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Regency Centers Buys 20% Stake in Ridgewood Shopping Center
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Regency Centers Corporation (REG - Free Report) recently announced the acquisition of the Ridgewood Shopping Center, through a joint-venture (JV) partnership, in which the company owns 20% stake. The property is located in Raleigh, NC, and has been operating as a grocery-anchored center since its inception in 1951.
In fact, it is anchored by the city’s original Whole Foods. Moreover, the center is well merchandised with Walgreens, Orvis, Fleet Feet Sports, and numerous local tenants with long-term leases.
Notably, it is located inside Raleigh’s Beltline — less than three miles from downtown. Further, it enjoys close proximity to NC State, Meredith College, and Raleigh’s most-affluent neighborhoods. Hence, the asset’s strategic location — in trade area with substantial buying power — will likely drive demand and footfall at the recently-acquired property.
Per management, this acquisition is in line with the company’s focus of building a premium portfolio of grocery-anchored shopping centers. Furthermore, it enables Regency to fortify its foothold in Carolinas. In fact, the company enjoys an impressive presence in the market, with 12 properties, including Cameron Village, Midtown East, and Market at Colonnade Center. Such efforts to expand its presence will likely improve the company’s pricing power ability.
Additionally, management intends to leverage on its strong leasing and property-management teams to stoke growth at this in-fill property.
Regency’s preference toward grocery-anchored shopping centers bodes well. This is because such centers are usually necessity driven and drive a dependable traffic. Also, the long-term leases with its tenants at the center will cushion it from short-term market swings.
In fact, the company has a cluster of industry leading grocers, such as Kroger, Safeway and Publix, as tenants, which help generate steady rental revenues. Moreover, 80% of its properties are anchored by leading grocers, which augurs well for steady cash flows and long-term growth.
The stock carries a Zacks Rank #3 (Hold), at present.
In addition, shares of this Zacks Rank #3 (Hold) company have outperformed its industry in the past six months. While the stock has rallied 13%, the industry has gained 1.7% during the same time frame.
Nonetheless, the company’s business is not immune to the prevailing e-commerce boon. Particularly, the latest effort of online retailers to penetrate into the grocery business has emerged as a pressing concern for this real estate investment trust (REIT). This is because the shift in retail shopping to Internet sales is affecting retail tenants’ sales, compelling retailers to reconsider their footprint and opt for store closures, thereby resulting in lesser demand for retail real estate space.
We anticipate that high tenant bankruptcy and retail fleet rationalization will weigh on the occupancy, leasing spreads and net operating income growth for retail REITs like Regency, Simon Property Group (SPG - Free Report) , Kimco Realty Corp. (KIM - Free Report) and Macerich Company (MAC - Free Report) .
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Regency Centers Buys 20% Stake in Ridgewood Shopping Center
Regency Centers Corporation (REG - Free Report) recently announced the acquisition of the Ridgewood Shopping Center, through a joint-venture (JV) partnership, in which the company owns 20% stake. The property is located in Raleigh, NC, and has been operating as a grocery-anchored center since its inception in 1951.
In fact, it is anchored by the city’s original Whole Foods. Moreover, the center is well merchandised with Walgreens, Orvis, Fleet Feet Sports, and numerous local tenants with long-term leases.
Notably, it is located inside Raleigh’s Beltline — less than three miles from downtown. Further, it enjoys close proximity to NC State, Meredith College, and Raleigh’s most-affluent neighborhoods. Hence, the asset’s strategic location — in trade area with substantial buying power — will likely drive demand and footfall at the recently-acquired property.
Per management, this acquisition is in line with the company’s focus of building a premium portfolio of grocery-anchored shopping centers. Furthermore, it enables Regency to fortify its foothold in Carolinas. In fact, the company enjoys an impressive presence in the market, with 12 properties, including Cameron Village, Midtown East, and Market at Colonnade Center. Such efforts to expand its presence will likely improve the company’s pricing power ability.
Additionally, management intends to leverage on its strong leasing and property-management teams to stoke growth at this in-fill property.
Regency’s preference toward grocery-anchored shopping centers bodes well. This is because such centers are usually necessity driven and drive a dependable traffic. Also, the long-term leases with its tenants at the center will cushion it from short-term market swings.
In fact, the company has a cluster of industry leading grocers, such as Kroger, Safeway and Publix, as tenants, which help generate steady rental revenues. Moreover, 80% of its properties are anchored by leading grocers, which augurs well for steady cash flows and long-term growth.
The stock carries a Zacks Rank #3 (Hold), at present.
In addition, shares of this Zacks Rank #3 (Hold) company have outperformed its industry in the past six months. While the stock has rallied 13%, the industry has gained 1.7% during the same time frame.
Nonetheless, the company’s business is not immune to the prevailing e-commerce boon. Particularly, the latest effort of online retailers to penetrate into the grocery business has emerged as a pressing concern for this real estate investment trust (REIT). This is because the shift in retail shopping to Internet sales is affecting retail tenants’ sales, compelling retailers to reconsider their footprint and opt for store closures, thereby resulting in lesser demand for retail real estate space.
We anticipate that high tenant bankruptcy and retail fleet rationalization will weigh on the occupancy, leasing spreads and net operating income growth for retail REITs like Regency, Simon Property Group (SPG - Free Report) , Kimco Realty Corp. (KIM - Free Report) and Macerich Company (MAC - Free Report) .
You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>