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Regency Centers (REG) Q3 FFO Misses Estimates, NOI Slips

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Regency Centers Corporation’s (REG - Free Report) third-quarter 2020 NAREIT funds from operations (FFO) per share of 60 cents missed the Zacks Consensus Estimate of 75 cents. The reported figure is also 39.4% lower than the prior-year quarter’s 99 cents.

Results reflect a decline in same property net operating income (NOI) because of a higher rate of uncollectible lease income in relation to the coronavirus pandemic.

Further, total revenues of $242.9 million lagged the Zacks Consensus Estimate of $260.7 million. Moreover, the top line fell 13.9% year on year.

Notably, 415 properties of the company remained open and operational during the entire pandemic. Roughly 97% of Regency Centers’ tenants were open, based on pro-rata Annual Base Rent (ABR) as of the end of October.

Through Oct 31, 2020, the company collected 86% of third-quarter pro-rata base rent (89% when including executed rent deferral agreements) and 87% of October pro-rata base rent (88% when including executed rent deferral agreements). The company also collected 77% of second-quarter pro-rata base rent (86% when including executed rent deferral agreements) as of the same date.

Inside the Headlines

During the third quarter, Regency Centers executed 1.4 million square feet of comparable new and renewal leases with blended rent spreads of 1.2%.

As of Sep 30, 2020, the company’s wholly-owned portfolio, along with its pro-rata shares of co-investment partnerships, was 92.9% leased. Its same-property portfolio was 93.4% leased. In its same property portfolio, anchor percent leased (includes spaces greater than or equal to 10,000 square feet) was 96%, highlighting a contraction of 90 basis points (bps) sequentially, while same property shop percent leased (includes spaces less than 10,000 square feet) was 89.1%, marking a decrease of 120 bps.

Same-property NOI excluding termination fees slid 15.2% on a year-over-year basis. Results reflect a higher rate of uncollectible lease income pertaining to the coronavirus pandemic.

Portfolio Activity

In the July-September quarter, the company concluded two redevelopment projects with combined pro-rata costs of $9.3 million.

As of Sep 30, 2020, the company had $238 million of in-process developments and redevelopments with $102.3 million of remaining costs to complete.

Liquidity Update

As of Sep 30, 2020, Regency Centers had a cash balance of nearly $281 million and no outstanding balance under its $1.25-billion revolving credit facility. Further, the company had a debt-to-EBITDAre ratio of 5.9X as of Sep 30, 2020. It has no unsecured maturities until 2022.

Dividend Update

On Nov 4, Regency Centers’ board of directors announced a quarterly cash dividend of 59.5 cents per share on its common stock. The dividend will be paid out on Jan 5, 2021 to its shareholders of record as of Dec 16, 2020.

Regency Centers Corporation Price, Consensus and EPS Surprise

Regency Centers Corporation Price, Consensus and EPS Surprise

Regency Centers Corporation price-consensus-eps-surprise-chart | Regency Centers Corporation Quote

Regency Centers currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

OUTFRONT Media (OUT - Free Report) delivered third-quarter 2020 adjusted FFO per share of 19 cents, outpacing the Zacks Consensus Estimate of 12 cents. In the prior-year quarter, the company had reported adjusted FFO per share of 64 cents.

Extra Space Storage, Inc. (EXR - Free Report) reported third-quarter core FFO per share of $1.31, beating the Zacks Consensus Estimate of $1.24. The figure came in 5.6% higher than the year-earlier quarter’s $1.24.

Mack-Cali Realty Corp’s (CLI - Free Report) third-quarter 2020 core FFO per share of 30 cents exceeded the Zacks Consensus Estimate of 29 cents. However, the figure compared unfavorably with the year-ago quarter’s 38 cents.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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