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Regency Centers Corporation’s (REG - Free Report) third-quarter 2018 NAREIT funds from operations (FFO) per share of 96 cents surpassed the Zacks Consensus Estimate by a cent. Further, the figure compares favorably with the year-ago tally of 91 cents.
The company’s quarterly results reflect growth in same-property net operating income (NOI), backed by higher base rent. Also, it witnessed higher occupancy in the Jul-Sep period.
Total revenues for the quarter came in at $278.3 million, outpacing the Zacks Consensus Estimate of $267.5 million. In addition, the figure came in higher than the year-ago tally of $262.1 million.
Inside the Headlines
During the reported quarter, Regency executed around 2.3 million square feet of new and renewal leases, leading to rent spreads on comparable new leases and renewal leases of 35.2% and 5.9% respectively. With this, total rent spread for the Sep-end quarter came in at 10.1%.
As of Sep 30, 2018, the company’s wholly owned portfolio, along with its pro-rata shares of co-investment partnerships, was 95.4% leased. The company’s same-property portfolio was 95.9% leased, indicating an expansion of 30 basis points (bps) sequentially and 10 bps year over year.
In addition, Regency’s same-property NOI as adjusted, excluding termination fees, climbed 2.9% on a year-over-year basis, wherein growth in base rent contributed 3.8% in the quarter under review.
Regency’s cash and cash equivalents were $44.5 million at the end of third-quarter 2018, down from $49.4 million recorded at the end of 2017. The company’s total outstanding debt was $3.7 billion, up from $3.6 billion witnessed at the end of the previous year.
Also, in August, S&P Global Ratings revised their outlook from stable to positive for the company. Issuer credit rating was reaffirmed at BBB+.
Notable Portfolio Activity
Including transactions subsequent to the third quarter, on a year-to-date basis, Regency’s sale proceeds from disposition of nine properties, totaled $194.7 million, while six properties were acquired for $145.1 million, at Regency’s share.
Also, at the third-quarter end, the company had 22 properties in development or redevelopment, indicating a total investment worth $354.4 million.
2018 Outlook
Regency expects 2018 NAREIT FFO per share of $3.76 - $3.79 compared with the previous guidance of $3.75 - $3.79. The Zacks Consensus Estimate for the same is currently pegged at the upper end of the range.
Dividend Update
On Oct 25, Regency’s board of directors announced a quarterly cash dividend of 55.5 cents per share on its common stock. This dividend will be paid on Nov 28, to shareholders of record as ofNov 14, 2018.
Our Take
Regency’s premium quality portfolio of shopping centers located in strong trade areas that are characterized with higher spending power enables the company to attract top grocers and retailers. This again aids the company to achieve higher leasing and NOI growth.
Nevertheless, to keep pace with the changing retail landscape, the company has undertaken numerous development and redevelopment activities. Amid these, rising construction costs, entitlement delays and lease-ups will likely drag near-term margins until project completions.
Regency Centers Corporation Price, Consensus and EPS Surprise
We now look forward to the earnings releases of other REITs like EPR Properties (EPR - Free Report) , Vornado Realty Trust (VNO - Free Report) and UDR Inc. (UDR - Free Report) . All three companies are scheduled to release their quarterly figures on Oct 29.
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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Regency Centers (REG) Surpasses Q3 FFO & Revenue Estimates
Regency Centers Corporation’s (REG - Free Report) third-quarter 2018 NAREIT funds from operations (FFO) per share of 96 cents surpassed the Zacks Consensus Estimate by a cent. Further, the figure compares favorably with the year-ago tally of 91 cents.
The company’s quarterly results reflect growth in same-property net operating income (NOI), backed by higher base rent. Also, it witnessed higher occupancy in the Jul-Sep period.
Total revenues for the quarter came in at $278.3 million, outpacing the Zacks Consensus Estimate of $267.5 million. In addition, the figure came in higher than the year-ago tally of $262.1 million.
Inside the Headlines
During the reported quarter, Regency executed around 2.3 million square feet of new and renewal leases, leading to rent spreads on comparable new leases and renewal leases of 35.2% and 5.9% respectively. With this, total rent spread for the Sep-end quarter came in at 10.1%.
As of Sep 30, 2018, the company’s wholly owned portfolio, along with its pro-rata shares of co-investment partnerships, was 95.4% leased. The company’s same-property portfolio was 95.9% leased, indicating an expansion of 30 basis points (bps) sequentially and 10 bps year over year.
In addition, Regency’s same-property NOI as adjusted, excluding termination fees, climbed 2.9% on a year-over-year basis, wherein growth in base rent contributed 3.8% in the quarter under review.
Regency’s cash and cash equivalents were $44.5 million at the end of third-quarter 2018, down from $49.4 million recorded at the end of 2017. The company’s total outstanding debt was $3.7 billion, up from $3.6 billion witnessed at the end of the previous year.
Also, in August, S&P Global Ratings revised their outlook from stable to positive for the company. Issuer credit rating was reaffirmed at BBB+.
Notable Portfolio Activity
Including transactions subsequent to the third quarter, on a year-to-date basis, Regency’s sale proceeds from disposition of nine properties, totaled $194.7 million, while six properties were acquired for $145.1 million, at Regency’s share.
Also, at the third-quarter end, the company had 22 properties in development or redevelopment, indicating a total investment worth $354.4 million.
2018 Outlook
Regency expects 2018 NAREIT FFO per share of $3.76 - $3.79 compared with the previous guidance of $3.75 - $3.79. The Zacks Consensus Estimate for the same is currently pegged at the upper end of the range.
Dividend Update
On Oct 25, Regency’s board of directors announced a quarterly cash dividend of 55.5 cents per share on its common stock. This dividend will be paid on Nov 28, to shareholders of record as ofNov 14, 2018.
Our Take
Regency’s premium quality portfolio of shopping centers located in strong trade areas that are characterized with higher spending power enables the company to attract top grocers and retailers. This again aids the company to achieve higher leasing and NOI growth.
Nevertheless, to keep pace with the changing retail landscape, the company has undertaken numerous development and redevelopment activities. Amid these, rising construction costs, entitlement delays and lease-ups will likely drag near-term margins until project completions.
Regency Centers Corporation Price, Consensus and EPS Surprise
Regency Centers Corporation Price, Consensus and EPS Surprise | Regency Centers Corporation Quote
Regency currently carries a Zacks Rank #3 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We now look forward to the earnings releases of other REITs like EPR Properties (EPR - Free Report) , Vornado Realty Trust (VNO - Free Report) and UDR Inc. (UDR - Free Report) . All three companies are scheduled to release their quarterly figures on Oct 29.
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.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>