Regency Centers' (REG) Q3 FFO In Line, Revenues Surpass
Zacks Investment Research | Nov 02, 2016 02:06AM ET
Regency Centers Corporation’s (NYSE:REG) third-quarter 2016 core funds from operations (“FFO”) of 81 cents per share came in line with the Zacks Consensus Estimate. Further, the results compared favorably with 76 cents reported in the year-ago quarter.
The company reported better-than-expected growth in revenue. Moreover, it experienced growth in same property net operating income (“SPNOI”).
Total revenue for the quarter came in at $152.8 million, surpassing the Zacks Consensus Estimate of $149 million and up from $142.1 in the prior year.
Behind the Headlines
During the quarter, Regency’s tally for new and renewal leasing transactions reached 376, spanning 1.55 million square feet of space. Moreover, Regency’s SPNOI climbed 2.9% on a year-over-year basis, excluding termination fees, for its wholly owned properties, along with its pro-rata share of co-investment partnerships.
Rental rate growth for new leases was 14.3%, while the same for renewal leases was 4.6%. Same properties portfolio was 96.0% leased, while all of the company’s properties were 95.6% leased.
Regency’s cash and cash equivalents were $44.9 million at the end of third-quarter 2016, up from $40.6 million at the end of 2015. The company’s total outstanding debt was $1.63 billion, down from $1.86 billion at the end of the previous year.
Notable Portfolio Activity
During the quarter, Regency acquired Klahanie shopping center in the greater Seattle area, on a wholly owned, unencumbered basis, for a gross price of $36.0 million. On the other hand, the company sold three wholly owned properties as well as transferred the 50% ownership stake in three properties to a co-investment partner, for an aggregate of $66.6 million. Notably, the company has sold 16 properties for a total of $115.8 million year to date.
At the end of the reported quarter, the company had 21 properties in development or under redevelopment with combined, estimated costs of $220.5 million.
Outlook
Regency updated its guidance and now projects 2016 core FFO per share in a range of $3.25–$3.28 against the prior outlook of $3.22–$3.27. The Zacks Consensus Estimate is currently pegged at $3.26.
Dividend Update
On Oct 25, 2016, Regency’s board of directors announced a quarterly cash dividend of 50 cents per share on its common stock. The dividend will be paid on Nov 30 to shareholders of record as of Nov 16.
Our Take
The company’s focus on building a premium portfolio of grocery-anchored shopping centers augurs well for the near term. Such centers are usually necessity driven and attract huge traffic. Also, the presence of a cluster of leading grocers will cushion the company from market swings. Yet, stiff competition and an anticipated rise in interest rates pose concerns for the stock.
Get The News You Want
Regency currently carries a Zacks Rank #3 (Hold). You can see .
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.