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Regency Centers' April & May Rent Collections Total 68% & 58%

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Regency Centers Corporation (REG - Free Report) issued a business update related to the ongoing COVID-19 pandemic.

As of May 31, 2020, pro-rata base-rent collections for April improved to 68% as compared with 62% rent collected through May 5. Additionally, the company announced May rent collections of 58% as of May 31, 2020.

The encouraging rent-collection figures were likely supported by an increase in tenant operations from April to May. In fact, as of May end, around 75% of its tenants (based on pro-rate annual base rent or ABR) were open, increasing from around 60% in April.

Notably, significant exposure to essential retail businesses at the company’s centers has not only enabled its properties to remain open, it has also boosted rent collections. Specifically, with a focus on necessity, convenience and value retailers, Regency’s portfolio has 43% essential retail and services tenancy. This tenant category has paid 95% and 92% of April and May base rents, respectively.

Moreover, tenants from the essential restaurant category, representing 19% of total ABR have paid 54% and 42% of rents for April and May, respectively.

Additionally, in the uncertain times, having a grocery component has been saving the grace of retail REITs, and Regency has numerous industry-leading grocers such as Kroger, Albertsons Companies and Publix as tenants. In fact, 80% of its properties are anchored by leading grocers.

Regency also boosted its liquidity to $1.8 billion on May 31, 2020, compared with $1.3 billion as of the first-quarter end. This liquidity position consists of $525 million in cash balance and $1.25 billion available under its revolving credit facility. Strong liquidity and the company’s sector-leading free cash flows are sufficient to meet its expected near-term capital needs. In fact, after considering $305 million in near-term secured mortgage debt payments and capital expenditure, it will have $1.5 billion of net liquidity through 2021.

However, the company noted that 25% of its tenants (based on pro-rata ABR) remained closed as of May end. In fact, the pandemic has been most impactful for many non-essential businesses that are experiencing significant declines in the customer traffic and temporarily store closures. This is expected to have a significant adverse impact on tenants’ ability to pay rent obligations. As a result, there could be a significant increase in the number of tenants making late or partial rent payments, requesting rent deferrals, or defaulted on rent payments.

Moreover, shares of the Zacks Rank #4 (Sell) company have plunged 30.6% over the past year compared with the industry’s decline of 24.7%.

 


Stocks to Consider

Alexander Baldwin Holdings, Inc.’s (ALEX - Free Report) Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has been unchanged at 83 cents over the past month. The company currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

One Liberty Properties, Inc.’s (OLP - Free Report) FFO per share estimate for the ongoing year has been unchanged at $1.89 over the past 30 days. The company currently flaunts a Zacks Rank of 1.

Gladstone Land Corporation’s (LAND - Free Report) FFO per share estimate for 2020 has moved 3% upward to 68 cents over the past month. Further, it currently carries a Zacks Rank of 2 (Buy).

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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