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Regency (REG) Declares Retail Development Project in Texas
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Retail REIT, Regency Centers Corporation (REG - Free Report) declared a new ground-up development project – The Village at Riverstone – in Houston, TX. Construction is slated to begin by first-quarter 2017, while the property is expected to open in the spring of 2018. This project is likely to cost around $30.5 million.
This property in the Riverstone master-planned community would offer 165,000 square feet of retail space and have Kroger Co. (KR - Free Report) and other national and regional retailers as its tenants. Particularly, Kroger would occupy 100,000 square feet of space.
The property is likely to command significant footfalls for being situated at the corner of University Boulevard and LJ Parkway, which are the region’s highly-trafficked thoroughfares. Moreover, the master-planned community, in which the project is situated, has favorable demographics.
Also, around 80% of available homes in the community have been pre-sold at an average sales price of almost $600,000, which is encouraging. In addition to the solid demographics and a leading anchor, the asset has good scope to benefit from high barriers to entry.
Notably, the company has considerable experience in the retail real estate industry, with 223 developments since 2000, denoting an investment at completion of over $3 billion. In fact, recently, the company announced a new ground-up development – Chimney Rock – in Bridgewater, NJ, with an estimated cost of $70 million. Located in a thriving market, Chimney Rock, with 218,000 square feet of prime retail space, will be accretive for the company, moving ahead. (Read more: Regency Centers Announces New Ground-Up Development)
Anchored by Whole Foods Market, Inc. , the center will include several top national retailers. The center will be inside a community, with a population over 250,000, and a daytime population of around 330,000.
Last month, Regency also declared that it has agreed to acquire Equity One, Inc. , in an all-stock deal. The move would create a national portfolio of 429 properties, mainly grocery-anchored, covering over 57 million square feet, including co-investment partnerships. (Read more: Regency to House 429 Properties with $5B Equity One Buyout)
Going forward, Regency’s focus on building a premium portfolio of grocery-anchored shopping centers augurs well. Such centers are usually necessity driven and attract huge traffic. Additionally, the presence of a cluster of leading grocers will cushion the company from market swings. However, intense competition and rate hike pose concerns for the stock.
However, reflecting the negative sentiments surrounding the retail REIT industry, shares of Regency declined 12.4% over the past three months. The Zacks categorized REIT – Equity Trust – Retail industry also declined 10.3% over this time frame. Nevertheless, estimates for 2016 and 2017 remained unchanged at $3.27 and $3.46 per share, respectively, over the past 30 days.
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Regency (REG) Declares Retail Development Project in Texas
Retail REIT, Regency Centers Corporation (REG - Free Report) declared a new ground-up development project – The Village at Riverstone – in Houston, TX. Construction is slated to begin by first-quarter 2017, while the property is expected to open in the spring of 2018. This project is likely to cost around $30.5 million.
This property in the Riverstone master-planned community would offer 165,000 square feet of retail space and have Kroger Co. (KR - Free Report) and other national and regional retailers as its tenants. Particularly, Kroger would occupy 100,000 square feet of space.
The property is likely to command significant footfalls for being situated at the corner of University Boulevard and LJ Parkway, which are the region’s highly-trafficked thoroughfares. Moreover, the master-planned community, in which the project is situated, has favorable demographics.
Also, around 80% of available homes in the community have been pre-sold at an average sales price of almost $600,000, which is encouraging. In addition to the solid demographics and a leading anchor, the asset has good scope to benefit from high barriers to entry.
Notably, the company has considerable experience in the retail real estate industry, with 223 developments since 2000, denoting an investment at completion of over $3 billion. In fact, recently, the company announced a new ground-up development – Chimney Rock – in Bridgewater, NJ, with an estimated cost of $70 million. Located in a thriving market, Chimney Rock, with 218,000 square feet of prime retail space, will be accretive for the company, moving ahead. (Read more: Regency Centers Announces New Ground-Up Development)
Anchored by Whole Foods Market, Inc. , the center will include several top national retailers. The center will be inside a community, with a population over 250,000, and a daytime population of around 330,000.
Last month, Regency also declared that it has agreed to acquire Equity One, Inc. , in an all-stock deal. The move would create a national portfolio of 429 properties, mainly grocery-anchored, covering over 57 million square feet, including co-investment partnerships. (Read more: Regency to House 429 Properties with $5B Equity One Buyout)
Going forward, Regency’s focus on building a premium portfolio of grocery-anchored shopping centers augurs well. Such centers are usually necessity driven and attract huge traffic. Additionally, the presence of a cluster of leading grocers will cushion the company from market swings. However, intense competition and rate hike pose concerns for the stock.
Regency currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, reflecting the negative sentiments surrounding the retail REIT industry, shares of Regency declined 12.4% over the past three months. The Zacks categorized REIT – Equity Trust – Retail industry also declined 10.3% over this time frame. Nevertheless, estimates for 2016 and 2017 remained unchanged at $3.27 and $3.46 per share, respectively, over the past 30 days.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>