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Regency Centers (REG) Beats Q1 FFO Estimates, Raises '21 View

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Regency Centers Corporation’s (REG - Free Report) first-quarter 2021 NAREIT funds from operations (FFO) per share of 90 cents handily surpassed the Zacks Consensus Estimate of 75 cents.

Results reflect higher-than-anticipated revenue numbers. The retail REIT has also issued an upbeat outlook.

Particularly, total revenues of $274.7 million exceeded the Zacks Consensus Estimate of $255.5 million.    

Lisa Palmer, president and chief executive officer noted, “We see longer term structural tailwinds for our Company and our industry, benefitting from growth in suburban markets as well as renewed appreciation among consumers and retailers for the capabilities and conveniences of our open air neighborhood and community centers.”

However, the quarterly FFO per share came in lower than the prior-year period’s 98 cents. Moreover, revenues declined 3.2% from the year-earlier quarter.

Results also underline tenant vacancy and uncollectible lease income related to cash basis tenants, partly mitigated by revenues related to prior period collections from cash basis tenants.

Further, as of May 3, 2021, the company collected 93% of first-quarter pro-rata base rent, in addition to the 1% subject to executed deferral agreements. The retail REIT also continues to make progress on the 2020 accounts receivable.

Markedly, as of Mar 31, 2021, more than 1,700 rent deferral agreements were executed, with total deferred rent of $42.7 million. Also, as of the same date, the company had rent deferral agreements with balances still outstanding aggregating $28.3 million, of which 56% is on a cash basis.

Inside the Headlines

During the first quarter, Regency Centers executed 1.5 million square feet of new and renewal leases with blended rent spreads of 0.2%.

As of Mar 31, 2021, the company’s wholly-owned portfolio, along with its pro-rata shares of co-investment partnerships, was 92.2% leased. Its same-property portfolio was 92.5% leased, reflecting a contraction of 50 basis points (bps) sequentially.

In its same-property portfolio, anchor percent leased (includes spaces greater than or equal to 10,000 square feet) was 95.1%, highlighting a contraction of 40 bps sequentially, while same property shop percent leased (includes spaces less than 10,000 square feet) was 88.3%, marking a contraction of 40 bps sequentially.

Same-property NOI, excluding termination fees, edged down 1.6% on a year-over-year basis.

Portfolio Activity

During the January-March quarter, the company sold five properties for a total of $59.3 million at Regency’s share, and one non-income producing land parcel for $680,000 at Regency’s share. In the same period, Regency completed redevelopment projects with total pro-rata cost of $3.4 million.

As of Mar 31, 2021, Regency’s in-process redevelopment and development projects total $327 million and an estimated $161 million of remaining costs to complete these projects.

Liquidity Update

As of Mar 31, 2021, Regency Centers had cash, cash equivalents, and restricted cash of $139.3 million, down from $378.5 million at year-end 2020. The retail REIT had full capacity under its $1.2-billion revolving credit facility. As of that date, its pro-rata net debt-to-operating EBITDAre ratio was 5.9x.

Outlook

Regency has revised the guidance and now projects 2021 NAREIT FFO per share in the range of $3.33-$3.43 compared with the prior guidance $2.96-$3.14. The Zacks Consensus Estimate for the same is currently pegged at $3.11.

Management also increased the same-property NOI guided range to 6-8.5% from the -1.0% to 2.5% previously guided.

Dividend Update

On May 5, 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 Jul 6, to its shareholders of record as of Jun 15, 2021.

Regency Centers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

Performance of Other Retail REITs

Kimco Realty Corp.’s (KIM - Free Report) first-quarter NAREIT FFO came in at 33 cents per share, surpassing the Zacks Consensus Estimate of 30 cents. Results highlighted better-than-anticipated top-line numbers. Moreover, the retail REIT raised the outlook for 2021. With a well-located and largely grocery-anchored portfolio that offers essential goods and services, the retail REIT witnessed decent leasing activity during the first quarter. Rent-collection figures were also healthy. The company collected 94% of total pro-rata base rents billed during the first quarter.

Realty Income Corporation’s (O - Free Report) first-quarter 2021 adjusted funds from operations (AFFO) per share of 86 cents surpassed the Zacks Consensus Estimate of 85 cents. The encouraging performance reflected improved revenues in the quarter. The retail REIT also apprised of its rental receipts through Mar 31, 2021, and noted that it has collected 94.1% of contractual rent due for the first quarter across the total portfolio.

We now look forward to the earnings release of another retail REIT — Simon Property Group, Inc. (SPG - Free Report) — which is slated to report next week.

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

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