UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
For the quarterly period ended
or
For the transition period from to
Commission File Number
Commission File Number
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) (zip code) |
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(Registrant's telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
Regency Centers Corporation
Title of each class |
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Trading Symbol |
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Name of each exchange on which registered |
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Regency Centers, L.P.
Title of each class |
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Trading Symbol |
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Name of each exchange on which registered |
None |
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N/A |
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N/A |
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
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Regency Centers Corporation
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Regency Centers Corporation:
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Accelerated filer |
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Emerging growth company |
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Non-accelerated filer |
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Smaller reporting company |
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Regency Centers, L.P.:
Large accelerated filer |
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Accelerated filer |
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Emerging growth company |
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Smaller reporting company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Regency Centers Corporation Yes ☐ No ☐ Regency Centers, L.P. Yes ☐ No ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Regency Centers Corporation Yes ☐
The number of shares outstanding of Regency Centers Corporation's common stock was
EXPLANATORY NOTE
This Quarterly Report on Form 10-Q (this "Report") combines the quarterly reports on Form 10-Q for the quarter ended September 30, 2024, 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 terms "the Company," "Regency Centers," "Regency," "we," "our," and "us" as used in this Report mean 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. 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 Operating Partnership's capital includes general and limited common partnership units ("Common Units"). As of September 30, 2024, the Parent Company owned approximately 99.4% of the Common Units in the Operating Partnership. The remaining Common Units, which are all limited Common Units, are owned by third party investors. In addition to the Common Units, the Operating Partnership has also issued two series of preferred units: the 6.250% Series A Cumulative Redeemable Preferred Units (the "Series A Preferred Units") and the 5.875% Series B Cumulative Redeemable Preferred Units (the "Series B Preferred Units"). The Parent Company currently owns all of the Series A Preferred Units and Series B Preferred Units. The Series A Preferred Units and Series B Preferred Units are sometimes referred to collectively as the "Preferred Units."
The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report provides the following benefits:
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 officers and employees of the Operating Partnership.
The Company believes it is important to understand the key 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 Common and Preferred Units 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. Except for $200 million of unsecured private placement debt, the Parent Company does not hold any indebtedness, but guarantees all of the unsecured debt of the Operating Partnership. The Operating Partnership, directly or indirectly, is also the co-issuer and guarantor of the $200 million Parent Company’s unsecured private placement debt referenced above. The Operating Partnership holds all the assets of the Company and ownership of the Company's subsidiaries and equity interests in its joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for Common Units or Preferred Units, the Operating Partnership generates all other 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 Common Units and Preferred Units.
Shareholders' 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 the Common Units and the Preferred Units. The limited partners' Common 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 shareholders' equity in noncontrolling interests in the Parent Company's financial statements. The 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 the 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 shareholders' 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
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
REGENCY CENTERS CORPORATION
Consolidated Balance Sheets
September 30, 2024 and December 31, 2023
(in thousands, except share data)
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2024 |
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2023 |
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Assets |
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(unaudited) |
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Net real estate investments: |
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Real estate assets, at cost |
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$ |
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Less: accumulated depreciation |
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Real estate assets, net |
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Investments in sales-type lease, net |
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Investments in real estate partnerships |
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Net real estate investments |
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Properties held for sale, net |
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— |
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Cash, cash equivalents, and restricted cash, including $ |
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Tenant and other receivables, net |
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Deferred leasing costs, less accumulated amortization of $ |
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Acquired lease intangible assets, less accumulated amortization of $ |
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Right of use assets, net |
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Other assets |
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Total assets |
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$ |
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Liabilities and Equity |
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Liabilities: |
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Notes payable, net |
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$ |
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Unsecured credit facility |
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Accounts payable and other liabilities |
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Acquired lease intangible liabilities, less accumulated amortization of $ |
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Lease liabilities |
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Tenants' security, escrow deposits and prepaid rent |
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Total liabilities |
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— |
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— |
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Equity: |
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Shareholders' equity: |
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Preferred stock $ |
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Common stock $ |
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Treasury stock at cost, |
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Additional paid-in-capital |
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Accumulated other comprehensive loss |
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Distributions in excess of net income |
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Total shareholders' equity |
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Noncontrolling interests: |
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Exchangeable operating partnership units, aggregate redemption value of $ |
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Limited partners' interests in consolidated partnerships |
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Total noncontrolling interests |
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Total equity |
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Total liabilities and equity |
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$ |
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The accompanying notes are an integral part of the financial statements.
1
REGENCY CENTERS CORPORATION
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
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Three months ended September 30, |
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Nine months ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Revenues: |
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Lease income |
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$ |
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$ |
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Other property income |
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Management, transaction, and other fees |
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Total revenues |
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Operating expenses: |
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Depreciation and amortization |
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Property operating expense |
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Real estate taxes |
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General and administrative |
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Other operating expenses |
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Total operating expenses |
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Other expense, net: |
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Interest expense, net |
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Gain on sale of real estate, net of tax |
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Loss on early extinguishment of debt |
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— |
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— |
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— |
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Net investment (income) loss |
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Total other expense, net |
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Income before equity in income of investments in real estate partnerships |
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Equity in income of investments in real estate partnerships |
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Net income |
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Noncontrolling interests: |
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Exchangeable operating partnership units |
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Limited partners' interests in consolidated partnerships |
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Net income attributable to noncontrolling interests |
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Net income attributable to the Company |
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Preferred stock dividends |
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Net income attributable to common shareholders |
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$ |
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$ |
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Net income attributable to common shareholders: |
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Per common share - basic |
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$ |
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$ |
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Per common share - diluted |
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$ |
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$ |
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The accompanying notes are an integral part of the financial statements.
2
REGENCY CENTERS CORPORATION
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
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Three months ended September 30, |
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Nine months ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Net income |
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$ |
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$ |
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Other comprehensive (loss) income: |
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Effective portion of change in fair value of derivative instruments: |
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Effective portion of change in fair value of derivative instruments |
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Reclassification adjustment of derivative instruments included in net income |
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Unrealized gain (loss) on available-for-sale debt securities |
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Other comprehensive (loss) income |
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Comprehensive income |
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Less: comprehensive income attributable to noncontrolling interests: |
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Net income attributable to noncontrolling interests |
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Other comprehensive (loss) income attributable to noncontrolling interests |
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Comprehensive income attributable to noncontrolling interests |
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Comprehensive income attributable to the Company |
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$ |
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$ |
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The accompanying notes are an integral part of the financial statements.
3
REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the three months ended September 30, 2024 and 2023
(in thousands, except per share data)
(unaudited)
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Noncontrolling Interests |
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Preferred |
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Common |
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Treasury |
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Additional |
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Accumulated |
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Distributions |
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Total |
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Exchangeable |
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Limited |
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Total |
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Total |
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Balance at June 30, 2023 |
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$ |
— |
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Net income |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive income |
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Other comprehensive income before reclassification |
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— |
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— |
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— |
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— |
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— |
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Amounts reclassified from accumulated other comprehensive income |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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( |
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( |
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( |
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( |
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Deferred compensation plan, net |
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— |
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— |
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( |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Restricted stock issued, net of amortization |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Common stock repurchased for taxes withheld for stock based compensation, net |
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— |
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— |
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— |
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— |
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Common stock issued under dividend reinvestment plan |
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— |
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— |
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Common stock issued for partnership units exchanged |
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Common stock issued, net of issuance costs |
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Issuance of preferred stock |
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— |
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Contributions from partners |
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— |
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Distributions to partners |
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— |
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( |
) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Preferred stock (Series A: $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Common stock ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at September 30, 2023 |
|
$ |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at June 30, 2024 |
|
$ |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other comprehensive income before reclassification |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Amounts reclassified from accumulated other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Adjustment for noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Deferred compensation plan, net |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Restricted stock issued, net of amortization |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock repurchased for taxes withheld for stock based compensation, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued under dividend reinvestment plan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued for partnership units exchanged |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
||
Contributions from partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Distributions to partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Preferred stock (Series A: $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Common stock ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at September 30, 2024 |
|
$ |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
The accompanying notes are an integral part of the financial statements.
4
REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the nine months ended September 30, 2024 and 2023
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling Interests |
|
|
|
|
|||||||||||||||||
|
|
Preferred |
|
|
Common |
|
|
Treasury |
|
|
Additional |
|
|
Accumulated |
|
|
Distributions |
|
|
Total |
|
|
Exchangeable |
|
|
Limited |
|
|
Total |
|
|
Total |
|
|||||||||||
Balance at December 31, 2022 |
|
$ |
— |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other comprehensive income before reclassification |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Amounts reclassified from accumulated other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Deferred compensation plan, net |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Restricted stock issued, net of amortization |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Common stock repurchased for taxes withheld for stock based compensation, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Common stock repurchased and retired |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Common stock issued under dividend reinvestment plan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued for partnership units exchanged |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
||
Common stock issued, net of issuance costs |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Issuance of exchangeable operating partnership units |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Issuance of preferred stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||||||
Contributions from partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Distributions to partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Preferred stock (Series A: $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Common stock ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at September 30, 2023 |
|
$ |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2023 |
|
$ |
|
|
$ |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other comprehensive income before reclassification |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Amounts reclassified from accumulated other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Adjustment for noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Deferred compensation plan, net |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Restricted stock issued, net of amortization |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Common stock repurchased for taxes withheld for stock based compensation, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Common stock repurchased and retired |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Common stock issued under dividend reinvestment plan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Common stock issued for exchangeable operating partnership units |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
||
Contributions from partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Distributions to partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Preferred stock (Series A: $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Common stock ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at September 30, 2024 |
|
$ |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
The accompanying notes are an integral part of the financial statements.
5
REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the nine months ended September 30, 2024 and 2023
(in thousands)
(unaudited)
|
|
2024 |
|
|
2023 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Amortization of deferred financing costs and debt premiums |
|
|
|
|
|
|
||
Amortization of above and below market lease intangibles, net |
|
|
( |
) |
|
|
( |
) |
Stock-based compensation, net of capitalization |
|
|
|
|
|
|
||
Equity in income of investments in real estate partnerships |
|
|
( |
) |
|
|
( |
) |
Gain on sale of real estate, net of tax |
|
|
( |
) |
|
|
( |
) |
Loss on early extinguishment of debt |
|
|
|
|
|
— |
|
|
Distribution of earnings from investments in real estate partnerships |
|
|
|
|
|
|
||
Deferred compensation expense |
|
|
|
|
|
|
||
Realized and unrealized gain on investments |
|
|
( |
) |
|
|
( |
) |
Changes in assets and liabilities: |
|
|
|
|
|
|
||
Tenant and other receivables |
|
|
( |
) |
|
|
( |
) |
Deferred leasing costs |
|
|
( |
) |
|
|
( |
) |
Other assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable and other liabilities |
|
|
|
|
|
|
||
Tenants' security, escrow deposits and prepaid rent |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Acquisition of operating real estate |
|
|
( |
) |
|
|
( |
) |
Acquisition of UBP, net of cash acquired of $ |
|
|
— |
|
|
|
( |
) |
Real estate development and capital improvements |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of real estate |
|
|
|
|
|
|
||
Proceeds from property insurance casualty claims |
|
|
|
|
|
— |
|
|
Issuance of notes receivable |
|
|
( |
) |
|
|
( |
) |
Collection of notes receivable |
|
|
|
|
|
— |
|
|
Investments in real estate partnerships |
|
|
( |
) |
|
|
( |
) |
Return of capital from investments in real estate partnerships |
|
|
|
|
|
|
||
Dividends on investment securities |
|
|
|
|
|
|
||
Acquisition of investment securities |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of investment securities |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Net proceeds from common stock issuance |
|
|
— |
|
|
|
|
|
Repurchase of common shares in conjunction with equity award plans |
|
|
( |
) |
|
|
( |
) |
Common shares repurchased through share repurchase program |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of treasury stock |
|
|
|
|
|
|
||
Contributions from non-controlling interests |
|
|
|
|
|
|
||
Distributions to and redemptions of non-controlling interests |
|
|
( |
) |
|
|
|
|
Distributions to exchangeable operating partnership unit holders |
|
|
( |
) |
|
|
( |
) |
Dividends paid to common shareholders |
|
|
( |
) |
|
|
( |
) |
Dividends paid to preferred shareholders |
|
|
( |
) |
|
|
— |
|
Repayment of fixed rate unsecured notes |
|
|
( |
) |
|
|
— |
|
Proceeds from issuance of fixed rate unsecured notes, net of debt discount |
|
|
|
|
|
— |
|
|
Proceeds from unsecured credit facilities |
|
|
|
|
|
|
||
Repayment of unsecured credit facilities |
|
|
( |
) |
|
|
( |
) |
Proceeds from notes payable |
|
|
|
|
|
|
||
Repayment of notes payable |
|
|
( |
) |
|
|
( |
) |
Scheduled principal payments |
|
|
( |
) |
|
|
( |
) |
Payment of financing costs |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Net increase in cash and cash equivalents and restricted cash |
|
|
|
|
|
|
||
Cash and cash equivalents and restricted cash at beginning of the period |
|
|
|
|
|
|
||
Cash and cash equivalents and restricted cash at end of the period |
|
$ |
|
|
|
|
||
The accompanying notes are an integral part of the financial statements.
6
REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the nine months ended September 30, 2024 and 2023
(in thousands)
(unaudited)
|
|
2024 |
|
|
2023 |
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Cash paid for interest (net of capitalized interest of $ |
|
$ |
|
|
|
|
||
Cash paid for income taxes, net of refunds |
|
$ |
|
|
|
|
||
Supplemental disclosure of non-cash transactions: |
|
|
|
|
|
|
||
Common and Preferred stock, and exchangeable operating partnership dividends declared |
|
$ |
|
|
|
|
||
Right of use assets obtained in exchange for new operating lease liabilities |
|
$ |
|
|
|
|
||
Sale of leased asset in exchange for net investment in sales-type lease |
|
$ |
|
|
|
|
||
UBP Acquisition: |
|
|
|
|
|
|
||
Notes payable assumed in acquisition, at fair value |
|
$ |
— |
|
|
|
|
|
Non-controlling interest assumed in acquisition, at fair value |
|
$ |
— |
|
|
|
|
|
Common stock exchanged for UBP shares |
|
$ |
— |
|
|
|
|
|
Preferred stock exchanged for UBP shares |
|
$ |
— |
|
|
|
|
|
Common stock issued for partnership units exchanged |
|
$ |
|
|
|
|
||
Reallocation of equity upon acquisition of non-controlling interest |
|
$ |
|
|
|
— |
|
|
Exchangeable operating partnership units issued for acquisition of real estate |
|
$ |
— |
|
|
|
|
|
Change in accrued capital expenditures |
|
$ |
|
|
|
|
||
Common stock issued under dividend reinvestment plan |
|
$ |
|
|
|
|
||
Stock-based compensation capitalized |
|
$ |
|
|
|
|
||
Contributions to investments in real estate partnerships |
|
$ |
|
|
|
— |
|
|
Contributions from limited partners in consolidated partnerships |
|
$ |
|
|
|
— |
|
|
Common stock issued for dividend reinvestment in trust |
|
$ |
|
|
|
|
||
Contribution of stock awards into trust |
|
$ |
|
|
|
|
||
Distribution of stock held in trust |
|
$ |
|
|
|
|
||
Change in fair value of securities |
|
$ |
|
|
|
|
||
The accompanying notes are an integral part of the financial statements.
7
REGENCY CENTERS, L.P.
Consolidated Balance Sheets
September 30, 2024 and December 31, 2023
(in thousands, except unit data)
|
|
2024 |
|
|
2023 |
|
||
Assets |
|
(unaudited) |
|
|
|
|
||
Net real estate investments: |
|
|
|
|
|
|
||
Real estate assets, at cost |
|
$ |
|
|
|
|
||
Less: accumulated depreciation |
|
|
|
|
|
|
||
Real estate assets, net |
|
|
|
|
|
|
||
Investments in sales-type lease, net |
|
|
|
|
|
|
||
Investments in real estate partnerships |
|
|
|
|
|
|
||
Net real estate investments |
|
|
|
|
|
|
||
Properties held for sale, net |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash, including $ |
|
|
|
|
|
|
||
Tenant and other receivables, net |
|
|
|
|
|
|
||
Deferred leasing costs, less accumulated amortization of $ |
|
|
|
|
|
|
||
Acquired lease intangible assets, less accumulated amortization of $ |
|
|
|
|
|
|
||
Right of use assets, net |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
|
|
||
Liabilities and Capital |
|
|
|
|
|
|
||
Liabilities: |
|
|
|
|
|
|
||
Notes payable, net |
|
$ |
|
|
|
|
||
Unsecured credit facility |
|
|
|
|
|
|
||
Accounts payable and other liabilities |
|
|
|
|
|
|
||
Acquired lease intangible liabilities, less accumulated amortization of $ |
|
|
|
|
|
|
||
Lease liabilities |
|
|
|
|
|
|
||
Tenants' security, escrow deposits and prepaid rent |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
|
|
— |
|
|
|
— |
|
|
Capital: |
|
|
|
|
|
|
||
Partners' capital: |
|
|
|
|
|
|
||
Preferred units $ |
|
|
|
|
|
|
||
General partner's common units, |
|
|
|
|
|
|
||
Limited partners' common units, |
|
|
|
|
|
|
||
Accumulated other comprehensive loss |
|
|
( |
) |
|
|
( |
) |
Total partners' capital |
|
|
|
|
|
|
||
Noncontrolling interest: Limited partners' interests in consolidated partnerships |
|
|
|
|
|
|
||
Total capital |
|
|
|
|
|
|
||
Total liabilities and capital |
|
$ |
|
|
|
|
||
The accompanying notes are an integral part of the financial statements.
8
REGENCY CENTERS, L.P.
Consolidated Statements of Operations
(in thousands, except per unit data)
(unaudited)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Lease income |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
Other property income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Management, transaction, and other fees |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property operating expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Real estate taxes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other expense, net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on sale of real estate, net of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
Net investment (income) loss |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Total other expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income before equity in income of investments in real estate partnerships |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity in income of investments in real estate partnerships |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Limited partners' interests in consolidated partnerships |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income attributable to the Partnership |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Preferred unit distributions |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income attributable to common unit holders |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to common unit holders: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Per common unit - basic |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
Per common unit - diluted |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
The accompanying notes are an integral part of the financial statements.
9
REGENCY CENTERS, L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net income |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
Other comprehensive (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effective portion of change in fair value of derivative instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effective portion of change in fair value of derivative instruments |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Reclassification adjustment of derivative instruments included in net income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Unrealized gain (loss) on available-for-sale debt securities |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Other comprehensive (loss) income |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: comprehensive income attributable to noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other comprehensive income (loss) attributable to noncontrolling interests |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Comprehensive income attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Comprehensive income attributable to the Partnership |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
The accompanying notes are an integral part of the financial statements.
10
REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the three months ended September 30, 2024 and 2023
(in thousands)
(unaudited)
|
|
General Partner Preferred |
|
|
Limited |
|
|
Accumulated |
|
|
Total |
|
|
Noncontrolling Interests in |
|
|
Total |
|
||||||
Balance at June 30, 2023 |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income before reclassification |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Contributions from partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Distributions to partners |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Preferred unit distributions |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Preferred units issued as a result of preferred stock issued by Parent Company, net of issuance costs |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Common units issued as a result of common stock issued by Parent Company, net of issuance costs |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Common units exchanged for common stock of Parent Company |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Balance at September 30, 2023 |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at June 30, 2024 |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income before reclassification |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Amounts reclassified from accumulated other comprehensive loss |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Adjustment for noncontrolling interests |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Contributions from partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Distributions to partners |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Preferred unit distributions |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Common units exchanged for common stock of Parent Company |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Balance at September 30, 2024 |
|
$ |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
The accompanying notes are an integral part of the financial statements.
11
REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the nine months ended September 30, 2024 and 2023
(in thousands)
(unaudited)
|
|
General Partner Preferred |
|
|
Limited |
|
|
Accumulated |
|
|
Total |
|
|
Noncontrolling Interests in |
|
|
Total |
|
||||||
Balance at December 31, 2022 |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income before reclassification |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Amounts reclassified from accumulated other comprehensive income |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Contributions from partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Issuance of exchangeable operating partnership units |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Distributions to partners |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Preferred unit distributions |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
||
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Preferred units issued as a result of preferred stock issued by Parent Company, net of issuance costs |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Common units issued as a result of common stock issued by Parent Company, net of issuance costs |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Common units exchanged for common stock of Parent Company |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Balance at September 30, 2023 |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2023 |
|
$ |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Net income |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income before reclassification |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Amounts reclassified from accumulated other comprehensive income |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Adjustment for noncontrolling interests |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
||
Contributions from partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Distributions to partners |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Preferred unit distributions |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Exchangeable operating partnership units converted to common stock of Parent Company |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Balance at September 30, 2024 |
|
$ |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
The accompanying notes are an integral part of the financial statements.
12
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the nine months ended September 30, 2024 and 2023
(in thousands)
(unaudited)
|
|
2024 |
|
|
2023 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Amortization of deferred financing costs and debt premiums |
|
|
|
|
|
|
||
Amortization of above and below market lease intangibles, net |
|
|
( |
) |
|
|
( |
) |
Stock-based compensation, net of capitalization |
|
|
|
|
|
|
||
Equity in income of investments in real estate partnerships |
|
|
( |
) |
|
|
( |
) |
Gain on sale of real estate, net of tax |
|
|
( |
) |
|
|
( |
) |
Loss on early extinguishment of debt |
|
|
|
|
|
— |
|
|
Distribution of earnings from investments in real estate partnerships |
|
|
|
|
|
|
||
Deferred compensation expense |
|
|
|
|
|
|
||
Realized and unrealized gain on investments |
|
|
( |
) |
|
|
( |
) |
Changes in assets and liabilities: |
|
|
|
|
|
|
||
Tenant and other receivables |
|
|
( |
) |
|
|
( |
) |
Deferred leasing costs |
|
|
( |
) |
|
|
( |
) |
Other assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable and other liabilities |
|
|
|
|
|
|
||
Tenants' security, escrow deposits and prepaid rent |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Acquisition of operating real estate |
|
|
( |
) |
|
|
( |
) |
Acquisition of UBP, net of cash acquired of $ |
|
|
— |
|
|
|
( |
) |
Real estate development and capital improvements |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of real estate |
|
|
|
|
|
|
||
Proceeds from property insurance casualty claims |
|
|
|
|
|
— |
|
|
Issuance of notes receivable |
|
|
( |
) |
|
|
( |
) |
Collection of notes receivable |
|
|
|
|
|
— |
|
|
Investments in real estate partnerships |
|
|
( |
) |
|
|
( |
) |
Return of capital from investments in real estate partnerships |
|
|
|
|
|
|
||
Dividends on investment securities |
|
|
|
|
|
|
||
Acquisition of investment securities |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of investment securities |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Net proceeds from common stock issuance |
|
|
— |
|
|
|
|
|
Repurchase of common shares in conjunction with equity award plans |
|
|
( |
) |
|
|
( |
) |
Common units repurchased through share repurchase program |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of treasury stock |
|
|
|
|
|
|
||
Contributions from non-controlling interests |
|
|
|
|
|
|
||
Distributions to and redemptions of non-controlling interests |
|
|
( |
) |
|
|
— |
|
Distributions to partners |
|
|
( |
) |
|
|
( |
) |
Dividends paid to preferred unit holders |
|
|
( |
) |
|
|
— |
|
Repayment of fixed rate unsecured notes |
|
|
( |
) |
|
|
— |
|
Proceeds from issuance of fixed rate unsecured notes, net of debt discount |
|
|
|
|
|
— |
|
|
Proceeds from unsecured credit facilities |
|
|
|
|
|
|
||
Repayment of unsecured credit facilities |
|
|
( |
) |
|
|
( |
) |
Proceeds from notes payable |
|
|
|
|
|
|
||
Repayment of notes payable |
|
|
( |
) |
|
|
( |
) |
Scheduled principal payments |
|
|
( |
) |
|
|
( |
) |
Payment of financing costs |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Net increase in cash and cash equivalents and restricted cash |
|
|
|
|
|
|
||
Cash and cash equivalents and restricted cash at beginning of the period |
|
|
|
|
|
|
||
Cash and cash equivalents and restricted cash at end of the period |
|
$ |
|
|
|
|
||
The accompanying notes are an integral part of the financial statements.
13
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the nine months ended September 30, 2024 and 2023
(in thousands)
(unaudited)
|
|
2024 |
|
|
2023 |
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Cash paid for interest (net of capitalized interest of $ |
|
$ |
|
|
|
|
||
Cash paid for income taxes, net of refunds |
|
$ |
|
|
|
|
||
Supplemental disclosure of non-cash transactions: |
|
|
|
|
|
|
||
Common and Preferred stock, and exchangeable operating partnership dividends declared |
|
$ |
|
|
|
|
||
Right of use assets obtained in exchange for new operating lease liabilities |
|
$ |
|
|
|
|
||
Sale of leased asset in exchange for net investment in sales-type lease |
|
$ |
|
|
|
|
||
UBP Acquisition: |
|
|
|
|
|
|
||
Notes payable assumed in acquisition, at fair value |
|
$ |
— |
|
|
|
|
|
Non-controlling interest assumed in acquisition, at fair value |
|
$ |
— |
|
|
|
|
|
Common stock exchanged for UBP shares |
|
$ |
— |
|
|
|
|
|
Preferred stock exchanged for UBP shares |
|
$ |
— |
|
|
|
|
|
Common stock issued by Parent Company for partnership units exchanged |
|
$ |
|
|
|
|
||
Reallocation of equity upon acquisition of non-controlling interest |
|
$ |
|
|
|
— |
|
|
Exchangeable operating partnership units issued for acquisition of real estate |
|
$ |
— |
|
|
|
|
|
Change in accrued capital expenditures |
|
$ |
|
|
|
|
||
Common stock issued by Parent Company for dividend reinvestment plan |
|
$ |
|
|
|
|
||
Stock-based compensation capitalized |
|
$ |
|
|
|
|
||
Contributions to investments in real estate partnerships |
|
$ |
|
|
|
— |
|
|
Contributions from limited partners in consolidated partnerships |
|
$ |
|
|
|
— |
|
|
Common stock issued for dividend reinvestment in trust |
|
$ |
|
|
|
|
||
Contribution of stock awards into trust |
|
$ |
|
|
|
|
||
Distribution of stock held in trust |
|
$ |
|
|
|
|
||
Change in fair value of securities |
|
$ |
|
|
|
|
||
The accompanying notes are an integral part of the financial statements.
14
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2024
1. |
Organization and Significant Accounting Policies |
General
Regency Centers Corporation (the "Parent Company") began its operations as a REIT in 1993 and is the general partner of Regency Centers, L.P. (the "Operating Partnership"). The Parent Company primarily engages in the ownership, management, leasing, acquisition, development, and redevelopment of shopping centers through the Operating Partnership and has no other assets other than through its investment in the Operating Partnership. Its only indebtedness consists of $
As of September 30, 2024, the Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis owned
Basis of Presentation
The information included in this Report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as certain disclosures in this Report that would duplicate those included in such Annual Report on Form 10-K are not included in these consolidated financial statements. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. These adjustments are considered to be of a normal recurring nature.
Acquisition of Urstadt Biddle Properties Inc.
As a result of the acquisition, the Company acquired
Risks and Uncertainties
The success of the Company's tenants in operating their businesses and their corresponding ability to pay rent continue to be influenced by current economic challenges, which may impact their cost of doing business, including but not limited to the impact of inflation, the cost and availability of labor, increasing energy prices and interest rates, and access to credit. Additionally, geopolitical and macroeconomic challenges, including the war involving Russia and Ukraine, the current Middle East conflicts and wars, and economic conflicts with China, as well as the slowing of its economy, could impact aspects of the U.S. economy and, therefore, consumer spending. The policies implemented by the U.S. government to address these and related issues, including changes by the Board of Governors of the Federal Reserve System of its benchmark federal funds rate, increases or decreases in federal government spending, and economic sanctions and tariffs, could result in adverse impacts on the U.S. economy, including a slowing of growth and potentially a recession, thereby impacting consumer spending, tenants' businesses, and/or decreasing future demand for space in shopping centers. The potential impact of current macroeconomic and geopolitical challenges on the Company's financial condition, results of operations, and cash flows is subject to change and continues to depend on the extent and duration of these risks and uncertainties. See Item 1A of Part I of the Company's Annual Report on Form 10-K for a more detailed discussion of the Risk Factors potentially impacting the Company's business and results of operations.
Investment Risk Concentrations
As of September 30, 2024, no single tenant comprised 10% or more of our aggregate annualized base rent ("ABR"). As of September 30, 2024, the Company had three geographic concentrations that accounted for at least 10.0% of our aggregate ABR.
15
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2024
Real estate properties located in California, Florida and the New York-Newark-Jersey City core-based statistical area accounted for
Consolidation
In addition to properties that are wholly-owned, the Company consolidates properties where it owns less than 100% but holds a controlling financial interest in the entity. Controlling financial interest is determined using an evaluation based on accounting standards related to the consolidation of Variable Interest Entities ("VIEs") and voting interest entities.
Ownership of the Parent Company
The Parent Company currently has a single class of common stock and two series of preferred stock outstanding.
Ownership of the Operating Partnership
The Operating Partnership's capital includes Common Units and Preferred Units. As of September 30, 2024, the Parent Company owned approximately
Real Estate Partnerships
As of September 30, 2024, Regency held partial ownership interests in
The assets of these partnerships are restricted to use by the respective partnerships and cannot be directly reached by general creditors of the Company. Similarly, the obligations of the partnerships are backed by, and can only be settled through the assets of these partnerships or by additional capital contributions by the partners.
The carrying amounts of VIEs' assets and liabilities included in the Company's consolidated financial statements, exclusive of the Operating Partnership, are as follows:
(in thousands) |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Assets |
|
|
|
|
|
|
||
Real estate assets, net |
|
$ |
|
|
|
|
||
Cash, cash equivalents and restricted cash |
|
|
|
|
|
|
||
Tenant and other receivables, net |
|
|
|
|
|
|
||
Deferred costs, net |
|
|
|
|
|
|
||
Acquired lease intangible assets, net |
|
|
|
|
|
|
||
Right of use assets, net |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
|
||
Total Assets |
|
$ |
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
||
Notes payable |
|
$ |
|
|
|
|
||
Accounts payable and other liabilities |
|
|
|
|
|
|
||
Acquired lease intangible liabilities, net |
|
|
|
|
|
|
||
Tenants' security, escrow deposits and prepaid rent |
|
|
|
|
|
|
||
Lease liabilities |
|
|
|
|
|
|
||
Total Liabilities |
|
$ |
|
|
|
|
||
16
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2024
Revenues, and Tenant and other Receivables
Other property income includes parking fees and other incidental income from the properties and is generally recognized at the point in time that the performance obligation is met. Income within Management, transaction, and other fees is primarily derived from contracts with the Company's real estate partnerships.
|
|
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
(in thousands) |
|
Timing of satisfaction of performance obligations |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Management, transaction, and other fees: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property management services |
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|||||
Asset management services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Leasing services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total management, transaction, and other fees |
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
The accounts receivable for management, transactions, and other fees, which are included within Tenant and other receivables in the accompanying Consolidated Balance Sheets, are $
Recent Accounting Pronouncements
The following table provides a brief description of recently adopted accounting pronouncements and impact on our financial statements:
Standard |
|
Description |
|
Earlier of Effective Date or the Date of adoption |
|
Effect on the financial statements or other significant matters |
Recently |
|
|
|
|
|
|
|
The amendments are aimed at enhancing the disclosures public entities provide regarding significant segment expenses so that investors can "better understand an entity’s overall performance" and assess "potential future cash flows." |
|
|
The standard became effective for the Company on January 1, 2024 and the required disclosures for the Company will begin with its Annual Report on Form 10-K for the fiscal year ending December 31, 2024. The adoption and implementation of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.
|
||
|
|
|
|
|
|
|
|
ASU 2023-09 requires public business entities to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes. It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold. |
|
|
The Company will review the extent of new disclosures necessary prior to implementation. Other than additional disclosure, the adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.
|
17
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2024
2. |
Real Estate Investments |
The following tables detail the properties acquired for the periods set forth below:
(in thousands) |
Nine months ended September 30, 2024 |
|
||||||||||||||
Date Purchased |
Property Name |
City/State |
Property |
Regency Ownership |
Purchase |
|
Debt |
|
Intangible |
|
Intangible |
|
||||
Consolidated |
|
|
|
|
|
|
|
|
|
|
||||||
Development |
$ |
|
|
— |
|
|
— |
|
|
— |
|
|||||
Operating |
|
|
|
— |
|
|
|
|
|
|||||||
Development |
|
|
|
— |
|
|
— |
|
|
— |
|
|||||
Development |
|
|
|
— |
|
|
— |
|
|
— |
|
|||||
Total consolidated |
|
|
|
$ |
|
|
— |
|
|
|
|
|
||||
Unconsolidated |
|
|
|
|
|
|
|
|
|
|
||||||
Operating |
|
|
|
— |
|
|
|
|
|
|||||||
Total unconsolidated |
|
|
|
$ |
|
|
— |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total property acquisitions |
|
|
|
$ |
|
|
— |
|
|
|
|
|
||||
(in thousands) |
Nine months ended September 30, 2023 |
|
||||||||||||||
Date Purchased |
Property Name |
City/State |
Property |
Regency Ownership |
Purchase |
|
Debt |
|
Intangible |
|
Intangible |
|
||||
Consolidated |
|
|
|
|
|
|
|
|
|
|
||||||
Development |
$ |
|
|
— |
|
|
— |
|
|
— |
|
|||||
Development |
|
|
|
— |
|
|
— |
|
|
— |
|
|||||
Total consolidated |
|
|
|
$ |
|
|
— |
|
|
— |
|
|
— |
|
||
Unconsolidated |
|
|
|
|
|
|
|
|
|
|
||||||
Operating |
|
|
|
— |
|
|
|
|
|
|||||||
Total unconsolidated |
|
|
|
$ |
|
|
— |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total property acquisitions |
|
|
|
$ |
|
|
— |
|
|
|
|
|
||||
3. |
Property Dispositions |
The following table provides a summary of consolidated shopping centers and land parcels sold during the periods set forth below:
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
(in thousands, except number sold data) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net proceeds from sale of real estate investments |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
Gain on sale of real estate, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Number of operating properties sold |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Number of land parcels sold |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Percent interest sold |
|
|
|
|
|
|
|
|
||||||||
18
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2024
4. |
Other Assets |
The following table represents the components of Other assets in the accompanying Consolidated Balance Sheets as of the dates set forth below:
(in thousands) |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Goodwill |
|
$ |
|
|
|
|
||
Investments |
|
|
|
|
|
|
||
Prepaid and other |
|
|
|
|
|
|
||
Derivative assets |
|
|
|
|
|
|
||
Furniture, fixtures, and equipment, net ("FF&E") |
|
|
|
|
|
|
||
Deferred financing costs, net(1) |
|
|
|
|
|
|
||
Total other assets |
|
$ |
|
|
|
|
||
5. |
Notes Payable and Unsecured Credit Facilities |
The Company's outstanding debt, net of unamortized debt premium (discount) and debt issuance costs, consisted of the following as of the dates set forth below:
(in thousands) |
|
Maturing |
|
Weighted |
|
Weighted |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Notes payable: |
|
|
|
|
|
|
|
|
|
|
|
|
||
Fixed rate mortgage loans |
|
|
|
|
$ |
|
|
|
|
|||||
Variable rate mortgage loans (1) |
|
|
|
|
|
|
|
|
|
|||||
Fixed rate unsecured debt |
|
|
|
|
|
|
|
|
|
|||||
Total notes payable, net |
|
|
|
|
|
|
|
|
|
|
|
|
||
Unsecured credit facilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||
$ |
|
|
|
|
|
|
|
|
|
|||||
Total unsecured credit facilities |
|
|
|
|
|
|
|
|
|
|
|
|
||
Total debt outstanding |
|
|
|
|
|
|
|
$ |
|
|
|
|
||
Significant financing activity during 2024 includes:
On January 8, 2024, the Company priced a public offering of $
On January 18, 2024, the Company entered into a Sixth Amended and Restated Credit Agreement (the "Credit Agreement"), with the financial institutions party thereto, as lenders, and Wells Fargo Bank, National Association, as Administrative Agent. The Credit Agreement provides for an unsecured revolving credit facility in the amount of $
19
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2024
On June 17, 2024, the Company paid off $
On August 12, 2024, the Company priced a public offering of $
Scheduled principal payments and maturities on notes payable and unsecured credit facilities were as follows:
(in thousands) |
|
September 30, 2024 |
|
|||||||||||||
Scheduled Principal Payments and Maturities by Year: |
|
Scheduled |
|
|
Mortgage |
|
|
Unsecured |
|
|
Total |
|
||||
2024 (2) |
|
$ |
|
|
|
|
|
|
|
|
|
|
||||
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2027 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2028 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Beyond 5 Years |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unamortized debt premium/(discount) and issuance costs |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total |
|
$ |
|
|
|
|
|
|
|
|
|
|
||||
The Company was in compliance as of September 30, 2024, with all debt covenants.
6. |
Derivative Financial Instruments |
The Company may use derivative financial instruments, including interest swaps, caps, options, floors, and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company's operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative transactions or purposes other than mitigation of interest rate risk. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with quality credit ratings. The Company does not anticipate that any of the counterparties will fail to meet their obligations.
The Company's objectives in using interest rate derivatives are to attempt to stabilize interest expense where possible 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.
Detail on the Company's interest rate derivatives outstanding as of September 30, 2024 and December 31, 2023 is as follows:
|
|
Number of Instruments |
|
|||||
Interest Rate Swaps |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Notional amount |
|
$ |
|
|
|
|
||
Number of instruments |
|
|
|
|
|
|
||
Detail on the fair value of the Company's interest rate derivatives as of September 30, 2024 and December 31, 2023 is as follows:
(in thousands) |
|
Fair Value |
|
|||||
Interest rate swaps classified as: |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Derivative assets |
|
$ |
|
|
|
|
||
Derivative liabilities |
|
|
( |
) |
|
|
( |
) |
These derivative financial instruments are all interest rate swaps, which are designated and qualify as cash flow hedges. The Company does not use derivatives for trading or speculative purposes and, as of September 30, 2024, does not have any derivatives that are not designated as hedges.
20
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2024
The changes in the fair value of derivatives designated and qualifying as cash flow hedges are recorded in Accumulated other comprehensive income ("AOCI") and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.
The following table represents the effect of the derivative financial instruments on the accompanying Consolidated Financial Statements:
Location and Amount of Gain (Loss) Recognized in OCI on Derivative |
|
|
Location and Amount of Gain (Loss) Reclassified from AOCI into Income |
|
|
Total amounts presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded |
|
|||||||||||||||||||||
|
|
Three months ended September 30, |
|
|
|
|
Three months ended September 30, |
|
|
|
|
Three months ended September 30, |
|
|||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
|
|
2024 |
|
|
2023 |
|
|
|
|
2024 |
|
|
2023 |
|
||||||
Interest rate swaps |
|
$ |
( |
) |
|
|
|
|
|
$ |
( |
) |
|
|
( |
) |
|
Interest expense, net |
|
$ |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Nine months ended September 30, |
|
|
|
|
Nine months ended September 30, |
|
|
|
|
Nine months ended September 30, |
|
|||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
|
|
2024 |
|
|
2023 |
|
|
|
|
2024 |
|
|
2023 |
|
||||||
Interest rate swaps |
|
$ |
|
|
|
|
|
|
$ |
( |
) |
|
|
( |
) |
|
Interest expense, net |
|
$ |
|
|
|
|
|||||
As of September 30, 2024, the Company expects approximately $
7. |
Leases |
Substantially all of the Company's leases are classified as operating leases. The Company's Lease income is comprised of both fixed and variable income. Fixed and in-substance fixed lease income includes stated amounts per the lease contract, which are primarily related to base rent, and in some cases stated amounts for common area maintenance ("CAM"), real estate taxes, and insurance (collectively, "Recoverable Costs"). Income for these amounts is recognized on a straight-line basis.
Variable lease income includes the following two main items in the lease contracts:
The following table provides a disaggregation of lease income recognized as either fixed or variable lease income based on the criteria specified in ASC Topic 842:
(in thousands) |
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Operating lease income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed and in-substance fixed lease income |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
Variable lease income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other lease related income, net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Above/below market rent and tenant rent inducement amortization, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Uncollectible straight-line rent (1) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Uncollectible amounts billable in lease (loss) income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Total lease income |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
21
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2024
The following table represents the components of Tenant and other receivables, net of amounts considered uncollectible, in the accompanying Consolidated Balance Sheets:
(in thousands) |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Tenant receivables |
|
$ |
|
|
|
|
||
Straight-line rent receivables |
|
|
|
|
|
|
||
Notes receivable |
|
|
|
|
|
|
||
Other receivables(1) |
|
|
|
|
|
|
||
Total tenant and other receivables |
|
$ |
|
|
|
|
||
During the nine months ended September 30, 2024 the Company issued a note receivable in the amount of $
8. |
Fair Value Measurements |
(a) Disclosure of Fair Value of Financial Instruments
All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management's estimation, reasonably approximate their fair values, except those instruments listed below:
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||||||||||
(in thousands) |
|
Carrying |
|
|
Fair Value |
|
|
Carrying |
|
|
Fair Value |
|
||||
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Notes receivable |
|
$ |
|
|
|
|
|
|
|
|
|
|
||||
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Notes payable, net |
|
$ |
|
|
|
|
|
|
|
|
|
|
||||
Unsecured credit facilities(1) |
|
$ |
|
|
|
|
|
|
|
|
|
|
||||
The above fair values represent management's estimate of the amounts that would be received from selling those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants as of September 30, 2024, and December 31, 2023, respectively. These fair value measurements maximize the use of observable inputs which are classified within Level 2 of the fair value hierarchy. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company's own judgments about the assumptions that market participants would use in pricing the asset or liability.
The Company develops its judgments based on the best information available at the measurement date, including expected cash flows, appropriate risk-adjusted discount rates, and available observable and unobservable inputs. Service providers involved in fair value measurements are evaluated for competency and qualifications on an ongoing basis. As considerable judgment is often necessary to estimate the fair value of these financial instruments, the fair values presented above are not necessarily indicative of amounts that will be realized upon disposition of the financial instruments.
(b) Recurring Fair Value
The following financial instruments are measured at fair value on a recurring basis:
Securities
The Company has investments in marketable securities that are included within Other assets on the accompanying Consolidated Balance Sheets. The fair value of the securities was determined using quoted prices in active markets, which are considered Level 1 inputs of the fair value hierarchy. Changes in the value of securities are recorded within Net investment (income) loss in the accompanying Consolidated Statements of Operations, and include unrealized gains of $
22
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2024
Available-for-Sale Debt Securities
Available-for-sale debt securities consist of investments in corporate bonds, and are recorded at fair value using either recent trade prices for the identical debt instrument or comparable instruments by issuers of similar industry sector, issuer rating, and size, to estimate fair value, which are considered Level 2 inputs of the fair value hierarchy. Unrealized gains or losses on these debt securities are recognized through Other comprehensive income.
Interest Rate Derivatives
The fair value of the Company's interest rate derivatives 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. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy.
The following tables present the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis:
|
Fair Value Measurements as of September 30, 2024 |
|
|||||||||||||
|
|
|
|
Quoted Prices in Active Markets for Identical Assets |
|
|
Significant Other Observable Inputs |
|
|
Significant Unobservable Inputs |
|
||||
(in thousands) |
Balance |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
||||
Securities |
$ |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Available-for-sale debt securities |
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Interest rate derivatives |
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total |
$ |
|
|
|
|
|
|
|
|
|
— |
|
|||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate derivatives |
$ |
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
Fair Value Measurements as of December 31, 2023 |
|
|||||||||||||
|
|
|
|
Quoted Prices in Active Markets for Identical Assets |
|
|
Significant Other Observable Inputs |
|
|
Significant Unobservable Inputs |
|
||||
(in thousands) |
Balance |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
||||
Securities |
$ |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Available-for-sale debt securities |
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Interest rate derivatives |
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total |
$ |
|
|
|
|
|
|
|
|
|
— |
|
|||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate derivatives |
$ |
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
23
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2024
9. |
Equity and Capital |
Preferred Stock of the Parent Company
Terms and conditions of the preferred stock outstanding are summarized as follows:
|
Preferred Stock Outstanding as of September 30, 2024 and December 31, 2023 |
||||||||||||
|
Date of Issuance |
|
Shares Issued and Outstanding |
|
|
Liquidation Preference |
|
|
Distribution Rate |
|
Callable By Company |
||
Series A |
|
|
|
|
$ |
|
|
|
On demand |
||||
Series B |
|
|
|
|
|
|
|
|
On or after |
||||
|
|
|
|
|
|
$ |
|
|
|
|
|
||
At the Market ("ATM") Program
Under the Parent Company's ATM Program, as authorized by the Board, the Parent Company may sell up to $
Stock Repurchase Program
On February 8, 2023, the Board authorized a common stock repurchase program under which the Company may purchase up to a maximum of $
During the nine months ended September 30, 2023, the Company executed multiple trades, repurchasing
On July 31, 2024, the Board authorized a new common stock repurchase program under which the Company may purchase up to $
24
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2024
Preferred Units of the Operating Partnership
The number of Series A Preferred Units and Series B Preferred Units, respectively, issued by the Operating Partnership is equal to the number of Series A Preferred Stock and Series B Preferred Stock, respectively, issued by the Parent Company.
Common Units of the Operating Partnership
Common Units are issued, or redeemed and retired, for each share of the Parent Company stock issued or redeemed, or retired, as described above. During the nine months ended September 30, 2024,
10. |
Stock-Based Compensation |
During the nine months ended September 30, 2024, the Company granted
11. |
Earnings per Share and Unit |
Parent Company Earnings per Share
The following summarizes the calculation of basic and diluted earnings per share:
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
(in thousands, except per share data) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to common shareholders - basic |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
Net income attributable to common shareholders - diluted |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding for basic EPS |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding for diluted EPS (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per common share – basic |
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
||||
Net income per common share – diluted |
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
||||
The effect of the assumed conversion of the EOP units and certain other convertible units had an anti-dilutive effect upon the calculation of net income to the common shareholders per share. Accordingly, the impact of such assumed conversions has not been included in the determination of diluted net income per share calculations. Weighted average EOP units outstanding were
25
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2024
Operating Partnership Earnings per Unit
The following summarizes the calculation of basic and diluted earnings per unit ("EPU"):
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
(in thousands, except per unit data) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to common unit holders - basic |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
Net income attributable to common unit holders - diluted |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common units outstanding for basic EPU |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common units outstanding for diluted EPU (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per common unit – basic |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
Net income per common unit – diluted |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
The effect of the assumed conversion of certain other convertible units had an anti-dilutive effect upon the calculation of net income to the common unit holders per share. Accordingly, the impact of such assumed conversions has not been included in the determination of diluted net income per unit calculations.
12. |
Commitments and Contingencies |
Litigation
The Company is a party to litigation and other disputes that arise in the ordinary course of business. While the outcome of any particular lawsuit or dispute cannot be predicted with certainty, in the opinion of management, the Company's currently pending litigation and disputes are not expected to have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity of the Company taken as a whole as of September 30, 2024.
Environmental
The Company is subject to numerous environmental laws and regulations. With respect to applicability to the Company, these pertain primarily to chemicals historically used by certain current and former dry cleaning tenants, the existence of asbestos in older shopping centers, underground petroleum storage tanks and other historic land uses. 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. The Company can give no assurance that existing environmental studies with respect to its shopping centers have revealed all potential environmental contamination; that its estimate of liabilities will not change as more information becomes available; that any previous owner, occupant or tenant did not create any material environmental condition not known to the Company; 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; and that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to the Company.
The Company had accrued liabilities of $
Letters of Credit
The Company has the right to issue letters of credit under the Line up to an aggregate amount not to exceed $
26
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to Regency's future events, developments, or financial or operational performance or results, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as "may," "will," "could," "should," "would," "expect," "estimate," "believe," "intend," "forecast," "project," "plan," "anticipate," "guidance," and other similar language. However, the absence of these or similar words or expressions does not mean a statement is not forward-looking. While we believe these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance these expectations will be attained, and it is possible actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties.
Our operations are subject to a number of risks and uncertainties including, but not limited to, risk factors described in our Securities and Exchange Commission ("SEC") filings, which include our Annual Report on Form 10-K for the year ended December 31, 2023 ("2023 Form 10-K") under Item 1A. "Risk Factors" and in Part II, Item 1A. "Risk Factors" in this Report. When considering an investment in our securities, you should carefully read and consider these risks, together with all other information in our most recent 2023 Form 10-K, subsequent Quarterly Reports on Form 10-Q, and our other filings with and submissions to the SEC. If any of the events described in the risk factors actually occur, our business, financial condition or operating results, as well as the market price of our securities, could be materially adversely affected. Forward-looking statements are only as of the date they are made, and Regency undertakes no duty to update its forward-looking statements, whether as a result of new information, future events or developments or otherwise, except as and to the extent required by law.
Non-GAAP Measures
In addition to the required Generally Accepted Accounting Principles ("GAAP") presentations, we use and report certain non-GAAP measures as we believe these measures improve the understanding of our operational results. We believe these non-GAAP measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP measures to determine how best to provide relevant information to the public, and thus such reported measures could change.
We do not consider non-GAAP measures an alternative to financial measures determined in accordance with GAAP, rather they supplement GAAP measures by providing additional information we believe to be useful to our shareholders. The principal limitation of these non-GAAP measures is that they may exclude significant expense and income items that are required by GAAP to be recognized in our Consolidated Financial Statements. In addition, they reflect the exercise of management's judgment about which expense and income items are excluded or included in determining these non-GAAP measures. In order to compensate for these limitations, reconciliations of the non-GAAP measures we use to their most directly comparable GAAP measures are provided. Non-GAAP measures should not be relied upon in evaluating the financial condition, results of operations, or future prospects of the Company.
Defined Terms
The following terms, as defined, are commonly used by management and the investing public to understand and evaluate our operational results, and are included in this document:
27
Companies use different depreciable lives and methods, and real estate values historically fluctuate with market conditions. Since Nareit FFO excludes depreciation and amortization and gains on sale and impairments of real estate, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in percent leased, rental rates, operating costs, acquisition and development activities, and financing costs. This provides a perspective of our financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, Nareit FFO is a supplemental non-GAAP financial measure of our operating performance, which does not represent cash generated from operating activities in accordance with GAAP; and, therefore, should not be considered a substitute measure of cash flows from operations. We provide a reconciliation of Net Income Attributable to Common Shareholders to Nareit FFO.
We provide Pro-rata financial information because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated partnerships, when read in conjunction with our reported results under GAAP. We believe presenting our Pro-rata share of assets, liabilities, operating results, and other metrics, along with certain other non-GAAP measures, makes comparisons of our operating results to those of other REITs more meaningful. The Pro-rata information provided is not, nor is it intended to be, presented in accordance with GAAP. The Pro-rata supplemental details of assets and liabilities and supplemental details of operations reflect our proportionate economic ownership of the assets, liabilities, and operating results of the properties in our portfolio.
The Pro-rata information is prepared on a basis consistent with the comparable consolidated amounts and is intended to more accurately reflect our proportionate economic interest in the assets, liabilities, and operating results of properties in our portfolio. We do not control the unconsolidated real estate partnerships, and the Pro-rata presentations of the assets and liabilities, and revenues and expenses do not represent our legal claim to such items. The partners are entitled to profit or loss allocations and distributions of cash flows according to the operating agreements, which generally provide for such allocations according to their invested capital. Our share of invested capital establishes the ownership interests we use to prepare our Pro-rata share.
The presentation of Pro-rata information has limitations which include, but are not limited to, the following:
Because of these limitations, the Pro-rata financial information should not be considered independently or as a substitute for our financial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP financial statements, using the Pro-rata information as a supplement.
28
Overview of Our Strategy
Regency Centers Corporation began operations as a publicly-traded REIT in 1993. All of our operating, investing, and financing activities are performed through our Operating Partnership, Regency Centers, L.P. and its wholly-owned subsidiaries, and through our real estate partnerships. As of September 30, 2024, the Parent Company owned approximately 99.4% of the outstanding Common Units and 100% of the Preferred Units of the Operating Partnership.
We are a preeminent national owner, operator, and developer of neighborhood and community shopping centers predominantly located in suburban trade areas with compelling demographics. As of September 30, 2024, we had full or partial ownership interests in 483 retail properties. Our properties are high-quality neighborhood and community shopping centers primarily anchored by market leading grocers and principally located in suburban markets within the country's most desirable metro areas, and contain approximately 57.2 million square feet ("SF") of gross leasable area ("GLA"). Our mission is to create thriving environments for retailers and service providers to connect with surrounding neighborhoods and communities. Our vision is to elevate quality of life as an integral thread in the fabric of our communities. Our portfolio includes thriving properties merchandised with highly productive grocers, restaurants, service providers, and best-in-class retailers that connect with their neighborhoods, communities, and customers.
Our values:
Our goals are to:
Executing on our Strategy
During the nine months ended September 30, 2024, we had Net income attributable to common shareholders of $303.7 million as compared to $273.1 million during the nine months ended September 30, 2023.
29
During the nine months ended September 30, 2024:
We continued our development and redevelopment of high quality shopping centers:
We maintained liquidity and financial flexibility to cost effectively fund investment opportunities and debt maturities:
Property Portfolio
The following table summarizes general information related to the consolidated properties in our portfolio:
(GLA in thousands) |
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Number of Properties |
381 |
|
|
381 |
|
||
GLA |
|
43,946 |
|
|
|
43,758 |
|
% Leased – Operating and Development |
|
95.5 |
% |
|
|
94.9 |
% |
% Leased – Operating |
|
95.8 |
% |
|
|
95.4 |
% |
Weighted average annual effective rent per square foot ("PSF"), net of tenant concessions. |
$25.41 |
|
|
$24.67 |
|
||
The following table summarizes general information related to the unconsolidated properties owned in real estate investment partnerships in our portfolio:
(GLA in thousands) |
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Number of Properties |
102 |
|
|
101 |
|
||
GLA |
|
13,226 |
|
|
|
13,067 |
|
% Leased – Operating and Development |
|
96.6 |
% |
|
|
96.6 |
% |
% Leased –Operating |
|
96.6 |
% |
|
|
96.6 |
% |
Weighted average annual effective rent PSF, net of tenant concessions |
$24.47 |
|
|
$24.04 |
|
||
30
The following table summarizes Pro-rata occupancy rates of our combined consolidated and unconsolidated shopping center portfolio:
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Percent Leased – All Properties |
|
95.6 |
% |
|
|
95.1 |
% |
Anchor Space (spaces ≥ 10,000 SF) |
|
97.7 |
% |
|
|
96.7 |
% |
Shop Space (spaces < 10,000 SF) |
|
92.3 |
% |
|
|
92.4 |
% |
The following table summarizes leasing activity, including our Pro-rata share of activity within the portfolio of our real estate partnerships (totals as a weighted average PSF):
|
|
Nine months ended September 30, 2024 |
|
|||||||||||||||||
|
|
Leasing |
|
|
SF (in |
|
|
Base Rent |
|
|
Tenant |
|
|
Leasing |
|
|||||
Anchor Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
New |
|
|
29 |
|
|
|
723 |
|
|
$ |
19.73 |
|
|
$ |
53.17 |
|
|
$ |
6.28 |
|
Renewal |
|
|
104 |
|
|
|
2,871 |
|
|
|
18.03 |
|
|
|
0.34 |
|
|
|
0.10 |
|
Total Anchor Space Leases |
|
|
133 |
|
|
|
3,594 |
|
|
$ |
18.37 |
|
|
$ |
10.97 |
|
|
$ |
1.34 |
|
Shop Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
New |
|
|
439 |
|
|
|
890 |
|
|
$ |
39.50 |
|
|
$ |
42.61 |
|
|
$ |
13.99 |
|
Renewal |
|
|
931 |
|
|
|
1,819 |
|
|
|
37.57 |
|
|
|
2.34 |
|
|
|
0.61 |
|
Total Shop Space Leases |
|
|
1,370 |
|
|
|
2,709 |
|
|
$ |
38.21 |
|
|
$ |
15.57 |
|
|
$ |
5.00 |
|
Total Leases |
|
|
1,503 |
|
|
|
6,303 |
|
|
$ |
26.89 |
|
|
$ |
12.95 |
|
|
$ |
2.92 |
|
|
|
Nine months ended September 30, 2023 |
|
|||||||||||||||||
|
|
Leasing |
|
|
SF (in |
|
|
Base Rent |
|
|
Tenant |
|
|
Leasing |
|
|||||
Anchor Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
New |
|
|
23 |
|
|
|
513 |
|
|
$ |
19.96 |
|
|
$ |
46.57 |
|
|
$ |
4.33 |
|
Renewal |
|
|
79 |
|
|
|
2,090 |
|
|
|
16.90 |
|
|
|
0.45 |
|
|
|
0.10 |
|
Total Anchor Space Leases |
|
|
102 |
|
|
|
2,603 |
|
|
$ |
17.50 |
|
|
$ |
9.54 |
|
|
$ |
0.93 |
|
Shop Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
New |
|
|
417 |
|
|
|
830 |
|
|
$ |
37.83 |
|
|
$ |
38.90 |
|
|
$ |
12.13 |
|
Renewal |
|
|
791 |
|
|
|
1,386 |
|
|
|
37.37 |
|
|
|
1.49 |
|
|
|
0.64 |
|
Total Shop Space Leases |
|
|
1,208 |
|
|
|
2,216 |
|
|
$ |
37.54 |
|
|
$ |
15.50 |
|
|
$ |
4.94 |
|
Total Leases |
|
|
1,310 |
|
|
|
4,819 |
|
|
$ |
26.71 |
|
|
$ |
12.28 |
|
|
$ |
2.78 |
|
The weighted-average base rent PSF on signed Shop Space leases during 2024 was $38.21 PSF, which is higher than the weighted average annual base rent PSF of all Shop Space leases due to expire during the next 12 months of $35.64 PSF. New and renewal rent spreads, compared to prior rents on these same spaces leased, were positive at 9.0% for the nine months ended September 30, 2024, compared to 9.2% for the nine months ended September 30, 2023.
31
Significant Tenants
We seek to reduce our operating and leasing risks by avoiding dependence on any single tenant. Based on percentage of annualized base rent, the following table summarizes our most significant tenants, of which four of the top five are grocers:
|
|
September 30, 2024 |
||||||
Tenant |
|
Number of |
|
|
Percentage of |
|
Percentage of |
|
Publix |
|
|
67 |
|
|
6.0% |
|
2.9% |
Albertsons Companies, Inc.(2) |
|
|
53 |
|
|
4.4% |
|
2.8% |
TJX Companies, Inc. |
|
|
74 |
|
|
3.6% |
|
2.8% |
Amazon/Whole Foods |
|
|
39 |
|
|
2.7% |
|
2.7% |
Kroger Co.(2) |
|
|
52 |
|
|
6.0% |
|
2.6% |
Bankruptcies and Credit Concerns
Our management team devotes significant time to researching and monitoring consumer preferences and trends, customer shopping behaviors, changes in delivery methods, shifts to e-commerce, and changing demographics in order to anticipate the challenges and opportunities impacting our industry. We seek to mitigate these potential impacts through maintaining a high quality portfolio, diversifying our tenant mix, replacing less successful tenants with stronger operators, anchoring our centers with market leading grocers that drive customer traffic, and investing in suburban trade areas with compelling demographic populations benefiting from high levels of disposal income. The potential for a recession and the severity and duration of any economic downturn could negatively impact our existing tenants and their ability to continue to meet their lease obligations.
Although base rent is derived from long-term lease contracts, tenants that file for bankruptcy generally have the legal right to reject any or all of their leases and close related stores. Any unsecured claim we hold against a bankrupt tenant for unpaid rent might be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. As a result, in a tenant bankruptcy situation it is likely that we would recover substantially less than the full value of any unsecured claims we hold. Additionally, we may incur significant expense to adjudicate our claim and significant downtime to re-lease the vacated space. In the event that a tenant with a significant number of leases in our shopping centers files for bankruptcy and rejects its leases, we could experience a significant reduction in our revenues. At September 30, 2024, tenants currently in bankruptcy and which continue to occupy space in our shopping centers represent an aggregate of 0.3% of our Pro-rata annual base rent.
32
Results from Operations
Comparison of the three months ended September 30, 2024 and 2023:
Revenues changed as summarized in the following table:
|
|
Three months ended September 30, |
|
|
|
|
||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Lease income |
|
|
|
|
|
|
|
|
|
|||
Base rent |
|
$ |
246,531 |
|
|
|
227,347 |
|
|
|
19,184 |
|
Recoveries from tenants |
|
|
84,795 |
|
|
|
76,973 |
|
|
|
7,822 |
|
Percentage rent |
|
|
2,155 |
|
|
|
1,868 |
|
|
|
287 |
|
Uncollectible lease income |
|
|
(342 |
) |
|
|
(636 |
) |
|
|
294 |
|
Other lease income |
|
|
5,029 |
|
|
|
4,558 |
|
|
|
471 |
|
Straight-line rent |
|
|
5,163 |
|
|
|
2,693 |
|
|
|
2,470 |
|
Above/below market rent amortization, net |
|
|
5,726 |
|
|
|
8,118 |
|
|
|
(2,392 |
) |
Total lease income |
|
$ |
349,057 |
|
|
|
320,921 |
|
|
|
28,136 |
|
Other property income |
|
|
4,444 |
|
|
|
2,638 |
|
|
|
1,806 |
|
Management, transaction, and other fees |
|
|
6,765 |
|
|
|
7,079 |
|
|
|
(314 |
) |
Total revenues |
|
$ |
360,266 |
|
|
|
330,638 |
|
|
|
29,628 |
|
Total lease income increased by $28.1 million primarily due to the following:
Other property income of $1.8 million increased primarily due to an increase in business interruption proceeds received in 2024.
There were no significant changes in Management, transaction, and other fees.
33
Changes in our operating expenses are summarized in the following table:
|
|
Three months ended September 30, |
|
|
|
|
||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Depreciation and amortization |
|
$ |
100,955 |
|
|
|
87,505 |
|
|
|
13,450 |
|
Property operating expense |
|
|
60,477 |
|
|
|
59,227 |
|
|
|
1,250 |
|
Real estate taxes |
|
|
45,729 |
|
|
|
40,171 |
|
|
|
5,558 |
|
General and administrative |
|
|
25,073 |
|
|
|
20,903 |
|
|
|
4,170 |
|
Other operating expenses |
|
|
3,654 |
|
|
|
3,533 |
|
|
|
121 |
|
Total operating expenses |
|
$ |
235,888 |
|
|
|
211,339 |
|
|
|
24,549 |
|
Depreciation and amortization costs increased by $13.5 million, mainly due to the following:
There were no significant changes in Property operating expense.
Real estate taxes increased by $5.6 million, mainly due to:
General and administrative costs increased by $4.2 million, mainly due to the following:
There were no significant changes in Other operating expenses.
The following table presents the components of other expense, net:
|
|
Three months ended September 30, |
|
|
|
|
||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|||
Interest on notes payable |
|
$ |
46,365 |
|
|
|
39,000 |
|
|
|
7,365 |
|
Interest on unsecured credit facilities |
|
|
3,640 |
|
|
|
1,574 |
|
|
|
2,066 |
|
Capitalized interest |
|
|
(1,636 |
) |
|
|
(1,492 |
) |
|
|
(144 |
) |
Hedge expense |
|
|
245 |
|
|
|
109 |
|
|
|
136 |
|
Interest income |
|
|
(1,592 |
) |
|
|
(384 |
) |
|
|
(1,208 |
) |
Interest expense, net |
|
$ |
47,022 |
|
|
|
38,807 |
|
|
|
8,215 |
|
Gain on sale of real estate, net of tax |
|
|
(11,360 |
) |
|
|
(184 |
) |
|
|
(11,176 |
) |
Net investment (income) loss |
|
|
(1,372 |
) |
|
|
1,020 |
|
|
|
(2,392 |
) |
Total other expense |
|
$ |
34,290 |
|
|
|
39,643 |
|
|
|
(5,353 |
) |
Interest expense, net, increased by $8.2 million primarily due to the following:
34
During the three months ended September 30, 2024, we recognized gains on sale of $11.4 million mainly from the sale of one operating property.
Net investment income increased by $2.4 million primarily driven by $1.7 million increase in gains on investments held in the non-qualified deferred compensation plan, which has an offsetting expense in General and administrative expenses noted above, and $0.7 million increase in gains on other corporate investments.
There were no significant changes in Equity in income of investments in real estate partnerships.
The following represents the remaining components that comprise Net income attributable to common shareholders and unit holders:
|
|
Three months ended September 30, |
|
|
|
|
||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Net income |
|
$ |
103,576 |
|
|
|
92,173 |
|
|
|
11,403 |
|
Income attributable to noncontrolling interests |
|
|
(2,107 |
) |
|
|
(1,453 |
) |
|
|
(654 |
) |
Net income attributable to the Company |
|
|
101,469 |
|
|
|
90,720 |
|
|
|
10,749 |
|
Preferred stock dividends |
|
|
(3,413 |
) |
|
|
(1,644 |
) |
|
|
(1,769 |
) |
Net income attributable to common shareholders |
|
$ |
98,056 |
|
|
$ |
89,076 |
|
|
$ |
8,980 |
|
Net income attributable to exchangeable operating partnership units |
|
|
(593 |
) |
|
|
(520 |
) |
|
|
(73 |
) |
Net income attributable to common unit holders |
|
$ |
98,649 |
|
|
|
89,596 |
|
|
|
9,053 |
|
There were no significant changes in Income attributable to noncontrolling interests.
The $1.8 million increase in Preferred stock dividends is related to the preferred stock issued in connection with UBP acquisition. The current period includes a full quarter of dividends as compared to a partial (pro-rated) quarter included for the comparable period in 2023, as the UBP acquisition was completed mid-quarter on August 18, 2023.
Results from Operations
Comparison of the nine months ended September 30, 2024 and 2023:
Revenues changed as summarized in the following table:
|
|
Nine months ended September 30, |
|
|
|
|
||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Lease income |
|
|
|
|
|
|
|
|
|
|||
Base rent |
|
$ |
736,142 |
|
|
|
654,254 |
|
|
|
81,888 |
|
Recoveries from tenants |
|
|
254,623 |
|
|
|
222,947 |
|
|
|
31,676 |
|
Percentage rent |
|
|
11,958 |
|
|
|
10,278 |
|
|
|
1,680 |
|
Uncollectible lease income |
|
|
(3,433 |
) |
|
|
958 |
|
|
|
(4,391 |
) |
Other lease income |
|
|
16,851 |
|
|
|
14,840 |
|
|
|
2,011 |
|
Straight-line rent |
|
|
14,877 |
|
|
|
8,169 |
|
|
|
6,708 |
|
Above / below market rent amortization, net |
|
|
18,990 |
|
|
|
22,734 |
|
|
|
(3,744 |
) |
Total lease income |
|
$ |
1,050,008 |
|
|
|
934,180 |
|
|
|
115,828 |
|
Other property income |
|
|
11,464 |
|
|
|
8,459 |
|
|
|
3,005 |
|
Management, transaction, and other fees |
|
|
19,896 |
|
|
|
20,223 |
|
|
|
(327 |
) |
Total revenues |
|
$ |
1,081,368 |
|
|
|
962,862 |
|
|
|
118,506 |
|
Total lease income increased by $115.8 million primarily due to the following:
35
Other property income increased by $3.0 million primarily due to business interruption insurance proceeds received in 2024.
There were no significant changes in Management, transaction, and other fees.
Changes in our operating expenses are summarized in the following table:
|
|
Nine months ended September 30, |
|
|
|
|
||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Depreciation and amortization |
|
$ |
299,508 |
|
|
|
253,373 |
|
|
|
46,135 |
|
Property operating expense |
|
|
183,242 |
|
|
|
164,643 |
|
|
|
18,599 |
|
Real estate taxes |
|
|
135,514 |
|
|
|
117,157 |
|
|
|
18,357 |
|
General and administrative |
|
|
75,443 |
|
|
|
71,248 |
|
|
|
4,195 |
|
Other operating expenses |
|
|
9,363 |
|
|
|
4,718 |
|
|
|
4,645 |
|
Total operating expenses |
|
$ |
703,070 |
|
|
|
611,139 |
|
|
|
91,931 |
|
Depreciation and amortization costs increased by $46.1 million, mainly due to the following:
Property operating expense increased by $18.6 million, mainly due to the following:
36
Real estate taxes increased by $18.4 million, mainly due to the following:
General and administrative costs increased by $4.2 million mainly due to the following:
Other operating expenses increased by $4.6 million, mainly due to the acquisition of UBP.
The following table presents the components of other expense, net:
|
|
Nine months ended September 30, |
|
|
|
|
||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|||
Interest on notes payable |
|
$ |
138,830 |
|
|
|
113,087 |
|
|
|
25,743 |
|
Interest on unsecured credit facilities |
|
|
6,783 |
|
|
|
3,903 |
|
|
|
2,880 |
|
Capitalized interest |
|
|
(4,813 |
) |
|
|
(4,026 |
) |
|
|
(787 |
) |
Hedge expense |
|
|
503 |
|
|
|
328 |
|
|
|
175 |
|
Interest income |
|
|
(8,235 |
) |
|
|
(1,136 |
) |
|
|
(7,099 |
) |
Interest expense, net |
|
$ |
133,068 |
|
|
|
112,156 |
|
|
|
20,912 |
|
Gain on sale of real estate, net of tax |
|
|
(33,844 |
) |
|
|
(515 |
) |
|
|
(33,329 |
) |
Loss on early extinguishment of debt |
|
|
180 |
|
|
|
— |
|
|
|
180 |
|
Net investment income |
|
|
(4,506 |
) |
|
|
(2,449 |
) |
|
|
(2,057 |
) |
Total other expense, net |
|
$ |
94,898 |
|
|
|
109,192 |
|
|
|
(14,294 |
) |
Interest expense, net increased by $20.9 million primarily due to the following:
During the nine months ended September 30, 2024, we recognized gains on sale of $33.8 million mainly from the sale of four operating properties and recognition of two sales type leases.
Net investment income increased by $2.1 million primarily driven by $1.6 million increase in gains on investments held in the non-qualified deferred compensation plan which have an offsetting expense in General and administrative costs noted above and $0.5 million increase in gains on other corporate investments.
There were no significant changes in Equity in income of investments in real estate partnerships.
37
The following represents the remaining components that comprise Net income attributable to common shareholders and unit holders:
|
|
Nine months ended September 30, |
|
|
|
|
||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Net income |
|
$ |
321,163 |
|
|
|
278,833 |
|
|
|
42,330 |
|
Income attributable to noncontrolling interests |
|
|
(7,252 |
) |
|
|
(4,050 |
) |
|
|
(3,202 |
) |
Net income attributable to the Company |
|
|
313,911 |
|
|
|
274,783 |
|
|
|
39,128 |
|
Preferred stock dividends |
|
|
(10,239 |
) |
|
|
(1,644 |
) |
|
|
(8,595 |
) |
Net income attributable to common shareholders |
|
$ |
303,672 |
|
|
$ |
273,139 |
|
|
$ |
30,533 |
|
Net income attributable to exchangeable operating partnership units |
|
|
(1,836 |
) |
|
|
(1,490 |
) |
|
|
(346 |
) |
Net income attributable to common unit holders |
|
$ |
305,508 |
|
|
|
274,629 |
|
|
|
30,879 |
|
Income attributable to noncontrolling interests increased $3.2 million, mainly due to the acquisition of UBP.
The $8.6 million increase in Preferred stock dividends is related to the preferred stock issued in connection with the UBP acquisition.
The current period reflects nine months of dividends, in contrast to one and a half months in the comparable period of 2023.
Supplemental Earnings Information
We use certain non-GAAP measures, in addition to certain performance metrics determined under GAAP, as we believe these measures improve the understanding of the operating results. We believe these non-GAAP measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We provide Pro-rata financial information because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated real estate partnerships, when read in conjunction with our reported results under GAAP. We believe presenting our Pro-rata share of operating results, along with other non-GAAP measures, may assist in comparing our operating results to other REITs. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP measures to determine how best to provide relevant information to the public, and thus such reported non-GAAP measures could change. See "Non-GAAP Measures" at the beginning of this Management's Discussion and Analysis.
Pro-rata Same Property NOI:
Pro-rata same property NOI, excluding termination fees/expenses, changed from the following major components:
|
|
Three months ended September 30, |
|
|
|
|
|
Nine months ended September 30, |
|
|
|
|
||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Base rent |
|
$ |
244,170 |
|
|
|
238,142 |
|
|
|
6,028 |
|
|
$ |
728,514 |
|
|
|
709,809 |
|
|
|
18,705 |
|
Recoveries from tenants |
|
|
83,090 |
|
|
|
81,096 |
|
|
|
1,994 |
|
|
|
250,468 |
|
|
|
242,647 |
|
|
|
7,821 |
|
Percentage rent |
|
|
2,287 |
|
|
|
2,208 |
|
|
|
79 |
|
|
|
12,476 |
|
|
|
11,554 |
|
|
|
922 |
|
Termination fees |
|
|
636 |
|
|
|
1,037 |
|
|
|
(401 |
) |
|
|
3,199 |
|
|
|
6,441 |
|
|
|
(3,242 |
) |
Uncollectible lease income |
|
|
(487 |
) |
|
|
(462 |
) |
|
|
(25 |
) |
|
|
(3,757 |
) |
|
|
1,033 |
|
|
|
(4,790 |
) |
Other lease income |
|
|
3,415 |
|
|
|
3,292 |
|
|
|
123 |
|
|
|
9,949 |
|
|
|
9,092 |
|
|
|
857 |
|
Other property income |
|
|
3,830 |
|
|
|
2,023 |
|
|
|
1,807 |
|
|
|
8,390 |
|
|
|
6,803 |
|
|
|
1,587 |
|
Total real estate revenue |
|
|
336,941 |
|
|
|
327,336 |
|
|
|
9,605 |
|
|
|
1,009,239 |
|
|
|
987,379 |
|
|
|
21,860 |
|
Operating and maintenance |
|
|
54,251 |
|
|
|
56,374 |
|
|
|
(2,123 |
) |
|
|
166,137 |
|
|
|
164,489 |
|
|
|
1,648 |
|
Termination expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5 |
|
|
|
— |
|
|
|
5 |
|
Real estate taxes |
|
|
43,565 |
|
|
|
41,263 |
|
|
|
2,302 |
|
|
|
129,494 |
|
|
|
125,890 |
|
|
|
3,604 |
|
Ground rent |
|
|
3,537 |
|
|
|
3,700 |
|
|
|
(163 |
) |
|
|
10,788 |
|
|
|
10,337 |
|
|
|
451 |
|
Total real estate operating expenses |
|
|
101,353 |
|
|
|
101,337 |
|
|
|
16 |
|
|
|
306,424 |
|
|
|
300,716 |
|
|
|
5,708 |
|
Pro-rata same property NOI |
|
$ |
235,588 |
|
|
|
225,999 |
|
|
|
9,589 |
|
|
$ |
702,815 |
|
|
|
686,663 |
|
|
|
16,152 |
|
Less: Termination fees |
|
|
636 |
|
|
|
1,037 |
|
|
|
(401 |
) |
|
|
3,194 |
|
|
|
6,441 |
|
|
|
(3,247 |
) |
Pro-rata same property NOI, excluding termination fees |
|
$ |
234,952 |
|
|
|
224,962 |
|
|
|
9,990 |
|
|
$ |
699,621 |
|
|
|
680,222 |
|
|
|
19,399 |
|
Pro-rata same property NOI growth, excluding termination fees |
|
|
|
|
|
|
|
|
4.4 |
% |
|
|
|
|
|
|
|
|
2.9 |
% |
||||
38
Total real estate revenue increased by $9.6 million and $21.9 million, on a net basis, during the three and nine months ended September 30, 2024 and 2023, respectively, as follows:
Total real estate operating expenses increased by $5.7 million, on a net basis, during the nine months ended September 30, 2024 and 2023, respectively, as follows:
Reconciliation of Pro-rata Same Property NOI to Net Income Attributable to Common Shareholders:
Our reconciliation of Net income attributable to common shareholders to Same Property NOI, on a Pro-rata basis, is as follows:
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net income attributable to common shareholders |
|
$ |
98,056 |
|
|
|
89,076 |
|
|
$ |
303,672 |
|
|
|
273,139 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Management, transaction, and other fees |
|
|
6,765 |
|
|
|
7,079 |
|
|
|
19,896 |
|
|
|
20,223 |
|
Other (1) |
|
|
12,115 |
|
|
|
12,016 |
|
|
|
37,428 |
|
|
|
34,317 |
|
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
100,955 |
|
|
|
87,505 |
|
|
|
299,508 |
|
|
|
253,373 |
|
General and administrative |
|
|
25,073 |
|
|
|
20,903 |
|
|
|
75,443 |
|
|
|
71,248 |
|
Other operating expense |
|
|
3,654 |
|
|
|
3,533 |
|
|
|
9,363 |
|
|
|
4,718 |
|
Other expense, net |
|
|
34,290 |
|
|
|
39,643 |
|
|
|
94,898 |
|
|
|
109,192 |
|
Equity in income of investments in real estate excluded from NOI (2) |
|
|
12,492 |
|
|
|
11,668 |
|
|
|
39,439 |
|
|
|
35,266 |
|
Net income attributable to noncontrolling interests |
|
|
2,107 |
|
|
|
1,453 |
|
|
|
7,252 |
|
|
|
4,050 |
|
Preferred stock dividends and issuance costs |
|
|
3,413 |
|
|
|
1,644 |
|
|
|
10,239 |
|
|
|
1,644 |
|
Pro-rata NOI |
|
$ |
261,160 |
|
|
|
236,330 |
|
|
$ |
782,490 |
|
|
|
698,090 |
|
Less non-same property NOI |
|
|
25,572 |
|
|
|
10,331 |
|
|
|
79,675 |
|
|
|
11,427 |
|
Pro-rata same property NOI |
|
$ |
235,588 |
|
|
|
225,999 |
|
|
$ |
702,815 |
|
|
|
686,663 |
|
39
Nareit FFO, Core Operating Earnings and AFFO:
Our reconciliation of net income attributable to common shareholders to Nareit FFO, to Core Operating Earnings, and to AFFO is as follows:
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
(in thousands, except share information) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Reconciliation of Net income attributable to common shareholders to Nareit FFO |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to common shareholders |
|
$ |
98,056 |
|
|
|
89,076 |
|
|
$ |
303,672 |
|
|
|
273,139 |
|
Adjustments to reconcile to Nareit FFO: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization (excluding FF&E) |
|
|
107,801 |
|
|
|
94,011 |
|
|
|
319,765 |
|
|
|
272,551 |
|
Gain on sale of real estate, net of tax |
|
|
(11,365 |
) |
|
|
(827 |
) |
|
|
(33,853 |
) |
|
|
(1,132 |
) |
Exchangeable operating partnership units |
|
|
593 |
|
|
|
520 |
|
|
|
1,836 |
|
|
|
1,490 |
|
Nareit FFO attributable to common stock and unit holders |
|
$ |
195,085 |
|
|
|
182,780 |
|
|
$ |
591,420 |
|
|
|
546,048 |
|
Reconciliation of Nareit FFO to Core Operating Earnings |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Nareit Funds From Operations |
|
$ |
195,085 |
|
|
|
182,780 |
|
|
$ |
591,420 |
|
|
|
546,048 |
|
Adjustments to reconcile to Core Operating Earnings: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Not Comparable Items |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Merger transition costs |
|
|
2,375 |
|
|
|
1,511 |
|
|
|
7,069 |
|
|
|
1,511 |
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
180 |
|
|
|
— |
|
Certain Non Cash Items |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Straight-line rent |
|
|
(5,886 |
) |
|
|
(3,142 |
) |
|
|
(16,907 |
) |
|
|
(7,315 |
) |
Uncollectible straight-line rent |
|
|
(134 |
) |
|
|
92 |
|
|
|
1,899 |
|
|
|
(2,298 |
) |
Above/below market rent amortization, net |
|
|
(5,370 |
) |
|
|
(7,919 |
) |
|
|
(17,910 |
) |
|
|
(22,138 |
) |
Debt and derivative mark-to-market amortization |
|
|
1,693 |
|
|
|
667 |
|
|
|
4,333 |
|
|
|
667 |
|
Core Operating Earnings |
|
$ |
187,763 |
|
|
|
173,989 |
|
|
$ |
570,084 |
|
|
|
516,475 |
|
Reconciliation of Core Operating Earnings to AFFO: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Core Operating Earnings |
|
$ |
187,763 |
|
|
|
173,989 |
|
|
$ |
570,084 |
|
|
|
516,475 |
|
Adjustments to reconcile to AFFO (1): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating capital expenditures |
|
|
(36,430 |
) |
|
|
(26,638 |
) |
|
|
(91,168 |
) |
|
|
(65,183 |
) |
Debt cost and derivative adjustments |
|
|
2,107 |
|
|
|
1,690 |
|
|
|
6,269 |
|
|
|
5,049 |
|
Stock-based compensation |
|
|
4,776 |
|
|
|
4,199 |
|
|
|
14,078 |
|
|
|
13,123 |
|
AFFO |
|
$ |
158,216 |
|
|
|
153,240 |
|
|
$ |
499,263 |
|
|
|
469,464 |
|
Liquidity and Capital Resources
General
We use cash flows generated from operating, investing, and financing activities to strengthen our balance sheet, finance our development and redevelopment projects, fund our investment activities, and maintain financial flexibility. A significant portion of our cash from operations is distributed to our common shareholders in the form of dividends in order to maintain our status as a REIT.
Except for $200 million of private placement debt, our Parent Company has no capital commitments other than its guarantees of the commitments of our Operating Partnership. All remaining debt is held by our Operating Partnership, its subsidiaries, or by our real estate partnerships. The Operating Partnership is a co-issuer and a guarantor of the $200 million of outstanding debt of our Parent Company. 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.
We continually assess our available liquidity and our expected cash requirements, including monitoring our tenant rent collections. We have access to and draw on multiple financing sources to fund our operations and our long-term capital needs, including the requirements of our in process and planned developments, redevelopments, other capital expenditures, and the repayment of debt. We expect to meet these needs by using a combination of the following: cash flow from operations after funding our common stock and preferred stock dividends, borrowings from our Line, proceeds from the sale of real estate, mortgage loan and unsecured bank financing, distributions received from our real estate partnerships, and when the capital markets are favorable, proceeds from the sale of equity securities or the issuance of new unsecured debt. We continually evaluate alternative financing options, and we believe we can obtain new financing on reasonable terms, although likely at higher interest rates than that of our debt currently outstanding, due to the current interest rate environment.
40
On January 8, 2024, we priced a public offering of $400 million of senior unsecured notes due in 2034 (the "January 2024 Notes") under our existing shelf registration statement filed with the SEC. The January 2024 Notes were issued at 99.617% of par value with a coupon of 5.25%, and will mature on January 15, 2034. Additionally, on August 12, 2024, we priced a public offering of $325 million of senior unsecured notes due in 2035 (the "August 2024 Notes") under our existing shelf registration statement filed with the SEC. The August 2024 Notes were issued at 99.813% of par value with a coupon of 5.10%, and will mature on January 15, 2035.
We redeemed $250 million of senior unsecured notes that matured in June 2024, and our next maturity of senior unsecured notes occurs in November 2025. We have $103.5 million of secured loan maturities during the next 12 months, including Regency's pro-rata share of maturities within our unconsolidated real estate partnerships, which we intend to refinance or pay off as they mature. Based upon our available cash balance, sources of capital, our current credit ratings, and the number of high quality, unencumbered properties we own, we believe our available capital resources are sufficient to meet our expected capital needs for the next year, although, in the longer term, we can provide no assurances.
In addition to our $110.0 million of unrestricted cash, we have the following additional sources of capital available:
(in thousands) |
September 30, 2024 |
|
|
ATM program |
|
|
|
Original offering amount |
$ |
500,000 |
|
Available capacity |
$ |
500,000 |
|
Line of credit |
|
|
|
Total commitment amount |
$ |
1,500,000 |
|
Available capacity (1) |
$ |
1,459,885 |
|
Maturity (2) |
March 23, 2028 |
|
|
The declaration of dividends is determined quarterly by, and in the discretion of, our Board of Directors ("Board"). We expect 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 have historically generated sufficient cash flow from operations to fund our dividend distributions. During the nine months ended September 30, 2024 and 2023, we generated cash flows from operating activities of $598.8 million and $547.7 million, respectively, and paid $381.5 million in dividends to our common and preferred stock and unit holders, and $334.3 million in dividends to our common stock and unit holders, in the same respective periods.
We currently have development and redevelopment projects in various stages of planning, design and construction, along with a pipeline of potential projects for future development or redevelopment. After funding our common and preferred stock dividend payments in October of 2024, we estimate that we will require capital during the next 12 months of approximately $460.7 million related to leasing commissions, tenant improvements, in-process developments and redevelopments, capital contributions to our real estate partnerships, and repaying maturing debt. These capital requirements are being impacted by inflation resulting in increased costs of construction materials, labor, and services from third-party contractors and suppliers. In response, we have implemented mitigation strategies such as entering into fixed cost construction contracts, pre-ordering materials, and other planning efforts. Further, continued challenges from permitting delays and labor shortages may extend the time to completion of these projects.
If we start new developments or redevelopments, commit to property acquisitions, repay debt prior to maturity, declare future dividends, or repurchase shares of our common stock, our cash requirements will increase. If we refinance maturing debt, our cash requirements will decrease.
We endeavor to maintain a high percentage of unencumbered assets. As of September 30, 2024, 88.1% of our wholly-owned real estate assets were unencumbered. Our low level of encumbered assets allows us to more readily access the secured and unsecured debt markets and to maintain borrowing capacity on the Line.
Our Line and unsecured debt require that we remain in compliance with various customary financial covenants, which are described in the Notes to Consolidated Financial Statements included in our 2023 Form 10-K. We were in compliance with these covenants at September 30, 2024, and expect to remain in compliance.
41
Summary of Cash Flow Activity
The following table summarizes net cash flows related to operating, investing, and financing activities of the Company:
|
|
Nine months ended September 30, |
|
|
|
|
||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Net cash provided by operating activities |
|
$ |
598,813 |
|
|
|
547,685 |
|
|
|
51,128 |
|
Net cash used in investing activities |
|
|
(209,071 |
) |
|
|
(231,527 |
) |
|
|
22,456 |
|
Net cash used in financing activities |
|
|
(366,265 |
) |
|
|
(303,864 |
) |
|
|
(62,401 |
) |
Net change in cash, cash equivalents, and restricted cash |
|
$ |
23,477 |
|
|
|
12,294 |
|
|
|
11,183 |
|
Total cash, cash equivalents, and restricted cash |
|
$ |
114,831 |
|
|
|
81,070 |
|
|
|
33,761 |
|
Net cash provided by operating activities:
Net cash provided by operating activities increased $51.1 million due to:
Net cash used in investing activities:
Net cash used in investing activities changed by $22.5 million as follows:
|
|
Nine months ended September 30, |
|
|
|
|
||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|||
Acquisition of operating real estate |
|
$ |
(45,205 |
) |
|
|
(2,033 |
) |
|
|
(43,172 |
) |
Acquisition of UBP, net of cash acquired |
|
|
— |
|
|
|
(80,488 |
) |
|
|
80,488 |
|
Real estate development and capital improvements |
|
|
(235,284 |
) |
|
|
(158,982 |
) |
|
|
(76,302 |
) |
Proceeds from sale of real estate |
|
|
103,626 |
|
|
|
10,338 |
|
|
|
93,288 |
|
Proceeds from property insurance casualty claims |
|
|
5,257 |
|
|
|
— |
|
|
|
5,257 |
|
Issuance of notes receivable |
|
|
(32,651 |
) |
|
|
(4,000 |
) |
|
|
(28,651 |
) |
Collection of notes receivable |
|
|
3,052 |
|
|
|
— |
|
|
|
3,052 |
|
Investments in real estate partnerships |
|
|
(25,771 |
) |
|
|
(9,118 |
) |
|
|
(16,653 |
) |
Return of capital from investments in real estate partnerships |
|
|
12,859 |
|
|
|
3,644 |
|
|
|
9,215 |
|
Dividends on investment securities |
|
|
296 |
|
|
|
571 |
|
|
|
(275 |
) |
Acquisition of investment securities |
|
|
(99,035 |
) |
|
|
(5,206 |
) |
|
|
(93,829 |
) |
Proceeds from sale of investment securities |
|
|
103,785 |
|
|
|
13,747 |
|
|
|
90,038 |
|
Net cash used in investing activities |
|
$ |
(209,071 |
) |
|
|
(231,527 |
) |
|
|
22,456 |
|
Significant changes in investing activities include:
42
We plan to continue developing and redeveloping shopping centers for long-term investment. During the nine months ended September 30, 2024, we deployed capital of $235.3 million for the development, redevelopment, and improvement of our real estate properties, comprised of the following:
|
|
Nine months ended September 30, |
|
|
|
|
||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Capital expenditures: |
|
|
|
|
|
|
|
|
|
|||
Land acquisitions |
|
$ |
13,882 |
|
|
|
2,580 |
|
|
|
11,302 |
|
Building and tenant improvements |
|
|
76,002 |
|
|
|
58,549 |
|
|
|
17,453 |
|
Redevelopment costs |
|
|
85,287 |
|
|
|
57,384 |
|
|
|
27,903 |
|
Development costs |
|
|
45,370 |
|
|
|
30,613 |
|
|
|
14,757 |
|
Capitalized interest |
|
|
4,709 |
|
|
|
3,931 |
|
|
|
778 |
|
Capitalized direct compensation |
|
|
10,034 |
|
|
|
5,925 |
|
|
|
4,109 |
|
Real estate development and capital improvements |
|
$ |
235,284 |
|
|
|
158,982 |
|
|
|
76,302 |
|
43
The following table summarizes our development projects in-process and completed:
(in thousands, except cost PSF) |
|
|
|
|
|
|
|
September 30, 2024 |
|
|||||||||||||||
Property Name |
|
Market |
|
Ownership (3) |
|
Start |
|
Estimated |
|
Estimated / Actual Net |
|
|
GLA (3) |
|
|
Cost PSF |
|
|
% of Costs Incurred |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Developments In-Process |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Baybrook East - Phase 1B |
|
Houston, TX |
|
50% |
|
Q2-2022 |
|
2026 |
|
|
9,792 |
|
|
|
77 |
|
|
|
127 |
|
|
|
87 |
% |
Sienna Grande - Phase 1 |
|
Houston, TX |
|
75% |
|
Q2-2023 |
|
2027 |
|
|
9,409 |
|
|
|
23 |
|
|
|
409 |
|
|
|
69 |
% |
The Shops at SunVet |
|
Long Island, NY |
|
100% |
|
Q2-2023 |
|
2027 |
|
|
91,159 |
|
|
|
170 |
|
|
|
536 |
|
|
|
52 |
% |
The Shops at Stone Bridge |
|
Cheshire, CT |
|
100% |
|
Q1-2024 |
|
2027 |
|
|
68,277 |
|
|
|
155 |
|
|
|
440 |
|
|
|
26 |
% |
Jordan Ranch Market |
|
Houston, TX |
|
50% |
|
Q3-2024 |
|
2027 |
|
|
23,006 |
|
|
|
81 |
|
|
|
284 |
|
|
|
21 |
% |
Oakley Shops at Laurel Fields |
|
Bay Area, CA |
|
100% |
|
Q3-2024 |
|
2027 |
|
|
34,984 |
|
|
|
78 |
|
|
|
449 |
|
|
|
12 |
% |
Total Developments In-Process |
|
|
|
|
|
|
|
$ |
236,627 |
|
|
|
584 |
|
|
|
405 |
|
|
|
38 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Developments Completed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Glenwood Green |
|
Metro NYC |
|
70% |
|
Q1-2022 |
|
2025 |
|
|
45,382 |
|
|
|
249 |
|
|
|
182 |
|
|
|
|
|
Total Developments Completed |
|
|
|
|
|
|
|
$ |
45,382 |
|
|
|
249 |
|
|
|
182 |
|
|
|
|
|||
The following table summarizes our redevelopment projects in process and completed:
(in thousands, except cost PSF) |
|
|
|
|
|
|
|
September 30, 2024 |
|
|||||||
Property Name |
|
Market |
|
Ownership (3) |
|
Start Date |
|
Estimated Stabilization Year (1) |
|
Estimated Net |
|
|
% of Costs Incurred |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Redevelopments In-Process |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Abbot |
|
Boston, MA |
|
100% |
|
Q2-2019 |
|
2026 |
|
$ |
59,854 |
|
|
|
94 |
% |
Westbard Square Phase I |
|
Bethesda, MD |
|
100% |
|
Q2-2021 |
|
2025 |
|
|
39,500 |
|
|
|
81 |
% |
Buckhead Landing |
|
Atlanta, GA |
|
100% |
|
Q2-2022 |
|
2025 |
|
|
30,859 |
|
|
|
84 |
% |
Bloom on Third |
|
Los Angeles, CA |
|
35% |
|
Q4-2022 |
|
2027 |
|
|
24,525 |
|
|
|
46 |
% |
Mandarin Landing |
|
Jacksonville, FL |
|
100% |
|
Q2-2023 |
|
2025 |
|
|
16,422 |
|
|
|
55 |
% |
Serramonte Center - Phase 3 |
|
San Francisco, CA |
|
100% |
|
Q2-2023 |
|
2025 |
|
|
36,989 |
|
|
|
17 |
% |
Circle Marina Center |
|
Los Angeles, CA |
|
100% |
|
Q3-2023 |
|
2025 |
|
|
14,986 |
|
|
|
60 |
% |
Avenida Biscayne |
|
Miami, FL |
|
100% |
|
Q4-2023 |
|
2026 |
|
|
22,743 |
|
|
|
23 |
% |
Cambridge Square |
|
Atlanta, GA |
|
100% |
|
Q4-2023 |
|
2026 |
|
|
15,002 |
|
|
|
24 |
% |
Anastasia Plaza |
|
St. Augustine, FL |
|
100% |
|
Q3-2024 |
|
2026 |
|
|
15,607 |
|
|
|
3 |
% |
East Meadow Plaza - Phase 1 |
|
Long Island, NY |
|
100% |
|
Q3-2024 |
|
2026 |
|
|
11,736 |
|
|
|
17 |
% |
Various Redevelopments |
|
Various |
|
83% - 100% |
|
Various |
|
Various |
|
|
93,487 |
|
|
|
26 |
% |
Total Redevelopments In-Process |
|
|
|
|
|
|
|
$ |
381,710 |
|
|
|
52 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Redevelopments Completed |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Various Properties |
|
Various |
|
100% |
|
Various |
|
Various |
|
|
31,261 |
|
|
|
95 |
% |
Total Redevelopments Completed |
|
|
|
|
|
|
|
$ |
31,261 |
|
|
|
95 |
% |
||
44
Net cash used in financing activities:
Net cash flows from financing activities changed by $62.4 million during 2024, as follows:
|
|
Nine months ended September 30, |
|
|
|
|
||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|||
Net proceeds from common stock issuances |
|
$ |
— |
|
|
|
4 |
|
|
|
(4 |
) |
Repurchase of common shares in conjunction with equity award plans |
|
|
(8,776 |
) |
|
|
(7,653 |
) |
|
|
(1,123 |
) |
Common shares repurchased through share repurchase program |
|
|
(200,066 |
) |
|
|
(20,006 |
) |
|
|
(180,060 |
) |
Contributions from non-controlling interests |
|
|
6,533 |
|
|
|
3,167 |
|
|
|
3,366 |
|
Distributions to and redemptions of non-controlling interests |
|
|
(9,435 |
) |
|
|
— |
|
|
|
(9,435 |
) |
Dividend payments and operating partnership distributions |
|
|
(381,453 |
) |
|
|
(334,293 |
) |
|
|
(47,160 |
) |
(Repayment of) Proceeds from unsecured credit facilities, net |
|
|
(122,000 |
) |
|
|
77,000 |
|
|
|
(199,000 |
) |
Proceeds from issuance of fixed rate unsecured notes, net of debt discount |
|
|
734,860 |
|
|
|
46,500 |
|
|
|
688,360 |
|
Debt repayment |
|
|
(369,578 |
) |
|
|
(68,234 |
) |
|
|
(301,344 |
) |
Payment of loan costs |
|
|
(16,560 |
) |
|
|
(411 |
) |
|
|
(16,149 |
) |
Proceeds from sale of treasury stock |
|
|
210 |
|
|
|
62 |
|
|
|
148 |
|
Net cash used in financing activities |
|
$ |
(366,265 |
) |
|
|
(303,864 |
) |
|
|
(62,401 |
) |
Significant financing activities during the nine months ended September 30, 2024 and 2023, include the following:
45
Investments in Real Estate Partnerships
The following table is a summary of the unconsolidated combined assets and liabilities of our real estate partnerships and our Pro-rata share:
|
|
Combined |
|
|
Regency's Share (1) |
|
||||||||||
(dollars in thousands) |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||||
Number of real estate partnerships |
|
|
19 |
|
|
|
18 |
|
|
|
|
|
|
|
||
Regency's ownership |
|
12% - 83% |
|
|
12% - 67% |
|
|
|
|
|
|
|
||||
Number of properties |
|
|
102 |
|
|
|
101 |
|
|
|
|
|
|
|
||
Assets |
|
$ |
2,772,964 |
|
|
|
2,689,993 |
|
|
$ |
1,044,870 |
|
|
|
984,027 |
|
Liabilities |
|
|
1,669,155 |
|
|
|
1,595,271 |
|
|
|
611,583 |
|
|
|
565,822 |
|
Equity |
|
|
1,103,809 |
|
|
|
1,094,722 |
|
|
|
433,287 |
|
|
|
418,205 |
|
Basis difference |
|
|
|
|
|
|
(45,874 |
) |
|
|
(47,600 |
) |
||||
Investments in real estate partnerships |
|
|
|
|
|
$ |
387,413 |
|
|
|
370,605 |
|
||||
Our equity method investments in real estate partnerships consist of the following:
(in thousands) |
|
Regency's Ownership |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
GRI - Regency, LLC (GRIR) |
|
40% |
|
$ |
137,536 |
|
|
|
144,371 |
|
Columbia Regency Partners II, LLC (Columbia II) (1) |
|
20% |
|
|
49,388 |
|
|
|
50,039 |
|
Columbia Village District, LLC |
|
30% |
|
|
6,361 |
|
|
|
6,123 |
|
Individual Investors |
|
|
|
|
|
|
|
|
||
Ballard Blocks |
|
50% |
|
|
60,424 |
|
|
|
62,140 |
|
Bloom on Third |
|
35% |
|
|
44,174 |
|
|
|
42,074 |
|
Others |
|
12% - 83% |
|
|
89,530 |
|
|
|
65,858 |
|
Total Investment in real estate partnerships |
|
|
|
$ |
387,413 |
|
|
$ |
370,605 |
|
Notes Payable - Investments in Real Estate Partnerships
Scheduled principal repayments on notes payable held by our investments in real estate partnerships were as follows:
(in thousands) |
|
September 30, 2024 |
|
|||||||||||||||||
Scheduled Principal Payments and Maturities by Year: |
|
Scheduled |
|
|
Mortgage |
|
|
Unsecured |
|
|
Total |
|
|
Regency’s |
|
|||||
2024 (1) |
|
$ |
1,055 |
|
|
|
7,008 |
|
|
|
— |
|
|
|
8,063 |
|
|
|
3,818 |
|
2025 |
|
|
6,727 |
|
|
|
147,512 |
|
|
|
— |
|
|
|
154,239 |
|
|
|
49,031 |
|
2026 |
|
|
7,393 |
|
|
|
263,220 |
|
|
|
42,800 |
|
|
|
313,413 |
|
|
|
105,320 |
|
2027 |
|
|
7,576 |
|
|
|
32,800 |
|
|
|
— |
|
|
|
40,376 |
|
|
|
13,669 |
|
2028 |
|
|
4,267 |
|
|
|
246,605 |
|
|
|
— |
|
|
|
250,872 |
|
|
|
92,027 |
|
Beyond 5 Years |
|
|
6,688 |
|
|
|
797,323 |
|
|
|
— |
|
|
|
804,011 |
|
|
|
311,328 |
|
Net unamortized loan costs, debt premium / (discount) |
|
|
— |
|
|
|
(9,137 |
) |
|
|
— |
|
|
|
(9,137 |
) |
|
|
(3,372 |
) |
Total |
|
$ |
33,706 |
|
|
|
1,485,331 |
|
|
|
42,800 |
|
|
|
1,561,837 |
|
|
|
571,821 |
|
At September 30, 2024, our investments in real estate partnerships had notes payable of $1.6 billion maturing through 2034, of which 93.4% had a weighted average fixed interest rate of 3.9%. The remaining notes payable float with SOFR and had a weighted average variable interest rate of 7.3%, based on rates as of September 30, 2024. These fixed and variable rate notes payable are all non-recourse, and our Pro-rata share was $571.8 million as of September 30, 2024. As notes payable mature, they are expected to be repaid from proceeds from new borrowings and/or partner capital contributions. Refinancing debt at maturity in the current interest rate environment could result in higher interest expense in future periods if rates remain elevated.
We believe that our partners are financially sound and have sufficient capital or access thereto to fund future capital requirements. In the event that a real estate investment partner is unable to fund its share of the capital requirements of the real estate partnership, we would have the right, but not the obligation, to loan the defaulting partner the amount of its capital call which would be secured by the partner's membership interest.
46
Management fee income
In addition to earning our Pro-rata share of net income or loss in each of these real estate partnerships, we earned fees as shown below:
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Asset management, property management, leasing, and other transaction fees |
|
$ |
6,765 |
|
|
|
6,322 |
|
|
$ |
19,896 |
|
|
|
19,465 |
|
Critical Accounting Estimates
There have been no material changes in our Critical Accounting Estimates from the information provided in the "Critical Accounting Estimates" section of "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to two significant components of interest rate risk:
The table below presents the principal cash flows, weighted average interest rates of remaining debt, and the fair value of total debt as of September 30, 2024. For variable rate mortgages and unsecured credit facilities for which we have interest rate swaps in place to fix the interest rate, they are included in the Fixed rate debt section below at their all-in fixed rate. The table is presented 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 as of September 30, 2024, and are subject to change. In addition, we continually assess the market risk for floating rate debt and believe that an increase of 100 basis points in interest rates would decrease future earnings and cash flows by approximately $0.3 million per year based on $33.8 million of floating rate mortgage debt and floating rate line of credit balances outstanding at September 30, 2024.
Further, the table below incorporates only those exposures that exist as of September 30, 2024, and does not consider exposures or positions that could arise after that date or obligations repaid before maturity. 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.
The table below presents the principal cash flow payments associated with our outstanding debt by year, weighted average interest rates on debt outstanding at each year-end, and fair value of total debt as of September 30, 2024.
(dollars in thousands) |
|
2024 |
|
|
2025 |
|
|
2026 |
|
|
2027 |
|
|
2028 |
|
|
Thereafter |
|
|
Total |
|
|
Fair Value |
|
||||||||
Fixed rate debt (1) |
|
$ |
32,775 |
|
|
|
308,465 |
|
|
|
357,769 |
|
|
|
754,572 |
|
|
|
341,882 |
|
|
|
2,601,042 |
|
|
|
4,396,505 |
|
|
|
4,263,804 |
|
Average interest rate for all fixed rate debt (2) |
|
|
4.09 |
% |
|
|
4.11 |
% |
|
|
4.13 |
% |
|
|
4.24 |
% |
|
|
4.23 |
% |
|
|
4.47 |
% |
|
|
|
|
|
|
||
Variable rate SOFR debt (1) |
|
$ |
— |
|
|
|
3,750 |
|
|
|
— |
|
|
|
— |
|
|
|
30,000 |
|
|
|
— |
|
|
|
33,750 |
|
|
|
33,750 |
|
Average interest rate for all variable rate debt (2) |
|
|
5.88 |
% |
|
|
5.78 |
% |
|
|
5.78 |
% |
|
|
5.78 |
% |
|
|
5.78 |
% |
|
|
|
|
|
|
|
|
|
|||
47
Item 4. Controls and Procedures
Controls and Procedures (Regency Centers Corporation)
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 periods covered by this quarterly report on Form 10-Q 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.
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 quarter ended September 30, 2024 which have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
Controls and Procedures (Regency Centers, L.P.)
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 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 periods covered by this quarterly report on Form 10-Q 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 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.
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 quarter ended September 30, 2024 which have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
48
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
See Note 12 — Commitments and Contingencies in the Notes for discussion regarding material legal proceedings and contingencies. Except as set forth in such discussion, there have been no material developments in legal proceedings as reported in Item 3. "Legal Proceedings" of our 2023 Form 10-K.
Item 1A. Risk Factors
There have been no material changes from the risk factors disclosed in Item 1A. of Part I of our Annual Report on Form 10-K for the year ended December 31, 2023 ("2023 Annual Report").
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
There were no unregistered sales of equity securities during the three months ended September 30, 2024.
The following table represents information with respect to purchases by the Parent Company of its common stock, by month, during the three months ended September 30, 2024:
Period |
|
Total number of shares purchased |
|
|
Average price paid per share |
|
|
Total number of shares purchased as part of publicly announced plans or programs (2) |
|
|
Maximum number or approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) (2) |
|
||||
July 1 through July 31, 2024 |
|
|
— |
|
(1) |
$ |
— |
|
|
|
— |
|
|
$ |
250,000 |
|
August 1 through August 31, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
250,000 |
|
September 1 through September 30, 2024 |
|
|
678 |
|
|
$ |
72.39 |
|
|
|
— |
|
|
$ |
250,000 |
|
On July 31, 2024, the Board authorized and approved a new common stock repurchase program that replaces and supercedes, in all respects, the current program noted above. Under the new program we may repurchase up to $250 million in shares of our outstanding common stock. We intend for repurchases, if any, to be through open market transactions in accordance with applicable federal securities laws, including Rule 10b-18 of the Exchange Act. The new program expires on June 30, 2026, unless modified, extended or earlier terminated by the Board at its discretion.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Plans
During the fiscal quarter ended September 30, 2024,
49
Item 6. Exhibits
In reviewing any 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. Each agreement contains 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:
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 filings, 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 (Regency Centers Corporation) and 000-24763 (Regency Centers, L.P.).
Ex # |
Description |
4. |
Instruments defining the rights of securities holders, including indentures |
||
|
|
4.1 |
|
|
|
4.2 |
|
|
|
4.3 |
|
101. |
Interactive Data Files |
||
|
|
101.INS |
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
|
|
101.SCH |
Inline XBRL Taxonomy Extension Schema with embedded linkbases document |
104. |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
||
* |
Furnished, not filed. |
50
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.
November 1, 2024 |
REGENCY CENTERS CORPORATION |
|
|
By: |
/s/ Michael J. Mas |
|
|
Michael J. Mas, Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
|
|
|
|
By: |
/s/ Terah L. Devereaux |
|
|
Terah L. Devereaux, Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) |
November 1, 2024 |
REGENCY CENTERS, L.P. |
|
|
By: |
Regency Centers Corporation, General Partner |
|
|
|
|
By: |
/s/ Michael J. Mas |
|
|
Michael J. Mas, Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
|
|
|
|
By: |
/s/ Terah L. Devereaux |
|
|
Terah L. Devereaux, Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) |
51
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, Lisa Palmer, certify that:
(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
(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: November 1, 2024
/s/ Lisa Palmer |
Lisa Palmer |
President and 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, Michael J. Mas, certify that:
(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
(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: November 1, 2024
/s/ Michael J. Mas |
Michael J. Mas |
Executive Vice President, 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, Lisa Palmer, certify that:
(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
(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: November 1, 2024
/s/ Lisa Palmer |
Lisa Palmer |
President and 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, Michael J. Mas, certify that:
(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
(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: November 1, 2024
/s/ Michael J. Mas |
Michael J. Mas |
Executive Vice President, 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 Quarterly Report on Form 10-Q of Regency Centers Corporation for the quarter ended September 30, 2024 (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: November 1, 2024
/s/ Lisa Palmer |
Lisa Palmer |
President and 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 Quarterly Report on Form 10-Q of Regency Centers Corporation for the quarter ended September 30, 2024 (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: November 1, 2024
/s/ Michael J. Mas |
Michael J. Mas |
Executive Vice President, 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 Quarterly Report on Form 10-Q of Regency Centers, L.P. for the quarter ended September 30, 2024 (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: November 1, 2024
/s/ Lisa Palmer |
Lisa Palmer |
President and 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 Quarterly Report on Form 10-Q of Regency Centers, L.P. for the quarter ended September 30, 2024 (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: November 1, 2024
/s/ Michael J. Mas |
Michael J. Mas |
Executive Vice President, Chief Financial Officer of Regency Centers Corporation, general partner of registrant |