as the “Guarantied Obligations”): (a) all indebtedness, liabilities, obligations, covenants and duties owing by the Borrower to the Administrative Agent or any Guarantied Party under or in connection with the Credit Agreement and any other Loan Document, including without limitation, the repayment of all principal of the Loans and the payment of all interest, Fees, charges, reasonable attorneys’ fees and other amounts payable to the Administrative Agent or any Guarantied Party thereunder or in connection therewith (including, to the extent permitted by Applicable Law, interest, Fees and other amounts that would accrue and become due after the filing of a case or other proceeding under the Bankruptcy Code (as defined below) or other similar Applicable Law but for the commencement of such case or proceeding, whether or not such amounts are allowed or allowable in whole or in part in such case or proceeding); (b) any and all extensions, renewals, modifications, amendments or substitutions of the foregoing; (c) all other Obligations; and (d) all expenses, including, without limitation, reasonable attorneys’ fees and disbursements, that are incurred by the Administrative Agent or any of the Guarantied Parties in the enforcement of any of the foregoing or any obligation of such Guarantor hereunder.
Section 2. Guaranty of Payment and Not of Collection. This Guaranty is a guaranty of payment, and not of collection, and a debt of each Guarantor for its own account. Accordingly, none of the Administrative Agent or the Guarantied Parties shall be obligated or required before enforcing this Guaranty against any Guarantor: (a) to pursue any right or remedy any of them may have against the Borrower, any other Guarantor or any other Person or commence any suit or other proceeding against the Borrower, any other Guarantor or any other Person in any court or other tribunal; (b) to make any claim in a liquidation or bankruptcy of the Borrower, any other Guarantor or any other Person; or (c) to make demand of the Borrower, any other Guarantor or any other Person or to enforce or seek to enforce or realize upon any collateral security held by the Administrative Agent or any Guarantied Party which may secure any of the Guarantied Obligations.
Section 3. Guaranty Absolute. Each Guarantor guarantees that the Guarantied Obligations will be paid strictly in accordance with the terms of the documents evidencing the same, regardless of any Applicable Law now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Administrative Agent or the Guarantied Parties with respect thereto. The liability of each Guarantor under this Guaranty shall be absolute, irrevocable and unconditional in accordance with its terms and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including without limitation, the following (whether or not such Guarantor consents thereto or has notice thereof):
(a) (i) any change in the amount, interest rate or due date or other term of any of the Guarantied Obligations, (ii) any change in the time, place or manner of payment of all or any portion of the Guarantied Obligations, (iii) any amendment or waiver of, or consent to the departure from or other indulgence with respect to, the Credit Agreement, any other Loan Document, or any other document or instrument evidencing or relating to any Guarantied Obligations, or (iv) any waiver, renewal, extension, addition, or supplement to, or deletion from, or any other action or inaction under or in respect of, the Credit Agreement, any of the other Loan Documents, or any other documents, instruments or agreements relating to the Guarantied Obligations or any other instrument or agreement referred to therein or evidencing any Guarantied Obligations or any assignment or transfer of any of the foregoing;
(b) any lack of validity or enforceability of the Credit Agreement, any of the other Loan Documents, or any other document, instrument or agreement referred to therein or evidencing any Guarantied Obligations or any assignment or transfer of any of the foregoing;
(c) any furnishing to the Administrative Agent or the Guarantied Parties of any security for the Guarantied Obligations, or any sale, exchange, release or surrender of, or realization on, any collateral securing any of the Obligations;
(d) any settlement or compromise of any of the Guarantied Obligations, any security therefor, or any liability of any other party with respect to the Guarantied Obligations, or any subordination of the payment of the Guarantied Obligations to the payment of any other liability of the Borrower or any other Loan Party;
(e) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to such Guarantor, the Borrower, any other Loan Party or any other Person, or any action taken with respect to this Guaranty by any trustee or receiver, or by any court, in any such proceeding;
(f) any act or failure to act by the Borrower, any other Loan Party or any other Person which
may adversely affect such Guarantor’s subrogation rights, if any, against the Borrower to recover payments made under this Guaranty;
(g) any nonperfection or impairment of any security interest or other Lien on any collateral securing in any way any of the Guarantied Obligations;
(h) any application of sums paid by the Borrower, any other Guarantor or any other Person with respect to the liabilities of the Borrower to the Administrative Agent or the Guarantied Parties, regardless of what liabilities of the Borrower remain unpaid;
(i) any defect, limitation or insufficiency in the borrowing powers of the Borrower or in the exercise thereof;
(j) any defense, set-off, claim or counterclaim (other than indefeasible payment and performance in full) which may at any time be available to or be asserted by the Borrower, any other Loan Party or any other Person against the Administrative Agent or any of the Guarantied Parties;
(k) any change in the corporate existence, structure or ownership of the Borrower or any other Loan Party;
(l) any statement, representation or warranty made or deemed made by or on behalf of the Borrower, any Guarantor or any other Loan Party under any Loan Document, or any amendment hereto or thereto, proves to have been incorrect or misleading in any respect; or
(m) any other circumstance which might otherwise constitute a defense available to, or a discharge of, a Guarantor hereunder (other than indefeasible payment and performance in full).
Section 4. Action with Respect to Guarantied Obligations. The Administrative Agent and the Guarantied Parties may, at any time and from time to time, without the consent of, or notice to, any Guarantor, and without discharging any Guarantor from its obligations hereunder, take any and all actions described in Section 3 and may otherwise: (a) amend, modify, alter or supplement the terms of any of the Guarantied Obligations, including, but not limited to, extending or shortening the time of payment of any of the Guarantied Obligations or changing the interest rate that may accrue on any of the Guarantied Obligations; (b) amend, modify, alter or supplement the Credit Agreement or any other Loan Document; (c) sell, exchange, release or otherwise deal with all, or any part, of any collateral securing any of the Obligations; (d) release any other Loan Party or other Person liable in any manner for the payment or collection of the Guarantied Obligations; (e) exercise, or refrain from exercising, any rights against the Borrower, any other Guarantor or any other Person; and (f) apply any sum, by whomsoever paid or however realized, to the Guarantied Obligations in such order as the Administrative Agent and the Guarantied Parties shall elect.
Section 5. Representations and Warranties. Each Guarantor hereby makes to the Administrative Agent and the Guarantied Parties all of the representations and warranties made by the Borrower with respect to or in any way relating to such Guarantor in the Credit Agreement and the other Loan Documents, as if the same were set forth herein in full.
Section 6. Covenants. Each Guarantor will comply with all covenants which the Borrower and/or the Parent are to cause such Guarantor to comply with under the terms of the Credit Agreement or any of the other Loan Documents.
Section 7. Waiver. Each Guarantor, to the fullest extent permitted by Applicable Law, hereby waives
notice of acceptance hereof or any presentment, demand, protest or notice of any kind, and any other act or thing, or omission or delay to do any other act or thing, which in any manner or to any extent might vary the risk of such Guarantor or which otherwise might operate to discharge such Guarantor from its obligations hereunder.
Section 8. Inability to Accelerate Loan. If the Administrative Agent and/or the Guarantied Parties are prevented under Applicable Law or otherwise from demanding or accelerating payment of any of the Guarantied Obligations by reason of any automatic stay or otherwise, the Administrative Agent and/or the Guarantied Parties shall be entitled to receive from each Guarantor, upon demand therefor, the sums which otherwise would have been due had such demand or acceleration occurred.
Section 9. Reinstatement of Guarantied Obligations. If claim is ever made on the Administrative Agent or any of the Guarantied Parties for repayment or recovery of any amount or amounts received in payment or on account of any of the Guarantied Obligations, and the Administrative Agent or such Guarantied Party repays all or part of said amount by reason of (a) any judgment, decree or order of any court or administrative body of competent jurisdiction, or (b) any settlement or compromise of any such claim effected by the Administrative Agent or such Guarantied Party with any such claimant (including the Borrower or a trustee in bankruptcy for the Borrower), then and in such event each Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding on it, notwithstanding any revocation hereof or the cancellation of the Credit Agreement, any of the other Loan Documents, or any other instrument evidencing any liability of the Borrower, and such Guarantor shall be and remain liable to the Administrative Agent or such Guarantied Party for the amounts so repaid or recovered to the same extent as if such amount had never originally been paid to the Administrative Agent or such Guarantied Party.
Section 10. Subrogation. Upon the making by any Guarantor of any payment hereunder for the account of the Borrower, such Guarantor shall be subrogated to the rights of the payee against the Borrower; provided, however, that such Guarantor shall not enforce any right or receive any payment by way of subrogation or otherwise take any action in respect of any other claim or cause of action such Guarantor may have against the Borrower arising by reason of any payment or performance by such Guarantor pursuant to this Guaranty, unless and until all of the Guarantied Obligations have been indefeasibly paid and performed in full. If any amount shall be paid to such Guarantor on account of or in respect of such subrogation rights or other claims or causes of action, such Guarantor shall hold such amount in trust for the benefit of the Administrative Agent and the Guarantied Parties and shall forthwith pay such amount to the Administrative Agent to be credited and applied against the Guarantied Obligations, whether matured or unmatured, in accordance with the terms of the Credit Agreement or to be held by the Administrative Agent as collateral security for any Guarantied Obligations existing.
Section 11. Payments Free and Clear. All sums payable by each Guarantor hereunder, whether of principal, interest, Fees, expenses, premiums or otherwise, shall be paid in full, without set‑off or counterclaim or any deduction or withholding whatsoever (including any Taxes), and if any Guarantor is required by Applicable Law or by a Governmental Authority to make any such deduction or withholding, such Guarantor shall pay to the Administrative Agent and the Guarantied Parties such additional amount as will result in the receipt by the Administrative Agent and the Guarantied Parties of the full amount payable hereunder had such deduction or withholding not occurred or been required.
Section 12. Set-off. In addition to any rights now or hereafter granted under any of the other Loan Documents or Applicable Law and not by way of limitation of any such rights, each Guarantor hereby authorizes the Administrative Agent, each Lender and any of their respective Affiliates, at any time while an Event of Default exists, without any prior notice to such Guarantor or to any other Person, any such notice
being hereby expressly waived, but in the case of a Lender or an Affiliate of a Lender subject to receipt of the prior written consent of the Administrative Agent exercised in its sole discretion, to set off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, indebtedness evidenced by certificates of deposit, whether matured or unmatured) and any other indebtedness at any time held or owing by the Administrative Agent, such Lender, or any Affiliate of the Administrative Agent or such Lender, to or for the credit or the account of such Guarantor against and on account of any of the Guarantied Obligations, although such obligations shall be contingent or unmatured.
Section 13. Subordination. Each Guarantor hereby expressly covenants and agrees for the benefit of the Administrative Agent and the Guarantied Parties that all obligations and liabilities of the Borrower to such Guarantor of whatever description, including without limitation, all intercompany receivables of such Guarantor from the Borrower (collectively, the “Junior Claims”) shall be subordinate and junior in right of payment to all Guarantied Obligations. If an Event of Default shall exist, then no Guarantor shall accept any direct or indirect payment (in cash, property or securities, by setoff or otherwise) from the Borrower on account of or in any manner in respect of any Junior Claim until all of the Guarantied Obligations have been indefeasibly paid in full.
Section 14. Avoidance Provisions. It is the intent of each Guarantor, the Administrative Agent and the Guarantied Parties that in any Proceeding, such Guarantor’s maximum obligation hereunder shall equal, but not exceed, the maximum amount which would not otherwise cause the obligations of such Guarantor hereunder (or any other obligations of such Guarantor to the Administrative Agent and the Guarantied Parties) to be avoidable or unenforceable against such Guarantor in such Proceeding as a result of Applicable Law, including without limitation, (a) Section 548 of the Bankruptcy Code and (b) any state fraudulent transfer or fraudulent conveyance act or statute applied in such Proceeding, whether by virtue of Section 544 of the Bankruptcy Code or otherwise. The Applicable Laws under which the possible avoidance or unenforceability of the obligations of such Guarantor hereunder (or any other obligations of such Guarantor to the Administrative Agent and the Guarantied Parties) shall be determined in any such Proceeding are referred to as the “Avoidance Provisions”. Accordingly, to the extent that the obligations of any Guarantor hereunder would otherwise be subject to avoidance under the Avoidance Provisions, the maximum Guarantied Obligations for which such Guarantor shall be liable hereunder shall be reduced to that amount which, as of the time any of the Guarantied Obligations are deemed to have been incurred under the Avoidance Provisions, would not cause the obligations of such Guarantor hereunder (or any other obligations of such Guarantor to the Administrative Agent and the Guarantied Parties), to be subject to avoidance under the Avoidance Provisions. This Section is intended solely to preserve the rights of the Administrative Agent and the Guarantied Parties hereunder to the maximum extent that would not cause the obligations of any Guarantor hereunder to be subject to avoidance under the Avoidance Provisions, and no Guarantor or any other Person shall have any right or claim under this Section as against the Administrative Agent and the Guarantied Parties that would not otherwise be available to such Person under the Avoidance Provisions.
Section 15. Information. Each Guarantor assumes all responsibility for being and keeping itself informed of the financial condition of the Borrower and the other Guarantors, and of all other circumstances bearing upon the risk of nonpayment of any of the Guarantied Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that neither the Administrative Agent nor any of the Guarantied Parties shall have any duty whatsoever to advise any Guarantor of information regarding such circumstances or risks.
Section 16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
Section 17. Waiver of jury trial.
(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG ANY GUARANTOR, THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE ADMINISTRATIVE AGENT AND EACH GUARANTOR HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING OUT OF THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR BY REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG ANY GUARANTOR, THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE RELATING TO ANY OF THE LOAN DOCUMENTS.
(b) EACH OF THE GUARANTORS, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY AGREES THE FEDERAL DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK AND ANY STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, NEW YORK, NEW YORK SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG ANY GUARANTOR, THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM. EACH GUARANTOR AND EACH OF THE LENDERS EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS WITH RESPECT TO SUCH CLAIMS OR DISPUTES. EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY ANY PARTY OR THE ENFORCEMENT BY ANY PARTY OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.
(c) THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS AND THE TERMINATION OF THIS GUARANTY.
Section 18. Loan Accounts. The Administrative Agent and each Lender may maintain books and accounts setting forth the amounts of principal, interest and other sums paid and payable with respect to the Guarantied Obligations, and in the case of any dispute relating to any of the outstanding amount, payment or receipt of any of the Guarantied Obligations or otherwise, the entries in such books and accounts shall be deemed conclusive evidence of the amounts and other matters set forth herein, absent manifest error. The failure of the Administrative Agent or any Lender to maintain such books and accounts shall not in any way relieve or discharge any Guarantor of any of its obligations hereunder.
Section 19. Waiver of Remedies. No delay or failure on the part of the Administrative Agent or any
of the Guarantied Parties in the exercise of any right or remedy it may have against any Guarantor hereunder or otherwise shall operate as a waiver thereof, and no single or partial exercise by the Administrative Agent or any of the Guarantied Parties of any such right or remedy shall preclude any other or further exercise thereof or the exercise of any other such right or remedy.
Section 20. Termination. This Guaranty shall remain in full force and effect until the termination of the Credit Agreement in accordance with Section 12.11. of the Credit Agreement.
Section 21. Successors and Assigns. Each reference herein to the Administrative Agent or the Guarantied Parties shall be deemed to include such Person’s respective successors and assigns (including, but not limited to, any holder of the Guarantied Obligations) in whose favor the provisions of this Guaranty also shall inure, and each reference herein to each Guarantor shall be deemed to include such Guarantor’s successors and assigns, upon whom this Guaranty also shall be binding. The Lenders may, in accordance with the applicable provisions of the Credit Agreement, assign, transfer or sell any Guarantied Obligation, or grant or sell participations in any Guarantied Obligations, to any Person without the consent of, or notice to, any Guarantor and without releasing, discharging or modifying any Guarantor’s obligations hereunder. Subject to Section 12.9. of the Credit Agreement, each Guarantor hereby consents to the delivery by the Administrative Agent or any Lender to any Eligible Assignee or Participant (or any prospective Eligible Assignee or Participant) of any financial or other information regarding the Borrower or any Guarantor. No Guarantor may assign or transfer its rights or obligations hereunder to any Person without the prior written consent of the Administrative Agent and all Guarantied Parties and any such assignment or other transfer to which the Administrative Agent and all of the Guarantied Parties have not so consented shall be null and void.
Section 22. Joint and Several Obligations. the obligationS of the Guarantors HEREUNDER SHALL BE joint and several, and ACCORDINGLY, each Guarantor CONFIRMS THAT IT is liable for the full amount of the “GUARANTiED Obligations” AND ALL OF THE OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER gUARANTORS HEREUNDER.
Section 23. Amendments. This Guaranty may not be amended except in a writing signed by the Requisite Lenders (or all of the Lenders if required under the terms of the Credit Agreement), the Administrative Agent and each Guarantor.
Section 24. Payments. All payments to be made by any Guarantor pursuant to this Guaranty shall be made in Dollars, in immediately available funds to the Administrative Agent at the Principal Office, not later than 2:00 p.m. Eastern time on the date of demand therefor.
Section 25. Notices. All notices, requests and other communications hereunder shall be in writing (including facsimile transmission or similar writing) and shall be given (a) to each Guarantor at its address set forth below its signature hereto, (b) to the Administrative Agent or any Lender at its respective address for notices provided for in the Credit Agreement, or (c) as to each such party at such other address as such party shall designate in a written notice to the other parties. Each such notice, request or other communication shall be effective (i) if mailed, when received; (ii) if telecopied, when transmitted; or (iii) if hand delivered, when delivered; provided, however, that any notice of a change of address for notices shall not be effective until received.
Section 26. Severability. In case any provision of this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 27. Headings. Section headings used in this Guaranty are for convenience only and shall not affect the construction of this Guaranty.
Section 28. Limitation of Liability. Neither the Administrative Agent nor any of the Guarantied Parties, nor any Affiliate, officer, director, employee, attorney, or agent of the Administrative Agent or any of the Guarantied Parties, shall have any liability with respect to, and each Guarantor hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental, or consequential damages suffered or incurred by a Guarantor in connection with, arising out of, or in any way related to, this Guaranty or any of the other Loan Documents, or any of the transactions contemplated by this Guaranty, the Credit Agreement or any of the other Loan Documents. Each Guarantor hereby waives, releases, and agrees not to sue the Administrative Agent or any of the Guarantied Parties or any of the Administrative Agent’s or of any Guarantied Parties’, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Guaranty, the Credit Agreement or any of the other Loan Documents, or any of the transactions contemplated by Credit Agreement or financed thereby.
Section 29. Electronic Delivery of Certain Information. Each Guarantor acknowledges and agrees that information regarding the Guarantor may be delivered electronically pursuant to Section 8.5 of the Credit Agreement.
Section 30. Right of Contribution. The Guarantors hereby agree as among themselves that, if any Guarantor shall make an Excess Payment (as defined below), such Guarantor shall have a right of contribution from each other Guarantor in an amount equal to such other Guarantor’s Contribution Share (as defined below) of such Excess Payment. The payment obligations of any Guarantor under this Section shall be subordinate and subject in right of payment to the Obligations until such time as the Obligations have been paid in full and the Commitments have expired or terminated, and none of the Guarantors shall exercise any right or remedy under this Section against any other Guarantor until such Obligations have been paid in full and the Commitments have expired or terminated. Subject to Section 10 of this Guaranty, this Section shall not be deemed to affect any right of subrogation, indemnity, reimbursement or contribution that any Guarantor may have under Applicable Law against the Borrower in respect of any payment of Guarantied Obligations. Notwithstanding the foregoing, all rights of contribution against any Guarantor shall terminate from and after such time, if ever, that such Guarantor shall cease to be a Guarantor in accordance with the applicable provisions of the Loan Documents.
Section 31. Definitions. (a) For the purposes of this Guaranty:
“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as amended from time to time, and any successor statute or statutes and all rules and regulations from time to time promulgated thereunder, and any comparable foreign laws relating to bankruptcy, insolvency or creditors’ rights.
“Contribution Share” means, for any Guarantor in respect of any Excess Payment made by any other Guarantor, the ratio (expressed as a percentage) as of the date of such Excess Payment of (i) the amount by which the aggregate present fair salable value of all of its assets and properties exceeds the amount of all debts and liabilities of such Guarantor (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Guarantor hereunder) to (ii) the amount by which the aggregate present fair salable value of all assets and other properties of the Loan Parties other than the maker of such Excess Payment exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of the Loan Parties) of the Loan Parties other than the maker of such Excess Payment; provided, however, that, for purposes of calculating the Contribution Shares of the Guarantors in respect of any Excess Payment, any Guarantor that became a Guarantor subsequent to the date of any such Excess Payment shall be deemed to have been a Guarantor on the date of such Excess Payment and the financial information for such Guarantor as of the date such Guarantor became a Guarantor shall be utilized for such Guarantor in connection with such Excess Payment.
“Excess Payment” means the amount paid by any Guarantor in excess of its Ratable Share of any Guarantied Obligations.
“Proceeding” means any of the following: (i) a voluntary or involuntary case concerning any Guarantor shall be commenced under the Bankruptcy Code; (ii) a custodian (as defined in such Bankruptcy Code or any other applicable bankruptcy laws) is appointed for, or takes charge of, all or any substantial part of the property of any Guarantor; (iii) any other proceeding under any Applicable Law, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding‑up or composition for adjustment of debts, whether now or hereafter in effect, is commenced relating to any Guarantor; (iv) any Guarantor is adjudicated insolvent or bankrupt; (v) any order of relief or other order approving any such case or proceeding is entered by a court of competent jurisdiction; (vi) any Guarantor makes a general assignment for the benefit of creditors; (vii) any Guarantor shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; (viii) any Guarantor shall call a meeting of its creditors with a view to arranging a composition or adjustment of its debts; (ix) any Guarantor shall by any act or failure to act indicate its consent to, approval of or acquiescence in any of the foregoing; or (x) any corporate action shall be taken by any Guarantor for the purpose of effecting any of the foregoing.
“Ratable Share” means, for any Guarantor in respect of any payment of Guarantied Obligations, the ratio (expressed as a percentage) as of the date of such payment of Guarantied Obligations of (i) the amount by which the aggregate present fair salable value of all of its assets and properties exceeds the amount of all debts and liabilities of such Guarantor (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Guarantor hereunder) to (ii) the amount by which the aggregate present fair salable value of all assets and other properties of all of the Loan Parties exceeds the amount of all of the debts and liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of the Loan Parties hereunder) of the Loan Parties; provided, however, that, for purposes of calculating the Ratable Shares of the Guarantors in respect of any payment of Guarantied Obligations, any Guarantor that became a Guarantor subsequent to the date of any such payment shall be deemed to have been a Guarantor on the date of such payment and the financial information for such Guarantor as of the date such Guarantor became a Guarantor shall be utilized for such Guarantor in connection with such payment.
(b) Terms not otherwise defined herein are used herein with the respective meanings given them in the Credit Agreement.
[Signatures on Next Page]
IN WITNESS WHEREOF, each Guarantor has duly executed and delivered this Guaranty as of the date and year first written above.
[GUARANTORS]
By:
Name:
Title:
Address for Notices:
c/o Regency Centers Corporation
One Independent Drive, Suite 114
Jacksonville, Florida 32202-5019
Attention: Chief Financial Officer
Telecopy Number: (904) 354-1832
Telephone Number: (904) 598-7608
ANNEX I
FORM OF ACCESSION AGREEMENT
THIS ACCESSION AGREEMENT dated as of ____________, 20__, executed and delivered by ______________________, a _____________ (the “New Guarantor”), in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the “Administrative Agent”) for the Lenders under that certain Term Loan Agreement dated as of November 17, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Regency Centers, L.P. (the “Borrower”), Regency Centers Corporation, the financial institutions party thereto and their assignees under Section 12.6. thereof (the “Lenders”), the Administrative Agent, and the other parties thereto, for its benefit and the benefit of the Lenders (the Administrative Agent and the Lenders, collectively, the “Guarantied Parties”).
WHEREAS, pursuant to the Credit Agreement, the Administrative Agent and the Lenders have agreed to make available to the Borrower certain financial accommodations on the terms and conditions set forth in the Credit Agreement;
WHEREAS, the Borrower, the New Guarantor, and the existing Guarantors, though separate legal entities, are mutually dependent on each other in the conduct of their respective businesses as an integrated operation and have determined it to be in their mutual best interests to obtain financing from the Administrative Agent and the Lenders through their collective efforts;
WHEREAS, the New Guarantor acknowledges that it will receive direct and indirect benefits from the Administrative Agent and the Lenders making such financial accommodations available to the Borrower under the Credit Agreement and, accordingly, the New Guarantor is willing to guarantee the Borrower’s obligations to the Administrative Agent and the Lenders on the terms and conditions contained herein; and
WHEREAS, the New Guarantor’s execution and delivery of this Accession Agreement is a condition to the Administrative Agent and the Lenders continuing to make such financial accommodations to the Borrower.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the New Guarantor, the New Guarantor agrees as follows:
Section 1. Accession to Guaranty. The New Guarantor hereby agrees that it is a “Guarantor” under that certain Guaranty dated as of November __, 2011 (as amended, supplemented, restated or otherwise modified from time to time, the “Guaranty”), made by each Subsidiary of the Borrower a party thereto in favor of the Administrative Agent and the other Guarantied Parties and assumes all obligations of a “Guarantor” thereunder and agrees to be bound thereby, all as if the New Guarantor had been an original signatory to the Guaranty. Without limiting the generality of the foregoing, the New Guarantor hereby:
(a) irrevocably and unconditionally guarantees the due and punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of all Guarantied Obligations (as defined in the Guaranty);
(b) makes to the Administrative Agent and the other Guarantied Parties as of the date hereof each of the representations and warranties contained in Section 5 of the Guaranty and agrees to be bound by each of the covenants contained in Section 6 of the Guaranty; and
(c) consents and agrees to each provision set forth in the Guaranty.
SECTION 2. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
Section 3. Definitions. Capitalized terms used herein and not otherwise defined herein shall have their respective defined meanings given them in the Credit Agreement.
[Signatures on Next Page]
IN WITNESS WHEREOF, the New Guarantor has caused this Accession Agreement to be duly executed and delivered under seal by its duly authorized officers as of the date first written above.
[NEW GUARANTOR]
By:
Name:
Title:
Address for Notices:
c/o _____________________________
________________________________
________________________________
Attn:____________________________
Telecopy Number:_________________
Telephone Number:________________
Accepted:
WELLS FARGO Bank, National association, as Administrative Agent
By:
Name:
Title:
EXHIBIT C
FORM OF NOTICE OF BORROWING
____________, 20__
Wells Fargo Bank, National Association
Minneapolis Loan Center
MAC N9303-110
608 Second Avenue S., 11th Floor
Minneapolis, Minnesota 55402-1916
Attn: Kimberly Perreault
Ladies and Gentlemen:
Reference is made to that certain Term Loan Agreement dated as of November 17, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Regency Centers, L.P. (the “Borrower”), Regency Centers Corporation, the financial institutions party thereto and their assignees under Section 12.6. thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.
1. | Pursuant to Section 2.2. of the Credit Agreement, the Borrower hereby requests that the Lenders make the [Initial Term Loans][Delayed Draw Term Loans] to the Borrower in an aggregate principal amount equal to $___________________1. |
2. | The Borrower requests that such Loans be made available to the Borrower on ____________, 20__2. |
3. | The Borrower hereby requests that such Loans be of the following Type: |
[Check one box only]
ž ¨ Base Rate Loan
ž ¨ LIBOR Loan, with an initial Interest Period for a duration of:
[Check one box only]
¨ž one month
¨ž three months
¨ž six months
____________________
1The Initial Term Loans shall be in an aggregate principal amount equal to $150,000,000.
2The Initial Term Loans shall be made available to the Borrower on the Initial Funding Date.
The Borrower hereby certifies to the Administrative Agent and the Lenders that as of the date hereof, as of the date of the making of the requested Loans, and after making such Loans, (a) no Default or Event of Default exists or would exist; and (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, are and shall be true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall have been true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances specifically and expressly permitted under the Loan Documents. In addition, the Borrower certifies to the Administrative Agent and the Lenders that all conditions to the making of the requested Loans contained in Article V. of the Credit Agreement will have been satisfied at the time such Loans are made.
REGENCY CENTERS, L.P.
By: Regency Centers Corporation, its general partner
By:
Name:
Title:
EXHIBIT D
FORM OF NOTICE OF CONTINUATION
____________, 20__
Wells Fargo Bank, National Association
Minneapolis Loan Center
MAC N9303-110
608 Second Avenue S., 11th Floor
Minneapolis, Minnesota 55402-1916
Attn: Kimberly Perreault
Ladies and Gentlemen:
Reference is made to that certain Term Loan Agreement dated as of November 17, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Regency Centers, L.P. (the “Borrower”), Regency Centers Corporation, the financial institutions party thereto and their assignees under Section 12.6. thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.
Pursuant to Section 2.9. of the Credit Agreement, the Borrower hereby requests a Continuation of LIBOR Loans under the Credit Agreement, and in that connection sets forth below the information relating to such Continuation as required by such Section of the Credit Agreement:
1. | The requested date of such Continuation is ____________, 20__. |
2. | The aggregate principal amount of the Loans subject to the requested Continuation is $________________________ and the portion of such principal amount subject to such Continuation is $__________________________. |
3. | The current Interest Period of the Loans subject to such Continuation ends on ________________, 20__. |
4. | The duration of the Interest Period for the Loans or portion thereof subject to such Continuation is: |
[Check one box only]
ž ¨ž one month
¨ž three months
¨ž six months
[Continued on next page]
The Borrower hereby certifies to the Administrative Agent and the Lenders that as of the date hereof, as of the proposed date of the requested Continuation, and after giving effect to such Continuation, (a) no
Default or Event of Default exists or will exist; and (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, are and shall be true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall have been true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances specifically and expressly permitted under the Loan Documents.
REGENCY CENTERS, L.P.
By: Regency Centers Corporation, its general partner
By:
Name:
Title:
EXHIBIT E
FORM OF NOTICE OF CONVERSION
____________, 20__
Wells Fargo Bank, National Association
Minneapolis Loan Center
MAC N9303-110
608 Second Avenue S., 11th Floor
Minneapolis, Minnesota 55402-1916
Attn: Kimberly Perreault
Ladies and Gentlemen:
Reference is made to that certain Term Loan Agreement dated as of November 17, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Regency Centers, L.P. (the “Borrower”), Regency Centers Corporation, the financial institutions party thereto and their assignees under Section 12.6. thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.
Pursuant to Section 2.10. of the Credit Agreement, the Borrower hereby requests a Conversion of Loans of one Type into Loans of another Type under the Credit Agreement, and in that connection sets forth below the information relating to such Conversion as required by such Section of the Credit Agreement:
1. | The requested date of such Conversion is ______________, 20__. |
2. | The Type of Loans to be Converted pursuant hereto is currently: |
[Check one box only]
ž | ¨ Base Rate Loan |
ž | ¨ LIBOR Loan |
3. | The aggregate principal amount of the Loans subject to the requested Conversion is $_____________________ and the portion of such principal amount subject to such Conversion is $___________________. |
[Continued on next page]
4. | The amount of such Loans to be so Converted is to be converted into Loans of the following Type: |
[Check one box only]
ž ¨ Base Rate Loan
ž ¨ LIBOR Loan, with an initial Interest Period for a duration of:
[Check one box only]
¨ž one month
¨ž three months
¨ž six months
[Continued on next page]
The Borrower hereby certifies to the Administrative Agent and the Lenders that as of the date hereof, as of the proposed date of the requested Conversion, and after giving effect to such Conversion, (a) no Default or Event of Default exists or will exist; and (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, are and shall be true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall have been true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances specifically and expressly permitted under the Loan Documents.
REGENCY CENTERS, L.P.
By: Regency Centers Corporation, its general partner
By:
Name:
Title:
EXHIBIT F
TRANSFER AUTHORIZER DESIGNATION
(For Disbursement of Loan Proceeds by Funds Transfer)
NEW REPLACE PREVIOUS DESIGNATION ADD CHANGE DELETE LINE NUMBER _____ INITIAL LOAN DISBURSEMENT
The following representatives of REGENCY CENTERS, L.P. ("Borrower") are authorized to request the disbursement of proceeds of the Loans and initiate funds transfers for Loan Number 1006110 assigned to the unsecured term loan facility evidenced by the Term Loan Agreement dated as of November 17, 2011 by and among the Borrower, each of the financial institutions initially a signatory thereto together with their assignees under Section 12.6. thereof (the “Lenders”), Wells Fargo Bank, National Association, as the Administrative Agent for the Lenders (the “Administrative Agent”), and the other parties thereto. The Administrative Agent is authorized to rely on this Transfer Authorizer Designation until it has received a new Transfer Authorizer Designation signed by Borrower, even in the event that any or all of the foregoing information may have changed.
Name | Title | Maximum Wire Amount1 | |
1 | |||
2 | |||
3 | |||
4 | |||
5 | |||
Initial Loan Disbursement Authorization Not Applicable Applicable --- The Administrative Agent is hereby authorized to accept wire transfer instructions from ________________ (ie. specify title company escrow) to be delivered, via fax, email, letter or other method, to the Administrative Agent for title/escrow #_____________ and/or loan #__________. Said instructions shall include the title/escrow company’s Receiving Party Account Name, city and state, Receiving Party Account Number, the Administrative Agent’s (ABA) Routing Number, Maximum Transfer Amount required, Borrower’s name, title order/escrow number to which the Administrative Agent shall fund the Initial Loan Disbursement under the loan number referenced above. The amount of said transfer shall not exceed $_______________. Borrower acknowledges and agrees that the acceptance of and wire transfer of funds by the Administrative Agent in accordance with the title/escrow company instructions shall be governed by this Transfer Authorizer Designation form and any other Loan Documents. The Administrative Agent shall not be further required to confirm said wiring instructions received from title/escrow company with Borrower. This Initial Loan Disbursement Authorization is in effect until a new authorization request shall be required. Borrower shall instruct title/escrow company via a separate letter, to deliver said wiring instructions in writing, directly to the Administrative Agent at its address. Borrower also hereby authorizes the Administrative Agent to attach a copy of the title/escrow company’s written wire instructions to this Transfer Authorizer Designation form upon receipt of said instructions.
____________________
1Maximum Wire Amount may not exceed the Loan Amount.
Beneficiary Bank and Account Holder Information |
1.
Transfer Funds to (Receiving Party Account Name): | ||
Receiving Party Account Number: | ||
Receiving Bank Name, City and State: | Receiving Bank Routing (ABA) Number | |
Maximum Transfer Amount: | ||
Further Credit Information/Instructions: | ||
2.
Transfer Funds to (Receiving Party Account Name): | ||
Receiving Party Account Number: | ||
Receiving Bank Name, City and State: | Receiving Bank Routing (ABA) Number | |
Maximum Transfer Amount: | ||
Further Credit Information/Instructions: | ||
3.
Transfer Funds to (Receiving Party Account Name): | ||
Receiving Party Account Number: | ||
Receiving Bank Name, City and State: | Receiving Bank Routing (ABA) Number | |
Maximum Transfer Amount: | ||
Further Credit Information/Instructions: | ||
Date: ___________, 20__
“BORROWER”
REGENCY CENTERS, L.P.
By: Regency Centers Corporation, its general partner
By:___________________________
Name:______________________
Title:_______________________
[Signature Page to Transfer Authorizer Designation]
EXHIBIT G
Form of NOTE
[Initial term loan note][DELAYED DRAW TERM LOAN NOTE]
$______________ _________, 20__
FOR VALUE RECEIVED, the undersigned, REGENCY CENTERS, L.P. (the “Borrower”) hereby unconditionally promises to pay to the order of ___________________________ (the “Lender”), in care of Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), to Wells Fargo Bank, National Association, 608 Second Avenue S., 11th Floor, Minneapolis, Minnesota 55402‑1916, or at such other address as may be specified by the Administrative Agent to the Borrower, the principal sum of ___________________ AND ___/100 DOLLARS ($_____________), or such lesser amount as may be the then outstanding and unpaid balance of [the Initial Term Loan][all Delayed Draw Term Loans] made by the Lender to the Borrower pursuant to, and in accordance with the terms of, the Credit Agreement.
The Borrower further agrees to pay interest at said office, in like money, on the unpaid principal amount owing hereunder from time to time on the dates and at the rates and at the times specified in the Credit Agreement.
This [Initial Term][Delayed Draw Term] Loan Note (this “Note”) is one of the “Notes” referred to in the Term Loan Agreement dated as of November 17, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrower, Regency Centers Corporation, the financial institutions party thereto and their assignees under Section 12.6. thereof, the Administrative Agent, and the other parties thereto, and is subject to, and entitled to, all provisions and benefits thereof. Capitalized terms used herein and not defined herein shall have the respective meanings given to such terms in the Credit Agreement. The Credit Agreement, among other things, (a) provides for the making of [the Initial Term Loan][Delayed Draw Term Loans] by the Lender to the Borrower from time to time in an aggregate amount not to exceed at any time outstanding the Dollar amount first above mentioned, (b) permits the prepayment of the Loans by the Borrower subject to certain terms and conditions and (c) provides for the acceleration of the Loans upon the occurrence of certain specified events.
The Borrower hereby waives presentment, demand, protest and notice of any kind. No failure to exercise, and no delay in exercising any rights hereunder on the part of the holder hereof shall operate as a waiver of such rights.
Time is of the essence for this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has executed and delivered this [Initial Term][Delayed Draw Term] Loan Note under seal as of the date written above.
REGENCY CENTERS, L.P.
By: Regency Centers Corporation, its general partner
By:
Name:
Title:
EXHIBIT H
FORM OF OPINION OF COUNSEL
[Attached]
EXHIBIT I
FORM OF COMPLIANCE CERTIFICATE
Reference is made to that certain Term Loan Agreement dated as of November 17, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Regency Centers, L.P. (the “Borrower”), Regency Centers Corporation (the “Parent”), the financial institutions party thereto and their assignees under Section 12.6. thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.
Pursuant to Section 8.3. of the Credit Agreement, the undersigned Chief Financial Officer of the Parent hereby certifies, on behalf of the Parent, to the Administrative Agent and the Lenders that:
1. (a) The undersigned has reviewed the terms of the Credit Agreement and has made a review of the transactions, financial condition and other affairs of the Borrower, the Parent and its other Subsidiaries as of, and during the relevant accounting period ending on, _______________, 20__ and (b) such review has not disclosed the existence during such accounting period, and the undersigned does not have knowledge of the existence, as of the date hereof, of any condition or event constituting a Default or Event of Default [except as set forth on Attachment A hereto, which specifies such Default or Event of Default and its nature, when it occurred and the steps that the Parent is taking (or is planning to take) with respect to such event, condition or failure.]
2. Schedule 1 attached hereto accurately and completely sets forth in reasonable detail the calculations required to establish compliance with the financial covenants contained in Section 9.1. of the Credit Agreement on the date of the financial statements for the accounting period set forth above.
3. (a) No Default or Event of Default exists [except as set forth on Attachment A hereto], and (b) the representations and warranties of the Borrower and the other Loan Parties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects), except to the extent such representations or warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall have been true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances specifically and expressly permitted under the Credit Agreement or the other Loan Documents.
4. Schedule 2 attached hereto includes (i) a reasonably detailed list of all Properties included in the calculations of Unencumbered NOI and Unencumbered Asset Value for the fiscal period covered by this Compliance Certificate, (ii) statements of Funds From Operations and Recurring Funds From Operations for the fiscal period covered by this Compliance Certificate, and (iii) a report listing Properties acquired in the most recently ended fiscal quarter setting forth for each such Property the purchase price and Net Operating Income for such Property and indicating whether such Property is collateral for any Indebtedness of the owner of such Property that is secured in any manner by any Lien and, if so, a description of such Indebtedness.
IN WITNESS WHEREOF, the undersigned has signed this Compliance Certificate on and as of ___________, 20__.
_____________________________
Name: _______________________
Title: Chief Financial Officer of Regency Centers Corporation
Exhibit 12.1
Regency Centers Corporation and Regency Centers, L.P.
Computation of Ratio of Earnings to Fixed Charges
(in thousands)
Year Ended December 31, | |||||||||||||||
2011 | 2010 (1) | 2009 (1) | 2008 (1) | 2007 (1) | |||||||||||
Fixed Coverage Ratio: | |||||||||||||||
Add: pre-tax income from continuing operations before adjustment for income or loss from equity investees and noncontrolling interests in consolidated subsidiaries | $ | 42,000 | 12,743 | (10,559 | ) | 114,259 | 161,929 | ||||||||
Add: fixed charges | 153,648 | 158,560 | 157,888 | 159,192 | 146,356 | ||||||||||
Add: distributed income of equity investees | 43,361 | 41,054 | 31,252 | 30,730 | 30,547 | ||||||||||
Subtract: capitalized interest | (1,480 | ) | (5,099 | ) | (19,062 | ) | (36,511 | ) | (35,424 | ) | |||||
Subtract: preferred stock dividends / preferred unit distributions | (23,400 | ) | (23,400 | ) | (23,400 | ) | (23,400 | ) | (23,400 | ) | |||||
Subtract: noncontrolling interest in pre-tax income of subsidiaries that have not incurred fixed charges | (55 | ) | (66 | ) | (59 | ) | (41 | ) | (869 | ) | |||||
Earnings | $ | 214,074 | 183,792 | 136,060 | 244,229 | 279,139 | |||||||||
Fixed Charge Data: | |||||||||||||||
Interest expensed and capitalized | $ | 124,707 | 129,837 | 128,551 | 131,009 | 118,987 | |||||||||
Amortized premiums, discounts and capitalized expenses related to indebtedness | 2,860 | 2,957 | 3,517 | 2,981 | 1,987 | ||||||||||
Estimate of the interest within rental expense | 2,680 | 2,366 | 2,420 | 1,802 | 1,982 | ||||||||||
Preferred stock dividends / preferred unit distributions | 23,400 | 23,400 | 23,400 | 23,400 | 23,400 | ||||||||||
Total fixed charges | $ | 153,647 | 158,560 | 157,888 | 159,192 | 146,356 | |||||||||
Ratio of earnings to fixed charges (2) | 1.4 | 1.2 | 0.9 | (3) | 1.5 | 1.9 | |||||||||
(1) As further described in Note 7 to Consolidated Financial Statements, historical amounts have been restated to reflect an immaterial adjustment relating to the Company's non-qualified deferred compensation plan.
(2) Historical amounts have been restated to conform to changes made to the 2011 calculation, which exclude from earnings distributions from equity investees for property disposals or refinancing.
(3) The Company's ratio of earnings to fixed charges was deficient in 2009 by $21.8 million, due to significant non-cash charges for impairment of real estate investments recorded in 2009 of $97.5 million,
Exhibit 21
REGENCY CENTERS CORPORATION | ||||
Subsidiaries | ||||
Entity | Jurisdiction | Owner(s) | Nature of Interest | % of Ownership |
Regency Centers, L.P. | Delaware | Regency Centers Corporation Outside Investors | General Partner Limited Partners | 99.0% 1.0% |
MCW-RC FL-Anastasia, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
MCW-RC FL-King's, LLC (fka MCW-RC Florida, LLC) | Delaware | Regency Centers, L.P. | Member | 100% |
MCW-RC FL-Shoppes at 104, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
MCW-RC GA-Howell Mill Village, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
MCD-RC CA-Amerige, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
MCD-RC El Cerrito Holdings, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
MCD-RC CA-El Cerrito, LLC | Delaware | MCD-RC El Cerrito Holdings, LLC | Member | 100% |
REG8 Member, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
REG8 Tassajara Crossing, LLC | Delaware | REG8 Member, LLC | Member | 100% |
REG8 Plaza Hermosa, LLC | Delaware | REG8 Member, LLC | Member | 100% |
REG8 Sequoia Station, LLC | Delaware | REG8 Member, LLC | Member | 100% |
REG8 Mockingbird Commons, LLC | Delaware | REG8 Member, LLC | Member | 100% |
REG8 Sterling Ridge, LLC | Delaware | REG8 Member, LLC | Member | 100% |
REG8 Prestonbrook Crossing, LLC | Delaware | REG8 Member, LLC | Member | 100% |
REG8 Wellington, LLC | Delaware | REG8 Member, LLC | Member | 100% |
REG8 Berkshire Commons, LLC | Delaware | REG8 Member, LLC | Member | 100% |
FL-Corkscrew Village Member, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
FL-Corkscrew Village, LLC | Delaware | FL-Corkscrew Village Member, LLC | Member | 100% |
FL-Crossroads Shopping Center Member, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
FL-Crossroads Shopping Center, LLC | Delaware | FL-Crossroads Shopping Center Member, LLC | Member | 100% |
FL-Naples Walk Shopping Center Member, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
FL-Naples Walk Shopping Center, LLC | Delaware | FL-Naples Walk Shopping Center Member, LLC | Member | 100% |
FL-Northgate Square Member, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
FL-Northgate Square, LLC | Delaware | FL-Northgate Square Member, LLC | Member | 100% |
4S Regency Partners, LLC | Delaware | Regency Centers, L.P. 4S Ranch Company 1700, L.P. | Member Member | 80% 20% |
Alba Village Regency, LLC | Delaware | Regency Centers, L.P. Northgate Center Phase I, LLC | Member Member | Interests Vary |
1
REGENCY CENTERS CORPORATION | ||||
Subsidiaries | ||||
Entity | Jurisdiction | Owner(s) | Nature of Interest | % of Ownership |
Applegate Ranch, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Belleview Square, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Buckwalter Bluffton, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Clayton Valley Shopping Center, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Regency NC GP, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Colonnade Regency, L.P. | Delaware | Regency NC GP, LLC Regency Centers, L.P. | General Partner Limited Partner | 1.00% 99.0% |
WFC-Purnell, L.P. | Delaware | Regency NC GP, LLC Regency Centers, L.P. | General Partner Limited Partner | 1.00% 99.0% |
Corvallis Market Center, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Deer Springs Town Center, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Fairfax Regency, LLC | Delaware | Regency Centers, L.P. J. Donegan Company | Member Member | Varies |
Fairhope, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Fortuna Regency Phase II, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
FV Commons, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Gateway Azco GP, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Gateway Azco LP, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
AZCO Partners | Pennsylvania | Gateway Azco Partners GP, LLC Gateway Azco LP, LLC | General Partner Limited Partner | 1% 99% |
Gateway Azco Manager, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Glen Oak Glenview, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Hasley Canyon Village, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Hibernia North, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Hickory Creek Plaza, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Hoadly Regency, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Indian Springs GP, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Indio Jackson, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Kent Place Regency, LLC | Delaware | Regency Centers, L.P. Kent Place Investors, LLC | Member Member | Interests Vary |
Lee Regency, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
The Marketplace at Briargate, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Menifee Marketplace, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Merrimack Shopping Center, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Murfreesboro North, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Murieta Gardens Shopping Center, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
NSHE Winnebago, LLC | Arizona | Regency Centers, L.P. | Member | 100% |
NTC-REG, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
New Smyrna Regency, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
New Windsor Marketplace, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
2
REGENCY CENTERS CORPORATION | ||||
Subsidiaries | ||||
Entity | Jurisdiction | Owner(s) | Nature of Interest | % of Ownership |
Northlake Village Shopping Center, LLC | Florida | Regency Centers, L.P. | Member | 100% |
Oakshade Regency, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Ocala Corners, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Ocala Retail Partners, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Otay Mesa Crossing, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Parmer Tech Ridge, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Regency Centers Acquisitions, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Regency Centers Advisors, LLC | Florida | Regency Centers, L.P. | Member | 100% |
RC CA Santa Barbara, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
RC Georgia Holdings, LLC | Georgia | Regency Centers, L.P. | Member | 100% |
Red Bank Village, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Regency Alliance Santa Rosa | Delaware | Regency Centers, L.P. | Member | 100% |
Regency Centers Georgia, L.P. | Georgia | RC Georgia Holdings, LLC Regency Centers, L.P. | General Partner Limited Partner | 1% 99% |
Regency Blue Ash, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Regency Cahan Clovis, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Regency Magi, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Regency Marinta-LaQuinta, LLC | Delaware | Regency Centers, L.P. Marinita Development Co. | Member Member | Interest Varies |
Regency Opitz, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Regency Petaluma, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Regency Remediation, LLC | Florida | Regency Centers, L.P. | Member | 100% |
Shops at Saugus, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Signature Plaza, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Spring Hill Town Center, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
T&M Shiloh Development Company | Texas | Regency Centers, L.P. | General Partner | 100% |
T&R New Albany Development Company, LLC | Ohio | Regency Centers, L.P. Topvalco | Member Member | 50% 50% |
Twin City Plaza Member, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Twin City Plaza, LLC | Delaware | Twin City Plaza Member, LLC | Member | 100% |
Valleydale, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Vista Village, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Wadsworth, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
DJB No. 23, L.P. | Texas | Wadsworth, LLC Regency Centers, L.P. | General Partner Limited Partner | 1% 99% |
Walton Town Center, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
Waterside Marketplace, LLC | Delaware | Regency Centers, L.P. | Member | 100% |
RRG Holdings, LLC | Florida | Regency Centers, L.P. | Member | 100% |
Regency Realty Group, Inc. | Florida | Regency Centers, L.P. RRG Holdings, LLC | Preferred Stock Common Stock Common Stock | 100% 7% 93% |
3
REGENCY CENTERS CORPORATION | ||||
Subsidiaries | ||||
Entity | Jurisdiction | Owner(s) | Nature of Interest | % of Ownership |
1488-2978 SC GP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
1488-2978 SC, L.P. | Texas | 1488-2978 SC GP, LLC Regency Realty Group, Inc. | General Partner Limited Partner | 1% 99% |
Accokeek Regency South, LLC | Delaware | Regency Realty Group, Inc. Accokeek South, LLC | Member Member | Interests Vary |
Alameda Bridgeside Shopping Center, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Amherst Street Shopping Center, LLC | Delaware | Regency Realty Group | Member | 100% |
Bordeaux Development, LLC | Florida | Regency Realty Group, Inc. | Member | 100% |
Caligo Crossing, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Castaic Vine, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Cathedral City Rio Vista Town Centre, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Chestnut Powder, LLC | Georgia | Regency Realty Group, Inc. | Member | 100% |
Clarksburg Retail Partners, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Culpeper Regency, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Dixon, LLC | Florida | Regency Realty Group, Inc. | Member | 100% |
East Towne Center, LLC | Delaware | Regency Realty Group, Inc. Lake McLeod, LLC | Member Member | Interests Vary |
Edmunson Orange Corp. | Tennessee | Regency Realty Group, Inc. | Common Stock | 100% |
Edmunson Orange North Carolina, LLC | Delaware | Edmunson Orange Corp. | Member | 100% |
VP101, LLC | Delaware | Edmunson Orange Corp. | Member | 100% |
Gateway 101, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Harding Place, LLC | Delaware | Regency Realty Group, Inc. RFM Harding, LLC | Member Member | 50% 50% |
Tennessee-Florida Investors, LLC | Delaware | Harding Place, LLC | Member | 100% |
Hanover Northampton GP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Hanover Northampton LP Holding, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Hanover Northampton Partner, LP | Delaware | Hanover Northampton LP Holding, LLC Regency Realty Group, Inc. | General Partner Limited Partner | 0% 100% |
Hanover Northampton Retail, LP | Delaware | Hanover Northampton GP, LLC Hanover Northampton Partner, LP | General Partner Limited Partner | .5% 99.5% |
Hermitage Development II, LLC | Florida | Regency Realty Group, Inc. | Member | 100% |
Kulpsville Village Center LP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Kulpsville Village Center, LP | Delaware | Kulpsville Village Center LP, LLC Regency Realty Group, Inc. | General Partner Limited Partner | .5% 99.5% |
Lonestar Retail, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Longmont Center, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
4
REGENCY CENTERS CORPORATION | ||||
Subsidiaries | ||||
Entity | Jurisdiction | Owner(s) | Nature of Interest | % of Ownership |
Loveland Shopping Center, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Lower Nazareth LP Holding, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Lower Nazareth Partner, LP | Delaware | Regency Realty Group, Inc. Lower Nazareth LP Holding, LLC | Limited Partner General Partner | 100% 0% |
Lower Nazareth GP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Lower Nazareth Commons, LP | Delaware | Lower Nazareth GP, LLC Lower Nazareth Partner, LP | General Partner Limited Partner | .5% 99.5% |
Lower Nazareth II LP Holding, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Lower Nazareth II Partner, LP | Delaware | Lower Nazareth II LP Holding, LLC Regency Realty Group, Inc. | General Partner Limited Partner | 0% 100% |
Lower Nazareth II GP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Lower Nazareth Commons II, LP | Delaware | Lower Nazareth II GP, LLC Lower Nazareth II Partner, LP | General Partner Limited Partner | .5% 99.5% |
Luther Properties, Inc. | Tennessee | Regency Realty Group, Inc. | Common Stock | 100% |
Marietta Outparcel, Inc. | Georgia | Regency Realty Group, Inc. | Common Stock | 100% |
Middle Creek Commons, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Mitchell Service, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
NorthGate Regency, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Paso Golden Hill, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
R2 Media, LLC | Florida | Regency Realty Group, Inc. | Member | 100% |
RB Airport Crossing, LLC | Delaware | Regency Realty Group, Inc. Airport 6, LLC | Member Member | Interests Vary |
RB Augusta, LLC | Delaware | Regency Realty Group, Inc. P-6, LLC | Member Member | Interests Vary |
RB Schererville Crossings, LLC | Delaware | Regency Realty Group, Inc. WH41, LLC | Member Member | Interests Vary |
RB Schererville 101, LLC | Indiana | RB Schererville Crossings, LLC | Member | 100% |
RB Schererville 102, LLC | Indiana | RB Schererville Crossings, LLC | Member | 100% |
RB Schererville 103, LLC | Indiana | RB Schererville Crossings, LLC | Member | 100% |
RB Schererville 104, LLC | Indiana | RB Schererville Crossings, LLC | Member | 100% |
RB Schererville 105, LLC | Indiana | RB Schererville Crossings, LLC | Member | 100% |
RB Schererville 106, LLC | Indiana | RB Schererville Crossings, LLC | Member | 100% |
RRG Net, LLC | Florida | Regency Realty Group, Inc. | Member | 100% |
Regency/PGM-Burkitt, LLC | Delaware | Regency Realty Group, Inc. PGM-Burkitt, LLC | Member Member | Interests Vary |
Regency Realty Colorado, Inc. | Florida | Regency Realty Group, Inc Snowden Leftwich (see Note 1) | Common Stock Common Stock | 80% 20% |
Regency Realty Group-NE, Inc. | Florida | Regency Realty Group, Inc. | Common Stock | 100% |
Regency Solar, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
SS Harbour GP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
5
REGENCY CENTERS CORPORATION | ||||
Subsidiaries | ||||
Entity | Jurisdiction | Owner(s) | Nature of Interest | % of Ownership |
SS Harbour, L.P. | Texas | SS Harbour GP, LLC Regency Realty Group, Inc. | General Partner Limited Partner | 1% 99% |
Seminole Shoppes, LLC | Delaware | Regency Reatly Group, Inc. M&P Shopping Centers | Member Member | 50% 50% |
Shops at Highland Village GP, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Shops at Highland Village Development, Ltd. | Texas | Shops at Highland Village GP, LLC Regency Realty Group, Inc. | General Partner Limited Partner | 1% 99% |
Shops at Quail Creek, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Slausen Central, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Stanley Bernal, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
State Street Crossing, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Stonewall Regency, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
Summerville-Orangeburg, LLC | Delaware | Regency Realty Group, Inc. | Member | 100% |
RRG Pennsylvania GP, Inc. | Florida | Regency Realty Group, Inc. | Common Stock | 100% |
Swatara Marketplace LP | Delaware | RRG Pennsylvania GP, Inc. Regency Realty Group, Inc. | General Partner Limited Partner | .5% 99.5% |
West End Properties, LLC | Florida | Regency Realty Group, Inc. | Member | 100% |
Note 1: Snowden Leftwich is a Regency employee who is the licensed broker for this entity. Colorado requires that the broker must own a minimum of 20% of the equity in a licensed entity.
6
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Regency Centers Corporation:
We consent to the incorporation by reference in the registration statement (No. 333-930, No. 333-52089, No. 333-44724, No. 333-114567, No. 333-125858, and No. 333-125913) on Form S-3 and (No. 333-174535) on Form S-3ASR and (No. 333-24971, No. 333-55062, No. 333-125857, and No. 333-149872) on Form S-8 of Regency Centers Corporation and (No. 333-174535) on Form S-3ASR of Regency Centers, L.P. of our reports dated February 29, 2012, with respect to the consolidated balance sheets of Regency Centers Corporation as of December 31, 2011 and 2010, and the related consolidated statements of operations, equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2011, and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of December 31, 2011, which reports appear in the December 31, 2011 annual report on Form 10-K of Regency Centers Corporation and Regency Centers, L.P.
/s/ KPMG LLP
February 29, 2012
Jacksonville, Florida
Certified Public Accountants
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
The Board of Directors of
Regency Centers Corporation,
the general partner of
Regency Centers, L.P.:
We consent to the incorporation by reference in the registration statement (No. 333-930, No. 333-52089, No. 333-44724, No. 333-114567, No. 333-125858, and No. 333-125913) on Form S-3 and (No. 333-174535) on Form S-3ASR and (No. 333-24971, No. 333-55062, No. 333-125857, and No. 333-149872) on Form S-8 of Regency Centers Corporation and (No. 333-174535) on Form S-3ASR of Regency Centers, L.P. of our reports dated February 29, 2012, with respect to the consolidated balance sheets of Regency Centers, L.P. as of December 31, 2011 and 2010, and the related consolidated statements of operations, capital and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2011, and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of December 31, 2011, which reports appear in the December 31, 2011 annual report on Form 10-K of Regency Centers Corporation and Regency Centers, L.P.
/s/ KPMG LLP
February 29, 2012
Jacksonville, Florida
Certified Public Accountants
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Registration Statements on Form S-3 (No. 333-00930, No. 333-52089, No. 333-44724, No. 333-114567, No. 333-125858, and No. 333-125913), Form S-3ASR (No. 333-158635 and No, 333-174535), Form S-4 (No. 333-127274-1), and Form S-8 (No. 333-24971, No. 333-55062, No. 333-125857, No. 333-149872, and No. 333-174662) of Regency Centers Corporation and on Form S-3ASR (No. 333-174535-01) and Form S-4 (No. 333-127274) of Regency Centers, L.P. of our report dated March 31, 2010, except for note 4, as to which the date is February 29, 2012, relating to the consolidated financial statements of GRI-Regency, LLC (formerly Macquarie Countrywide-Regency II, LLC), which appears in this Form 10-K of Regency Centers Corporation dated February 29, 2012.
/s/PricewaterhouseCoopers
McLean, VA
February 29, 2012
Exhibit 31.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934
I, Martin E. Stein, Jr., certify that:
1. | I have reviewed this Annual Report on Form 10-K of Regency Centers Corporation (“registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: February 29, 2012
/s/ Martin E. Stein, Jr. |
Martin E. Stein, Jr. |
Chief Executive Officer |
Exhibit 31.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934
I, Bruce M. Johnson, certify that:
1. | I have reviewed this Annual Report on Form 10-K of Regency Centers Corporation (“registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: February 29, 2012
/s/ Bruce M. Johnson |
Bruce M. Johnson |
Chief Financial Officer |
Exhibit 31.3
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934
I, Martin E. Stein, Jr., certify that:
1. | I have reviewed this Annual Report on Form 10-K of Regency Centers, L.P. (“registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: February 29, 2012
/s/ Martin E. Stein, Jr. |
Martin E. Stein, Jr. |
Chief Executive Officer of Regency Centers Corporation, general partner of registrant |
Exhibit 31.4
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934
I, Bruce M. Johnson, certify that:
1. | I have reviewed this Annual Report on Form 10-K of Regency Centers, L.P. (“registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: February 29, 2012
/s/ Bruce M. Johnson |
Bruce M. Johnson |
Chief Financial Officer of Regency Centers Corporation, general partner of registrant |
Exhibit 32.1
Written Statement of the Chief Executive Officer
Pursuant to 18 U.S.C. §1350
Solely for the purposes of complying with 18 U.S.C. §1350, I, the undersigned Chief Executive Officer of Regency Centers Corporation, hereby certify, based on my knowledge, that the Annual Report on Form 10-K of Regency Centers Corporation for the year ended December 31, 2011 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Regency Centers Corporation.
Date: February 29, 2012
/s/ Martin E. Stein, Jr. |
Martin E. Stein, Jr. |
Chief Executive Officer |
Exhibit 32.2
Written Statement of the Chief Financial Officer
Pursuant to 18 U.S.C. §1350
Solely for the purposes of complying with 18 U.S.C. §1350, I, the undersigned Chief Financial Officer of Regency Centers Corporation, hereby certify, based on my knowledge, that the Annual Report on Form 10-K of Regency Centers Corporation for the year ended December 31, 2011 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Regency Centers Corporation.
Date: February 29, 2012
/s/ Bruce M. Johnson
Bruce M. Johnson
Chief Financial Officer
Exhibit 32.3
Written Statement of the Chief Executive Officer
Pursuant to 18 U.S.C. §1350
Solely for the purposes of complying with 18 U.S.C. §1350, I, the undersigned Chief Executive Officer of Regency Centers, L.P., hereby certify, based on my knowledge, that the Annual Report on Form 10-K of Regency Centers, L.P. for the year ended December 31, 2011 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Regency Centers, L.P.
Date: February 29, 2012
/s/ Martin E. Stein, Jr. |
Martin E. Stein, Jr. |
Chief Executive Officer of Regency Centers Corporation, general partner of registrant |
Exhibit 32.4
Written Statement of the Chief Financial Officer
Pursuant to 18 U.S.C. §1350
Solely for the purposes of complying with 18 U.S.C. §1350, I, the undersigned Chief Financial Officer of Regency Centers, L.P., hereby certify, based on my knowledge, that the Annual Report on Form 10-K of Regency Centers, L.P. for the year ended December 31, 2011 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Regency Centers, L.P.
Date: February 29, 2012
/s/ Bruce M. Johnson |
Bruce M. Johnson |
Chief Financial Officer of Regency Centers Corporation, general partner of registrant |
Exhibit 99.1
GRI - Regency, LLC
Index to Financial Statements
GRI - Regency, LLC
All other schedules are omitted because of the absence of conditions under which they are required, materiality or because information required therein is shown in the consolidated financial statements or notes thereto.
Report of Independent Auditors
To the Members of
GRI-Regency, LLC:
In our opinion, the accompanying consolidated statements of operations, of changes in members' capital and comprehensive income (loss) and of cash flows for the year ended December 31, 2009 present fairly, in all material respects, the results of operations, of changes in members' capital and of cash flows of GRI-Regency, LLC (formerly Macquarie Countrywide-Regency II, LLC) and its subsidiaries (collectively the “Company”) for the year ended December 31, 2009, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers
McLean, Virginia
March 31, 2010, except for note 4,
as to which the date is February 29, 2012
1
GRI - Regency, LLC | |||||||
Consolidated Balance Sheets | |||||||
December 31, 2011 and 2010 (both unaudited) | |||||||
(in thousands) | |||||||
2011 | 2010 | ||||||
(unaudited) | (unaudited) | ||||||
Assets | |||||||
Real estate investments, at cost (note 3): | |||||||
Land | $ | 677,753 | 679,602 | ||||
Buildings and improvements | 1,609,936 | 1,598,208 | |||||
Construction in progress | 20,372 | 766 | |||||
2,308,061 | 2,278,576 | ||||||
Less: accumulated depreciation | 416,136 | 349,133 | |||||
Net real estate investments | 1,891,925 | 1,929,443 | |||||
Cash and cash equivalents | 9,167 | 34,636 | |||||
Restricted cash | 4,706 | 4,727 | |||||
Tenant receivables, less allowance for doubtful accounts of | |||||||
$2,177 and $2,647, respectively | 16,472 | 18,582 | |||||
Straight line rent receivables, net of reserve of $897 | |||||||
and $634, respectively | 18,703 | 16,115 | |||||
Deferred costs, less accumulated amortization of $17,045 and | |||||||
$14,142, respectively | 25,510 | 17,266 | |||||
Acquired lease intangible assets, less accumulated amortization | |||||||
of $175,005 and $168,720, respectively (note 5) | 23,403 | 30,916 | |||||
Other assets | 10,704 | 12,564 | |||||
Assets held for sale | — | 12,023 | |||||
Total assets | $ | 2,000,590 | 2,076,272 | ||||
Liabilities and Members' Capital | |||||||
Liabilities: | |||||||
Mortgages payable (notes 6 and 8) | $ | 1,079,954 | 1,108,005 | ||||
Accounts payable and other liabilities (note 11) | 44,389 | 38,451 | |||||
Acquired lease intangible liabilities, less accumulated accretion | |||||||
of $63,805 and $59,633, respectively (note 5) | 15,312 | 19,512 | |||||
Tenants’ security deposits and prepaid rent | 4,697 | 4,607 | |||||
Liabilities associated with assets held for sale | — | 10,428 | |||||
Total liabilities | 1,144,352 | 1,181,003 | |||||
Members' capital (note 9): | |||||||
Regency Centers, L.P. | 342,495 | 358,107 | |||||
Global Retail Investors, LLC | 513,743 | 537,162 | |||||
Total members' capital | 856,238 | 895,269 | |||||
Total liabilities and members' capital | $ | 2,000,590 | 2,076,272 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
2
GRI - Regency, LLC | ||||||||||
Consolidated Statements of Operations | ||||||||||
For the years ended December 31, 2011 (unaudited), 2010 (unaudited), and 2009 | ||||||||||
(in thousands) | ||||||||||
2011 | 2010 | 2009 | ||||||||
(unaudited) | (unaudited) | |||||||||
Revenues: | ||||||||||
Minimum rent (note 10) | $ | 164,122 | 163,836 | 165,136 | ||||||
Recoveries from tenants and other income | 51,189 | 53,217 | 49,954 | |||||||
Gain on sale of properties and outparcels | — | 2,374 | — | |||||||
Total revenues | 215,311 | 219,427 | 215,090 | |||||||
Operating expenses: | ||||||||||
Depreciation and amortization | 76,184 | 77,240 | 80,048 | |||||||
Operating and maintenance | 24,939 | 23,761 | 20,876 | |||||||
General and administrative (note 1) | 2,522 | 2,820 | 3,765 | |||||||
Real estate taxes | 26,752 | 26,989 | 28,478 | |||||||
Property management fees (note 11) | 8,356 | 8,166 | 7,570 | |||||||
Provision for doubtful accounts | 1,959 | 1,706 | 4,936 | |||||||
Loss on sale of properties and outparcels | — | — | 329 | |||||||
Provision for impairment | — | 19,145 | 73,387 | |||||||
Total operating expenses | 140,712 | 159,827 | 219,389 | |||||||
Other expense: | ||||||||||
Interest expense, net of interest income of $12, $9, | ||||||||||
and $98, respectively | 57,951 | 65,001 | 75,307 | |||||||
Early extinguishment of debt | 51 | — | 78 | |||||||
Total other expense | 58,002 | 65,001 | 75,385 | |||||||
Net income (loss) from continuing operations | 16,597 | (5,401 | ) | (79,684 | ) | |||||
Discontinued operations, net (note 4): | ||||||||||
Operating income (loss) from discontinued operations | 172 | (15,090 | ) | (31,335 | ) | |||||
Gain on sale of operating properties | 1,475 | 5,377 | — | |||||||
Net income (loss) from discontinued operations | 1,647 | (9,713 | ) | (31,335 | ) | |||||
Net income (loss) | $ | 18,244 | (15,114 | ) | (111,019 | ) | ||||
The accompanying notes are an integral part of these consolidated financial statements.
3
GRI - Regency, LLC | |||||||||||||||
Consolidated Statements of Changes in Members' Capital and Comprehensive Income (Loss) | |||||||||||||||
For the years ended December 31, 2011 (unaudited), 2010 (unaudited), and 2009 | |||||||||||||||
(in thousands) | |||||||||||||||
Macquarie CountryWide (US) No. 2, LLC | Regency Centers, L.P. | Macquarie - Regency Management, LLC | Global Retail Investors, LLC | Total Members' Capital | |||||||||||
Balance at December 31, 2008 (audited) | $ | 605,410 | 200,996 | 807 | — | 807,213 | |||||||||
Members' ownership change | (294,357 | ) | 654 | (654 | ) | 294,357 | — | ||||||||
Comprehensive income (loss): | |||||||||||||||
Net (loss) income | (85,571 | ) | (26,932 | ) | 4,814 | (3,330 | ) | (111,019 | ) | ||||||
Change in fair value of derivative instruments | 797 | 320 | 1 | 163 | 1,281 | ||||||||||
Total comprehensive loss | (109,738 | ) | |||||||||||||
Contribution of real estate, net of liabilities | |||||||||||||||
assumed, at fair value | (2,775 | ) | (922 | ) | (4 | ) | — | (3,701 | ) | ||||||
Cash distribution from debt re-financing | (3,212 | ) | (1,066 | ) | (4 | ) | — | (4,282 | ) | ||||||
Cash distributions from operations | (37,354 | ) | (15,349 | ) | (42 | ) | (8,818 | ) | (61,563 | ) | |||||
Preferred return cash distribution | 5,441 | (719 | ) | (4,918 | ) | 196 | — | ||||||||
Balance at December 31, 2009 | 188,379 | 156,982 | — | 282,568 | 627,929 | ||||||||||
Members' ownership change | (183,986 | ) | 94,204 | — | 89,782 | — | |||||||||
December 2009 income adjustment | 15 | (15 | ) | — | — | — | |||||||||
Net loss | (1,561 | ) | (5,100 | ) | — | (8,453 | ) | (15,114 | ) | ||||||
Cash contributions | — | 228,450 | — | 342,675 | 571,125 | ||||||||||
Cash distributions from operations | (2,847 | ) | (27,730 | ) | — | (38,748 | ) | (69,325 | ) | ||||||
Cash distribution from debt financing | — | (79,600 | ) | — | (119,401 | ) | (199,001 | ) | |||||||
Cash distributions from sale of real estate | — | (8,138 | ) | — | (12,207 | ) | (20,345 | ) | |||||||
Preferred return cash distribution | — | (946 | ) | — | 946 | — | |||||||||
Balance at December 31, 2010 (unaudited) | — | 358,107 | — | 537,162 | 895,269 | ||||||||||
Net income | — | 8,524 | — | 9,720 | 18,244 | ||||||||||
Cash contributions | — | 182,660 | — | 273,991 | 456,651 | ||||||||||
Cash distributions from operations | — | (29,680 | ) | — | (44,520 | ) | (74,200 | ) | |||||||
Cash distribution from debt financing | — | (163,032 | ) | — | (244,549 | ) | (407,581 | ) | |||||||
Cash distributions from sale of real estate | — | (12,858 | ) | — | (19,287 | ) | (32,145 | ) | |||||||
Preferred return cash distribution | — | (1,226 | ) | — | 1,226 | — | |||||||||
Balance at December 31, 2011 (unaudited) | $ | — | 342,495 | — | 513,743 | 856,238 | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
GRI - Regency, LLC | ||||||||||||
Consolidated Statements of Cash Flows | ||||||||||||
For the years ended December 31, 2011 (unaudited), 2010 (unaudited), and 2009 | ||||||||||||
(in thousands) | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
(unaudited) | (unaudited) | |||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | 18,244 | (15,114 | ) | (111,019 | ) | ||||||
Adjustments to reconcile net income (loss) to net | ||||||||||||
cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 76,320 | 80,003 | 84,126 | |||||||||
Net amortization and accretion of above and below market lease intangibles | (2,330 | ) | (2,958 | ) | (4,458 | ) | ||||||
Amortization of rent inducements | 16 | 8 | — | |||||||||
Amortization of deferred loan costs and debt premium | 834 | 881 | 1,097 | |||||||||
Net gain on sale of real estate investments | (1,475 | ) | (5,377 | ) | — | |||||||
Net (gain) loss on sale of outparcels | — | (2,374 | ) | 329 | ||||||||
Provision for doubtful accounts | 1,911 | 1,914 | 5,599 | |||||||||
Provision for impairment | — | 36,250 | 104,416 | |||||||||
Dead deal costs | — | — | 1,333 | |||||||||
Early extinguishment of debt | 28 | — | (35 | ) | ||||||||
Changes in assets and liabilities: | ||||||||||||
Tenant receivables, net | (2,016 | ) | (758 | ) | (5,337 | ) | ||||||
Accounts payable and other liabilities | 5,979 | (6,384 | ) | (719 | ) | |||||||
Other assets | 1,856 | (9,241 | ) | (848 | ) | |||||||
Net cash provided by operating activities | 99,367 | 76,850 | 74,484 | |||||||||
Cash flows from investing activities: | ||||||||||||
Restricted cash | (3 | ) | (2,897 | ) | 6 | |||||||
Deferred leasing costs | (9,102 | ) | (3,354 | ) | (5,256 | ) | ||||||
Proceeds from sale of real estate investments | 7,175 | 60,071 | 982 | |||||||||
Capital improvements | (33,564 | ) | (12,696 | ) | (9,022 | ) | ||||||
Net cash (used in) provided by investing activities | (35,494 | ) | 41,124 | (13,290 | ) | |||||||
Cash flows from financing activities: | ||||||||||||
Cash contributions from members | 456,651 | 571,125 | — | |||||||||
Cash distributions to members | (513,926 | ) | (288,671 | ) | (65,845 | ) | ||||||
Proceeds from mortgage payables | 404,750 | 202,000 | 7,500 | |||||||||
Repayments on mortgage payables | (430,382 | ) | (576,310 | ) | (3,500 | ) | ||||||
Scheduled principal payments on mortgage payables | (2,363 | ) | (701 | ) | (97 | ) | ||||||
Deferred loan costs | (4,199 | ) | (3,576 | ) | (217 | ) | ||||||
Security deposits and prepaid rent | 127 | 65 | (111 | ) | ||||||||
Net cash used in financing activities | (89,342 | ) | (96,068 | ) | (62,270 | ) | ||||||
Net (decrease) increase in cash and cash equivalents | (25,469 | ) | 21,906 | (1,076 | ) | |||||||
Cash and cash equivalents at beginning of the year | 34,636 | 12,730 | 13,806 | |||||||||
Cash and cash equivalents at end of the year | $ | 9,167 | 34,636 | 12,730 | ||||||||
5
GRI - Regency, LLC | ||||||||||||
Consolidated Statements of Cash Flows | ||||||||||||
For the years ended December 31, 2011 (unaudited), 2010 (unaudited), and 2009 | ||||||||||||
(in thousands) | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
(unaudited) | (unaudited) | |||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid for interest | $ | 56,427 | 66,119 | 76,999 | ||||||||
Supplemental disclosure of non-cash transactions: | ||||||||||||
Liabilities contributed, net of real estate (note 3) | $ | — | — | (3,701 | ) | |||||||
Mortgage loan transferred in sale of real estate | $ | 8,445 | — | — | ||||||||
Change in fair value of derivative instrument | $ | — | — | 1,281 | ||||||||
Accrued PP & E | $ | 12 | 475 | 678 | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
GRI - Regency, LLC
Notes to Consolidated Financial Statements
December 31, 2011 and 2010 (both unaudited)
1. | Summary of Significant Accounting Policies |
(a) | Organization and Principles of Consolidation |
General
GRI - Regency, LLC ("the Company"), formerly Macquarie CountryWide - Regency II, LLC, was formed on June 1, 2005 for the purpose of owning, acquiring, managing, leasing, financing and ultimately disposing of commercial real estate properties, primarily grocery-anchored neighborhood shopping centers. The operations of the Company are governed by the Second Amended and Restated Limited Liability Company Agreement of GRI - Regency II, LLC (the "Agreement"). At December 31, 2011, the Company owned 80 shopping centers.
Ownership of the Company
At formation, the Company was 64.95% owned by Macquarie CountryWide (US) No. 2, LLC ("MCW"), 34.95% owned by Regency Centers, L.P. ("RCLP" or “Regency”), and 0.1% owned by Macquarie-Regency Management ("MRM"). MCW was a wholly owned subsidiary of Macquarie CountryWide Trust of Australia. RCLP is a consolidated subsidiary of Regency Centers Corporation. MRM was owned by Macquarie Real Estate Inc. (50%) and RCLP (50%).
On January 1, 2006, RCLP sold 10.05% of its interest in the Company to MCW. After the sale, the Company was 75% owned by MCW, 24.9% owned by RCLP, and 0.1% owned by MRM.
On July 17, 2009, MCW agreed to sell 60% of the partnership's interest to Global Retail Investors, LLC (“GRI”), a joint venture between the California Public Employees' Retirement System (“CalPERS”) and an affiliate of First Washington Realty, Inc., in two closings. The first closing was completed on July 31, 2009, with GRI purchasing a 45% ownership interest in the real estate partnership. As part of the closing, Regency acquired MRM's 0.1% ownership of the Company. The transaction increased Regency's ownership in the Company to 25% from 24.95%.
As part of the original agreement with MCW, Regency negotiated two separate options to acquire an additional 15% interest in the partnership. In November 2009, Regency exercised its two options with the closing contingent upon obtaining lender consents. On March 30, 2010, Regency closed on its options increasing its ownership interest in the real estate partnership to 40% with an effective date of December 1, 2009.
Effective January 1, 2010, the Agreement was amended to include a unilateral right to elect to dissolve the partnership and receive a distribution-in-kind upon liquidation.
On March 11, 2010, an amendment was filed with the state of Delaware to change the name of the Company from Macquarie CountryWide - Regency II, LLC to GRI - Regency, LLC.
On April 30, 2010, GRI closed on the purchase of its remaining 15% interest from Charter Hall Retail REIT, formerly MCW, increasing its total ownership in the real estate partnership to 60%. As of December 31, 2011 and 2010, the Company was 60% owned by GRI and 40% owned by RCLP. RCLP and GRI are hereafter referred to collectively as the Members.
Method of Accounting
The accompanying consolidated financial statements are prepared on the accrual basis of accounting.
7
GRI - Regency, LLC
Notes to Consolidated Financial Statements
December 31, 2011 and 2010 (both unaudited)
Estimates, Risks, and Uncertainties
The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates in the Company's financial statements relate to the carrying values of its investments in real estate and accounts receivable, net. Although the U.S. economy is recovering, economic conditions remain challenging, and therefore, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change significantly, if economic conditions were to weaken.
Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated in the consolidated financial statements.
(b) | Revenues |
The Company leases space to tenants under agreements with varying terms. Leases are accounted for as operating leases with minimum rent recognized on a straight-line basis over the term of the lease regardless of when payments are due. The Company estimates the collectibility of the accounts receivable related to base rents, straight-line rents, expense reimbursements, and other revenue taking into consideration the Company's experience in the retail sector, available internal and external tenant credit information, payment history, industry trends, tenant credit-worthiness, and remaining lease terms. In some cases, primarily related to straight-line rents, the ultimate collection of these amounts are associated with increased rents to be collected in future years which extend beyond one year. During the years ended December 31, 2011, 2010, and 2009, the Company recorded provisions for doubtful accounts of $1.9 million, $1.9 million, and $5.6 million, respectively, of which approximately income of $48,000 and expense of $208,000, and $663,000, respectively, is included in discontinued operations.
The following table represents the components of accounts receivable, net of allowance for doubtful accounts, as of December 31, 2011 and 2010 in the accompanying Consolidated Balance Sheets (in thousands):
2011 | 2010 | |||||
Tenant receivables | $ | 3,085 | $ | 12,370 | ||
CAM and tax reimbursements | 14,620 | 7,693 | ||||
Other receivables | 944 | 1,166 | ||||
Less: Allowance for doubtful accounts | 2,177 | 2,647 | ||||
Total | $ | 16,472 | $ | 18,582 | ||
Substantially all of the lease agreements with anchor tenants contain provisions that provide for additional rents based on tenants' sales volume (percentage rent). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. Substantially all lease agreements contain provisions for reimbursement of the tenants' share of real estate taxes, insurance and common area maintenance (“CAM”) costs. Recovery of real estate taxes, insurance, and CAM costs are recognized as the respective costs are incurred in accordance with the lease agreements.
As part of the leasing process, the Company may provide the lessee with an allowance for the construction of leasehold improvements. These leasehold improvements are capitalized and recorded as tenant improvements, and depreciated over the shorter of the useful life of the improvements or the remaining lease term. If the allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements, the allowance is considered to be a lease incentive and is recognized over the lease term as a reduction of minimum rent. Factors considered during this evaluation include, among other things, who holds legal title to the improvements as well as other controlling rights provided by the lease agreement and provisions for substantiation of
8
GRI - Regency, LLC
Notes to Consolidated Financial Statements
December 31, 2011 and 2010 (both unaudited)
such costs (e.g. unilateral control of the tenant space during the build-out process). Determination of the appropriate accounting for the payment of a tenant allowance is made on a lease-by-lease basis, considering the facts and circumstances of the individual tenant lease. When the Company is the owner of the leasehold improvements, recognition of lease revenue commences when the lessee is given possession of the leased space upon completion of tenant improvements. However, when the leasehold improvements are owned by the tenant, the lease inception date is the date the tenant obtains possession of the leased space for purposes of constructing their leasehold improvements.
Profits from sales of real estate are recognized under the full accrual method by the Company when a sale is consummated; the buyer's initial and continuing investment is adequate to demonstrate a commitment to pay for the property; the Company's receivable, if applicable, is not subject to future subordination; the Company has transferred to the buyer the usual risks and rewards of ownership; and the Company does not have substantial continuing involvement with the property.
(c) | Real Estate Investments |
Land, buildings, and improvements are recorded at cost. Major additions and improvements to real estate investments are capitalized to the property accounts, while replacements, maintenance, and repairs that do not improve or extend the useful lives of the respective assets are recorded in operating and maintenance expense.
The Company incurs costs including contract deposits, as well as legal, engineering, and other external professional fees related to evaluating the feasibility of developing or re-developing a shopping center. These pre-development costs are included in construction in progress in the accompanying Consolidated Balance Sheets. If the Company determines that the development or re-development of a particular shopping center is no longer probable, any related pre-development costs previously capitalized are immediately expensed in general and administrative expenses in the accompany Consolidated Statements of Operations. There were no pre-development costs expensed during the year ended December 31, 2011. During the years ended December 31, 2010 and 2009, the Company expensed pre-development costs of approximately $16,000 and $1.3 million, respectively.
Depreciation is computed using the straight-line method over estimated useful lives of approximately 40 years for buildings and improvements and the shorter of the useful life or the remaining lease term subject to a maximum of 10 years for tenant improvements.
The Company accounts for business combinations using the acquisition method by recognizing and measuring the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at their acquisition date fair values. The Company expenses transaction costs associated with business combinations in the period incurred.
The Company's methodology includes estimating an “as-if vacant” fair value of the physical property, which includes land, building, and improvements. In addition, the Company determines the estimated fair value of identifiable intangible assets, considering the following three categories: (i) value of in-place leases, (ii) above and below-market value of in-place leases, and (iii) customer relationship value.
The value of in-place leases is estimated based on the value associated with the costs avoided in originating leases compared to the acquired in-place leases as well as the value associated with lost rental and recovery revenue during the assumed lease-up period. The value of in-place leases is recorded to amortization expense over the remaining initial term of the respective leases.
Above-market and below-market in-place lease values for acquired properties are recorded based on the present value of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management's estimate of fair market lease rates for comparable in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The value of above-market leases is amortized as a reduction of minimum rent over the remaining terms of the respective leases and the value of below-market leases is accreted to minimum rent over the remaining terms of the respective leases, including below-market renewal options, if applicable. The Company does not assign value to customer relationship intangibles if it or Regency has pre-existing business relationships with the major retailers at the acquired property since they do not provide incremental value over the Company's existing relationships.
9
GRI - Regency, LLC
Notes to Consolidated Financial Statements
December 31, 2011 and 2010 (both unaudited)
The Company classifies an operating property as held-for-sale when it determines that the property is available for immediate sale in its present condition, the property is being actively marketed for sale, and management believes it is probable that a sale will be consummated within one year. Given the nature of all real estate sales contracts, it is not unusual for such contracts to allow prospective buyers a period of time to evaluate the property prior to formal acceptance of the contract. In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance. As a result, properties under contract may not close within the expected time period, or may not close at all. Therefore, any properties categorized as held-for-sale represent only those properties that management has determined are probable to close within the requirements set forth above. Operating properties held-for-sale are carried at the lower of cost or fair value less costs to sell. The recording of depreciation and amortization expense is suspended during the held-for-sale period. If circumstances arise that previously were considered unlikely and, as a result, the Company decides not to sell a property previously classified as held-for-sale, the property is reclassified as held and used and is measured individually at the lower of its (i) carrying amount before the property was classified as held-for-sale, adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used or (ii) the fair value at the date of the subsequent decision not to sell. Any required adjustment to the carrying amount of the property reclassified as held and used is included in income from continuing operations in the period of the subsequent decision not to sell and the results of operations previously reported in discontinued operations are reclassified and included in income from continuing operations for all periods presented.
When the Company sells a property or classifies a property as held-for-sale and will not have significant continuing involvement in the operation of the property, the operations of the property are eliminated from ongoing operations and classified in discontinued operations. Its operations, including any mortgage interest and gain on sale, are reported in discontinued operations so that the operations are clearly distinguished. Prior periods are also reclassified to reflect the operations of the property as discontinued operations. One property was classified as held-for-sale at December 31, 2010; however, there were no properties held-for-sale as of December 31, 2011.
The Company reviews its real estate portfolio for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In addition, the Company performs an annual review to re-evaluate market-based capitalization rates, estimated holding periods, expected future operating income, trends and prospects, the effects of demand, competition and other factors. For properties to be “held and used” for long term investment, to determine recoverability, the Company estimates undiscounted future cash flows over the expected investment term including the estimated future value of the asset upon sale at the end of the investment period. Future value is generally determined by applying a market-based capitalization rate to the estimated future net operating income in the final year of the expected investment term. If the estimated undiscounted cash flows used in the recoverability test are less than the long-lived asset's carrying amount, management then determines the fair value of the long-lived asset and if the carrying amount of the long-lived asset exceeds its fair value, an impairment loss is recognized equal to the excess of carrying value over fair value. Fair value 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. For properties “held-for-sale”, the Company estimates current resale values through appraisal information and other market data, less expected costs to sell. These methods of determining fair value can fluctuate significantly as a result of a number of factors, including changes in the general economy for those markets in which the Company operates, the Company's estimated holding period of the property, tenant credit quality, ongoing leasing activity, and demand for new retail stores. If as a result of a change in the Company's strategy for a specific property which the Company owns a property previously classified as held and used is changed to held-for-sale, or if its estimated holding period changes, such change could cause the Company to determine that the property is impaired and a provision for impairment would be recorded. No impairment was recorded for the year ended December 31, 2011. During 2010 and 2009, the Company established a provision for impairment of $36.3 million and $104.4 million, respectively, of which $17.2 million and $31.0 million, respectively, is included in discontinued operations. See Note 8 for further discussion.
10
GRI - Regency, LLC
Notes to Consolidated Financial Statements
December 31, 2011 and 2010 (both unaudited)
(d) | Cash and Cash Equivalents |
Any instruments that have an original maturity of 90 days or less when purchased are considered cash equivalents. At times, cash and cash equivalent balances may exceed the insurance limit of the Federal Deposit Insurance Corporation. Management believes it mitigates its risk of loss by investing in or through major financial institutions.
(e) | Restricted Cash |
Restricted cash includes amounts restricted and held in escrow for tenant improvements, taxes and insurance as required by the terms of related mortgages payables.
(f) | Deferred Costs |
Deferred costs include leasing costs and loan costs, net of accumulated amortization. Such costs are amortized over the periods through lease expiration or loan maturity, respectively. If the lease is terminated early, or if the loan is repaid prior to maturity, the remaining leasing costs or loan costs are written off. Deferred leasing costs consist of external commissions associated with leasing the Company's shopping centers. Net deferred leasing costs were $17.8 million and $12.8 million at December 31, 2011 and 2010, respectively. Deferred loan costs consist of initial direct and incremental costs associated with financing activities and are amortized as a component of interest expense over the life of the debt using the straight-line method, which approximates the effective interest method. Net deferred loan costs were $7.7 million and $4.5 million at December 31, 2011 and 2010, respectively.
(g) | Derivative Financial Instruments |
All derivative instruments, whether designated in hedging relationships or not, are recorded on the accompanying Consolidated Balance Sheets at their fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.
The Company's use of derivative financial instruments is intended to mitigate its interest rate risk on a related financial instrument or forecasted transaction through the use of interest rate swaps (the “Swaps”) and the Company designates these interest rate swaps as cash flow hedges. The gains or losses resulting from changes in fair value of derivatives that qualify as cash flow hedges are recognized in other comprehensive income (“OCI”) while the ineffective portion of the derivative's change in fair value is recognized in the Statements of Operations as a gain or loss on derivative instruments. Upon the settlement of a hedge, gains and losses remaining in OCI are amortized over the underlying term of the hedged transaction. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking various hedge transactions. The Company assesses, both at inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the cash flows and/or forecasted cash flows of the hedged items.
In assessing the valuation of the hedges, the Company uses standard market conventions and techniques such as discounted cash flow analysis, option pricing models, and termination costs at each balance sheet date. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized.
The Company held interest rate swaps that expired on September 1, 2009 which were designated as cash flow hedges
11
GRI - Regency, LLC
Notes to Consolidated Financial Statements
December 31, 2011 and 2010 (both unaudited)
of the variability in interest payments on certain notes payable. The Company formally assessed whether the derivative instruments were highly effective in offsetting changes in the related interest payments at hedge inception and an ongoing basis. The changes in fair value of derivative instruments that were highly effective and were designated as cash flow hedges were recorded in other comprehensive income. Over time, the unrealized gains and losses held in accumulated other comprehensive income were reclassified to earnings. This reclassification occurs when the related interest payments are also recognized in earnings. See Note 7 for further discussion.
(h) | Asset Retirement Obligations |
The Company recognizes a liability for the fair value of conditional asset retirement obligations if the fair value of the liability can be reasonably estimated. Recorded conditional asset retirement obligations at December 31, 2011 and 2010 were $6.0 million and $6.2 million, respectively. Related accretion was approximately $131,000, $200,000, and $191,000 of expense for the years ended December 31, 2011, 2010, and 2009, respectively.
(i) | Income Taxes |
The Company, with the consent of its members, has elected under the Internal Revenue Code to be taxed as a partnership. Accordingly, income is allocated to the members for inclusion in their tax returns and no provision or liability for Federal and state income taxes has been included in the consolidated financial statements.
Tax positions are initially recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open tax years based on an assessment of many factors including past experience and interpretations of tax laws applied to the facts of each matter.
The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state, and local jurisdictions, where applicable. As of December 31, 2011, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2008 forward (with limited exceptions).
(j) | Assets and Liabilities Measured at Fair Value |
Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement is determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the Company uses a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from independent sources (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the Company's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The three levels of inputs used to measure fair value are as follows:
• | Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. |
• | Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. |
• | Level 3 - Unobservable inputs for the asset or liability, which are typically based on the Company's own assumptions, as there is little, if any, related market activity. |
The Company also remeasures nonfinancial assets and nonfinancial liabilities, initially measured at fair value in a business combination or other new basis event, at fair value in subsequent periods.
12
GRI - Regency, LLC
Notes to Consolidated Financial Statements
December 31, 2011 and 2010 (both unaudited)
(a) | Recent Accounting Pronouncements |
Recently Adopted
In 2010, the Company adopted FASB Accounting Standards Update (“ASU”) No. 2010-06, “Fair Value Measurements and Disclosures (820) - Improving Disclosures about Fair Value Measurements” (“ASU 2010-06”), which requires new disclosures for transfers in and out of Levels 1 and 2 and activity in Level 3 fair value measurements. ASU 2010-06 also clarifies existing disclosure requirements for the level of disaggregation for each class of assets and liabilities and for the inputs and valuation techniques used to measure fair value. In 2011, the Company adopted the deferred provision of ASU 2010-06 relating to disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. The adoption of this ASU had no impact to the Company's financial position, results of operations, or cash flows.
Recently Issued But Not Yet Adopted
In May 2011, the FASB issued ASU No. 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure requirements in U.S.GAAP and IFRSs" ("ASU 2011-04"). ASU 2011-04 provides new guidance concerning fair value measurements and disclosure. The new guidance is the result of joint efforts by the FASB and the International Accounting Standards Board ("IASB") to develop a single, converged fair value framework on how to measure fair value and the necessary disclosures concerning fair value measurements. The guidance is to be applied prospectively and is effective for interim and annual periods beginning after December 15, 2011. Early adoption is not permitted. The Company does not expect this ASU to have a material effect on the Company's financial position, results of operations, or cash flows.
In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (Topic 220): Presentation of Comprehensive Income" ("ASU 2011-05"). ASU 2011-05 revised guidance over the manner in which entities present comprehensive income in the financial statements. This guidance removes the previous presentation options and provides that entities must report comprehensive income in either a continuous statement of comprehensive income or two separate but consecutive statements. This guidance does not change the items that must be reported in other comprehensive income nor does it require incremental disclosures in addition to those previously required. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company does not expect this ASU to have a material effect on the Company's financial position, results of operations, or cash flows.
(b) | Reclassifications |
Certain reclassifications have been made to the 2010 and 2009 amounts to conform to classifications adopted in 2011 and there was no effect from these reclassifications on previously reported net loss or members' equity.
2. | Concentration of Risk |
Management of the Company performs ongoing credit evaluations of its tenants. At December 31, 2011, approximately 26%, 21%, and 14% of the Company's consolidated revenues are generated in California, Virginia and Maryland, respectively. No other state generates more than 7% of the Company's consolidated revenues. No single tenant generates more than 3% of the Company's consolidated revenues.
3. | Real Estate Investments |
No members contributed property during 2011 or 2010. During 2009, the members' contributed a property with an asset value of $6.8 million. The property was contributed subject to a mortgage payable of $10.5 million and security deposits of approximately $30,000. The operating results of the property are included in the Company's accompanying Consolidated Statements of Operations from its contribution date of June 1, 2009.
13
GRI - Regency, LLC
Notes to Consolidated Financial Statements
December 31, 2011 and 2010 (both unaudited)
The book value of the property contributed is as follows (in thousands):
Land | $ | 1,787 | |
Buildings and improvements, net | 4,931 | ||
Straight-line rent | 44 | ||
Deferred leasing costs, net | 66 | ||
Deferred loan costs, net | 1 | ||
Total assets contributed | 6,829 | ||
Liabilities contributed | 10,530 | ||
Net liabilities contributed | $ | 3,701 | |
4. Discontinued Operations
During the years ended December 31, 2011 and 2010, the Company sold three properties in both years. There were no properties sold during the year ended December 31, 2009. The combined operating income and gain on the sale of these properties and the property classified as held for sale were reclassified to discontinued operations. The components of the net income (loss) from discontinued operations for the years ended December 31, 2011, 2010, and 2009 are as follows (in thousands):
2011 | 2010 | 2009 | |||||||
(unaudited) | (unaudited) | ||||||||
Revenues | $ | 1,049 | $ | 10,488 | $ | 12,637 | |||
Expenses | (877 | ) | (25,578 | ) | (43,972 | ) | |||
Operating income (loss) from discontinued operations | 172 | (15,090 | ) | (31,335 | ) | ||||
Gain on sale of properties | 1,475 | 5,377 | — | ||||||
Net income (loss) from discontinued operations | $ | 1,647 | $ | (9,713 | ) | $ | (31,335 | ) | |
5. | Acquired Lease Intangibles |
The Company has acquired lease intangible assets, net of amortization, of $23.4 million and $31.4 million at December 31, 2011 and 2010, respectively, of which approximately $460,000 was recorded in assets held for sale as of December 31, 2010. Of the acquired lease intangible assets, net of amortization, $16.2 million and $22.3 million relates to in-place leases of which approximately $460,000 was included in assets held for sale as of December 31, 2010. These in-place leases have a remaining weighted average amortization period of 6 years and the aggregate amortization expense recorded for these in-place leases was $5.6 million, $7.5 million, and $11.7 million for the years ended December 31, 2011, 2010, and 2009, respectively, of which approximately $21,000, $304,000, and $597,000 was included in discontinued operations for the years ended December 31, 2010, 2010, and 2009, respectively. The Company has above-market lease intangible assets, net of amortization, of $7.2 million and $9.1 million at December 31, 2011 and 2010. The remaining weighted average amortization period is 10 years and the aggregate amortization expense recorded as a reduction to minimum rent for these above-market leases was $1.9 million, $2.2 million, and $2.9 million for the years ended December 31, 2011, 2010, and 2009, respectively, of which approximately $19,000 was recorded in discontinued operations for the year ended December 31, 2009.
The Company has acquired lease intangible liabilities, net of accretion, of $15.3 million and $20.3 million at December 31, 2011 and 2010, of which approximately $791,000 was included in assets held for sale as of December 31, 2010. The remaining weighted average accretion period is 6 years and the aggregate amount accreted as an increase to minimum rent for these below-market rents was $4.2 million, $5.1 million, and $7.4 million for the years ended December 31, 2011, 2010, and 2009, respectively, of which approximately $122,000 and $123,000 was included in discontinued operations for the years ended December 31, 2010 and 2009, respectively.
14
GRI - Regency, LLC
Notes to Consolidated Financial Statements
December 31, 2011 and 2010 (both unaudited)
The estimated aggregate amortization and net accretion amounts from acquired lease intangibles for each of the next five years are as follows (in thousands):
Year Ending December 31, | Amortization Expense | Net Accretion | ||||
2012 | $ | 6,051 | $ | 3,417 | ||
2013 | 4,690 | 3,088 | ||||
2014 | 3,371 | 2,672 | ||||
2015 | 2,470 | 2,122 | ||||
2016 | 1,349 | 1,535 | ||||
Thereafter | 5,472 | 2,478 | ||||
Total | $ | 23,403 | $ | 15,312 | ||
6. Mortgages Payable
Mortgages payable consist of mortgage loans secured by properties. Mortgage loans may be prepaid, but could be subject to yield maintenance premiums. Mortgage loans are generally due in monthly installments of principal and interest or interest only, and mature over various terms through 2023. Fixed interest rates on mortgage loans range from 4.49% to 6.75% and average 5.27%.
The Company's outstanding debt at December 31, 2011 and 2010 consists of the following (in thousands):
2011 | 2010 | ||||||
Mortgages payable: | |||||||
Fixed rate mortgage loans | $ | 1,079,710 | 1,107,662 | ||||
Unamortized debt market premiums | 244 | 343 | |||||
Total | $ | 1,079,954 | 1,108,005 | ||||
As of December 31, 2011, scheduled principal repayments on mortgages payable were as follows (in thousands):
Schedule Principal Payments by Year: | Scheduled Principal Payments | Mortgage Loan Maturities | Total | |||||||
2012 | $ | 8,462 | 229,237 | 237,699 | ||||||
2013 | 11,997 | 20,695 | 32,692 | |||||||
2014 | 12,673 | 9,800 | 22,473 | |||||||
2015 | 13,024 | 35,598 | 48,622 | |||||||
2016 | 11,103 | 158,460 | 169,563 | |||||||
Beyond 5 Years | 59,215 | 509,446 | 568,661 | |||||||
Unamortized debt market premiums | 244 | — | 244 | |||||||
Total | $ | 116,718 | 963,236 | 1,079,954 | ||||||
The Company is required to comply, and is in compliance with, certain financial and other covenants customary with these types of mortgage financings.
15
GRI - Regency, LLC
Notes to Consolidated Financial Statements
December 31, 2011 and 2010 (both unaudited)
During 2010, the Company prepaid, without penalty, $514.8 million of mortgage loans that would have matured in June and July 2010. The Members each contributed capital for their respective share of the repayment. On June 2, 2010, the Company closed on $202.0 million of new 10-year secured mortgage loans and distributed the proceeds to the Members in proportion to their ownership interests.
On April 1 and April 11, 2011, the Company paid off $430.4 million of mortgage loans that would have matured in June and July 2011, of which $392.1 million was prepaid, without penalty. The Members each contributed capital for their respective share of the repayment. On April 14, 2011, the Company closed on $340.0 million of new 10- and 12-year secured mortgage loans secured by 19 properties with a weighted average interest rate of 4.90% and interest only payments for the first year. On November 10 and 14, 2011, the Company closed on two mortgage loans for $13.0 million and $51.8 million, respectively. The proceeds from both were distributed to the Members in proportion to their ownership interests.
On August 17, 2011, the Company locked a 4.50% interest rate on $128.0 million of 10-year mortgage loan financings secured by six properties to refinance a portion of the $229.2 million secured debt maturing in mid-2012. The Company will repay the remaining secured debt maturing in 2012 using funds contributed by the partners in proportion to their respective percentage interest.
7. Derivative Financial Instruments
On August 17, 2007, the Company entered into an interest rate swap to mitigate the interest rate risk on $47.2 million of variable rate debt held by the Company. The Company expected the cash flows related to the swaps to be highly effective in offsetting the changes in the cash flows of the variable rate debt, therefore, the Company elected to designate the swaps as cash flow hedges of the variable rate debt. The swap expired on September 1, 2009. The Company recognized a net loss of $1.5 million on the interest rate swap for the year ended December 31, 2009, which has been recognized as a component of interest expense. The decrease in fair value of approximately $1.3 million was recorded in other comprehensive income for the year ended December 31, 2009.
8. Fair Value Measurements
Impairment of Long-lived Assets
Long-lived assets held and used are comprised primarily of real estate. No impairment was recorded for the year ended December 31, 2011. The Company recorded a provision for impairment of long-lived assets of $36.3 million and $104.4 million for the years ended December 31, 2010 and 2009, respectively, of which $17.2 million and $31.0 million is included in discontinued operations for the years ended December 31, 2010 and 2009, respectively. The principal triggering event that led to the impairment charges were changes in hold periods for certain properties targeted to sell over the next three years. As a result, the Company evaluated the current fair market value of and recorded a provision for impairment. Additional impairments may be necessary in the future in the event that market conditions continue to deteriorate and impact the factors used to estimate fair value, the Company reduces the holding period on properties held and used, or it decides to classify properties as held for sale where they were previously classified as held and used. See Note 1(b) for a discussion of the inputs used in determining the fair value of long-lived assets. As of December 31, 2011, all of the Company's assets and liabilities that are measured at fair value on a non-recurring basis were derived using primarily Level 3 inputs.
The Company's assets measured at fair value on a non-recurring basis are those assets for which the Company has recorded a provision for impairment during 2010 and 2009. The assets measured at fair value on a non-recurring basis had a fair market value of $120.1 million and $161.5 million at the date of impairment during 2010 and 2009, respectively.
The following represent additional fair value disclosures for other assets and liabilities that are included in the accompanying consolidated financial statements.
Mortgages Payable
The fair value of the Company's notes payable is estimated based on the current market rates available to the Company for debt of the same terms and remaining maturities. Fixed rate loans assumed in connection with real estate acquisitions are recorded in the accompanying consolidated financial statements at fair value at the time the property is acquired. The fair
16
GRI - Regency, LLC
Notes to Consolidated Financial Statements
December 31, 2011 and 2010 (both unaudited)
value of the notes payable was determined using Level 3 inputs of the fair value hierarchy. Based on the estimates used by the Company, the fair value of notes payable was $1.1 billion at December 31, 2011 and 2010, respectively.
9. Members' Capital
Additional contributions may be made by RCLP in the form of properties and/or cash and by GRI in the form of cash. Written approval of the Members is required prior to additional contributions. If, at any time, the Members agree that additional funds are needed for any purpose, the Members shall make such additional contributions in accordance with their respective percentage interest.
Distributions of net operating cash flow are made to the Members each month in proportion to their percentage interest as of the end of the month for which the distributions are being made. Distributions are adjusted quarterly in accordance with the Agreement for preferred distributions related to the Performance Amount and/or the Base Amount as defined in the Agreement.
Distributions of proceeds from debt refinancings or property sale transactions are made in accordance with their respective percentage interest.
Net income is allocated to the Members in proportion to their respective percentage interest except for special quarterly allocations related to preferred distributions. These special allocations are intended to return the Members capital accounts to an amount equal to their respective percentage interest, which represents hypothetical liquidation at book value.
10. Leases
The Company has entered into noncancelable operating leases with nonrelated parties, as tenants of its properties. Future minimum rents under noncancelable operating leases as of December 31, 2011, excluding both tenant reimbursements of operating expenses and additional percentage rent based on tenants' sales volume, are as follows (in thousands):
Year Ending December 31, | Amount | ||
2012 | $ | 153,206 | |
2013 | 139,396 | ||
2014 | 118,639 | ||
2015 | 98,466 | ||
2016 | 77,056 | ||
Thereafter | 316,877 | ||
Total | $ | 903,640 | |
In connection with the property acquisitions on June 1, 2005, the Company assumed a capital lease for certain land parcels and a related note payable and accrued interest totaling $4.8 million. The Company recorded a debt premium of $1.1 million to reflect the assumed debt at its fair value. The note payable accrues interest at a fixed rate of 7.9%, and the principal and accrued interest balance matures August 1, 2018, at which time the Company has the option to purchase the land, or the lessor has the right to put the land to the Company for $6.5 million plus the outstanding note payable and accrued interest.
The note payable, accrued interest, and debt premium are recorded in accounts payable and other liabilities in the accompanying Consolidated Balance Sheets. Assets under the capital lease are included in real estate investments as land with the recorded value of $5.7 million at December 31, 2011 and 2010.
17
GRI - Regency, LLC
Notes to Consolidated Financial Statements
December 31, 2011 and 2010 (both unaudited)
Future minimum lease payments under the capital lease as of December 31, 2011 are as follows (in thousands):
Year Ending December 31, | Amount | ||
2012 | $ | 292 | |
2013 | 292 | ||
2014 | 292 | ||
2015 | 292 | ||
2016 | 292 | ||
Thereafter | 6,959 | ||
8,419 | |||
Less: amount representing interest | (4,713 | ) | |
Total | $ | 3,706 | |
11. Related Party Transactions
For each new property acquired by the Company from a third party that is not an affiliate of the Members, the Company shall pay RCLP an acquisition fee equal to 1% of the total purchase price of the property plus reimbursement of its third party acquisition costs. No such fees were incurred during the years ended December 31, 2011, 2010, and 2009.
For each new property acquired by the Company directly from an affiliated joint venture, the Company shall pay RCLP an acquisition fee equal to 1% of the total purchase price multiplied by the percentage of the equity ownership interest in such affiliated joint venture that is not directly or indirectly owned by a Member or its affiliate plus reimbursement of its third party acquisition costs. No such fees were incurred during the years ended December 31, 2011, 2010, and 2009.
For each new property acquired by the Company directly from RCLP or its affiliates, the Company shall pay RCLP an acquisition fee, which will be separately agreed upon by the Members. No such fees were incurred for the years ended December 31, 2011, 2010, and 2009.
Per the Agreement, the Company shall pay RCLP a fee for capital restructuring and consulting services provided in connection with any new financing, as defined by the Agreement, for the Company. The fee is equal to 50 basis points of the total amount of the original principal amount of such financing less any third party brokerage fees. During the year ended December 31, 2011 and 2010, the Company paid approximately $170,000 and $73,000 in fees to RCLP for their services related to the $340.0 million and $202.0 million debt portfolios that closed on April 14, 2011 and June 2, 2010, respectively. No such fees were incurred during the years ended December 31, 2009.
Regency Realty Group, Inc. (RRG), an affiliate of RCLP, has entered into a management agreement whereby RRG provides property management services to the Company for the properties owned by the Company as detailed in the management agreement. RRG receives, as compensation for property management services, an annual sum equal to 4% of effective gross income of the properties, as defined by the Agreement. During the years ended December 31, 2011, 2010, and 2009, the Company incurred $8.4 million, $8.5 million and $8.0 million respectively, for such services, of which approximately $704,000, $705,000 and $742,000 are included in accounts payable and other liabilities at 2011, 2010 and 2009, respectively.
Per the Agreement, the Company incurs a due diligence fee payable to RCLP for due diligence services provide in connection with the Company's acquisition or disposition of properties. The fee is equal to 25 basis points of the purchase price or sale price, as the case may be, of any property. In addition, RCLP shall be reimbursed for its third party costs. No such fees were incurred during the years ended December 31, 2011, 2010, and 2009.
The management agreement also states that RCLP is entitled to a construction supervision fee of 5% of project costs in excess of $25,000 on any future development or construction project undertaken by the Company. During the years ended December 31, 2011, 2010 and 2009, the Company incurred fees of approximately $945,000, $364,000, and $461,000, respectively, for such services, of which approximately $136,000, $10,000 and $5,000 are included in accounts payable and other liabilities at December 31, 2011, 2010, and 2009, respectively.
18
GRI - Regency, LLC
Notes to Consolidated Financial Statements
December 31, 2011 and 2010 (both unaudited)
12. Commitments and Contingencies
The Company is involved in litigation and other legal proceedings arising in the course of its normal business activities. The Company believes that any liability resulting from these matters, after taking into consideration its insurance coverages and amounts recorded in the accompanying consolidated financial statements, will not have a material adverse effect on its consolidated financial position, cash flows, or results from operations.
13. Subsequent Events (unaudited)
The Company has evaluated subsequent events and transactions that occurred after the December 31, 2011 consolidated balance sheet date for potential recognition or disclosure in our consolidated financial statements.
• | On January 17, 2012, the Company acquired one operating property in Lake Grove, NY, Lake Grove Commons, for a purchase price of $72.5 million, including the assumption of approximately $34.3 million of debt. |
19