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Regency Centers (REG) Updates on Q4 Transaction Activity

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Regency Centers Corporation (REG - Free Report) witnessed solid inorganic growth in the fourth quarter of 2021. On a wholly-owned basis, REG completed acquisitions worth $311 million.

Regency Centers closed its previously-announced acquisition of a 383,000-square-foot grocery-anchored community center Blakeney Shopping Center in South Charlotte, NC for $181 million. The acquisition seems a strategic fit as the center is anchored by Harris Teeter, Marshalls, HomeGoods, Best Buy and PetSmart, and shadow-anchored by Target.

In addition, Regency Centers acquired a portfolio of four grocery-anchored neighborhood centers for $130 million. The four properties enclosing 387,000 square foot are located in Long Island in NY. While the three centers are anchored by King Kullen, one property is anchored by Stew Leonard’s.

During the full year, Regency Centers concluded acquisitions for a total of $489 million at a blended cap rate of 5.1%.

Per management, “Investing in high-quality, well-located grocery-anchored retail, as we did successfully in 2021, is at the core of Regency Centers’ capital allocation strategy.”

With regard to disposition activities, Regency Centers wrapped up the sale of two properties for a combined total of $87 million at Regency Centers’ share during the fourth quarter.

This consisted of the sale of its Marina Shores property located in Long Beach and its wholly-owned Sequoia Station center located in Redwood City. Both properties located in California were sold at$14 million and $73 million, respectively.

Closed on Nov 16, 2021 the Long Beach property was sold to a private buyer for a proposed multifamily development. Additionally, the Redwood City property was sold to a private buyer for a proposed mixed-use densification project and was completed on Dec 15.

For the full year, REG completed a total of $279 million dispositions on a combined basis. Excluding non-income producing properties, the blended cap rate was 5.2%.

Moreover, on Jan 11, 2022, Regency Centers sold its wholly-owned Costa Verde Center in San Diego to another public REIT for $125 million. The property was sold for a proposed development of office/laboratory space. The cap rate on in-place net operating income was 1.5%.

Shares of this currently Zacks Rank #3 (Hold) player have gained 9% in the past three months, outperforming the industry’s rally of 0.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Stocks to Consider

Some better-ranked stocks from the REIT sector are Kimco Realty (KIM - Free Report) , Kite Realty Group Trust (KRG - Free Report) and EPR Properties (EPR - Free Report) .

Kimco flaunts a Zacks Rank #1 (Strong Buy) at present. Shares of KIM have gained 17.5% in the past six months.

The Zacks Consensus Estimate for Kimco’s 2021 funds from operations (FFO) per share has been raised marginally over the past month. Over the last four quarters, KIM’s FFO per share surpassed the consensus mark on all occasions, the average being 7.4%.

The Zacks Consensus Estimate for Kite Realty’s 2021 FFO per share has been raised 2.2% in the past two months. Over the last four quarters, KRG’s FFO per share surpassed the consensus mark thrice and was in line with the other, the average beat being 4.7%.

Currently, KRG sports a Zacks Rank of 1. Shares of Kite Realty have appreciated 2.8% in the past six months.

The Zacks Consensus Estimate for EPR Properties’ 2021 FFO per share has been raised 3.3% over the past two months. Over the last four quarters, EPR’s FFO per share surpassed the consensus mark on three occasions and missed the other, the average being 4.4%.

EPR Properties carries a Zacks Rank #2 (Buy) at present. Shares of EPR have declined 14.1% in the past six months.

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