UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended JuneSeptember 30, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 1-12298 (Regency Centers Corporation)
Commission File Number 0-24763 (Regency Centers, L.P.)
REGENCY CENTERS CORPORATION
REGENCY CENTERS, L.P.
(Exact name of registrant as specified in its charter)
| ||
|
|
|
florida (REGENCY CENTERS CORPORATION) |
| 59-3191743 |
Delaware (REGENCY CENTERS, L.P) | 59-3429602 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
|
| |
One Independent Drive, Suite 114 Jacksonville, Florida 32202 | (904) 598-7000 | |
(Address of principal executive offices) (zip code) |
| (Registrant's telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
Regency Centers Corporation
Title of each class |
| Trading Symbol |
| Name of each exchange on which registered |
Common Stock, $.01 par value |
| REG |
| The Nasdaq Stock Market LLC |
6.250% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share | REGCP | The Nasdaq Stock Market LLC | ||
5.875% Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share | REGCO | The Nasdaq Stock Market LLC |
Regency Centers, L.P.
Title of each class |
| Trading Symbol |
| Name of each exchange on which registered |
None |
| N/A |
| N/A |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Regency Centers Corporation Yes ☒ No ☐ Regency Centers, L.P. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Regency Centers Corporation Yes ☒ No ☐ Regency Centers, L.P. Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Regency Centers Corporation:
Large accelerated filer | ☒ | Accelerated filer | ☐ | Emerging growth company | ☐ |
Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
|
|
Regency Centers, L.P.:
Large accelerated filer | ☐ | Accelerated filer | ☐ | Emerging growth company | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Regency Centers Corporation Yes ☐ No ☐ Regency Centers, L.P. Yes ☐ No ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Regency Centers Corporation Yes ☐ No ☒ Regency Centers, L.P. Yes ☐ No ☒
The number of shares outstanding of Regency Centers Corporation's common stock was 171,003,217184,580,981 as of AugustNovember 3, 2023.
EXPLANATORY NOTE
This Quarterly Report on Form 10-Q (this "Report") combines the quarterly reports on Form 10-Q for the quarter ended JuneSeptember 30, 2023, of Regency Centers Corporation and Regency Centers, L.P. Unless stated otherwise or the context otherwise requires, references to "Regency Centers Corporation" or the "Parent Company" mean Regency Centers Corporation and its controlled subsidiaries and references to "Regency Centers, L.P." or the "Operating Partnership" mean Regency Centers, L.P. and its controlled subsidiaries. The terms "the Company," "Regency Centers," "Regency," "we," "our," and "us" as used in this Report mean the Parent Company and the Operating Partnership, collectively.
The Parent Company is a Real Estate Investment Trust ("REIT") and the general partner of the Operating Partnership. The Operating Partnership's capital includes general and limited common Partnership Units ("Units"). As of June 30, 2023, the Parent Company owned approximately 99.4% of the Units in the Operating Partnership. The remaining limited Units are owned by third party investors. As the sole general partner of the Operating Partnership, the Parent Company has exclusive control of the Operating Partnership's day-to-day management. The Operating Partnership's capital includes general and limited common partnership units ("Common Units"). As of September 30, 2023, the Parent Company owned approximately 99.4% of the Common Units in the Operating Partnership. The remaining Common Units, which are all limited Common Units, are owned by third party investors. In addition to the Common Units, the Operating Partnership has also issued two series of preferred units: the 6.250% Series A Cumulative Redeemable Preferred Units (the “Series A Preferred Units”) and the 5.875% Series B Cumulative Redeemable Preferred Units (the “Series B Preferred Units”). The Parent Company currently owns all of the Series A Preferred Units and Series B Preferred Units. The Series A Preferred Units and Series B Preferred Units are sometimes referred to collectively as the “Preferred Units".
The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report provides the following benefits:
Management operates the Parent Company and the Operating Partnership as one business. The management of the Parent Company consists of the same individuals as the management of the Operating Partnership. These individuals are officers of the Parent Company and employees of the Operating Partnership.
The Company believes it is important to understand the key differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its ownership of Common Units of partnership interests of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership. Except for $200 million of unsecured private placement debt, the Parent Company does not hold any indebtedness, but guarantees all of the unsecured debt of the Operating Partnership. The Operating Partnership is also the, directly or indirectly, co-issuer and guaranteesguarantor of the $200 million of the above mentioned Parent Company unsecured private placement debt. The Operating Partnership holds all the assets of the Company and retains the ownership interests in the Company's joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates all remaining capital required by the Company's business. These sources include the Operating Partnership's operations, its direct or indirect incurrence of indebtedness, and the issuance of partnership units.Common Units and Preferred Units.
Shareholders' equity, partners' capital, and noncontrolling interests are the main areas of difference between the Consolidated Financial Statements of the Parent Company and those of the Operating Partnership.Partnership, as well as the Preferred Units owned by the Parent Company. The Operating Partnership's capital includes generalthe Common Units and limited common Partnershipthe Preferred Units. The limited partners' Common Units in the Operating Partnership owned by third parties are accounted for in partners' capital in the Operating Partnership's financial statements and outside of shareholders' equity in noncontrolling interests in the Parent Company's financial statements. The Preferred Units owned by the Parent Company are eliminated in consolidation in the accompanying consolidated financial statements of the Parent Company and are classified as preferred units of general partner in the accompanying consolidated financial statements of the Operating Partnership.
In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this Report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements, controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this Report refers to actions or holdings as being actions or holdings of the Company.
As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have assets other than its investment in the Operating Partnership. Therefore, while shareholders' equity and partners' capital differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
REGENCY CENTERS CORPORATION
Consolidated Balance Sheets
JuneSeptember 30, 2023 and December 31, 2022
(in thousands, except share data)
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Assets |
| (unaudited) |
|
|
|
|
| (unaudited) |
|
|
|
| ||||
Net real estate investments: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Real estate assets, at cost |
| $ | 11,953,086 |
|
|
| 11,858,064 |
|
| $ | 13,361,194 |
|
|
| 11,858,064 |
|
Less: accumulated depreciation |
|
| 2,549,937 |
|
|
| 2,415,860 |
|
|
| 2,619,345 |
|
|
| 2,415,860 |
|
Real estate assets, net |
|
| 9,403,149 |
|
|
| 9,442,204 |
|
|
| 10,741,849 |
|
|
| 9,442,204 |
|
Investments in sales-type lease, net |
|
| 8,558 |
|
|
| — |
| ||||||||
Investments in real estate partnerships |
|
| 342,439 |
|
|
| 350,377 |
|
|
| 382,300 |
|
|
| 350,377 |
|
Net real estate investments |
|
| 9,745,588 |
|
|
| 9,792,581 |
|
|
| 11,132,707 |
|
|
| 9,792,581 |
|
Cash, cash equivalents, and restricted cash, including $3,259 and $2,310 of restricted cash at June 30, 2023 and December 31, 2022, respectively |
|
| 43,108 |
|
|
| 68,776 |
| ||||||||
Cash, cash equivalents, and restricted cash, including $6,710 and $2,310 of restricted cash at September 30, 2023 and December 31, 2022, respectively |
|
| 81,070 |
|
|
| 68,776 |
| ||||||||
Tenant and other receivables |
|
| 206,053 |
|
|
| 188,863 |
|
|
| 199,439 |
|
|
| 188,863 |
|
Deferred leasing costs, less accumulated amortization of $120,436 and $117,137 at June 30, 2023 and December 31, 2022, respectively |
|
| 69,788 |
|
|
| 68,945 |
| ||||||||
Acquired lease intangible assets, less accumulated amortization of $345,131 and $338,053 at June 30, 2023 and December 31, 2022, respectively |
|
| 178,849 |
|
|
| 197,745 |
| ||||||||
Deferred leasing costs, less accumulated amortization of $122,530 and $117,137 at September 30, 2023 and December 31, 2022, respectively |
|
| 71,551 |
|
|
| 68,945 |
| ||||||||
Acquired lease intangible assets, less accumulated amortization of $351,118 and $338,053 at September 30, 2023 and December 31, 2022, respectively |
|
| 295,347 |
|
|
| 197,745 |
| ||||||||
Right of use assets, net |
|
| 303,716 |
|
|
| 275,513 |
|
|
| 301,821 |
|
|
| 275,513 |
|
Other assets |
|
| 280,843 |
|
|
| 267,797 |
|
|
| 299,479 |
|
|
| 267,797 |
|
Total assets |
| $ | 10,827,945 |
|
|
| 10,860,220 |
|
| $ | 12,381,414 |
|
|
| 10,860,220 |
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Notes payable |
| $ | 3,709,074 |
|
|
| 3,726,754 |
| ||||||||
Notes payable, net |
| $ | 3,992,093 |
|
|
| 3,726,754 |
| ||||||||
Unsecured credit facility |
|
| 77,000 |
|
|
| — |
| ||||||||
Accounts payable and other liabilities |
|
| 317,894 |
|
|
| 317,259 |
|
|
| 360,102 |
|
|
| 317,259 |
|
Acquired lease intangible liabilities, less accumulated amortization of $201,440 and $193,315 at June 30, 2023 and December 31, 2022, respectively |
|
| 336,636 |
|
|
| 354,204 |
| ||||||||
Acquired lease intangible liabilities, less accumulated amortization of $205,096 and $193,315 at September 30, 2023 and December 31, 2022, respectively |
|
| 396,423 |
|
|
| 354,204 |
| ||||||||
Lease liabilities |
|
| 243,462 |
|
|
| 213,722 |
|
|
| 242,394 |
|
|
| 213,722 |
|
Tenants' security, escrow deposits and prepaid rent |
|
| 77,093 |
|
|
| 70,242 |
|
|
| 81,875 |
|
|
| 70,242 |
|
Total liabilities |
|
| 4,684,159 |
|
|
| 4,682,181 |
|
|
| 5,149,887 |
|
|
| 4,682,181 |
|
Commitments and contingencies |
|
| — |
|
|
| — |
| ||||||||
Equity: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Shareholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Common stock; $0.01 par value per share, 220,000,000 shares authorized; 170,998,004 and 171,124,593 shares issued at June 30, 2023 and December 31, 2022, respectively |
|
| 1,710 |
|
|
| 1,711 |
| ||||||||
Treasury stock at cost; 442,449 and 465,415 shares held at June 30, 2023 and December 31, 2022, respectively |
|
| (24,676 | ) |
|
| (24,461 | ) | ||||||||
Series A and Series B preferred stock, $0.01 par value per share, 30,000,000 shares authorized; 9,000,000 shares issued at September 30, 2023 with liquidation preferences of $25 per share and no shares authorized or issued at December 30, 2022 |
|
| 225,000 |
|
|
| — |
| ||||||||
Common stock; $0.01 par value per share, 220,000,000 shares authorized; 184,576,090 and 171,124,593 shares issued at September 30, 2023 and December 31, 2022, respectively |
|
| 1,846 |
|
|
| 1,711 |
| ||||||||
Treasury stock at cost; 443,809 and 465,415 shares held at September 30, 2023 and December 31, 2022, respectively |
|
| (25,081 | ) |
|
| (24,461 | ) | ||||||||
Additional paid-in-capital |
|
| 7,859,249 |
|
|
| 7,877,152 |
|
|
| 8,684,012 |
|
|
| 7,877,152 |
|
Accumulated other comprehensive income |
|
| 7,336 |
|
|
| 7,560 |
|
|
| 9,435 |
|
|
| 7,560 |
|
Distributions in excess of net income |
|
| (1,803,406 | ) |
|
| (1,764,977 | ) |
|
| (1,834,298 | ) |
|
| (1,764,977 | ) |
Total shareholders' equity |
|
| 6,040,213 |
|
|
| 6,096,985 |
|
|
| 7,060,914 |
|
|
| 6,096,985 |
|
Noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Exchangeable operating partnership units, aggregate redemption value of $66,720 and $46,340 at June 30, 2023 and December 31, 2022, respectively |
|
| 54,281 |
|
|
| 34,489 |
| ||||||||
Exchangeable operating partnership units, aggregate redemption value of $64,005 and $46,340 at September 30, 2023 and December 31, 2022, respectively |
|
| 53,914 |
|
|
| 34,489 |
| ||||||||
Limited partners' interests in consolidated partnerships |
|
| 49,292 |
|
|
| 46,565 |
|
|
| 116,699 |
|
|
| 46,565 |
|
Total noncontrolling interests |
|
| 103,573 |
|
|
| 81,054 |
|
|
| 170,613 |
|
|
| 81,054 |
|
Total equity |
|
| 6,143,786 |
|
|
| 6,178,039 |
|
|
| 7,231,527 |
|
|
| 6,178,039 |
|
Total liabilities and equity |
| $ | 10,827,945 |
|
|
| 10,860,220 |
|
| $ | 12,381,414 |
|
|
| 10,860,220 |
|
See accompanying notes to consolidated financial statements.
1
REGENCY CENTERS CORPORATION
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
|
| Three months ended June 30, |
|
| Six months ended June 30, |
|
| Three months ended September 30, |
|
| Nine months ended September 30, |
| ||||||||||||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Lease income |
| $ | 304,458 |
|
|
| 292,864 |
|
| $ | 613,259 |
|
|
| 586,509 |
|
| $ | 320,921 |
|
|
| 295,756 |
|
| $ | 934,180 |
|
|
| 882,265 |
|
Other property income |
|
| 2,683 |
|
|
| 2,720 |
|
|
| 5,821 |
|
|
| 5,824 |
|
|
| 2,638 |
|
|
| 2,466 |
|
|
| 8,459 |
|
|
| 8,290 |
|
Management, transaction, and other fees |
|
| 7,106 |
|
|
| 6,499 |
|
|
| 13,144 |
|
|
| 13,183 |
|
|
| 7,079 |
|
|
| 5,767 |
|
|
| 20,223 |
|
|
| 18,950 |
|
Total revenues |
|
| 314,247 |
|
|
| 302,083 |
|
|
| 632,224 |
|
|
| 605,516 |
|
|
| 330,638 |
|
|
| 303,989 |
|
|
| 962,862 |
|
|
| 909,505 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Depreciation and amortization |
|
| 83,161 |
|
|
| 79,350 |
|
|
| 165,868 |
|
|
| 157,192 |
|
|
| 87,505 |
|
|
| 80,270 |
|
|
| 253,373 |
|
|
| 237,462 |
|
Property operating expense |
|
| 54,394 |
|
|
| 47,750 |
|
|
| 105,416 |
|
|
| 94,211 |
|
|
| 59,227 |
|
|
| 49,577 |
|
|
| 164,643 |
|
|
| 143,788 |
|
Real estate taxes |
|
| 38,509 |
|
|
| 36,700 |
|
|
| 76,986 |
|
|
| 73,569 |
|
|
| 40,171 |
|
|
| 37,926 |
|
|
| 117,157 |
|
|
| 111,495 |
|
General and administrative |
|
| 25,065 |
|
|
| 17,645 |
|
|
| 50,345 |
|
|
| 36,437 |
|
|
| 20,903 |
|
|
| 20,273 |
|
|
| 71,248 |
|
|
| 56,710 |
|
Other operating expenses |
|
| 1,682 |
|
|
| 617 |
|
|
| 1,185 |
|
|
| 2,790 |
|
|
| 3,533 |
|
|
| 949 |
|
|
| 4,718 |
|
|
| 3,739 |
|
Total operating expenses |
|
| 202,811 |
|
|
| 182,062 |
|
|
| 399,800 |
|
|
| 364,199 |
|
|
| 211,339 |
|
|
| 188,995 |
|
|
| 611,139 |
|
|
| 553,194 |
|
Other expense (income): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Interest expense, net |
|
| 36,956 |
|
|
| 36,699 |
|
|
| 73,349 |
|
|
| 73,437 |
|
|
| 38,807 |
|
|
| 36,361 |
|
|
| 112,156 |
|
|
| 109,798 |
|
Gain on sale of real estate, net of tax |
|
| (81 | ) |
|
| (4,291 | ) |
|
| (331 | ) |
|
| (106,239 | ) |
|
| (184 | ) |
|
| (220 | ) |
|
| (515 | ) |
|
| (106,459 | ) |
Net investment (income) loss |
|
| (1,742 | ) |
|
| 5,468 |
|
|
| (3,469 | ) |
|
| 7,962 |
| ||||||||||||||||
Total other expense (income) |
|
| 35,133 |
|
|
| 37,876 |
|
|
| 69,549 |
|
|
| (24,840 | ) | ||||||||||||||||
Net investment loss (income) |
|
| 1,020 |
|
|
| 1,215 |
|
|
| (2,449 | ) |
|
| 9,177 |
| ||||||||||||||||
Total other expense |
|
| 39,643 |
|
|
| 37,356 |
|
|
| 109,192 |
|
|
| 12,516 |
| ||||||||||||||||
Income from operations before equity in income of investments in real estate partnerships |
|
| 76,303 |
|
|
| 82,145 |
|
|
| 162,875 |
|
|
| 266,157 |
|
|
| 79,656 |
|
|
| 77,638 |
|
|
| 242,531 |
|
|
| 343,795 |
|
Equity in income of investments in real estate partnerships |
|
| 11,869 |
|
|
| 23,842 |
|
|
| 23,785 |
|
|
| 36,646 |
|
|
| 12,517 |
|
|
| 11,209 |
|
|
| 36,302 |
|
|
| 47,855 |
|
Net income |
|
| 88,172 |
|
|
| 105,987 |
|
|
| 186,660 |
|
|
| 302,803 |
|
|
| 92,173 |
|
|
| 88,847 |
|
|
| 278,833 |
|
|
| 391,650 |
|
Noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Exchangeable operating partnership units |
|
| (550 | ) |
|
| (452 | ) |
|
| (970 | ) |
|
| (1,315 | ) |
|
| (520 | ) |
|
| (379 | ) |
|
| (1,490 | ) |
|
| (1,694 | ) |
Limited partners' interests in consolidated partnerships |
|
| (840 | ) |
|
| (739 | ) |
|
| (1,627 | ) |
|
| (1,464 | ) |
|
| (933 | ) |
|
| (890 | ) |
|
| (2,560 | ) |
|
| (2,354 | ) |
Income attributable to noncontrolling interests |
|
| (1,390 | ) |
|
| (1,191 | ) |
|
| (2,597 | ) |
|
| (2,779 | ) |
|
| (1,453 | ) |
|
| (1,269 | ) |
|
| (4,050 | ) |
|
| (4,048 | ) |
Net income attributable to the Company |
|
| 90,720 |
|
|
| 87,578 |
|
|
| 274,783 |
|
|
| 387,602 |
| ||||||||||||||||
Preferred stock dividends |
|
| (1,644 | ) |
|
| — |
|
|
| (1,644 | ) |
|
| — |
| ||||||||||||||||
Net income attributable to common shareholders |
| $ | 86,782 |
|
|
| 104,796 |
|
| $ | 184,063 |
|
|
| 300,024 |
|
| $ | 89,076 |
|
|
| 87,578 |
|
| $ | 273,139 |
|
|
| 387,602 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Income per common share - basic |
| $ | 0.51 |
|
|
| 0.61 |
|
| $ | 1.08 |
|
|
| 1.75 |
|
| $ | 0.50 |
|
|
| 0.51 |
|
| $ | 1.58 |
|
|
| 2.26 |
|
Income per common share - diluted |
| $ | 0.51 |
|
|
| 0.61 |
|
| $ | 1.07 |
|
|
| 1.74 |
|
| $ | 0.50 |
|
|
| 0.51 |
|
| $ | 1.57 |
|
|
| 2.26 |
|
See accompanying notes to consolidated financial statements.
2
REGENCY CENTERS CORPORATION
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
|
| Three months ended June 30, |
|
| Six months ended June 30, |
|
| Three months ended September 30, |
|
| Nine months ended September 30, |
| ||||||||||||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||||||
Net income |
| $ | 88,172 |
|
|
| 105,987 |
|
| $ | 186,660 |
|
|
| 302,803 |
|
| $ | 92,173 |
|
|
| 88,847 |
|
| $ | 278,833 |
|
|
| 391,650 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective portion of change in fair value of derivative instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective portion of change in fair value of derivative instruments |
|
| 5,457 |
|
|
| 4,436 |
|
|
| 2,721 |
|
|
| 13,404 |
|
|
| 4,606 |
|
|
| 7,069 |
|
|
| 7,327 |
|
|
| 20,473 |
|
Reclassification adjustment of derivative instruments included in net income |
|
| (1,649 | ) |
|
| 481 |
|
|
| (3,141 | ) |
|
| 1,491 |
|
|
| (2,161 | ) |
|
| 72 |
|
|
| (5,302 | ) |
|
| 1,563 |
|
Unrealized (loss) gain on available-for-sale debt securities |
|
| (115 | ) |
|
| (223 | ) |
|
| 77 |
|
|
| (977 | ) | ||||||||||||||||
Other comprehensive income (loss) |
|
| 3,693 |
|
|
| 4,694 |
|
|
| (343 | ) |
|
| 13,918 |
| ||||||||||||||||
Unrealized loss on available-for-sale debt securities |
|
| (292 | ) |
|
| (659 | ) |
|
| (215 | ) |
|
| (1,636 | ) | ||||||||||||||||
Other comprehensive income |
|
| 2,153 |
|
|
| 6,482 |
|
|
| 1,810 |
|
|
| 20,400 |
| ||||||||||||||||
Comprehensive income |
|
| 91,865 |
|
|
| 110,681 |
|
|
| 186,317 |
|
|
| 316,721 |
|
|
| 94,326 |
|
|
| 95,329 |
|
|
| 280,643 |
|
|
| 412,050 |
|
Less: comprehensive income attributable to noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net income attributable to noncontrolling interests |
|
| 1,390 |
|
|
| 1,191 |
|
|
| 2,597 |
|
|
| 2,779 |
|
|
| 1,453 |
|
|
| 1,269 |
|
|
| 4,050 |
|
|
| 4,048 |
|
Other comprehensive income (loss) attributable to noncontrolling interests |
|
| 284 |
|
|
| 542 |
|
|
| (119 | ) |
|
| 1,303 |
|
|
| 54 |
|
|
| 617 |
|
|
| (65 | ) |
|
| 1,920 |
|
Comprehensive income attributable to noncontrolling interests |
|
| 1,674 |
|
|
| 1,733 |
|
|
| 2,478 |
|
|
| 4,082 |
|
|
| 1,507 |
|
|
| 1,886 |
|
|
| 3,985 |
|
|
| 5,968 |
|
Comprehensive income attributable to the Company |
| $ | 90,191 |
|
|
| 108,948 |
|
| $ | 183,839 |
|
|
| 312,639 |
|
| $ | 92,819 |
|
|
| 93,443 |
|
| $ | 276,658 |
|
|
| 406,082 |
|
See accompanying notes to consolidated financial statements.
3
REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the three months ended JuneSeptember 30, 2023 and 2022
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noncontrolling Interests |
|
|
|
| ||||||||||||||||
|
| Common |
|
| Treasury |
|
| Additional |
|
| Accumulated |
|
| Distributions |
|
| Total |
|
| Exchangeable |
|
| Limited |
|
| Total |
|
| Total |
| ||||||||||
Balance at March 31, 2022 |
| $ | 1,714 |
|
|
| (23,831 | ) |
|
| 7,882,764 |
|
|
| (1,764 | ) |
|
| (1,726,556 | ) |
|
| 6,132,327 |
|
|
| 35,876 |
|
|
| 37,489 |
|
|
| 73,365 |
|
|
| 6,205,692 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 104,796 |
|
|
| 104,796 |
|
|
| 452 |
|
|
| 739 |
|
|
| 1,191 |
|
|
| 105,987 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3,743 |
|
|
| — |
|
|
| 3,743 |
|
|
| 17 |
|
|
| 453 |
|
|
| 470 |
|
|
| 4,213 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 409 |
|
|
| — |
|
|
| 409 |
|
|
| 3 |
|
|
| 69 |
|
|
| 72 |
|
|
| 481 |
|
Deferred compensation plan, net |
|
| — |
|
|
| (51 | ) |
|
| 51 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Restricted stock issued, net of amortization |
|
| — |
|
|
| — |
|
|
| 4,366 |
|
|
| — |
|
|
| — |
|
|
| 4,366 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,366 |
|
Common stock repurchased for taxes withheld for stock based compensation, net |
|
| — |
|
|
| — |
|
|
| 3 |
|
|
| — |
|
|
| — |
|
|
| 3 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3 |
|
Common stock repurchased and retired |
|
| (13 | ) |
|
| — |
|
|
| (75,406 | ) |
|
| — |
|
|
| — |
|
|
| (75,419 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (75,419 | ) |
Common stock issued under dividend reinvestment plan |
|
| — |
|
|
| — |
|
|
| 134 |
|
|
| — |
|
|
| — |
|
|
| 134 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 134 |
|
Common stock issued for partnership units exchanged |
|
| — |
|
|
| — |
|
|
| 1,275 |
|
|
| — |
|
|
| — |
|
|
| 1,275 |
|
|
| (1,275 | ) |
|
| — |
|
|
| (1,275 | ) |
|
| — |
|
Common stock issued, net of issuance costs |
|
| 10 |
|
|
| — |
|
|
| 61,274 |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,446 |
|
|
| 10,446 |
|
|
| 10,446 |
|
Distributions to partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (2,705 | ) |
|
| (2,705 | ) |
|
| (2,705 | ) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Common stock/unit ($0.625 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (107,885 | ) |
|
| (107,885 | ) |
|
| (462 | ) |
|
| — |
|
|
| (462 | ) |
|
| (108,347 | ) |
Balance at June 30, 2022 |
| $ | 1,711 |
|
|
| (23,882 | ) |
|
| 7,874,461 |
|
|
| 2,388 |
|
|
| (1,729,645 | ) |
|
| 6,125,033 |
|
|
| 34,611 |
|
|
| 46,491 |
|
|
| 81,102 |
|
|
| 6,206,135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Balance at March 31, 2023 |
| $ | 1,710 |
|
|
| (25,699 | ) |
|
| 7,856,426 |
|
|
| 3,927 |
|
|
| (1,779,043 | ) |
|
| 6,057,321 |
|
|
| 34,411 |
|
|
| 47,703 |
|
|
| 82,114 |
|
|
| 6,139,435 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 86,782 |
|
|
| 86,782 |
|
|
| 550 |
|
|
| 840 |
|
|
| 1,390 |
|
|
| 88,172 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,886 |
|
|
| — |
|
|
| 4,886 |
|
|
| 32 |
|
|
| 424 |
|
|
| 456 |
|
|
| 5,342 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,477 | ) |
|
| — |
|
|
| (1,477 | ) |
|
| (10 | ) |
|
| (162 | ) |
|
| (172 | ) |
|
| (1,649 | ) |
Deferred compensation plan, net |
|
| — |
|
|
| 1,023 |
|
|
| (1,023 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Restricted stock issued, net of amortization |
|
| — |
|
|
| — |
|
|
| 4,105 |
|
|
| — |
|
|
| — |
|
|
| 4,105 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,105 |
|
Common stock repurchased for taxes withheld for stock based compensation, net |
|
| — |
|
|
| — |
|
|
| (406 | ) |
|
| — |
|
|
| — |
|
|
| (406 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (406 | ) |
Common stock issued under dividend reinvestment plan |
|
| — |
|
|
| — |
|
|
| 157 |
|
|
| — |
|
|
| — |
|
|
| 157 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 157 |
|
Common stock issued, net of issuance costs |
|
| — |
|
|
| — |
|
|
| (10 | ) |
|
| — |
|
|
| — |
|
|
| (10 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (10 | ) |
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,428 |
|
|
| 1,428 |
|
|
| 1,428 |
|
Issuance of exchangeable operating partnership units |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 20,000 |
|
|
| — |
|
|
| 20,000 |
|
|
| 20,000 |
|
Distributions to partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (941 | ) |
|
| (941 | ) |
|
| (941 | ) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Common stock/unit ($0.650 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (111,145 | ) |
|
| (111,145 | ) |
|
| (702 | ) |
|
| — |
|
|
| (702 | ) |
|
| (111,847 | ) |
Balance at June 30, 2023 |
| $ | 1,710 |
|
|
| (24,676 | ) |
|
| 7,859,249 |
|
|
| 7,336 |
|
|
| (1,803,406 | ) |
|
| 6,040,213 |
|
|
| 54,281 |
|
|
| 49,292 |
|
|
| 103,573 |
|
|
| 6,143,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noncontrolling Interests |
|
|
|
| |||||||||||||||||
|
| Preferred |
|
| Common |
|
| Treasury |
|
| Additional |
|
| Accumulated |
|
| Distributions |
|
| Total |
|
| Exchangeable |
|
| Limited |
|
| Total |
|
| Total |
| |||||||||||
Balance at June 30, 2022 |
| $ | — |
|
|
| 1,711 |
|
|
| (23,882 | ) |
|
| 7,874,461 |
|
|
| 2,388 |
|
|
| (1,729,645 | ) |
|
| 6,125,033 |
|
|
| 34,611 |
|
|
| 46,491 |
|
|
| 81,102 |
|
|
| 6,206,135 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 87,578 |
|
|
| 87,578 |
|
|
| 379 |
|
|
| 890 |
|
|
| 1,269 |
|
|
| 88,847 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 5,787 |
|
|
| — |
|
|
| 5,787 |
|
|
| 27 |
|
|
| 596 |
|
|
| 623 |
|
|
| 6,410 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 78 |
|
|
| — |
|
|
| 78 |
|
|
| 1 |
|
|
| (7 | ) |
|
| (6 | ) |
|
| 72 |
|
Deferred compensation plan, net |
|
| — |
|
|
| — |
|
|
| (179 | ) |
|
| 179 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Restricted stock issued, net of amortization |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,125 |
|
|
| — |
|
|
| — |
|
|
| 4,125 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,125 |
|
Common stock repurchased for taxes withheld for stock based compensation, net |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 92 |
|
|
| — |
|
|
| — |
|
|
| 92 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 92 |
|
Common stock issued under dividend reinvestment plan |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 136 |
|
|
| — |
|
|
| — |
|
|
| 136 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 136 |
|
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,457 |
|
|
| 1,457 |
|
|
| 1,457 |
|
Distributions to partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,124 | ) |
|
| (1,124 | ) |
|
| (1,124 | ) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Common stock/unit ($0.625 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (106,946 | ) |
|
| (106,946 | ) |
|
| (464 | ) |
|
| — |
|
|
| (464 | ) |
|
| (107,410 | ) |
Balance at September 30, 2022 |
| $ | — |
|
|
| 1,711 |
|
|
| (24,061 | ) |
|
| 7,878,993 |
|
|
| 8,253 |
|
|
| (1,749,013 | ) |
|
| 6,115,883 |
|
|
| 34,554 |
|
|
| 48,303 |
|
|
| 82,857 |
|
|
| 6,198,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Balance at June 30, 2023 |
| $ | — |
|
|
| 1,710 |
|
|
| (24,676 | ) |
|
| 7,859,249 |
|
|
| 7,336 |
|
|
| (1,803,406 | ) |
|
| 6,040,213 |
|
|
| 54,281 |
|
|
| 49,292 |
|
|
| 103,573 |
|
|
| 6,143,786 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 90,720 |
|
|
| 90,720 |
|
|
| 520 |
|
|
| 933 |
|
|
| 1,453 |
|
|
| 92,173 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,026 |
|
|
| — |
|
|
| 4,026 |
|
|
| 25 |
|
|
| 263 |
|
|
| 288 |
|
|
| 4,314 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,927 | ) |
|
| — |
|
|
| (1,927 | ) |
|
| (11 | ) |
|
| (223 | ) |
|
| (234 | ) |
|
| (2,161 | ) |
Deferred compensation plan, net |
|
| — |
|
|
| — |
|
|
| (405 | ) |
|
| 405 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Restricted stock issued, net of amortization |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 5,465 |
|
|
| — |
|
|
| — |
|
|
| 5,465 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 5,465 |
|
Common stock repurchased for taxes withheld for stock based compensation, net |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 125 |
|
|
| — |
|
|
| — |
|
|
| 125 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 125 |
|
Common stock issued under dividend reinvestment plan |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 162 |
|
|
| — |
|
|
| — |
|
|
| 162 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 162 |
|
Common stock issued for partnership units exchanged |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 198 |
|
|
| — |
|
|
| — |
|
|
| 198 |
|
|
| (198 | ) |
|
| — |
|
|
| (198 | ) |
|
| — |
|
Common stock issued, net of issuance costs |
|
| — |
|
|
| 136 |
|
|
| — |
|
|
| 818,408 |
|
|
| — |
|
|
| — |
|
|
| 818,544 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 818,544 |
|
Issuance of preferred stock |
|
| 225,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 225,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 225,000 |
|
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 69,625 |
|
|
| 69,625 |
|
|
| 69,625 |
|
Distributions to partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,191 | ) |
|
| (3,191 | ) |
|
| (3,191 | ) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Preferred stock/unit |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,644 | ) |
|
| (1,644 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,644 | ) |
Common stock/unit ($0.650 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (119,968 | ) |
|
| (119,968 | ) |
|
| (703 | ) |
|
| — |
|
|
| (703 | ) |
|
| (120,671 | ) |
Balance at September 30, 2023 |
| $ | 225,000 |
|
|
| 1,846 |
|
|
| (25,081 | ) |
|
| 8,684,012 |
|
|
| 9,435 |
|
|
| (1,834,298 | ) |
|
| 7,060,914 |
|
|
| 53,914 |
|
|
| 116,699 |
|
|
| 170,613 |
|
|
| 7,231,527 |
|
See accompanying notes to consolidated financial statements.
4
REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the sixnine months ended JuneSeptember 30, 2023 and 2022
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noncontrolling Interests |
|
|
|
| ||||||||||||||||
|
| Common |
|
| Treasury |
|
| Additional |
|
| Accumulated |
|
| Distributions |
|
| Total |
|
| Exchangeable |
|
| Limited |
|
| Total |
|
| Total |
| ||||||||||
Balance at December 31, 2021 |
| $ | 1,712 |
|
|
| (22,758 | ) |
|
| 7,883,458 |
|
|
| (10,227 | ) |
|
| (1,814,814 | ) |
|
| 6,037,371 |
|
|
| 35,447 |
|
|
| 37,114 |
|
|
| 72,561 |
|
|
| 6,109,932 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 300,024 |
|
|
| 300,024 |
|
|
| 1,315 |
|
|
| 1,464 |
|
|
| 2,779 |
|
|
| 302,803 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 11,280 |
|
|
| — |
|
|
| 11,280 |
|
|
| 54 |
|
|
| 1,093 |
|
|
| 1,147 |
|
|
| 12,427 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,335 |
|
|
| — |
|
|
| 1,335 |
|
|
| 7 |
|
|
| 149 |
|
|
| 156 |
|
|
| 1,491 |
|
Deferred compensation plan, net |
|
| — |
|
|
| (1,124 | ) |
|
| 1,124 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Restricted stock issued, net of amortization |
|
| 2 |
|
|
| — |
|
|
| 8,572 |
|
|
| — |
|
|
| — |
|
|
| 8,574 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 8,574 |
|
Common stock repurchased for taxes withheld for stock based compensation, net |
|
| — |
|
|
| — |
|
|
| (6,088 | ) |
|
| — |
|
|
| — |
|
|
| (6,088 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (6,088 | ) |
Common stock repurchased and retired |
|
| (13 | ) |
|
| — |
|
|
| (75,406 | ) |
|
| — |
|
|
| — |
|
|
| (75,419 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (75,419 | ) |
Common stock issued under dividend reinvestment plan |
|
| — |
|
|
| — |
|
|
| 252 |
|
|
| — |
|
|
| — |
|
|
| 252 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 252 |
|
Common stock issued for partnership units exchanged |
|
| — |
|
|
| — |
|
|
| 1,275 |
|
|
| — |
|
|
| — |
|
|
| 1,275 |
|
|
| (1,275 | ) |
|
| — |
|
|
| (1,275 | ) |
|
| — |
|
Common stock issued, net of issuance costs |
|
| 10 |
|
|
| — |
|
|
| 61,274 |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,446 |
|
|
| 10,446 |
|
|
| 10,446 |
|
Distributions to partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,775 | ) |
|
| (3,775 | ) |
|
| (3,775 | ) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Common stock/unit ($1.250 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (214,855 | ) |
|
| (214,855 | ) |
|
| (937 | ) |
|
| — |
|
|
| (937 | ) |
|
| (215,792 | ) |
Balance at June 30, 2022 |
| $ | 1,711 |
|
|
| (23,882 | ) |
|
| 7,874,461 |
|
|
| 2,388 |
|
|
| (1,729,645 | ) |
|
| 6,125,033 |
|
|
| 34,611 |
|
|
| 46,491 |
|
|
| 81,102 |
|
|
| 6,206,135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Balance at December 31, 2022 |
| $ | 1,711 |
|
|
| (24,461 | ) |
|
| 7,877,152 |
|
|
| 7,560 |
|
|
| (1,764,977 | ) |
|
| 6,096,985 |
|
|
| 34,489 |
|
|
| 46,565 |
|
|
| 81,054 |
|
|
| 6,178,039 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 184,063 |
|
|
| 184,063 |
|
|
| 970 |
|
|
| 1,627 |
|
|
| 2,597 |
|
|
| 186,660 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,570 |
|
|
| — |
|
|
| 2,570 |
|
|
| 21 |
|
|
| 207 |
|
|
| 228 |
|
|
| 2,798 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (2,794 | ) |
|
| — |
|
|
| (2,794 | ) |
|
| (15 | ) |
|
| (332 | ) |
|
| (347 | ) |
|
| (3,141 | ) |
Deferred compensation plan, net |
|
| — |
|
|
| (215 | ) |
|
| 215 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Restricted stock issued, net of amortization |
|
| 2 |
|
|
| — |
|
|
| 8,922 |
|
|
| — |
|
|
| — |
|
|
| 8,924 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 8,924 |
|
Common stock repurchased for taxes withheld for stock based compensation, net |
|
| — |
|
|
| — |
|
|
| (7,326 | ) |
|
| — |
|
|
| — |
|
|
| (7,326 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (7,326 | ) |
Common stock repurchased and retired |
|
| (3 | ) |
|
| — |
|
|
| (20,003 | ) |
|
| — |
|
|
| — |
|
|
| (20,006 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (20,006 | ) |
Common stock issued under dividend reinvestment plan |
|
| — |
|
|
| — |
|
|
| 299 |
|
|
| — |
|
|
| — |
|
|
| 299 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 299 |
|
Common stock issued, net of issuance costs |
|
| — |
|
|
| — |
|
|
| (10 | ) |
|
| — |
|
|
| — |
|
|
| (10 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (10 | ) |
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3,205 |
|
|
| 3,205 |
|
|
| 3,205 |
|
Issuance of exchangeable operating partnership units |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 20,000 |
|
|
| — |
|
|
| 20,000 |
|
|
| 20,000 |
|
Distributions to partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,980 | ) |
|
| (1,980 | ) |
|
| (1,980 | ) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Common stock/unit ($1.300 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (222,492 | ) |
|
| (222,492 | ) |
|
| (1,184 | ) |
|
| — |
|
|
| (1,184 | ) |
|
| (223,676 | ) |
Balance at June 30, 2023 |
| $ | 1,710 |
|
|
| (24,676 | ) |
|
| 7,859,249 |
|
|
| 7,336 |
|
|
| (1,803,406 | ) |
|
| 6,040,213 |
|
|
| 54,281 |
|
|
| 49,292 |
|
|
| 103,573 |
|
|
| 6,143,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noncontrolling Interests |
|
|
|
| |||||||||||||||||
|
| Preferred |
|
| Common |
|
| Treasury |
|
| Additional |
|
| Accumulated |
|
| Distributions |
|
| Total |
|
| Exchangeable |
|
| Limited |
|
| Total |
|
| Total |
| |||||||||||
Balance at December 31, 2021 |
| $ | — |
|
|
| 1,712 |
|
|
| (22,758 | ) |
|
| 7,883,458 |
|
|
| (10,227 | ) |
|
| (1,814,814 | ) |
|
| 6,037,371 |
|
|
| 35,447 |
|
|
| 37,114 |
|
|
| 72,561 |
|
|
| 6,109,932 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 387,602 |
|
|
| 387,602 |
|
|
| 1,694 |
|
|
| 2,354 |
|
|
| 4,048 |
|
|
| 391,650 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 17,067 |
|
|
| — |
|
|
| 17,067 |
|
|
| 81 |
|
|
| 1,689 |
|
|
| 1,770 |
|
|
| 18,837 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,413 |
|
|
| — |
|
|
| 1,413 |
|
|
| 8 |
|
|
| 142 |
|
|
| 150 |
|
|
| 1,563 |
|
Deferred compensation plan, net |
|
| — |
|
|
| — |
|
|
| (1,303 | ) |
|
| 1,303 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Restricted stock issued, net of amortization |
|
| — |
|
|
| 2 |
|
|
| — |
|
|
| 12,697 |
|
|
| — |
|
|
| — |
|
|
| 12,699 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 12,699 |
|
Common stock repurchased for taxes withheld for stock based compensation, net |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (5,996 | ) |
|
| — |
|
|
| — |
|
|
| (5,996 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (5,996 | ) |
Common stock repurchased and retired |
|
| — |
|
|
| (13 | ) |
|
| — |
|
|
| (75,406 | ) |
|
| — |
|
|
| — |
|
|
| (75,419 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (75,419 | ) |
Common stock issued under dividend reinvestment plan |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 388 |
|
|
| — |
|
|
| — |
|
|
| 388 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 388 |
|
Common stock issued for partnership units exchanged |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,275 |
|
|
| — |
|
|
| — |
|
|
| 1,275 |
|
|
| (1,275 | ) |
|
| — |
|
|
| (1,275 | ) |
|
| — |
|
Common stock issued, net of issuance costs |
|
| — |
|
|
| 10 |
|
|
| — |
|
|
| 61,274 |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 11,903 |
|
|
| 11,903 |
|
|
| 11,903 |
|
Distributions to partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (4,899 | ) |
|
| (4,899 | ) |
|
| (4,899 | ) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Common stock/unit ($1.875 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (321,801 | ) |
|
| (321,801 | ) |
|
| (1,401 | ) |
|
| — |
|
|
| (1,401 | ) |
|
| (323,202 | ) |
Balance at September 30, 2022 |
| $ | — |
|
|
| 1,711 |
|
|
| (24,061 | ) |
|
| 7,878,993 |
|
|
| 8,253 |
|
|
| (1,749,013 | ) |
|
| 6,115,883 |
|
|
| 34,554 |
|
|
| 48,303 |
|
|
| 82,857 |
|
|
| 6,198,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Balance at December 31, 2022 |
| $ | — |
|
| $ | 1,711 |
|
|
| (24,461 | ) |
|
| 7,877,152 |
|
|
| 7,560 |
|
|
| (1,764,977 | ) |
|
| 6,096,985 |
|
|
| 34,489 |
|
|
| 46,565 |
|
|
| 81,054 |
|
|
| 6,178,039 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 274,783 |
|
|
| 274,783 |
|
|
| 1,490 |
|
|
| 2,560 |
|
|
| 4,050 |
|
|
| 278,833 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 6,596 |
|
|
| — |
|
|
| 6,596 |
|
|
| 46 |
|
|
| 470 |
|
|
| 516 |
|
|
| 7,112 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (4,721 | ) |
|
| — |
|
|
| (4,721 | ) |
|
| (26 | ) |
|
| (555 | ) |
|
| (581 | ) |
|
| (5,302 | ) |
Deferred compensation plan, net |
|
| — |
|
|
| — |
|
|
| (620 | ) |
|
| 620 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Restricted stock issued, net of amortization |
|
| — |
|
|
| 2 |
|
|
| — |
|
|
| 14,387 |
|
|
| — |
|
|
| — |
|
|
| 14,389 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 14,389 |
|
Common stock repurchased for taxes withheld for stock based compensation, net |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (7,201 | ) |
|
| — |
|
|
| — |
|
|
| (7,201 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (7,201 | ) |
Common stock repurchased and retired |
|
| — |
|
|
| (3 | ) |
|
| — |
|
|
| (20,003 | ) |
|
| — |
|
|
| — |
|
|
| (20,006 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (20,006 | ) |
Common stock issued under dividend reinvestment plan |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 461 |
|
|
| — |
|
|
| — |
|
|
| 461 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 461 |
|
Common stock issued for partnership units exchanged |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 198 |
|
|
| — |
|
|
| — |
|
|
| 198 |
|
|
| (198 | ) |
|
| — |
|
|
| (198 | ) |
|
| — |
|
Common stock issued, net of issuance costs |
|
| — |
|
|
| 136 |
|
|
| — |
|
|
| 818,398 |
|
|
| — |
|
|
| — |
|
|
| 818,534 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 818,534 |
|
Issuance of exchangeable operating partnership units |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 20,000 |
|
|
| — |
|
|
| 20,000 |
|
|
| 20,000 |
|
Issuance of preferred stock |
|
| 225,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 225,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 225,000 |
| |||||
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 72,830 |
|
|
| 72,830 |
|
|
| 72,830 |
|
Distributions to partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (5,171 | ) |
|
| (5,171 | ) |
|
| (5,171 | ) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Preferred stock/unit |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,644 | ) |
|
| (1,644 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,644 | ) |
Common stock/unit ($1.950 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (342,460 | ) |
|
| (342,460 | ) |
|
| (1,887 | ) |
|
| — |
|
|
| (1,887 | ) |
|
| (344,347 | ) |
Balance at September 30, 2023 |
| $ | 225,000 |
|
|
| 1,846 |
|
|
| (25,081 | ) |
|
| 8,684,012 |
|
|
| 9,435 |
|
|
| (1,834,298 | ) |
|
| 7,060,914 |
|
|
| 53,914 |
|
|
| 116,699 |
|
|
| 170,613 |
|
|
| 7,231,527 |
|
See accompanying notes to consolidated financial statements.
5
REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the sixnine months ended JuneSeptember 30, 2023 and 2022
(in thousands)
(unaudited)
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 186,660 |
|
|
| 302,803 |
|
| $ | 278,833 |
|
|
| 391,650 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
|
| 165,868 |
|
|
| 157,192 |
|
|
| 253,373 |
|
|
| 237,462 |
|
Amortization of deferred loan costs and debt premiums |
|
| 2,983 |
|
|
| 2,821 |
|
|
| 5,124 |
|
|
| 4,297 |
|
(Accretion) and amortization of above and below market lease intangibles, net |
|
| (13,842 | ) |
|
| (10,528 | ) |
|
| (21,573 | ) |
|
| (15,625 | ) |
Stock-based compensation, net of capitalization |
|
| 8,854 |
|
|
| 8,501 |
|
|
| 14,203 |
|
|
| 12,592 |
|
Equity in income of investments in real estate partnerships |
|
| (23,785 | ) |
|
| (36,646 | ) |
|
| (36,302 | ) |
|
| (47,855 | ) |
Gain on sale of real estate, net of tax |
|
| (331 | ) |
|
| (106,239 | ) |
|
| (515 | ) |
|
| (106,459 | ) |
Distribution of earnings from investments in real estate partnerships |
|
| 31,869 |
|
|
| 29,207 |
|
|
| 48,451 |
|
|
| 45,238 |
|
Deferred compensation expense (income) |
|
| 2,940 |
|
|
| (7,007 | ) |
|
| 2,148 |
|
|
| (8,016 | ) |
Realized and unrealized (gain) loss on investments |
|
| (3,376 | ) |
|
| 8,033 |
|
|
| (2,252 | ) |
|
| 9,253 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Tenant and other receivables |
|
| (14,549 | ) |
|
| (8,252 | ) |
|
| (3,094 | ) |
|
| (18,544 | ) |
Deferred leasing costs |
|
| (3,591 | ) |
|
| (4,263 | ) |
|
| (7,705 | ) |
|
| (7,022 | ) |
Other assets |
|
| (17,951 | ) |
|
| (8,353 | ) |
|
| (7,577 | ) |
|
| (4,312 | ) |
Accounts payable and other liabilities |
|
| 6,091 |
|
|
| (172 | ) |
|
| 20,875 |
|
|
| 21,656 |
|
Tenants' security, escrow deposits and prepaid rent |
|
| 6,837 |
|
|
| 660 |
|
|
| 3,696 |
|
|
| 13,927 |
|
Net cash provided by operating activities |
|
| 334,677 |
|
|
| 327,757 |
|
|
| 547,685 |
|
|
| 528,242 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Acquisition of operating real estate, net of cash acquired of $3,061 in 2022 |
|
| — |
|
|
| (139,775 | ) |
|
| (2,033 | ) |
|
| (141,275 | ) |
Acquisition of UBP, net of cash acquired of $14,143 |
|
| (80,488 | ) |
|
| — |
| ||||||||
Real estate development and capital improvements |
|
| (100,114 | ) |
|
| (99,470 | ) |
|
| (158,982 | ) |
|
| (143,724 | ) |
Proceeds from sale of real estate and FF&E |
|
| 3,745 |
|
|
| 136,421 |
|
|
| 10,338 |
|
|
| 137,280 |
|
Issuance of notes receivable |
|
| (4,000 | ) |
|
| — |
|
|
| (4,000 | ) |
|
| — |
|
Investments in real estate partnerships |
|
| (3,109 | ) |
|
| (11,549 | ) |
|
| (9,118 | ) |
|
| (13,573 | ) |
Return of capital from investments in real estate partnerships |
|
| 3,644 |
|
|
| 48,473 |
|
|
| 3,644 |
|
|
| 48,473 |
|
Dividends on investment securities |
|
| 420 |
|
|
| 214 |
|
|
| 571 |
|
|
| 336 |
|
Acquisition of investment securities |
|
| (2,748 | ) |
|
| (8,313 | ) |
|
| (5,206 | ) |
|
| (15,205 | ) |
Proceeds from sale of investment securities |
|
| 10,751 |
|
|
| 8,737 |
|
|
| 13,747 |
|
|
| 15,821 |
|
Net cash used in investing activities |
|
| (91,411 | ) |
|
| (65,262 | ) |
|
| (231,527 | ) |
|
| (111,867 | ) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net proceeds from common stock issuance |
|
| (10 | ) |
|
| 61,284 |
|
|
| 4 |
|
|
| 61,284 |
|
Repurchase of common shares in conjunction with equity award plans |
|
| (7,621 | ) |
|
| (6,388 | ) |
|
| (7,653 | ) |
|
| (6,438 | ) |
Common shares repurchased through share repurchase program |
|
| (20,006 | ) |
|
| (71,898 | ) |
|
| (20,006 | ) |
|
| (75,419 | ) |
Proceeds from sale of treasury stock |
|
| 28 |
|
|
| 64 |
|
|
| 62 |
|
|
| 64 |
|
Contributions from limited partners in consolidated partnerships, net |
|
| 1,225 |
|
|
| 1,234 |
|
|
| 3,167 |
|
|
| 1,568 |
|
Distributions to exchangeable operating partnership unit holders |
|
| (964 | ) |
|
| (950 | ) |
|
| (1,666 | ) |
|
| (1,413 | ) |
Dividends paid to common shareholders |
|
| (222,275 | ) |
|
| (213,868 | ) |
|
| (332,627 | ) |
|
| (321,484 | ) |
Proceeds from unsecured credit facilities |
|
| 235,000 |
|
|
| 75,000 |
|
|
| 442,000 |
|
|
| 95,000 |
|
Repayment of unsecured credit facilities |
|
| (235,000 | ) |
|
| (75,000 | ) |
|
| (365,000 | ) |
|
| (95,000 | ) |
Proceeds from notes payable |
|
| 15,500 |
|
|
| — |
|
|
| 46,500 |
|
|
| — |
|
Repayment of notes payable |
|
| (29,616 | ) |
|
| — |
|
|
| (60,257 | ) |
|
| (5,995 | ) |
Scheduled principal payments |
|
| (5,054 | ) |
|
| (5,728 | ) |
|
| (7,977 | ) |
|
| (8,503 | ) |
Payment of loan costs |
|
| (141 | ) |
|
| (82 | ) |
|
| (411 | ) |
|
| (82 | ) |
Net cash used in financing activities |
|
| (268,934 | ) |
|
| (236,332 | ) |
|
| (303,864 | ) |
|
| (356,418 | ) |
Net (decrease) increase in cash and cash equivalents and restricted cash |
|
| (25,668 | ) |
|
| 26,163 |
| ||||||||
Net increase in cash and cash equivalents and restricted cash |
|
| 12,294 |
|
|
| 59,957 |
| ||||||||
Cash and cash equivalents and restricted cash at beginning of the period |
|
| 68,776 |
|
|
| 95,027 |
|
|
| 68,776 |
|
|
| 95,027 |
|
Cash and cash equivalents and restricted cash at end of the period |
| $ | 43,108 |
|
|
| 121,190 |
|
| $ | 81,070 |
|
|
| 154,984 |
|
See accompanying notes to consolidated financial statements.
6
REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the sixnine months ended JuneSeptember 30, 2023 and 2022
(in thousands)
(unaudited)
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash paid for interest (net of capitalized interest of $2,534 and $1,815 in 2023 and 2022, respectively) |
| $ | 71,091 |
|
|
| 70,876 |
| ||||||||
Cash paid for interest (net of capitalized interest of $4,026 and $2,985 in 2023 and 2022, respectively) |
| $ | 116,686 |
|
|
| 115,011 |
| ||||||||
Cash paid for income taxes, net of refunds |
| $ | 573 |
|
|
| 370 |
|
| $ | 728 |
|
|
| 488 |
|
Supplemental disclosure of non-cash transactions: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Common stock and exchangeable operating partnership dividends declared |
| $ | 111,847 |
|
|
| 108,215 |
| ||||||||
Common and Preferred stock, and exchangeable operating partnership dividends declared |
| $ | 122,946 |
|
|
| 107,410 |
| ||||||||
Acquisition of real estate previously held within investments in real estate partnerships |
| $ | — |
|
|
| 17,179 |
|
| $ | — |
|
|
| 17,179 |
|
Mortgage loans assumed by Company with the acquisition of real estate |
| $ | — |
|
|
| 22,779 |
|
| $ | — |
|
|
| 22,779 |
|
Right of use assets obtained in exchange for new operating lease liabilities |
| $ | 32,002 |
|
|
|
| |||||||||
Sale of leased asset in exchange for net investment in sales-type lease |
| $ | 8,510 |
|
|
|
| |||||||||
UBP Acquisition: |
|
|
|
|
|
| ||||||||||
Notes payable assumed in acquisition, at fair value |
| $ | 284,706 |
|
|
| — |
| ||||||||
Non-controlling interest assumed in acquisition, at fair value |
| $ | 64,492 |
|
|
| — |
| ||||||||
Common stock exchanged for UBP shares |
| $ | 818,530 |
|
|
| — |
| ||||||||
Preferred stock exchanged for UBP shares |
| $ | 225,000 |
|
|
| — |
| ||||||||
Common stock issued for partnership units exchanged |
| $ | — |
|
|
| 1,275 |
|
| $ | 199 |
|
|
| 1,275 |
|
Accrued common stock repurchase in Accounts payable and other liabilities |
| $ | — |
|
|
| 3,521 |
| ||||||||
Exchangeable operating partnership units issued for acquisition of real estate |
| $ | 20,000 |
|
|
| — |
|
| $ | 20,000 |
|
|
| — |
|
Change in accrued capital expenditures |
| $ | 9,011 |
|
|
| 5,050 |
|
| $ | 20,967 |
|
|
| 10,230 |
|
Common stock issued under dividend reinvestment plan |
| $ | 299 |
|
|
| 252 |
|
| $ | 461 |
|
|
| 388 |
|
Stock-based compensation capitalized |
| $ | 366 |
|
|
| 373 |
|
| $ | 638 |
|
|
| 550 |
|
Contributions from limited partners in consolidated partnerships |
| $ | — |
|
|
| 5,436 |
|
| $ | — |
|
|
| 5,434 |
|
Common stock issued for dividend reinvestment in trust |
| $ | 617 |
|
|
| 555 |
|
| $ | 905 |
|
|
| 840 |
|
Contribution of stock awards into trust |
| $ | 1,844 |
|
|
| 2,022 |
|
| $ | 1,961 |
|
|
| 2,136 |
|
Distribution of stock held in trust |
| $ | 2,245 |
|
|
| 566 |
|
| $ | 2,245 |
|
|
| 786 |
|
Change in fair value of securities |
| $ | 98 |
|
|
| 1,236 |
|
| $ | 215 |
|
|
| 1,896 |
|
See accompanying notes to consolidated financial statements.
7
REGENCY CENTERS, L.P.
Consolidated Balance Sheets
JuneSeptember 30, 2023 and December 31, 2022
(in thousands, except unit data)
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Assets |
| (unaudited) |
|
|
|
| (unaudited) |
|
|
| ||||||
Net real estate investments: |
|
|
|
|
|
|
|
|
|
| ||||||
Real estate assets, at cost |
| $ | 11,953,086 |
|
|
| 11,858,064 |
|
| $ | 13,361,194 |
|
|
| 11,858,064 |
|
Less: accumulated depreciation |
|
| 2,549,937 |
|
|
| 2,415,860 |
|
|
| 2,619,345 |
|
|
| 2,415,860 |
|
Real estate assets, net |
|
| 9,403,149 |
|
|
| 9,442,204 |
|
|
| 10,741,849 |
|
|
| 9,442,204 |
|
Investments in sales-type lease, net |
|
| 8,558 |
|
|
| — |
| ||||||||
Investments in real estate partnerships |
|
| 342,439 |
|
|
| 350,377 |
|
|
| 382,300 |
|
|
| 350,377 |
|
Net real estate investments |
|
| 9,745,588 |
|
|
| 9,792,581 |
|
|
| 11,132,707 |
|
|
| 9,792,581 |
|
Cash, cash equivalents, and restricted cash, including $3,259 and $2,310 of restricted cash at June 30, 2023 and December 31, 2022, respectively |
|
| 43,108 |
|
|
| 68,776 |
| ||||||||
Cash, cash equivalents, and restricted cash, including $6,710 and $2,310 of restricted cash at September 30, 2023 and December 31, 2022, respectively |
|
| 81,070 |
|
|
| 68,776 |
| ||||||||
Tenant and other receivables |
|
| 206,053 |
|
|
| 188,863 |
|
|
| 199,439 |
|
|
| 188,863 |
|
Deferred leasing costs, less accumulated amortization of $120,436 and $117,137 at June 30, 2023 and December 31, 2022, respectively |
|
| 69,788 |
|
|
| 68,945 |
| ||||||||
Acquired lease intangible assets, less accumulated amortization of $345,131 and $338,053 at June 30, 2023 and December 31, 2022, respectively |
|
| 178,849 |
|
|
| 197,745 |
| ||||||||
Deferred leasing costs, less accumulated amortization of $122,530 and $117,137 at September 30, 2023 and December 31, 2022, respectively |
|
| 71,551 |
|
|
| 68,945 |
| ||||||||
Acquired lease intangible assets, less accumulated amortization of $351,118 and $338,053 at September 30, 2023 and December 31, 2022, respectively |
|
| 295,347 |
|
|
| 197,745 |
| ||||||||
Right of use assets, net |
|
| 303,716 |
|
|
| 275,513 |
|
|
| 301,821 |
|
|
| 275,513 |
|
Other assets |
|
| 280,843 |
|
|
| 267,797 |
|
|
| 299,479 |
|
|
| 267,797 |
|
Total assets |
| $ | 10,827,945 |
|
|
| 10,860,220 |
|
| $ | 12,381,414 |
|
|
| 10,860,220 |
|
Liabilities and Capital |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Notes payable |
| $ | 3,709,074 |
|
|
| 3,726,754 |
| ||||||||
Notes payable, net |
| $ | 3,992,093 |
|
|
| 3,726,754 |
| ||||||||
Unsecured credit facility |
|
| 77,000 |
|
|
| — |
| ||||||||
Accounts payable and other liabilities |
|
| 317,894 |
|
|
| 317,259 |
|
|
| 360,102 |
|
|
| 317,259 |
|
Acquired lease intangible liabilities, less accumulated amortization of $201,440 and $193,315 at June 30, 2023 and December 31, 2022, respectively |
|
| 336,636 |
|
|
| 354,204 |
| ||||||||
Acquired lease intangible liabilities, less accumulated amortization of $205,096 and $193,315 at September 30, 2023 and December 31, 2022, respectively |
|
| 396,423 |
|
|
| 354,204 |
| ||||||||
Lease liabilities |
|
| 243,462 |
|
|
| 213,722 |
|
|
| 242,394 |
|
|
| 213,722 |
|
Tenants' security, escrow deposits and prepaid rent |
|
| 77,093 |
|
|
| 70,242 |
|
|
| 81,875 |
|
|
| 70,242 |
|
Total liabilities |
|
| 4,684,159 |
|
|
| 4,682,181 |
|
|
| 5,149,887 |
|
|
| 4,682,181 |
|
Capital: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Partners' capital: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
General partner; 170,998,004 and 171,124,593 units outstanding at June 30, 2023 and December 31, 2022, respectively |
|
| 6,032,877 |
|
|
| 6,089,425 |
| ||||||||
Limited partners; 1,080,137 and 741,433 units outstanding at June 30, 2023 and December 31, 2022 respectively |
|
| 54,281 |
|
|
| 34,489 |
| ||||||||
Series A and Series B preferred units, $0.01 par value per unit, 30,000,000 units authorized; 9,000,000 units issued as September 30, 2023 with liquidation preferences of $25 per unit and no units authorized or issued at December 30, 2022 |
|
| 225,000 |
|
|
| — |
| ||||||||
General partner; 184,576,090 and 171,124,593 units outstanding at September 30, 2023 and December 31, 2022, respectively |
|
| 6,826,479 |
|
|
| 6,089,425 |
| ||||||||
Limited partners; 1,076,797 and 741,433 units outstanding at September 30, 2023 and December 31, 2022 respectively |
|
| 53,914 |
|
|
| 34,489 |
| ||||||||
Accumulated other comprehensive income |
|
| 7,336 |
|
|
| 7,560 |
|
|
| 9,435 |
|
|
| 7,560 |
|
Total partners' capital |
|
| 6,094,494 |
|
|
| 6,131,474 |
|
|
| 7,114,828 |
|
|
| 6,131,474 |
|
Noncontrolling interest: Limited partners' interests in consolidated partnerships |
|
| 49,292 |
|
|
| 46,565 |
|
|
| 116,699 |
|
|
| 46,565 |
|
Total capital |
|
| 6,143,786 |
|
|
| 6,178,039 |
|
|
| 7,231,527 |
|
|
| 6,178,039 |
|
Total liabilities and capital |
| $ | 10,827,945 |
|
|
| 10,860,220 |
|
| $ | 12,381,414 |
|
|
| 10,860,220 |
|
See accompanying notes to consolidated financial statements.
8
REGENCY CENTERS, L.P.
Consolidated Statements of Operations
(in thousands, except per unit data)
(unaudited)
|
| Three months ended June 30, |
|
| Six months ended June 30, |
|
| Three months ended September 30, |
|
| Nine months ended September 30, |
| ||||||||||||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Lease income |
| $ | 304,458 |
|
|
| 292,864 |
|
| $ | 613,259 |
|
|
| 586,509 |
|
| $ | 320,921 |
|
|
| 295,756 |
|
| $ | 934,180 |
|
|
| 882,265 |
|
Other property income |
|
| 2,683 |
|
|
| 2,720 |
|
|
| 5,821 |
|
|
| 5,824 |
|
|
| 2,638 |
|
|
| 2,466 |
|
|
| 8,459 |
|
|
| 8,290 |
|
Management, transaction, and other fees |
|
| 7,106 |
|
|
| 6,499 |
|
|
| 13,144 |
|
|
| 13,183 |
|
|
| 7,079 |
|
|
| 5,767 |
|
|
| 20,223 |
|
|
| 18,950 |
|
Total revenues |
|
| 314,247 |
|
|
| 302,083 |
|
|
| 632,224 |
|
|
| 605,516 |
|
|
| 330,638 |
|
|
| 303,989 |
|
|
| 962,862 |
|
|
| 909,505 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Depreciation and amortization |
|
| 83,161 |
|
|
| 79,350 |
|
|
| 165,868 |
|
|
| 157,192 |
|
|
| 87,505 |
|
|
| 80,270 |
|
|
| 253,373 |
|
|
| 237,462 |
|
Property operating expense |
|
| 54,394 |
|
|
| 47,750 |
|
|
| 105,416 |
|
|
| 94,211 |
|
|
| 59,227 |
|
|
| 49,577 |
|
|
| 164,643 |
|
|
| 143,788 |
|
Real estate taxes |
|
| 38,509 |
|
|
| 36,700 |
|
|
| 76,986 |
|
|
| 73,569 |
|
|
| 40,171 |
|
|
| 37,926 |
|
|
| 117,157 |
|
|
| 111,495 |
|
General and administrative |
|
| 25,065 |
|
|
| 17,645 |
|
|
| 50,345 |
|
|
| 36,437 |
|
|
| 20,903 |
|
|
| 20,273 |
|
|
| 71,248 |
|
|
| 56,710 |
|
Other operating expenses |
|
| 1,682 |
|
|
| 617 |
|
|
| 1,185 |
|
|
| 2,790 |
|
|
| 3,533 |
|
|
| 949 |
|
|
| 4,718 |
|
|
| 3,739 |
|
Total operating expenses |
|
| 202,811 |
|
|
| 182,062 |
|
|
| 399,800 |
|
|
| 364,199 |
|
|
| 211,339 |
|
|
| 188,995 |
|
|
| 611,139 |
|
|
| 553,194 |
|
Other expense (income): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Interest expense, net |
|
| 36,956 |
|
|
| 36,699 |
|
|
| 73,349 |
|
|
| 73,437 |
|
|
| 38,807 |
|
|
| 36,361 |
|
|
| 112,156 |
|
|
| 109,798 |
|
Gain on sale of real estate, net of tax |
|
| (81 | ) |
|
| (4,291 | ) |
|
| (331 | ) |
|
| (106,239 | ) |
|
| (184 | ) |
|
| (220 | ) |
|
| (515 | ) |
|
| (106,459 | ) |
Net investment (income) loss |
|
| (1,742 | ) |
|
| 5,468 |
|
|
| (3,469 | ) |
|
| 7,962 |
| ||||||||||||||||
Total other expense (income) |
|
| 35,133 |
|
|
| 37,876 |
|
|
| 69,549 |
|
|
| (24,840 | ) | ||||||||||||||||
Net investment loss (income) |
|
| 1,020 |
|
|
| 1,215 |
|
|
| (2,449 | ) |
|
| 9,177 |
| ||||||||||||||||
Total other expense |
|
| 39,643 |
|
|
| 37,356 |
|
|
| 109,192 |
|
|
| 12,516 |
| ||||||||||||||||
Income from operations before equity in income of investments in real estate partnerships |
|
| 76,303 |
|
|
| 82,145 |
|
|
| 162,875 |
|
|
| 266,157 |
|
|
| 79,656 |
|
|
| 77,638 |
|
|
| 242,531 |
|
|
| 343,795 |
|
Equity in income of investments in real estate partnerships |
|
| 11,869 |
|
|
| 23,842 |
|
|
| 23,785 |
|
|
| 36,646 |
|
|
| 12,517 |
|
|
| 11,209 |
|
|
| 36,302 |
|
|
| 47,855 |
|
Net income |
|
| 88,172 |
|
|
| 105,987 |
|
|
| 186,660 |
|
|
| 302,803 |
|
|
| 92,173 |
|
|
| 88,847 |
|
|
| 278,833 |
|
|
| 391,650 |
|
Limited partners' interests in consolidated partnerships |
|
| (840 | ) |
|
| (739 | ) |
|
| (1,627 | ) |
|
| (1,464 | ) |
|
| (933 | ) |
|
| (890 | ) |
|
| (2,560 | ) |
|
| (2,354 | ) |
Net income attributable to the Partnership |
|
| 91,240 |
|
|
| 87,957 |
|
|
| 276,273 |
|
|
| 389,296 |
| ||||||||||||||||
Preferred unit distributions |
|
| (1,644 | ) |
|
| — |
|
|
| (1,644 | ) |
|
| — |
| ||||||||||||||||
Net income attributable to common unit holders |
| $ | 87,332 |
|
|
| 105,248 |
|
| $ | 185,033 |
|
|
| 301,339 |
|
| $ | 89,596 |
|
|
| 87,957 |
|
| $ | 274,629 |
|
|
| 389,296 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Income per common share - basic |
| $ | 0.51 |
|
|
| 0.61 |
|
| $ | 1.08 |
|
|
| 1.75 |
|
| $ | 0.50 |
|
|
| 0.51 |
|
| $ | 1.58 |
|
|
| 2.26 |
|
Income per common share - diluted |
| $ | 0.51 |
|
|
| 0.61 |
|
| $ | 1.07 |
|
|
| 1.74 |
|
| $ | 0.50 |
|
|
| 0.51 |
|
| $ | 1.57 |
|
|
| 2.26 |
|
See accompanying notes to consolidated financial statements.
9
REGENCY CENTERS, L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
|
| Three months ended June 30, |
|
| Six months ended June 30, |
|
| Three months ended September 30, |
|
| Nine months ended September 30, |
| ||||||||||||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||||||
Net income |
| $ | 88,172 |
|
|
| 105,987 |
|
| $ | 186,660 |
|
|
| 302,803 |
|
| $ | 92,173 |
|
|
| 88,847 |
|
| $ | 278,833 |
|
|
| 391,650 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Effective portion of change in fair value of derivative instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Effective portion of change in fair value of derivative instruments |
|
| 5,457 |
|
|
| 4,436 |
|
|
| 2,721 |
|
|
| 13,404 |
|
|
| 4,606 |
|
|
| 7,069 |
|
|
| 7,327 |
|
|
| 20,473 |
|
Reclassification adjustment of derivative instruments included in net income |
|
| (1,649 | ) |
|
| 481 |
|
|
| (3,141 | ) |
|
| 1,491 |
|
|
| (2,161 | ) |
|
| 72 |
|
|
| (5,302 | ) |
|
| 1,563 |
|
Unrealized (loss) gain on available-for-sale debt securities |
|
| (115 | ) |
|
| (223 | ) |
|
| 77 |
|
|
| (977 | ) | ||||||||||||||||
Other comprehensive income (loss) |
|
| 3,693 |
|
|
| 4,694 |
|
|
| (343 | ) |
|
| 13,918 |
| ||||||||||||||||
Unrealized loss on available-for-sale debt securities |
|
| (292 | ) |
|
| (659 | ) |
|
| (215 | ) |
|
| (1,636 | ) | ||||||||||||||||
Other comprehensive income |
|
| 2,153 |
|
|
| 6,482 |
|
|
| 1,810 |
|
|
| 20,400 |
| ||||||||||||||||
Comprehensive income |
|
| 91,865 |
|
|
| 110,681 |
|
|
| 186,317 |
|
|
| 316,721 |
|
|
| 94,326 |
|
|
| 95,329 |
|
|
| 280,643 |
|
|
| 412,050 |
|
Less: comprehensive income attributable to noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net income attributable to noncontrolling interests |
|
| 840 |
|
|
| 739 |
|
|
| 1,627 |
|
|
| 1,464 |
|
|
| 933 |
|
|
| 890 |
|
|
| 2,560 |
|
|
| 2,354 |
|
Other comprehensive income (loss) attributable to noncontrolling interests |
|
| 262 |
|
|
| 522 |
|
|
| (125 | ) |
|
| 1,242 |
|
|
| 40 |
|
|
| 589 |
|
|
| (85 | ) |
|
| 1,831 |
|
Comprehensive income attributable to noncontrolling interests |
|
| 1,102 |
|
|
| 1,261 |
|
|
| 1,502 |
|
|
| 2,706 |
|
|
| 973 |
|
|
| 1,479 |
|
|
| 2,475 |
|
|
| 4,185 |
|
Comprehensive income attributable to the Partnership |
| $ | 90,763 |
|
|
| 109,420 |
|
| $ | 184,815 |
|
|
| 314,015 |
|
| $ | 93,353 |
|
|
| 93,850 |
|
| $ | 278,168 |
|
|
| 407,865 |
|
See accompanying notes to consolidated financial statements.
10
REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the three months ended JuneSeptember 30, 2023 and 2022
(in thousands)
(unaudited)
|
| General Partner Preferred |
|
| Limited |
|
| Accumulated |
|
| Total |
|
| Noncontrolling Interests in |
|
| Total |
|
| General Partner Preferred |
|
| Limited |
|
| Accumulated |
|
| Total |
|
| Noncontrolling Interests in |
|
| Total |
| ||||||||||||
Balance at March 31, 2022 |
| $ | 6,134,091 |
|
|
| 35,876 |
|
|
| (1,764 | ) |
|
| 6,168,203 |
|
|
| 37,489 |
|
|
| 6,205,692 |
| ||||||||||||||||||||||||
Balance at June 30, 2022 |
| $ | 6,122,645 |
|
|
| 34,611 |
|
|
| 2,388 |
|
|
| 6,159,644 |
|
|
| 46,491 |
|
|
| 6,206,135 |
| ||||||||||||||||||||||||
Net income |
|
| 104,796 |
|
|
| 452 |
|
|
| — |
|
|
| 105,248 |
|
|
| 739 |
|
|
| 105,987 |
|
|
| 87,578 |
|
|
| 379 |
|
|
| — |
|
|
| 87,957 |
|
|
| 890 |
|
|
| 88,847 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| ||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| 17 |
|
|
| 3,743 |
|
|
| 3,760 |
|
|
| 453 |
|
|
| 4,213 |
|
|
| — |
|
|
| 27 |
|
|
| 5,787 |
|
|
| 5,814 |
|
|
| 596 |
|
|
| 6,410 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| 3 |
|
|
| 409 |
|
|
| 412 |
|
|
| 69 |
|
|
| 481 |
|
|
| — |
|
|
| 1 |
|
|
| 78 |
|
|
| 79 |
|
|
| (7 | ) |
|
| 72 |
|
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,446 |
|
|
| 10,446 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,457 |
|
|
| 1,457 |
|
Distributions to partners |
|
| (107,885 | ) |
|
| (462 | ) |
|
| — |
|
|
| (108,347 | ) |
|
| (2,705 | ) |
|
| (111,052 | ) |
|
| (106,946 | ) |
|
| (464 | ) |
|
| — |
|
|
| (107,410 | ) |
|
| (1,124 | ) |
|
| (108,534 | ) |
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization |
|
| 4,366 |
|
|
| — |
|
|
| — |
|
|
| 4,366 |
|
|
| — |
|
|
| 4,366 |
|
|
| 4,125 |
|
|
| — |
|
|
| — |
|
|
| 4,125 |
|
|
| — |
|
|
| 4,125 |
|
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company |
|
| (75,419 | ) |
|
| — |
|
|
| — |
|
|
| (75,419 | ) |
|
| — |
|
|
| (75,419 | ) | ||||||||||||||||||||||||
Common units issued as a result of common stock issued by Parent Company, net of issuance costs |
|
| 61,284 |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
|
| — |
|
|
| 61,284 |
| ||||||||||||||||||||||||
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances |
|
| 137 |
|
|
| — |
|
|
| — |
|
|
| 137 |
|
|
| — |
|
|
| 137 |
|
|
| 228 |
|
|
| — |
|
|
| — |
|
|
| 228 |
|
|
| — |
|
|
| 228 |
|
Common units exchanged for common stock of Parent Company |
|
| 1,275 |
|
|
| (1,275 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||
Balance at June 30, 2022 |
| $ | 6,122,645 |
|
|
| 34,611 |
|
|
| 2,388 |
|
|
| 6,159,644 |
|
|
| 46,491 |
|
|
| 6,206,135 |
| ||||||||||||||||||||||||
Balance at September 30, 2022 |
| $ | 6,107,630 |
|
|
| 34,554 |
|
|
| 8,253 |
|
|
| 6,150,437 |
|
|
| 48,303 |
|
|
| 6,198,740 |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Balance at March 31, 2023 |
| $ | 6,053,394 |
|
|
| 34,411 |
|
|
| 3,927 |
|
|
| 6,091,732 |
|
|
| 47,703 |
|
|
| 6,139,435 |
| ||||||||||||||||||||||||
Balance at June 30, 2023 |
| $ | 6,032,877 |
|
|
| 54,281 |
|
|
| 7,336 |
|
|
| 6,094,494 |
|
|
| 49,292 |
|
|
| 6,143,786 |
| ||||||||||||||||||||||||
Net income |
|
| 86,782 |
|
|
| 550 |
|
|
| — |
|
|
| 87,332 |
|
|
| 840 |
|
|
| 88,172 |
|
|
| 90,720 |
|
|
| 520 |
|
|
| — |
|
|
| 91,240 |
|
|
| 933 |
|
|
| 92,173 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| 32 |
|
|
| 4,886 |
|
|
| 4,918 |
|
|
| 424 |
|
|
| 5,342 |
|
|
| — |
|
|
| 25 |
|
|
| 4,026 |
|
|
| 4,051 |
|
|
| 263 |
|
|
| 4,314 |
|
Amounts reclassified from accumulated other comprehensive loss |
|
| — |
|
|
| (10 | ) |
|
| (1,477 | ) |
|
| (1,487 | ) |
|
| (162 | ) |
|
| (1,649 | ) |
|
| — |
|
|
| (11 | ) |
|
| (1,927 | ) |
|
| (1,938 | ) |
|
| (223 | ) |
|
| (2,161 | ) |
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,428 |
|
|
| 1,428 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 69,625 |
|
|
| 69,625 |
|
Issuance of exchangeable operating partnership units |
|
| — |
|
|
| 20,000 |
|
|
| — |
|
|
| 20,000 |
|
|
| — |
|
|
| 20,000 |
| ||||||||||||||||||||||||
Distributions to partners |
|
| (111,145 | ) |
|
| (702 | ) |
|
| — |
|
|
| (111,847 | ) |
|
| (941 | ) |
|
| (112,788 | ) |
|
| (119,968 | ) |
|
| (703 | ) |
|
| — |
|
|
| (120,671 | ) |
|
| (3,191 | ) |
|
| (123,862 | ) |
Preferred unit distributions |
|
| (1,644 | ) |
|
| — |
|
|
| — |
|
|
| (1,644 | ) |
|
| — |
|
|
| (1,644 | ) | ||||||||||||||||||||||||
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization |
|
| 4,105 |
|
|
| — |
|
|
| — |
|
|
| 4,105 |
|
|
| — |
|
|
| 4,105 |
|
|
| 5,465 |
|
|
| — |
|
|
| — |
|
|
| 5,465 |
|
|
| — |
|
|
| 5,465 |
|
Preferred units issued as a result of preferred stock issued by Parent Company, net of issuance costs |
|
| 225,000 |
|
|
| — |
|
|
| — |
|
|
| 225,000 |
|
|
| — |
|
|
| 225,000 |
| ||||||||||||||||||||||||
Common units issued as a result of common stock issued by Parent Company, net of issuance costs |
|
| (10 | ) |
|
| — |
|
|
| — |
|
|
| (10 | ) |
|
| — |
|
|
| (10 | ) |
|
| 818,544 |
|
|
| — |
|
|
| — |
|
|
| 818,544 |
|
|
| — |
|
|
| 818,544 |
|
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances |
|
| (249 | ) |
|
| — |
|
|
| — |
|
|
| (249 | ) |
|
| — |
|
|
| (249 | ) |
|
| 287 |
|
|
| — |
|
|
| — |
|
|
| 287 |
|
|
| — |
|
|
| 287 |
|
Balance at June 30, 2023 |
| $ | 6,032,877 |
|
|
| 54,281 |
|
|
| 7,336 |
|
|
| 6,094,494 |
|
|
| 49,292 |
|
|
| 6,143,786 |
| ||||||||||||||||||||||||
Common units exchanged for common stock of Parent Company |
|
| 198 |
|
|
| (198 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||
Balance at September 30, 2023 |
| $ | 7,051,479 |
|
|
| 53,914 |
|
|
| 9,435 |
|
|
| 7,114,828 |
|
|
| 116,699 |
|
|
| 7,231,527 |
|
See accompanying notes to consolidated financial statements.
11
REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the sixnine months ended JuneSeptember 30, 2023 and 2022
(in thousands)
(unaudited)
|
| General Partner Preferred |
|
| Limited |
|
| Accumulated |
|
| Total |
|
| Noncontrolling Interests in |
|
| Total |
|
| General Partner Preferred |
|
| Limited |
|
| Accumulated |
|
| Total |
|
| Noncontrolling Interests in |
|
| Total |
| ||||||||||||
Balance at December 31, 2021 |
| $ | 6,047,598 |
|
|
| 35,447 |
|
|
| (10,227 | ) |
|
| 6,072,818 |
|
|
| 37,114 |
|
|
| 6,109,932 |
|
| $ | 6,047,598 |
|
|
| 35,447 |
|
|
| (10,227 | ) |
|
| 6,072,818 |
|
|
| 37,114 |
|
|
| 6,109,932 |
|
Net income |
|
| 300,024 |
|
|
| 1,315 |
|
|
| — |
|
|
| 301,339 |
|
|
| 1,464 |
|
|
| 302,803 |
|
|
| 387,602 |
|
|
| 1,694 |
|
|
| — |
|
|
| 389,296 |
|
|
| 2,354 |
|
|
| 391,650 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| 54 |
|
|
| 11,280 |
|
|
| 11,334 |
|
|
| 1,093 |
|
|
| 12,427 |
|
|
| — |
|
|
| 81 |
|
|
| 17,067 |
|
|
| 17,148 |
|
|
| 1,689 |
|
|
| 18,837 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| 7 |
|
|
| 1,335 |
|
|
| 1,342 |
|
|
| 149 |
|
|
| 1,491 |
|
|
| — |
|
|
| 8 |
|
|
| 1,413 |
|
|
| 1,421 |
|
|
| 142 |
|
|
| 1,563 |
|
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,446 |
|
|
| 10,446 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 11,903 |
|
|
| 11,903 |
|
Distributions to partners |
|
| (214,855 | ) |
|
| (937 | ) |
|
| — |
|
|
| (215,792 | ) |
|
| (3,775 | ) |
|
| (219,567 | ) |
|
| (321,801 | ) |
|
| (1,401 | ) |
|
| — |
|
|
| (323,202 | ) |
|
| (4,899 | ) |
|
| (328,101 | ) |
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization |
|
| 8,574 |
|
|
| — |
|
|
| — |
|
|
| 8,574 |
|
|
| — |
|
|
| 8,574 |
|
|
| 12,699 |
|
|
| — |
|
|
| — |
|
|
| 12,699 |
|
|
| — |
|
|
| 12,699 |
|
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company |
|
| (75,419 | ) |
|
|
|
|
|
| (75,419 | ) |
|
|
|
| (75,419 | ) |
|
| (75,419 | ) |
|
|
|
|
|
| (75,419 | ) |
|
|
|
| (75,419 | ) | ||||||||||||
Common units issued as a result of common stock issued by Parent Company, net of issuance costs |
|
| 61,284 |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
|
| — |
|
|
| 61,284 |
|
|
| 61,284 |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
|
| — |
|
|
| 61,284 |
|
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances |
|
| (5,836 | ) |
|
| — |
|
|
| — |
|
|
| (5,836 | ) |
|
| — |
|
|
| (5,836 | ) |
|
| (5,608 | ) |
|
| — |
|
|
| — |
|
|
| (5,608 | ) |
|
| — |
|
|
| (5,608 | ) |
Common units exchanged for common stock of Parent Company |
|
| 1,275 |
|
|
| (1,275 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,275 |
|
|
| (1,275 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Balance at June 30, 2022 |
| $ | 6,122,645 |
|
|
| 34,611 |
|
|
| 2,388 |
|
|
| 6,159,644 |
|
|
| 46,491 |
|
|
| 6,206,135 |
| ||||||||||||||||||||||||
Balance at September 30, 2022 |
| $ | 6,107,630 |
|
|
| 34,554 |
|
|
| 8,253 |
|
|
| 6,150,437 |
|
|
| 48,303 |
|
|
| 6,198,740 |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Balance at December 31, 2022 |
| $ | 6,089,425 |
|
|
| 34,489 |
|
|
| 7,560 |
|
|
| 6,131,474 |
|
|
| 46,565 |
|
|
| 6,178,039 |
|
| $ | 6,089,425 |
|
|
| 34,489 |
|
|
| 7,560 |
|
|
| 6,131,474 |
|
|
| 46,565 |
|
|
| 6,178,039 |
|
Net income |
|
| 184,063 |
|
|
| 970 |
|
|
| — |
|
|
| 185,033 |
|
|
| 1,627 |
|
|
| 186,660 |
|
|
| 274,783 |
|
|
| 1,490 |
|
|
| — |
|
|
| 276,273 |
|
|
| 2,560 |
|
|
| 278,833 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| 21 |
|
|
| 2,570 |
|
|
| 2,591 |
|
|
| 207 |
|
|
| 2,798 |
|
|
| — |
|
|
| 46 |
|
|
| 6,596 |
|
|
| 6,642 |
|
|
| 470 |
|
|
| 7,112 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| (15 | ) |
|
| (2,794 | ) |
|
| (2,809 | ) |
|
| (332 | ) |
|
| (3,141 | ) |
|
| — |
|
|
| (26 | ) |
|
| (4,721 | ) |
|
| (4,747 | ) |
|
| (555 | ) |
|
| (5,302 | ) |
Deferred compensation plan, net |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3,205 |
|
|
| 3,205 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 72,830 |
|
|
| 72,830 |
|
Issuance of exchangeable operating partnership units |
|
| — |
|
|
| 20,000 |
|
|
| — |
|
|
| 20,000 |
|
|
| — |
|
|
| 20,000 |
|
|
| — |
|
|
| 20,000 |
|
|
| — |
|
|
| 20,000 |
|
|
| — |
|
|
| 20,000 |
|
Distributions to partners |
|
| (222,492 | ) |
|
| (1,184 | ) |
|
| — |
|
|
| (223,676 | ) |
|
| (1,980 | ) |
|
| (225,656 | ) |
|
| (342,460 | ) |
|
| (1,887 | ) |
|
| — |
|
|
| (344,347 | ) |
|
| (5,171 | ) |
|
| (349,518 | ) |
Preferred unit distributions |
|
| (1,644 | ) |
|
|
|
|
|
| (1,644 | ) |
|
| — |
|
|
| (1,644 | ) | ||||||||||||||||||||||||||||
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization |
|
| 8,924 |
|
|
| — |
|
|
| — |
|
|
| 8,924 |
|
|
| — |
|
|
| 8,924 |
|
|
| 14,389 |
|
|
| — |
|
|
| — |
|
|
| 14,389 |
|
|
| — |
|
|
| 14,389 |
|
Preferred units issued as a result of preferred stock issued by Parent Company, net of issuance costs |
|
| 225,000 |
|
|
| — |
|
|
| — |
|
|
| 225,000 |
|
|
| — |
|
|
| 225,000 |
| ||||||||||||||||||||||||
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company |
|
| (20,006 | ) |
|
| — |
|
|
| — |
|
|
| (20,006 | ) |
|
| — |
|
|
| (20,006 | ) |
|
| (20,006 | ) |
|
| — |
|
|
| — |
|
|
| (20,006 | ) |
|
| — |
|
|
| (20,006 | ) |
Common units issued as a result of common stock issued by Parent Company, net of issuance costs |
|
| (10 | ) |
|
| — |
|
|
| — |
|
|
| (10 | ) |
|
| — |
|
|
| (10 | ) |
|
| 818,534 |
|
|
| — |
|
|
| — |
|
|
| 818,534 |
|
|
| — |
|
|
| 818,534 |
|
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances |
|
| (7,027 | ) |
|
| — |
|
|
| — |
|
|
| (7,027 | ) |
|
| — |
|
|
| (7,027 | ) |
|
| (6,740 | ) |
|
| — |
|
|
| — |
|
|
| (6,740 | ) |
|
| — |
|
|
| (6,740 | ) |
Balance at June 30, 2023 |
| $ | 6,032,877 |
|
|
| 54,281 |
|
|
| 7,336 |
|
|
| 6,094,494 |
|
|
| 49,292 |
|
|
| 6,143,786 |
| ||||||||||||||||||||||||
Common unit exchanged for common stock of Parent Company |
|
| 198 |
|
|
| (198 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||
Balance at September 30, 2023 |
| $ | 7,051,479 |
|
|
| 53,914 |
|
|
| 9,435 |
|
|
| 7,114,828 |
|
|
| 116,699 |
|
|
| 7,231,527 |
|
See accompanying notes to consolidated financial statements.
12
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the sixnine months ended JuneSeptember 30, 2023 and 2022
(in thousands)
(unaudited)
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 186,660 |
|
|
| 302,803 |
|
| $ | 278,833 |
|
|
| 391,650 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
|
| 165,868 |
|
|
| 157,192 |
|
|
| 253,373 |
|
|
| 237,462 |
|
Amortization of deferred loan costs and debt premiums |
|
| 2,983 |
|
|
| 2,821 |
|
|
| 5,124 |
|
|
| 4,297 |
|
(Accretion) and amortization of above and below market lease intangibles, net |
|
| (13,842 | ) |
|
| (10,528 | ) |
|
| (21,573 | ) |
|
| (15,625 | ) |
Stock-based compensation, net of capitalization |
|
| 8,854 |
|
|
| 8,501 |
|
|
| 14,203 |
|
|
| 12,592 |
|
Equity in income of investments in real estate partnerships |
|
| (23,785 | ) |
|
| (36,646 | ) |
|
| (36,302 | ) |
|
| (47,855 | ) |
Gain on sale of real estate, net of tax |
|
| (331 | ) |
|
| (106,239 | ) |
|
| (515 | ) |
|
| (106,459 | ) |
Distribution of earnings from investments in real estate partnerships |
|
| 31,869 |
|
|
| 29,207 |
|
|
| 48,451 |
|
|
| 45,238 |
|
Deferred compensation expense (income) |
|
| 2,940 |
|
|
| (7,007 | ) |
|
| 2,148 |
|
|
| (8,016 | ) |
Realized and unrealized (gain) loss on investments |
|
| (3,376 | ) |
|
| 8,033 |
|
|
| (2,252 | ) |
|
| 9,253 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
| ||||||
Tenant and other receivables |
|
| (14,549 | ) |
|
| (8,252 | ) |
|
| (3,094 | ) |
|
| (18,544 | ) |
Deferred leasing costs |
|
| (3,591 | ) |
|
| (4,263 | ) |
|
| (7,705 | ) |
|
| (7,022 | ) |
Other assets |
|
| (17,951 | ) |
|
| (8,353 | ) |
|
| (7,577 | ) |
|
| (4,312 | ) |
Accounts payable and other liabilities |
|
| 6,091 |
|
|
| (172 | ) |
|
| 20,875 |
|
|
| 21,656 |
|
Tenants' security, escrow deposits and prepaid rent |
|
| 6,837 |
|
|
| 660 |
|
|
| 3,696 |
|
|
| 13,927 |
|
Net cash provided by operating activities |
|
| 334,677 |
|
|
| 327,757 |
|
|
| 547,685 |
|
|
| 528,242 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Acquisition of operating real estate, net of cash acquired of $3,061 in 2022 |
|
| — |
|
|
| (139,775 | ) |
|
| (2,033 | ) |
|
| (141,275 | ) |
Acquisition of UBP, net of cash acquired of $14,143 |
|
| (80,488 | ) |
|
| — |
| ||||||||
Real estate development and capital improvements |
|
| (100,114 | ) |
|
| (99,470 | ) |
|
| (158,982 | ) |
|
| (143,724 | ) |
Proceeds from sale of real estate and FF&E |
|
| 3,745 |
|
|
| 136,421 |
|
|
| 10,338 |
|
|
| 137,280 |
|
Issuance of notes receivable |
|
| (4,000 | ) |
|
| — |
|
|
| (4,000 | ) |
|
| — |
|
Investments in real estate partnerships |
|
| (3,109 | ) |
|
| (11,549 | ) |
|
| (9,118 | ) |
|
| (13,573 | ) |
Return of capital from investments in real estate partnerships |
|
| 3,644 |
|
|
| 48,473 |
|
|
| 3,644 |
|
|
| 48,473 |
|
Dividends on investment securities |
|
| 420 |
|
|
| 214 |
|
|
| 571 |
|
|
| 336 |
|
Acquisition of investment securities |
|
| (2,748 | ) |
|
| (8,313 | ) |
|
| (5,206 | ) |
|
| (15,205 | ) |
Proceeds from sale of investment securities |
|
| 10,751 |
|
|
| 8,737 |
|
|
| 13,747 |
|
|
| 15,821 |
|
Net cash used in investing activities |
|
| (91,411 | ) |
|
| (65,262 | ) |
|
| (231,527 | ) |
|
| (111,867 | ) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net proceeds from common stock issuance |
|
| (10 | ) |
|
| 61,284 |
|
|
| 4 |
|
|
| 61,284 |
|
Repurchase of common shares in conjunction with equity award plans |
|
| (7,621 | ) |
|
| (6,388 | ) |
|
| (7,653 | ) |
|
| (6,438 | ) |
Common units repurchased through share repurchase program |
|
| (20,006 | ) |
|
| (71,898 | ) |
|
| (20,006 | ) |
|
| (75,419 | ) |
Proceeds from sale of treasury stock |
|
| 28 |
|
|
| 64 |
|
|
| 62 |
|
|
| 64 |
|
Contributions from limited partners in consolidated partnerships, net |
|
| 1,225 |
|
|
| 1,234 |
|
|
| 3,167 |
|
|
| 1,568 |
|
Distributions to partners |
|
| (223,239 | ) |
|
| (214,818 | ) |
|
| (334,293 | ) |
|
| (322,897 | ) |
Proceeds from unsecured credit facilities |
|
| 235,000 |
|
|
| 75,000 |
|
|
| 442,000 |
|
|
| 95,000 |
|
Repayment of unsecured credit facilities |
|
| (235,000 | ) |
|
| (75,000 | ) |
|
| (365,000 | ) |
|
| (95,000 | ) |
Proceeds from notes payable |
|
| 15,500 |
|
|
| — |
|
|
| 46,500 |
|
|
| — |
|
Repayment of notes payable |
|
| (29,616 | ) |
|
| — |
|
|
| (60,257 | ) |
|
| (5,995 | ) |
Scheduled principal payments |
|
| (5,054 | ) |
|
| (5,728 | ) |
|
| (7,977 | ) |
|
| (8,503 | ) |
Payment of loan costs |
|
| (141 | ) |
|
| (82 | ) |
|
| (411 | ) |
|
| (82 | ) |
Net cash used in financing activities |
|
| (268,934 | ) |
|
| (236,332 | ) |
|
| (303,864 | ) |
|
| (356,418 | ) |
Net (decrease) increase in cash and cash equivalents and restricted cash |
|
| (25,668 | ) |
|
| 26,163 |
| ||||||||
Net increase in cash and cash equivalents and restricted cash |
|
| 12,294 |
|
|
| 59,957 |
| ||||||||
Cash and cash equivalents and restricted cash at beginning of the period |
|
| 68,776 |
|
|
| 95,027 |
|
|
| 68,776 |
|
|
| 95,027 |
|
Cash and cash equivalents and restricted cash at end of the period |
| $ | 43,108 |
|
|
| 121,190 |
|
| $ | 81,070 |
|
|
| 154,984 |
|
See accompanying notes to consolidated financial statements.
13
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the sixnine months ended JuneSeptember 30, 2023 and 2022
(in thousands)
(unaudited)
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash paid for interest (net of capitalized interest of $2,534 and $1,815 in 2023 and 2022, respectively) |
| $ | 71,091 |
|
|
| 70,876 |
| ||||||||
Cash paid for interest (net of capitalized interest of $4,026 and $2,985 in 2023 and 2022, respectively) |
| $ | 116,686 |
|
|
| 115,011 |
| ||||||||
Cash paid for income taxes, net of refunds |
| $ | 573 |
|
|
| 370 |
|
| $ | 728 |
|
|
| 488 |
|
Supplemental disclosure of non-cash transactions: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Common stock and exchangeable operating partnership dividends declared |
| $ | 111,847 |
|
|
| 108,215 |
| ||||||||
Common and Preferred stock, and exchangeable operating partnership dividends declared |
| $ | 122,946 |
|
|
| 107,410 |
| ||||||||
Acquisition of real estate previously held within investments in real estate partnerships |
| $ | — |
|
|
| 17,179 |
|
| $ | — |
|
|
| 17,179 |
|
Mortgage loans assumed by Company with the acquisition of real estate |
| $ | — |
|
|
| 22,779 |
|
| $ | — |
|
|
| 22,779 |
|
Right of use assets obtained in exchange for new operating lease liabilities |
| $ | 32,002 |
|
|
| — |
| ||||||||
Sale of leased asset in exchange for net investment in sales-type lease |
| $ | 8,510 |
|
|
| — |
| ||||||||
UBP Acquisition: |
|
|
|
|
|
| ||||||||||
Notes payable assumed in acquisition, at fair value |
| $ | 284,706 |
|
|
| — |
| ||||||||
Non-controlling interest assumed in acquisition, at fair value |
| $ | 64,492 |
|
|
| — |
| ||||||||
Common stock exchanged for UBP shares |
| $ | 818,530 |
|
|
| — |
| ||||||||
Preferred stock exchanged for UBP shares |
| $ | 225,000 |
|
|
| — |
| ||||||||
Common stock issued by Parent Company for partnership units exchanged |
| $ | — |
|
|
| 1,275 |
|
| $ | 199 |
|
|
| 1,275 |
|
Accrued common stock repurchase in Accounts payable and other liabilities |
| $ | — |
|
|
| 3,521 |
| ||||||||
Exchangeable operating partnership units issued for acquisition of real estate |
| $ | 20,000 |
|
|
| — |
|
| $ | 20,000 |
|
|
| — |
|
Change in accrued capital expenditures |
| $ | 9,011 |
|
|
| 5,050 |
|
| $ | 20,967 |
|
|
| 10,230 |
|
Common stock issued by Parent Company for dividend reinvestment plan |
| $ | 299 |
|
|
| 252 |
|
| $ | 461 |
|
|
| 388 |
|
Stock-based compensation capitalized |
| $ | 366 |
|
|
| 373 |
|
| $ | 638 |
|
|
| 550 |
|
Contributions from limited partners in consolidated partnerships |
| $ | — |
|
|
| 5,436 |
|
| $ | — |
|
|
| 5,434 |
|
Common stock issued for dividend reinvestment in trust |
| $ | 617 |
|
|
| 555 |
|
| $ | 905 |
|
|
| 840 |
|
Contribution of stock awards into trust |
| $ | 1,844 |
|
|
| 2,022 |
|
| $ | 1,961 |
|
|
| 2,136 |
|
Distribution of stock held in trust |
| $ | 2,245 |
|
|
| 566 |
|
| $ | 2,245 |
|
|
| 786 |
|
Change in fair value of securities |
| $ | 98 |
|
|
| 1,236 |
|
| $ | 215 |
|
|
| 1,896 |
|
See accompanying notes to consolidated financial statements.
14
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
JuneSeptember 30, 2023
1. | Organization and Significant Accounting Policies |
General
Regency Centers Corporation (the "Parent Company") began its operations as a REIT in 1993 and is the general partner of Regency Centers, L.P. (the "Operating Partnership"). The Parent Company primarily engages in the ownership, management, leasing, acquisition, development, and redevelopment of shopping centers through the Operating Partnership, and has no other assets other than through its investment in the Operating Partnership, and its only liabilities are $200 million of unsecured private placement notes, which are co-issued and guaranteed by the Operating Partnership. The Parent Company guarantees all of the unsecured debt of the Operating Partnership.
As of JuneSeptember 30, 2023, the Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis owned 310379 properties and held partial interests in an additional 96102 properties through unconsolidated Investments in real estate partnerships (also referred to as "joint ventures" or "investment partnerships").
The information included in this Report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2022, as certain disclosures in this Report that would duplicate those included in such Annual Report on Form 10-K are not included in these consolidated financial statements. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. These adjustments are considered to be of a normal recurring nature.
Pending Acquisition of Urstadt Biddle Properties Inc.
On May 17, 2023, the Parent Company entered into an Agreement and Plan of Merger (the “merger agreement”) by and among the Parent Company, Hercules Merger Sub, LLC, a wholly owned subsidiary of the Parent Company (“Merger Sub”), Urstadt Biddle Properties Inc. (“UBP” or “Urstadt Biddle”), UB Maryland I, Inc., a wholly owned subsidiary of Urstadt Biddle (“UB Sub I”), and UB Maryland II, Inc., a wholly owned subsidiary of UB Sub I (“UB Sub II”), pursuant to which, subject to the satisfaction or waiver of certain conditions, (a) UB Sub II will be merged with and into Urstadt Biddle (the “first merger”), with Urstadt Biddle surviving the first merger as a wholly owned subsidiary of UB Sub I, and (b) following the first merger, UB Sub I will be merged with and into Merger Sub (the “second merger” and together with the first merger, the “mergers”), with Merger Sub being the surviving entity in the second merger. The combined company will retain the Regency name and continuecontinues to trade under the ticker symbol “REG” on the National Association of Securities Dealers Automated Quotations (the “NASDAQ”). On the terms and subject to the conditions set forth in the merger agreement, which has been approved by the boards of directors of Regency Centers Corporation and UBP, at the effective time
The closing of the first merger (the “first merger effective time”),mergers completed on August 18, 2023 and each share of Urstadt Biddle’s common stock, par value $0.01 per share (“Urstadt Biddle common stock”), class A common stock, par value $0.01 per share (“Urstadt Biddle Class A common stock” and, together with Urstadt Biddle common stock, the “Urstadt Biddle common shares”), 6.25% Series H Cumulative Redeemable Preferred Stock and 5.875% Series K Cumulative Redeemable Preferred Stock will be converted into one equivalent share in UB Sub I, with respect to each class, subject to limited exceptions set forth in the merger agreement. Immediately thereafter, at the effective time of the second merger (the “second merger effective time”),on August 18, 2023, each share of UB Sub I’s common stock, par value $0.01 per share, and class A common stock, par value $0.01 per share, will be converted into 0.347 of a share of common stock, par value $0.01 per share, of common stock of the Parent Company, without interest and subject to certain adjustments, subject to limited exceptions set forth in the merger agreement, and each share of UB Sub I’s 6.25% Series H Cumulative Redeemable Preferred Stock and 5.875% Series K Cumulative Redeemable Preferred Stock will be converted into one share of newly issued Parent Company 6.25% Series A Cumulative Redeemable Preferred Stock (“Parent Company Series A preferred stock”) and 5.875% Series B Cumulative Redeemable Preferred Stock (“Parent Company Series B preferred stock”), respectively.respectively (collectively referred to as the “Preferred Stock”). The closing of the mergers is subject to certain conditions, including the requisite approval from the stockholders of UBP (a special meeting of the stockholders of UBP to vote on the mergers is scheduled to be held on August 16, 2023), the receipt of certain tax opinions by Regency Centers Corporation and UBP, and other customary closing conditions. The mergers are expected to close mid-to-late August, 2023. However, the Company cannot predict with certainty when, or if, the mergers will be completed because completion of the mergers is subject to conditions beyond the control of the Company. In connection with the proposed transaction, on July 12, 2023, Regency Centers Corporation filed with the Securities and Exchange Commission a registration statement on Form S-4 that included a proxy statement of UBP and constituted a prospectus of Regency.
15
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2023
Risks and Uncertainties
The success of the Company's tenants in operating their businesses and their corresponding ability to pay rent continue to be influenced by current economic challenges, which impact their cost of doing business, including but not limited to the impact of inflation, the cost and availability of labor, increasing energy prices and interest rates, and access to credit. Additionally, macroeconomic and geopolitical risks, including the current wars in Ukraine, and involving Israel and Gaza, create challenges that may exacerbate current market conditions in the United States of America ("U.S.", "USA" or "United States"). The policies implemented by the U.S. government to address these issues, including raising interest rates, could result in adverse impacts on the U.S. economy, including a slowing of growth and potentially a recession, thereby impacting consumer spending, tenants' businesses, and/or decreasing future demand for space in shopping centers. The potential impact of current economic challenges on the Company's financial condition, results of operations, and cash flows is subject to change and continues to depend on the extent and duration of these risks and uncertainties.
15
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2023
Consolidation
The Company consolidates properties that are wholly-owned, and properties where it owns less than 100%, but has control over the activities most important to the overall success of the partnership. Control is determined using an evaluation based on accounting standards related to the consolidation of Variable Interest Entities ("VIEs") and voting interest entities.
Ownership of the Parent Company
The Parent Company has a single class of common stock outstanding and two series of preferred stock outstanding.
Ownership of the Operating Partnership
The Operating Partnership's capital includes generalthe Common Units and limited common Partnershipthe Preferred Units. As of JuneSeptember 30, 2023, the Parent Company owned approximately 99.4% of the outstanding common PartnershipCommon Units, of the Operating Partnership, with the remaining limited common PartnershipCommon Units held by third parties ("Exchangeable operating partnership units" or "EOP units"). The Parent Company currently owns all of the Preferred Units.
Each EOP unit is exchangeable for cash or one share of common stock of the Parent Company, at the discretion of the Parent Company, and the unit holder cannot require redemption in cash or other assetscommon stock (i.e., registered shares of the Parent). The Parent Company has evaluated the conditions as specified under Accounting Standards Codification ("ASC") Topic 480, Distinguishing Liabilities from Equity, as it relates to EOP units outstanding and concluded that the Parent Company has the right to satisfy the redemption requirements of the units by delivering shares of unregistered common stock. Accordingly, the Parent Company classifies EOP units as permanent equity in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity and Comprehensive Income. The Parent Company serves as general partner of the Operating Partnership. The EOP unit holders have limited rights over the Operating Partnership such that they do not have the power to direct the activities ofthat most significantly impact the Operating Partnership.Partnership’s economic performance. As such, the Operating Partnership is considered a VIE, and the Parent Company, which consolidates it, is the primary beneficiary. The Parent Company's only investment is the Operating Partnership. Net income and distributions of the Operating Partnership are allocable to the general and limited common Partnership Units in accordance with their ownership percentages.
16
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2023
Real Estate Partnerships
As of JuneSeptember 30, 2023, Regency had aheld partial ownership interestinterests in 108120 properties through partnerships, of which 1218 are consolidated. Regency's partners include institutional investors and other real estate developers and/or operators (the "Partners" or "Limited Partners"). Regency has a variable interest in these entities through its equity interests, with Regency being the primary beneficiary in certain of these real estate partnerships. As such, Regency consolidates the partnerships into its financial statements for which it is the primary beneficiary and reports the limited partners' interests as noncontrolling interests. For those partnerships which Regency is not the primary beneficiary and does not control, but has significant influence, Regency recognizes its investment in them using the equity method of accounting.
The assets of these partnerships are restricted to the use of the partnerships and cannot be usedreached by general creditors of the Company. Similarly, the obligations of the partnerships can only be settled by the assets of these partnerships or additional contributions by the partners.
The major classes of assets, liabilities, and non-controlling equity interests held by the Company's consolidated VIEs, exclusive of the Operating Partnership, are as follows:
(in thousands) |
| June 30, 2023 |
|
| December 31, 2022 |
|
| September 30, 2023 |
|
| December 31, 2022 |
| ||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net real estate investments |
| $ | 132,744 |
|
|
| 107,725 |
|
| $ | 256,750 |
|
|
| 107,725 |
|
Cash, cash equivalents and restricted cash |
|
| 2,794 |
|
|
| 2,420 |
|
|
| 7,240 |
|
|
| 2,420 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Notes payable |
|
| 3,702 |
|
|
| 4,188 |
|
|
| 33,733 |
|
|
| 4,188 |
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Limited partners' interests in consolidated partnerships |
|
| 24,478 |
|
|
| 24,364 |
|
|
| 89,594 |
|
|
| 24,364 |
|
16
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2023
Revenues and Other Receivables
Other property income includes parking fees and other incidental income from the properties and is generally recognized at the point in time that the performance obligation is met. Income within Management, transaction, and other fees on the Consolidated Statements of Operations is primarily from contracts with the Company's real estate partnerships. The primary components of these revenue streams, the timing of satisfying the performance obligations, and amounts are as follows:
|
|
|
| Three months ended June 30, |
|
| Six months ended June 30, |
|
|
|
| Three months ended September 30, |
|
| Nine months ended September 30, |
| ||||||||||||||||||||
(in thousands) |
| Timing of satisfaction of performance obligations |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| Timing of satisfaction of performance obligations |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||||||
Management, transaction, and other fees: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Property management services |
| Over time |
| $ | 3,487 |
|
|
| 3,310 |
|
| $ | 6,945 |
|
|
| 6,928 |
|
| Over time |
| $ | 3,591 |
|
|
| 3,224 |
|
| $ | 10,536 |
|
|
| 10,152 |
|
Asset management services |
| Over time |
|
| 1,648 |
|
|
| 1,669 |
|
|
| 3,277 |
|
|
| 3,425 |
|
| Over time |
|
| 1,623 |
|
|
| 1,680 |
|
|
| 4,900 |
|
|
| 5,105 |
|
Leasing services |
| Point in time |
|
| 1,096 |
|
|
| 1,171 |
|
|
| 1,814 |
|
|
| 2,167 |
|
| Point in time |
|
| 889 |
|
|
| 729 |
|
|
| 2,703 |
|
|
| 2,895 |
|
Other transaction fees |
| Point in time |
|
| 875 |
|
|
| 349 |
|
|
| 1,108 |
|
|
| 663 |
| ||||||||||||||||||
Other fees |
| Point in time |
|
| 976 |
|
|
| 134 |
|
|
| 2,084 |
|
|
| 798 |
| ||||||||||||||||||
Total management, transaction, and other fees |
|
|
| $ | 7,106 |
|
|
| 6,499 |
|
| $ | 13,144 |
|
|
| 13,183 |
|
|
|
| $ | 7,079 |
|
|
| 5,767 |
|
| $ | 20,223 |
|
|
| 18,950 |
|
The accounts receivable for management services, which are included within Tenant and other receivables in the accompanying Consolidated Balance Sheets, are $17.115.9 million and $16.4 million, as of JuneSeptember 30, 2023 and December 31, 2022, respectively.
17
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
JuneSeptember 30, 2023
Recent Accounting Pronouncements
The following table provides a brief description of recently adopted accounting pronouncements and impact on our financial statements:
Standard | Description | Date of adoption | Effect on the financial statements or other significant matters | |||
Recently adopted: | ||||||
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
| In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related to activities that impact debt, leases, derivatives, and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.
The amendments in this update provide exceptions to the guidance in Topic 815 related to changes to the critical terms of a hedging relationship due to reference rate reform, which if criteria are met, provide such changes should not result in the dedesignation and redesignation of the hedging relationship. |
| March 2020 through March 31, 2023 |
| The Company has elected to apply the hedge accounting expedients and exceptions related to changes to the reference rate from LIBOR to SOFR in the Company's interest rate swaps, which it completed during the three months ended March 31, 2023. Application of these exceptions preserves the hedge designation of interest rate swaps and the related accounting and presentation consistent with past presentation. |
ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers | The amendments in this update require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination rather than at fair value on the acquisition date required by Topic 805. | January 1, 2023 | The adoption of this ASU did not have a material impact on the Company’s financial position and/or results of operations. |
18
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
JuneSeptember 30, 2023
2. | Real Estate Investments |
UBP Acquisition
General
With respect to the acquisition of UBP discussed in Note 1 - Acquisition of Urstadt Biddle Properties Inc, the following table provides the components that make up the total purchase price for the UBP acquisition:
(in thousands, except stock price) |
| Purchase Price |
| |
Shares of common stock issued for acquisition |
|
| 13,568 |
|
Closing stock price on August 17, 2023 |
| $ | 61.03 |
|
Value of common stock issued for acquisition |
| $ | 828,025 |
|
Other adjustments |
|
| (9,495 | ) |
Total value of common stock issued |
| $ | 818,530 |
|
Debt repaid |
|
| 39,266 |
|
Preferred stock issuance |
|
| 225,000 |
|
Transaction costs |
|
| 57,197 |
|
Other cash payments |
|
| 68 |
|
Total purchase price |
| $ | 1,140,061 |
|
Purchase Price Allocation
The acquisition has been accounted for using the asset acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires, among other things, that the total cost or total consideration exchanged be allocated to the real estate properties and related lease intangibles on a relative fair value basis. All the other assets acquired, and liabilities assumed, including notes payable, are recorded at fair value. The total purchase price, including direct transaction costs capitalized, was allocated as follows:
(in thousands) |
| Purchase Price Allocation |
| |
Real estate assets |
| $ | 1,379,835 |
|
Investments in unconsolidated real estate partnerships |
|
| 35,942 |
|
Real estate assets |
|
| 1,415,777 |
|
Cash, accounts receivable and other assets |
|
| 51,902 |
|
Lease intangible assets |
|
| 128,663 |
|
Total assets acquired |
|
| 1,596,342 |
|
|
|
| ||
Notes payable |
|
| 284,706 |
|
Accounts payable, accrued expenses, and other liabilities |
|
| 37,500 |
|
Lease intangible liabilities |
|
| 69,583 |
|
Total liabilities assumed |
|
| 391,789 |
|
|
|
| ||
Non-controlling interest |
|
| 64,492 |
|
|
|
| ||
Total purchase price |
| $ | 1,140,061 |
|
The acquired assets and assumed liabilities for an acquired operating property generally include, but are not limited to: land, buildings and improvements, identified tangible and intangible assets and liabilities associated with in-place leases, including tenant improvements, leasing costs, value of above-market and below-market leases, and value of acquired in-place leases. This methodology includes estimating an “as-if vacant” fair value of the physical property, which includes land, building, and improvements and also determines the estimated fair value of identifiable intangible assets and liabilities, considering the following categories: (i) value of in-place leases, and (ii) above and below-market value of in-place leases. The fair market value of the acquired operating properties is based on a valuation prepared by Regency with assistance of a third party valuation specialist. The third-party specialist utilized stabilized NOI and market specific capitalization rates as the primary valuation inputs in determining the fair value of the real estate assets. Management reviews the inputs used by the third-party specialist as well as the allocation of the purchase price to ensure reasonableness and that the procedures are performed in accordance with management's policy. Management and the third-party valuation specialist prepared their fair value estimates for each of the operating properties acquired. The allocation of the purchase price described above requires a significant amount of judgment
19
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2023
and represents management's best estimate of the fair value as of the acquisition date. The following table details the weighted average amortization and net accretion periods, in years, of the major classes of intangible assets and intangible liabilities arising from the UBP acquisition:
(in years) | Weighted Average Amortization Period | |||
Assets: | ||||
In-place leases | 8.0 | |||
Above-market leases | 7.0 | |||
Liabilities: | ||||
Below-market leases | 18.5 | |||
Other Acquisitions
The following tables detail the other properties acquired for the periods set forth below:
(in thousands) | (in thousands) |
| Six months ended June 30, 2023 |
| (in thousands) |
| Nine months ended September 30, 2023 |
| ||||||||||||||||||||||||||||||||||||||||
Date Purchased |
| Property Name |
| City/State |
| Property |
| Regency Ownership |
| Purchase |
|
| Debt |
|
| Intangible |
|
| Intangible |
|
| Property Name |
| City/State |
| Property |
| Regency Ownership |
| Purchase |
|
| Debt |
|
| Intangible |
|
| Intangible |
| ||||||||
Consolidated | Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
5/1/2023 |
| Sienna Phase 1 |
| Houston, TX |
| Development |
| 100% |
|
| 2,695 |
|
|
| — |
|
|
| — |
|
|
| — |
|
| Sienna Phase 1 |
| Houston, TX |
| Development |
| 75% |
| $ | 2,695 |
|
|
| — |
|
|
| — |
|
|
| — |
|
5/18/2023 |
| SunVet |
| Holbrook, NY |
| Development |
| 99% |
|
| 24,140 |
|
|
| — |
|
|
| — |
|
|
| — |
|
| SunVet |
| Holbrook, NY |
| Development |
| 99% |
|
| 24,140 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total consolidated | Total consolidated |
|
|
|
|
|
|
| $ | 26,835 |
|
|
| — |
|
|
| — |
|
|
| — |
| |||||||||||||||||||||||||
Unconsolidated | Unconsolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
9/19/2023 |
| Old Town Square |
| Chicago, IL |
| Operating |
| 20% |
|
| 27,510 |
|
|
| — |
|
|
| 3,625 |
|
|
| 503 |
| ||||||||||||||||||||||||
Total unconsolidated | Total unconsolidated |
|
|
|
|
|
|
| $ | 27,510 |
|
|
| — |
|
|
| 3,625 |
|
|
| 503 |
| |||||||||||||||||||||||||
Total property acquisitions | Total property acquisitions |
|
|
|
|
| $ | 26,835 |
|
|
| — |
|
|
| — |
|
|
| — |
| Total property acquisitions |
|
|
|
|
| $ | 54,345 |
|
|
| — |
|
|
| 3,625 |
|
|
| 503 |
|
(in thousands) | (in thousands) |
| Six months ended June 30, 2022 |
| (in thousands) |
| Nine months ended September 30, 2022 |
| ||||||||||||||||||||||||||||||||||||||||
Date Purchased |
| Property Name |
| City/State |
| Property |
| Regency Ownership |
| Purchase |
|
| Debt |
|
| Intangible |
|
| Intangible |
|
| Property Name |
| City/State |
| Property |
| Regency Ownership |
| Purchase |
|
| Debt |
|
| Intangible |
|
| Intangible |
| ||||||||
Consolidated | Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
3/1/2022 |
| Glenwood Green |
| Old Bridge, NJ |
| Development |
| 70% |
|
| 11,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
| Glenwood Green |
| Old Bridge, NJ |
| Development |
| 70% |
| $ | 11,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
3/31/2022 |
| Island Village |
| Bainbridge Island, WA |
| Operating |
| 100% |
|
| 30,650 |
|
|
| — |
|
|
| 2,900 |
|
|
| 6,839 |
|
| Island Village |
| Bainbridge Island, WA |
| Operating |
| 100% |
|
| 30,650 |
|
|
| — |
|
|
| 2,900 |
|
|
| 6,839 |
|
4/1/2022 |
| Apple Valley (2) |
| Apple Valley, MN |
| Operating |
| 100% |
|
| 34,070 |
|
|
| — |
|
|
| 4,773 |
|
|
| 490 |
|
| Apple Valley (2) |
| Apple Valley, MN |
| Operating |
| 100% |
|
| 34,070 |
|
|
| — |
|
|
| 4,773 |
|
|
| 490 |
|
4/1/2022 |
| Cedar Commons (2) |
| Minneapolis, MN |
| Operating |
| 100% |
|
| 29,330 |
|
|
| — |
|
|
| 4,369 |
|
|
| 58 |
|
| Cedar Commons (2) |
| Minneapolis, MN |
| Operating |
| 100% |
|
| 29,330 |
|
|
| — |
|
|
| 4,369 |
|
|
| 58 |
|
4/1/2022 |
| Corral Hollow (2) |
| Tracy, CA |
| Operating |
| 100% |
|
| 40,600 |
|
|
| — |
|
|
| 3,410 |
|
|
| 74 |
|
| Corral Hollow (2) |
| Tracy, CA |
| Operating |
| 100% |
|
| 40,600 |
|
|
| — |
|
|
| 3,410 |
|
|
| 74 |
|
4/1/2022 |
| Shops at the Columbia (2) |
| Washington, DC |
| Operating |
| 100% |
|
| 14,000 |
|
|
| — |
|
|
| 889 |
|
|
| 181 |
|
| Shops at the Columbia (2) |
| Washington, DC |
| Operating |
| 100% |
|
| 14,000 |
|
|
| — |
|
|
| 889 |
|
|
| 181 |
|
5/6/2022 |
| Baederwood Shoppes |
| Jenkintown, PA |
| Operating |
| 80% |
|
| 51,603 |
|
|
| 22,779 |
|
|
| 5,796 |
|
|
| 1,062 |
|
| Baederwood Shoppes |
| Jenkintown, PA |
| Operating |
| 80% |
|
| 51,603 |
|
|
| 22,779 |
|
|
| 5,796 |
|
|
| 1,062 |
|
Total consolidated | Total consolidated |
|
|
|
|
|
|
|
| 211,253 |
|
|
| 22,779 |
|
|
| 22,137 |
|
|
| 8,704 |
| Total consolidated |
|
|
|
|
|
|
| $ | 211,253 |
|
|
| 22,779 |
|
|
| 22,137 |
|
|
| 8,704 |
| ||
Unconsolidated | Unconsolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unconsolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
3/25/2022 |
| Naperville Plaza |
| Naperville, IL |
| Operating |
| 20% |
|
| 52,380 |
|
|
| 22,074 |
|
|
| 4,336 |
|
|
| 814 |
|
| Naperville Plaza |
| Naperville, IL |
| Operating |
| 20% |
|
| 52,380 |
|
|
| 22,074 |
|
|
| 4,336 |
|
|
| 814 |
|
6/24/2022 |
| Baybrook East 1B |
| Houston, TX |
| Development |
| 50% |
|
| 5,540 |
|
|
| — |
|
|
| — |
|
|
| — |
|
| Baybrook East 1B |
| Houston, TX |
| Development |
| 50% |
|
| 5,540 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total unconsolidated | Total unconsolidated |
|
|
|
|
|
|
| $ | 57,920 |
|
|
| 22,074 |
|
|
| 4,336 |
|
|
| 814 |
| Total unconsolidated |
|
|
|
|
|
|
| $ | 57,920 |
|
|
| 22,074 |
|
|
| 4,336 |
|
|
| 814 |
| ||
Total property acquisitions | Total property acquisitions |
|
|
|
|
| $ | 269,173 |
|
|
| 44,853 |
|
|
| 26,473 |
|
|
| 9,518 |
| Total property acquisitions |
|
|
|
|
| $ | 269,173 |
|
|
| 44,853 |
|
|
| 26,473 |
|
|
| 9,518 |
|
20
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2023
3. | Property Dispositions |
The following table provides a summary of consolidated shopping centers and land parcels sold during the periods set forth below:
|
| Three months ended June 30, |
|
| Six months ended June 30, |
|
| Three months ended September 30, |
|
| Nine months ended September 30, |
| ||||||||||||||||||||
(in thousands, except number sold data) |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||||||
Net proceeds from sale of real estate investments |
| $ | 142 |
|
|
| 11,497 |
|
| $ | 3,065 |
|
|
| 136,421 |
|
| $ | 6,593 |
|
|
| 859 |
|
| $ | 9,658 |
|
|
| 137,280 |
|
Gain on sale of real estate, net of tax |
|
| 81 |
|
|
| 4,291 |
|
|
| 331 |
|
|
| 106,239 |
|
|
| 184 |
|
|
| 220 |
|
|
| 515 |
|
|
| 106,459 |
|
Number of operating properties sold |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
Number of land parcels sold |
|
| — |
|
|
| 2 |
|
|
| 1 |
|
|
| 3 |
|
|
| 2 |
|
|
| 1 |
|
|
| 3 |
|
|
| 4 |
|
Percent interest sold |
| 100% |
|
| 100% |
|
| 100% |
| 100% |
|
| 100% |
|
| 100% |
|
| 100% |
| 100% |
|
19
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2023
4. | Other Assets |
The following table represents the components of Other assets in the accompanying Consolidated Balance Sheets as of the dates set forth below:
(in thousands) |
| June 30, 2023 |
|
| December 31, 2022 |
|
| September 30, 2023 |
|
| December 31, 2022 |
| ||||
Goodwill |
| $ | 167,062 |
|
|
| 167,062 |
|
| $ | 167,062 |
|
|
| 167,062 |
|
Investments |
|
| 49,616 |
|
|
| 54,581 |
|
|
| 48,304 |
|
|
| 54,581 |
|
Prepaid and other |
|
| 49,287 |
|
|
| 28,615 |
|
|
| 54,476 |
|
|
| 28,615 |
|
Derivative assets |
|
| 5,915 |
|
|
| 6,575 |
|
|
| 21,328 |
|
|
| 6,575 |
|
Furniture, fixtures, and equipment, net ("FF&E") |
|
| 4,953 |
|
|
| 5,808 |
|
|
| 4,871 |
|
|
| 5,808 |
|
Deferred financing costs, net |
|
| 4,010 |
|
|
| 5,156 |
|
|
| 3,438 |
|
|
| 5,156 |
|
Total other assets |
| $ | 280,843 |
|
|
| 267,797 |
|
| $ | 299,479 |
|
|
| 267,797 |
|
5. | Notes Payable and Unsecured Credit Facilities |
The Company's outstanding debt, net of unamortized debt premium (discount) and debt issuance costs, consisted of the following as of the dates set forth below:
(in thousands) |
| Weighted |
| Weighted |
| June 30, 2023 |
|
| December 31, 2022 |
|
| Weighted |
| Weighted |
| September 30, 2023 |
|
| December 31, 2022 |
| ||||
Notes payable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fixed rate mortgage loans |
| 3.9% |
| 3.4% |
| $ | 326,471 |
|
|
| 342,135 |
|
| 3.9% |
| 4.1% |
| $ | 452,512 |
|
|
| 342,135 |
|
Variable rate mortgage loans (1) |
| 3.8% |
| 3.9% |
|
| 132,039 |
|
|
| 136,246 |
|
| 4.1% |
| 4.1% |
|
| 287,922 |
|
|
| 136,246 |
|
Fixed rate unsecured debt |
| 3.8% |
| 4.0% |
|
| 3,250,564 |
|
|
| 3,248,373 |
|
| 3.8% |
| 4.0% |
|
| 3,251,659 |
|
|
| 3,248,373 |
|
Total notes payable |
|
|
|
|
|
| 3,709,074 |
|
|
| 3,726,754 |
| ||||||||||||
Total notes payable, net |
|
|
|
|
|
| 3,992,093 |
|
|
| 3,726,754 |
| ||||||||||||
Unsecured credit facilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
$1.25 Billion Line of Credit (the "Line") (2) |
| 6.0% |
| 6.4% |
|
| — |
|
|
| — |
|
| 6.3% |
| 6.6% |
|
| 77,000 |
|
|
| — |
|
Total unsecured credit facilities |
|
|
|
|
|
| 77,000 |
|
|
| — |
| ||||||||||||
Total debt outstanding |
|
|
|
|
| $ | 3,709,074 |
|
|
| 3,726,754 |
|
|
|
|
|
| $ | 4,069,093 |
|
|
| 3,726,754 |
|
21
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2023
Scheduled principal payments and maturities on notes payable and unsecured credit facilities were as follows:
(in thousands) |
| June 30, 2023 |
|
| September 30, 2023 |
| ||||||||||||||||||||||||||
Scheduled Principal Payments and Maturities by Year: |
| Scheduled |
|
| Mortgage |
|
| Unsecured |
|
| Total |
|
| Scheduled |
|
| Mortgage |
|
| Unsecured |
|
| Total |
| ||||||||
2023 (2) |
| $ | 4,490 |
|
|
| 30,592 |
|
|
| — |
|
|
| 35,082 |
|
| $ | 4,154 |
|
|
| — |
|
|
| — |
|
|
| 4,154 |
|
2024 |
|
| 5,044 |
|
|
| 90,742 |
|
|
| 250,000 |
|
|
| 345,786 |
|
|
| 12,934 |
|
|
| 133,809 |
|
|
| 250,000 |
|
|
| 396,743 |
|
2025 |
|
| 3,942 |
|
|
| 43,750 |
|
|
| 250,000 |
|
|
| 297,692 |
|
|
| 11,094 |
|
|
| 52,369 |
|
|
| 327,000 |
|
|
| 390,463 |
|
2026 |
|
| 4,127 |
|
|
| 127,096 |
|
|
| 200,000 |
|
|
| 331,223 |
|
|
| 11,426 |
|
|
| 134,850 |
|
|
| 200,000 |
|
|
| 346,276 |
|
2027 |
|
| 3,788 |
|
|
| 137,915 |
|
|
| 525,000 |
|
|
| 666,703 |
|
|
| 8,612 |
|
|
| 222,429 |
|
|
| 525,000 |
|
|
| 756,041 |
|
Beyond 5 Years |
|
| 2,873 |
|
|
| 319 |
|
|
| 2,050,000 |
|
|
| 2,053,192 |
|
|
| 14,762 |
|
|
| 142,893 |
|
|
| 2,050,000 |
|
|
| 2,207,655 |
|
Unamortized debt premium/(discount) and issuance costs |
|
| — |
|
|
| 3,832 |
|
|
| (24,436 | ) |
|
| (20,604 | ) |
|
| — |
|
|
| (8,898 | ) |
|
| (23,341 | ) |
|
| (32,239 | ) |
Total |
| $ | 24,264 |
|
|
| 434,246 |
|
|
| 3,250,564 |
|
|
| 3,709,074 |
|
| $ | 62,982 |
|
|
| 677,452 |
|
|
| 3,328,659 |
|
|
| 4,069,093 |
|
In connection with the acquisition of UBP on August 18, 2023, the Company completed the following debt transactions:
The Company was in compliance as of JuneSeptember 30, 2023, with all financial and other covenants under its unsecured public and private placement debt and unsecured credit facilities and expects to remain in compliance thereafter.
20
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2023
6. | Derivative Financial Instruments |
The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors, and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company's operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative transactions or purposes other than mitigation of interest rate risk. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with quality credit ratings. The Company does not anticipate that any of the counterparties will fail to meet their obligations.
The Company's objectives in using interest rate derivatives are to attempt to stabilize interest expense where possible and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
22
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2023
The following table summarizes the terms and fair values of the Company's derivative financial instruments, as well as their classification on the Consolidated Balance Sheets:
|
|
|
|
|
|
|
|
|
|
| Fair Value |
| ||||||
(in thousands) |
|
|
|
|
|
|
|
|
|
| Assets (Liabilities) (1) |
| ||||||
Effective |
| Maturity |
| Notional |
|
| Bank Pays |
| Regency Pays |
| June 30, 2023 |
|
| December 31, 2022 |
| |||
12/1/16 |
| 11/1/23 |
|
| 30,806 |
|
| SOFR |
| 1.490% |
|
| 407 |
|
|
| 883 |
|
9/17/19 |
| 3/17/25 |
|
| 24,000 |
|
| SOFR |
| 1.443% |
|
| 1,357 |
|
|
| 1,443 |
|
12/20/19 |
| 12/19/26 |
|
| 24,365 |
|
| SOFR |
| 1.684% |
|
| 1,938 |
|
|
| 1,939 |
|
2/24/23 |
| 12/31/26 |
|
| 15,435 |
|
| SOFR |
| 4.229% |
|
| (25 | ) |
|
| 152 |
|
6/2/17 |
| 6/2/27 |
|
| 35,160 |
|
| SOFR |
| 2.261% |
|
| 2,213 |
|
|
| 2,158 |
|
|
|
|
|
|
|
|
|
|
| $ | 5,890 |
|
|
| 6,575 |
|
|
|
|
|
|
|
|
|
|
|
| Fair Value |
| ||||||
(in thousands) |
|
|
|
|
|
|
|
|
|
| Assets (Liabilities) (1) |
| ||||||
Effective |
| Maturity |
| Notional |
|
| Bank Pays |
| Regency Pays |
| September 30, 2023 |
|
| December 31, 2022 |
| |||
12/1/22 |
| 3/17/25 |
|
| 24,000 |
|
| SOFR |
| 1.443% |
|
| 1,250 |
|
|
| 1,443 |
|
12/16/22 |
| 6/2/27 |
|
| 35,016 |
|
| SOFR |
| 2.261% |
|
| 2,485 |
|
|
| 2,158 |
|
1/17/23(2) |
| 8/15/24 |
|
| 13,134 |
|
| SOFR |
| 3.995% |
|
| 316 |
|
|
| - |
|
7/17/17(2) |
| 7/1/27 |
|
| 43,446 |
|
| SOFR |
| 1.498% |
|
| 4,341 |
|
|
| - |
|
9/21/16(2) |
| 10/1/26 |
|
| 8,856 |
|
| SOFR |
| 1.475% |
|
| 752 |
|
|
| - |
|
8/16/18(2) |
| 8/15/28 |
|
| 8,830 |
|
| SOFR |
| 4.830% |
|
| 505 |
|
|
| - |
|
3/18/19(2) |
| 4/1/29 |
|
| 23,193 |
|
| SOFR |
| 3.165% |
|
| 1,325 |
|
|
| - |
|
2/1/22(2) |
| 2/1/32 |
|
| 33,854 |
|
| SOFR |
| 3.053% |
|
| 6,508 |
|
|
| - |
|
1/3/23(2) |
| 7/1/29 |
|
| 11,008 |
|
| SOFR |
| 3.633% |
|
| 1,289 |
|
|
| - |
|
1/3/23(2) |
| 11/1/24 |
|
| 5,000 |
|
| SOFR |
| 3.705% |
|
| 163 |
|
|
| - |
|
2/24/23 |
| 12/31/26 |
|
| 15,390 |
|
| SOFR |
| 4.229% |
|
| 131 |
|
|
| 152 |
|
2/21/23 |
| 12/21/26 |
|
| 24,365 |
|
| SOFR |
| 1.684% |
|
| 2,061 |
|
|
| 1,939 |
|
9/19/23 |
| 9/19/28 |
|
| 31,000 |
|
| SOFR |
| 4.314% |
|
| 15 |
|
|
| 883 |
|
10/31/17(2) |
| 10/1/24 |
|
| 6,025 |
|
| SOFR |
| 2.334% |
|
| 187 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
| $ | 21,328 |
|
|
| 6,575 |
|
These derivative financial instruments are all interest rate swaps, which are designated and qualify as cash flow hedges. The Company does not use derivatives for trading or speculative purposes and, as of JuneSeptember 30, 2023, does not have any derivatives that are not designated as hedges.
The changes in the fair value of derivatives designated and qualifying as cash flow hedges are recorded in Accumulated other comprehensive income ("AOCI") and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.
21
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2023
The following table represents the effect of the derivative financial instruments on the accompanying Consolidated Financial Statements:
Location and Amount of Gain (Loss) Recognized in OCI on Derivative | Location and Amount of Gain (Loss) Recognized in OCI on Derivative |
|
| Location and Amount of Gain (Loss) Reclassified from AOCI into Income |
|
| Total amounts presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded |
| Location and Amount of Gain (Loss) Recognized in OCI on Derivative |
|
| Location and Amount of Gain (Loss) Reclassified from AOCI into Income |
|
| Total amounts presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded |
| ||||||||||||||||||||||||||||||||||||||||
|
| Three months ended June 30, |
|
|
|
| Three months ended June 30, |
|
|
|
| Three months ended June 30, |
|
| Three months ended September 30, |
|
|
|
| Three months ended September 30, |
|
|
|
| Three months ended September 30, |
| ||||||||||||||||||||||||||||||
(in thousands) |
| 2023 |
|
| 2022 |
|
|
|
| 2023 |
|
| 2022 |
|
|
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
|
|
| 2023 |
|
| 2022 |
|
|
|
| 2023 |
|
| 2022 |
| ||||||||||||
Interest rate swaps |
| $ | 5,457 |
|
|
| 4,436 |
|
| Interest expense |
| $ | (1,649 | ) |
|
| 481 |
|
| Interest expense, net |
| $ | 36,956 |
|
|
| 36,699 |
|
| $ | 4,606 |
|
|
| 7,069 |
|
| Interest expense |
| $ | (2,161 | ) |
|
| 72 |
|
| Interest expense, net |
| $ | 38,807 |
|
|
| 36,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
|
| Six months ended June 30, |
|
|
| Six months ended June 30, |
|
|
| Six months ended June 30, |
|
| Nine months ended September 30, |
|
|
| Nine months ended September 30, |
|
|
| Nine months ended September 30, |
| ||||||||||||||||||||||||||||||||||
(in thousands) |
| 2023 |
|
| 2022 |
|
|
|
| 2023 |
|
| 2022 |
|
|
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
|
|
| 2023 |
|
| 2022 |
|
|
|
| 2023 |
|
| 2022 |
| ||||||||||||
Interest rate swaps |
| $ | 2,721 |
|
|
| 13,404 |
|
| Interest expense |
| $ | (3,141 | ) |
|
| 1,491 |
|
| Interest expense, net |
| $ | 73,349 |
|
|
| 73,437 |
|
| $ | 7,327 |
|
|
| 20,473 |
|
| Interest expense |
| $ | (5,302 | ) |
|
| 1,563 |
|
| Interest expense, net |
| $ | 112,156 |
|
|
| 109,798 |
|
As of JuneSeptember 30, 2023, the Company expects approximately $5.87.8 million of accumulated comprehensive income on derivative instruments in AOCI, including the Company's share from its Investments in real estate partnerships, to be reclassified into earnings during the next 12 months.
23
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2023
7. | Leases |
AllSubstantially all of the Company's leases are classified as operating leases. The Company's Lease income is comprised of both fixed and variable income. Fixed and in-substance fixed lease income includes stated amounts per the lease contract, which are primarily related to base rent, and in some cases stated amounts for common area maintenance ("CAM"), real estate taxes, and insurance ("Recoverable(collectively, "Recoverable Costs"). Income for these amounts is recognized on a straight-line basis.
Variable lease income includes the following two main items in the lease contracts:
(ii)
The following table provides a disaggregation of lease income recognized as either fixed or variable lease income based on the criteria specified in ASC Topic 842:
(in thousands) Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Operating lease income Fixed and in-substance fixed lease income $ 235,489 215,077 $ 675,320 634,416 Variable lease income 77,901 70,473 233,019 210,390 Other lease related income, net: Above/below market rent and tenant rent inducement amortization, net 8,118 5,484 22,734 16,786 Uncollectible straight-line rent (1) 49 3,612 2,149 8,517 Uncollectible amounts billable in lease income (636 ) 1,110 958 12,156 Total lease income $ 320,921 295,756 $ 934,180 882,265
(in thousands) |
| Three months ended June 30, |
|
| Six months ended June 30, |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Operating lease income |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fixed and in-substance fixed lease income |
| $ | 220,191 |
|
|
| 211,838 |
|
| $ | 439,831 |
|
|
| 419,340 |
|
Variable lease income |
|
| 74,337 |
|
|
| 67,890 |
|
|
| 155,118 |
|
|
| 139,916 |
|
Other lease related income, net: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Above/below market rent and tenant rent inducement amortization, net |
|
| 8,751 |
|
|
| 5,613 |
|
|
| 14,616 |
|
|
| 11,302 |
|
Uncollectible straight-line rent |
|
| 1,522 |
|
|
| 2,623 |
|
|
| 2,100 |
|
|
| 4,905 |
|
Uncollectible amounts billable in lease income |
|
| (343 | ) |
|
| 4,900 |
|
|
| 1,594 |
|
|
| 11,046 |
|
Total lease income |
| $ | 304,458 |
|
|
| 292,864 |
|
| $ | 613,259 |
|
|
| 586,509 |
|
22
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2023
Lease income for operating leasesfixed payment terms is recognized on a straight-line basis over the expected term of the lease for all leases in which collectibility is considered probable. At lease commencement, the Company generally expects that collectibility of substantially all payments due under the lease is probable due to the Company's credit checks on tenants and other credit worthiness analysis undertaken before entering into a new lease; therefore, income from most operating leases is initially recognized on a straight-line basis. For operating leases in which collectibility of Lease income is not considered probable, Lease income is recognized on aconverting cash basis and all previously recognized straight-line rent receivables are reversed in the period in which the Lease income is determined not to be probable of collection. Should collectibility of Lease income become probable again, through evaluation of qualitative and quantitative measures on a tenant by tenant basis, accrual basis accounting resumes and all commencement-to-date straight-line rent is recognized in that period. In addition to the lease-specific collectibility assessment performed under ASC Topic 842, the Company may also recognize a general reserve, as a reduction to Lease income, for its portfolio of operating lease receivables which are not expected to be fully collectible based on the Company's historical collection experience.certain leases.
The following table represents the components of Tenant and other receivables, net of amounts considered uncollectible, in the accompanying Consolidated Balance Sheets:
(in thousands) |
| June 30, 2023 |
|
| December 31, 2022 |
|
| September 30, 2023 |
|
| December 31, 2022 |
| ||||
Tenant receivables |
| $ | 28,239 |
|
|
| 31,486 |
|
| $ | 28,792 |
|
|
| 31,486 |
|
Straight-line rent receivables |
|
| 133,690 |
|
|
| 128,214 |
|
|
| 136,334 |
|
|
| 128,214 |
|
Other receivables (1) |
|
| 44,124 |
|
|
| 29,163 |
|
|
| 34,313 |
|
|
| 29,163 |
|
Total tenant and other receivables |
| $ | 206,053 |
|
|
| 188,863 |
|
| $ | 199,439 |
|
|
| 188,863 |
|
24
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2023
8. | Fair Value Measurements |
(a) Disclosure of Fair Value of Financial Instruments
All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management's estimation, reasonably approximate their fair values, except for the following:
|
| June 30, 2023 |
|
| December 31, 2022 |
|
| September 30, 2023 |
|
| December 31, 2022 |
| ||||||||||||||||||||
(in thousands) |
| Carrying |
|
| Fair Value |
|
| Carrying |
|
| Fair Value |
|
| Carrying |
|
| Fair Value |
|
| Carrying |
|
| Fair Value |
| ||||||||
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Notes payable |
| $ | 3,709,074 |
|
|
| 3,367,758 |
|
|
| 3,726,754 |
|
|
| 3,333,378 |
| ||||||||||||||||
Notes payable, net |
| $ | 3,992,093 |
|
|
| 3,588,977 |
|
|
| 3,726,754 |
|
|
| 3,333,378 |
| ||||||||||||||||
Unsecured credit facilities |
| $ | 77,000 |
|
|
| 77,000 |
|
|
| — |
|
|
| — |
|
The above fair values represent management's estimate of the amounts that would be received from selling those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants as of JuneSeptember 30, 2023, and December 31, 2022, respectively. These fair value measurements maximize the use of observable inputs which are classified within Level 2 of the fair value hierarchy. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company's own judgments about the assumptions that market participants would use in pricing the asset or liability.
The Company develops its judgments based on the best information available at the measurement date, including expected cash flows, appropriate risk-adjusted discount rates, and available observable and unobservable inputs. Service providers involved in fair value measurements are evaluated for competency and qualifications on an ongoing basis. As considerable judgment is often necessary to estimate the fair value of these financial instruments, the fair values presented above are not necessarily indicative of amounts that will be realized upon disposition of the financial instruments.
23
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2023
(b) Fair Value Measurements
The following financial instruments are measured at fair value on a recurring basis:
Securities
The Company has investments in marketable securities that are included within Other assets on the accompanying Consolidated Balance Sheets. The fair value of the securities was determined using quoted prices in active markets, which are considered Level 1 inputs of the fair value hierarchy. Changes in the value of securities are recorded within Net investment loss (income) loss in the accompanying Consolidated Statements of Operations, and include unrealized losses of $1.0 million during the three months ended September 30, 2023 and 2022, and unrealized gains of $1.42.4 million and unrealized losses of $5.59.5 million during the threenine months ended June 30, 2023 and 2022, respectively, and unrealized gains of $3.0 million and unrealized losses of $8.5 million during the six months ended JuneSeptember 30, 2023 and 2022, respectively.
Available-for-Sale Debt Securities
Available-for-sale debt securities consist of investments in certificates of deposit and corporate bonds, and are recorded at fair value using either recent trade prices for the identical debt instrument or comparable instruments by issuers of similar industry sector, issuer rating, and size, to estimate fair value, which are considered Level 2 inputs of the fair value hierarchy. Unrealized gains or losses on these debt securities are recognized through Other comprehensive income.
Interest Rate Derivatives
The fair value of the Company's interest rate derivatives is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements.
25
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2023
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy.
24
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2023
The following tables present the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis:
| Fair Value Measurements as of June 30, 2023 |
| Fair Value Measurements as of September 30, 2023 |
| ||||||||||||||||||||||||||
|
|
|
| Quoted Prices in Active Markets for Identical Assets |
|
| Significant Other Observable Inputs |
|
| Significant Unobservable Inputs |
|
|
|
| Quoted Prices in Active Markets for Identical Assets |
|
| Significant Other Observable Inputs |
|
| Significant Unobservable Inputs |
| ||||||||
(in thousands) | Balance |
|
| (Level 1) |
|
| (Level 2) |
|
| (Level 3) |
| Balance |
|
| (Level 1) |
|
| (Level 2) |
|
| (Level 3) |
| ||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Securities | $ | 34,471 |
|
|
| 34,471 |
|
|
| — |
|
|
| — |
| $ | 33,881 |
|
|
| 33,881 |
|
|
| — |
|
|
| — |
|
Available-for-sale debt securities |
| 15,145 |
|
|
| — |
|
|
| 15,145 |
|
|
| — |
|
| 14,423 |
|
|
| — |
|
|
| 14,423 |
|
|
| — |
|
Interest rate derivatives |
| 5,915 |
|
|
| — |
|
|
| 5,915 |
|
|
| — |
|
| 21,328 |
|
|
| — |
|
|
| 21,328 |
|
|
| — |
|
Total | $ | 55,531 |
|
|
| 34,471 |
|
|
| 21,060 |
|
|
| — |
| $ | 69,632 |
|
|
| 33,881 |
|
|
| 35,751 |
|
|
| — |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Interest rate derivatives | $ | (25 | ) |
|
| — |
|
|
| (25 | ) |
|
| — |
|
| Fair Value Measurements as of December 31, 2022 |
| |||||||||||||
|
|
|
| Quoted Prices in Active Markets for Identical Assets |
|
| Significant Other Observable Inputs |
|
| Significant Unobservable Inputs |
| ||||
(in thousands) | Balance |
|
| (Level 1) |
|
| (Level 2) |
|
| (Level 3) |
| ||||
Assets: |
|
|
|
|
|
|
|
|
|
|
| ||||
Securities | $ | 40,089 |
|
|
| 40,089 |
|
|
| — |
|
|
| — |
|
Available-for-sale debt securities |
| 14,492 |
|
|
| — |
|
|
| 14,492 |
|
|
| — |
|
Interest rate derivatives |
| 6,575 |
|
|
| — |
|
|
| 6,575 |
|
|
| — |
|
Total | $ | 61,156 |
|
|
| 40,089 |
|
|
| 21,067 |
|
|
| — |
|
9. | Equity and Capital |
UBP Acquisition
See Note 1 — Acquisition of Urstadt Biddle Properties Inc, for discussion regarding UBP acquisition.
Preferred Stock of the Parent Company
Terms and conditions of the preferred stock outstanding are summarized as follows:
| Preferred Stock Outstanding as of September 30, 2023 | ||||||||||||
| Date of Issuance |
| Shares Issued and Outstanding |
|
| Liquidation Preference |
|
| Distribution Rate |
| Callable By Company | ||
Series A | 8/18/2023 |
|
| 4,600,000 |
|
| $ | 115,000,000 |
|
| 6.250% |
| On demand |
Series B | 8/18/2023 |
|
| 4,400,000 |
|
|
| 110,000,000 |
|
| 5.875% |
| On or after 10/1/2024 |
|
|
|
| 9,000,000 |
|
| $ | 225,000,000 |
|
|
|
|
|
Both series of Preferred Stock are non-voting, have no stated maturity and are redeemable for cash at $25.00 per share at the Company's option, except that the Parent Company Series B preferred stock is not redeemable until on or after October 1, 2024. The holders of the Preferred Stock have general preference rights with respect to liquidation and quarterly distributions. Except under certain conditions, holders of the Preferred Stock will not be entitled to vote on most matters. In the event of a cumulative arrearage equal to six quarterly dividends, holders of the Preferred Stock (voting as a single class without regard to series) will have the right to elect two additional members to serve on the Company's Board of Directors until the arrearage has been cured. Upon the occurrence of a Change of Control, as defined in the Company's Articles of Incorporation, the holders of the Preferred
26
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2023
Stock will have the right to convert all or part of the shares of the Preferred Stock held by such holders on the applicable conversion date into a number of shares of Common Stock.
Dividends Declared
On September 25, 2023, the Board of Directors (the “Board”) of the Company:
On November 2, 2023, the Board:
Common Stock of the Parent Company
Dividends Declared
On August 1,November 2, 2023, ourthe Board of Directors declared a common stock dividend of $0.650.67 per share, payable on October 4, 2023January 3, 2024, to shareholders of record as of SeptemberDecember 14, 2023.
ShareAt the Market ("ATM") Program
Under the Parent Company's ATM program, as authorized by the Board, the Parent Company may sell up to $500 million of common stock at prices determined by the market at the time of sale. The timing of sales, if any, will be dependent on market conditions and other factors. No sales occurred under the ATM program during 2023. As of September 30, 2023, $500 million of common stock remained available for issuance under this ATM program.
Stock Repurchase Program
The CompanyBoard has authorized a common sharestock repurchase program under which itthe Company may purchase, from time to time, up to a maximum of $250 million of its outstanding common stock through open market purchases, and/or in privately negotiated transactions (referred to as the "Repurchase Program"). The timing and price of sharestock repurchases, if any will be dependent upon market conditions and other factors. The sharesstock repurchased, if not retired, would be treated as treasury shares.stock. The Board's authorization for this repurchase program will expire on February 7, 2025, unless modified, extended or earlier terminated by the Board.
During the sixnine months ended JuneSeptember 30, 2023, the Company executed multiple trades to repurchase 349,519 common shares under the Repurchase Program for a total of $20.0 million at a weighted average price of $57.22 per share. All repurchased shares were retired on the respective settlement dates. At JuneSeptember 30, 2023, $230.0 million remained available under the Repurchase Program.
Preferred Units of the Operating Partnership
The number of Series A Preferred Units and Series B Preferred Units, respectively, issued by RCLP is equal to the number of Series A Preferred Stock and Series B Preferred Stock, respectively, issued by the Company.
27
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2023
Common Units of the Operating Partnership
Common units of the Operating PartnershipUnits are issued, or redeemed and retired, for each of the sharesshare of Parent Company common sharesstock issued or repurchased,redeemed, or retired, as described above.
In May During the nine months ended September 30, 2023, the Operating Partnership issued 338,704 exchangeable operating partnership units, valued at $20.0 million, as partial purchase price consideration for the acquisition of a development property.property to be developed. In addition, 3,340 Partnership Units were converted to Parent Company common stock.
25
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2023
10. | Stock-Based Compensation |
During the sixnine months ended JuneSeptember 30, 2023, the Company granted 301,099 shares of restricted stock with a weighted-average grant-date fair value of $68.29 per share. The Company records stock-based compensation expense within General and administrative expenses in the accompanying Consolidated Statements of Operations, and recognizes forfeitures as they occur.
11. | Earnings per Share and Unit |
Parent Company Earnings per Share
The following summarizes the calculation of basic and diluted earnings per share:
|
| Three months ended June 30, |
|
| Six months ended June 30, |
|
| Three months ended September 30, |
|
| Nine months ended September 30, |
| ||||||||||||||||||||
(in thousands, except per share data) |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Income attributable to common shareholders - basic |
| $ | 86,782 |
|
|
| 104,796 |
|
| $ | 184,063 |
|
|
| 300,024 |
|
| $ | 89,076 |
|
|
| 87,578 |
|
| $ | 273,139 |
|
|
| 387,602 |
|
Income attributable to common shareholders - diluted |
| $ | 86,782 |
|
|
| 104,796 |
|
| $ | 184,063 |
|
|
| 300,024 |
|
| $ | 89,076 |
|
|
| 87,578 |
|
| $ | 273,139 |
|
|
| 387,602 |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Weighted average common shares outstanding for basic EPS |
|
| 170,990 |
|
|
| 172,064 |
|
|
| 171,100 |
|
|
| 171,692 |
|
|
| 177,344 |
|
|
| 171,121 |
|
|
| 173,212 |
|
|
| 171,499 |
|
Weighted average common shares outstanding for diluted EPS (1) |
|
| 171,275 |
|
|
| 172,424 |
|
|
| 171,369 |
|
|
| 172,036 |
|
|
| 178,231 |
|
|
| 171,525 |
|
|
| 173,711 |
|
|
| 171,870 |
|
Income per common share – basic |
| $ | 0.51 |
|
|
| 0.61 |
|
| $ | 1.08 |
|
|
| 1.75 |
|
| $ | 0.50 |
|
|
| 0.51 |
|
| $ | 1.58 |
|
|
| 2.26 |
|
Income per common share – diluted |
| $ | 0.51 |
|
|
| 0.61 |
|
| $ | 1.07 |
|
|
| 1.74 |
|
| $ | 0.50 |
|
|
| 0.51 |
|
| $ | 1.57 |
|
|
| 2.26 |
|
Income attributable to noncontrolling interests of the Operating Partnership has been excluded from the numerator and EOP units have been omitted from the denominator for the purpose of computing diluted earnings per share since the effect of including these amounts in the numerator and denominator would be anti-dilutive. Weighted average EOP units outstanding were 901,4801,080,101 and 741,433 for the three months ended JuneSeptember 30, 2023 and 2022, respectively, and were 822,346909,527 and 755,393750,671 for the sixnine months ended JuneSeptember 30, 2023 and 2022, respectively.
Operating Partnership Earnings per Unit
The following summarizes the calculation of basic and diluted earnings per unit ("EPU"):
|
| Three months ended June 30, |
|
| Six months ended June 30, |
|
| Three months ended September 30, |
|
| Nine months ended September 30, |
| ||||||||||||||||||||
(in thousands, except per share data) |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Income attributable to common unit holders - basic |
| $ | 87,332 |
|
|
| 105,248 |
|
| $ | 185,033 |
|
|
| 301,339 |
|
| $ | 89,596 |
|
|
| 87,957 |
|
| $ | 274,629 |
|
|
| 389,296 |
|
Income attributable to common unit holders - diluted |
| $ | 87,332 |
|
|
| 105,248 |
|
| $ | 185,033 |
|
|
| 301,339 |
|
| $ | 89,596 |
|
|
| 87,957 |
|
| $ | 274,629 |
|
|
| 389,296 |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Weighted average common units outstanding for basic EPU |
|
| 171,891 |
|
|
| 172,805 |
|
|
| 171,922 |
|
|
| 172,448 |
|
|
| 178,424 |
|
|
| 171,862 |
|
|
| 174,121 |
|
|
| 172,249 |
|
Weighted average common units outstanding for diluted EPU (1) |
|
| 172,176 |
|
|
| 173,165 |
|
|
| 172,192 |
|
|
| 172,791 |
|
|
| 179,311 |
|
|
| 172,267 |
|
|
| 174,621 |
|
|
| 172,620 |
|
Income per common unit – basic |
| $ | 0.51 |
|
|
| 0.61 |
|
| $ | 1.08 |
|
|
| 1.75 |
|
| $ | 0.50 |
|
|
| 0.51 |
|
| $ | 1.58 |
|
|
| 2.26 |
|
Income per common unit – diluted |
| $ | 0.51 |
|
|
| 0.61 |
|
| $ | 1.07 |
|
|
| 1.74 |
|
| $ | 0.50 |
|
|
| 0.51 |
|
| $ | 1.57 |
|
|
| 2.26 |
|
28
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
September 30, 2023
12. | Commitments and Contingencies |
Litigation
The Company is involved ina party to litigation on a number of matters, and is subject to other disputes, in each case that arise in the ordinary course of business. While the outcome of any particular lawsuit or dispute cannot be predicted with certainty, in the opinion of management, the Company's currently pending litigation and disputes are not expected to have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity. Legal fees are expensed as incurred.
26
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2023
On May 17, 2023,, Regency Centers Corporation (“Regency”) entered the Company announced its entry into an agreement to acquire Urstadt Biddle Properties Inc. (“Urstadt Biddle”). In connection with the proposed acquisition, RegencyUBP and shortly thereafter filed a registration statement (the “Registration Statement”) with the SEC containing a proxy statement/prospectus that will be used in connection with obtaining approval of the proposed acquisition by UBP stockholders. As previously disclosed in the Urstadt Biddle stockholders. OneCompany's Form 10-Q for the second quarter of 2023, a complaint has beenwas filed in Connecticut state court in connection with the proposed acquisition by a purported Urstadt BiddleUBP stockholder, captioned Snitkoff v. Bannon et al., FBT-CV23-6125690-S (Superior Court, Fairfield County, Connecticut, July 19, 2023) (the “Complaint”). The Complaint allegeswhich alleged that, in connection with the Urstadt Biddleproposed acquisition, the UBP board of directors breached its fiduciary duties under Marylandapplicable law in connection with the proposed acquisition and that the Registration Statement failsfailed to disclose allegedly material information. The Complaint also allegesalleged that Regency aided and abetted the alleged breaches of fiduciary duty, by the Urstadt Biddle board of directors, and that all defendants engaged in negligent misrepresentation and concealment under Connecticut law in connection with the Registration Statement. The complaint seekssought various remedies, including, among other things, injunctive relief, to prevent the consummation of the proposed acquisition, requiring defendants to file a proxy statement/prospectus that does not contain allegedly false and misleading statements, a declaration that defendants have negligently misrepresented and omitted material facts in the proxy statement/prospectus, and awards of damages and attorney’sattorneys’ fees.
In addition to the Complaint, certain other purported stockholders of Urstadt Biddle haveUBP sent demand letters (the “Demands,” and together with the Complaint, the “Matters”) alleging deficiencies and/or omissions regarding the disclosures made in the proxy statement/prospectus.
Regency believesRegistration Statement. The Matters were resolved during the quarter to avoid additional litigation and associated costs. The resolution involved the claimants’ acknowledgment that their claims were mooted by additional information disclosed in a Form 8-K filed by UBP with the Matters are without meritSEC on August 8, 2023. In exchange for appropriate releases and that no supplemental disclosure is requiredthe dismissal of the Complaint, we also made payments to the Registration Statement or proxy statement/prospectus under any applicable rule, statute, regulation or law.claimants and their attorneys, in the aggregate, totaling an immaterial amount.
Environmental
The Company is subject to numerous environmental laws and regulations. With respect to impact on the Company, these pertain primarily to chemicals historically used by certain current and former dry cleaning tenants, the existence of asbestos in older shopping centers, older underground petroleum storage tanks and other historic land uses. The Company believes that the ultimate disposition of currently known environmental matters will not have a material effect on its financial position, liquidity, or operations. The Company can give no assurance that existing environmental studies with respect to its shopping centers have revealed all potential environmental contaminants; that its estimate of liabilities will not change as more information becomes available; that any previous owner, occupant or tenant did not create any material environmental condition not known to the Company; that the current environmental condition of the shopping centers will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties; and that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to the Company.
Letters of Credit
The Company has the right to issue letters of credit under the Line up to an aggregate amount not to exceed $50.0 million, which reduces the credit availability under the Line. These letters of credit are primarily issued as collateral on behalf of its captive insurance subsidiary and to facilitate the construction of development projects. The Company had $8.49.1 million and $9.4 million in letters of credit outstanding as of JuneSeptember 30, 2023 and December 31, 2022, respectively.
2729
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to Regency's future events, developments, or financial or operational performance or results, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as "may," "will," "could," "should," "would," "expect," "estimate," "believe," "intend," "forecast," "project," "plan," "anticipate," "guidance," and other similar language. However, the absence of these or similar words or expressions does not mean a statement is not forward-looking. While we believe these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance these expectations will be attained, and it is possible actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties.
Our operations are subject to a number of risks and uncertainties including, but not limited to, risk factors described in our Securities and Exchange Commission ("SEC") filings, our Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 Form 10-K") under Item 1A. "Risk Factors" and in Part II, Item 1A. "Risk Factors" in this Report. When considering an investment in our securities, you should carefully read and consider these risks, together with all other information in our most recent 2022 Form 10-K, subsequent Quarterly Reports on Form 10-Q and our other filings with and submissions to the SEC.SEC, including those made in connection with the Company’s acquisition of UBP. If any of the events described in the risk factors actually occur, our business, financial condition or operating results, as well as the market price of our securities, could be materially adversely affected. Forward-looking statements are only as of the date they are made, and Regency undertakes no duty to update its forward-looking statements, whether as a result of new information, future events, or developments otherwise, except as and to the extent required by law.
Pending Acquisition of Urstadt Biddle Properties Inc.
On May 17, 2023, the Parent Company entered into a merger agreement by and among the Parent Company, Hercules Merger Sub UBP, UB Sub I, and UB Sub II, pursuant to which, subject to the satisfaction or waiver of certain conditions, (a) UB Sub II will be merged with and into Urstadt Biddle, with Urstadt Biddle surviving the first merger as a wholly owned subsidiary of UB Sub I, and (b) following the first merger, UB Sub I will be merged with and into Merger Sub, with Merger Sub being the surviving entity in the second merger. The combined company will retain the Regency name and continue to trade under the ticker symbol “REG” on the NASDAQ. On the terms and subject to the conditions set forth in the merger agreement, which has been approved by the boards of directors of Regency Centers Corporation and UBP, at the first merger effective time, each Urstadt Biddle common share and each share of 6.25% Series H Cumulative Redeemable Preferred Stock and 5.875% Series K Cumulative Redeemable Preferred Stock will be converted into one equivalent share in UB Sub I, with respect to each class, subject to limited exceptions set forth in the merger agreement. Immediately thereafter, at second merger effective time, each share of UB Sub I’s common stock, par value $0.01 per share, and class A common stock, par value $0.01 per share, will be converted into 0.347 of a share of common stock, par value $0.01 per share, of common stock of the Parent Company, without interest and subject to certain adjustments, subject to limited exceptions set forth in the merger agreement, and each share of UB Sub I’s 6.25% Series H Cumulative Redeemable Preferred Stock and 5.875% Series K Cumulative Redeemable Preferred Stock will be converted into one share of newly issued Parent Company Series A preferred stock and Parent Company Series B preferred stock, respectively. The closing of the mergers is subject to certain conditions, including the requisite approval from the stockholders of UBP (a special meeting of the stockholders of UBP to vote on the mergers is scheduled to be held on August 16, 2023), the receipt of certain tax opinions by Regency Centers Corporation and UBP, and other customary closing conditions. The mergers are expected to close mid-to-late August, 2023. However, the Company cannot predict with certainty when, or if, the mergers will be completed because completion of the mergers is subject to conditions beyond the control of the Company. In connection with the proposed transaction, on July 12, 2023, Regency Centers Corporation filed with the Securities and Exchange Commission a registration statement on Form S-4 that included a proxy statement of UBP and constituted a prospectus of Regency.
Non-GAAP Measures
In addition to the required Generally Accepted Accounting Principles ("GAAP") presentations, we use and report certain non-GAAP measures as we believe these measures improve the understanding of our operational results. We believe these non-GAAP measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP measures to determine how best to provide relevant information to the public, and thus such reported measures could change.
28
We do not consider non-GAAP measures an alternative to financial measures determined in accordance with GAAP, rather they supplement GAAP measures by providing additional information we believe to be useful to our shareholders. The principal limitation of these non-GAAP measures is that they may exclude significant expense and income items that are required by GAAP to be recognized in our Consolidated Financial Statements. In addition, they reflect the exercise of management's judgment about which expense and income items are excluded or included in determining these non-GAAP measures. In order to compensate for these limitations, reconciliations of the non-GAAP measures we use to their most directly comparable GAAP measures are provided. Non-GAAP measures should not be relied upon in evaluating the financial condition, results of operations, or future prospects of the Company.
Defined Terms
The following terms, as defined, are commonly used by management and the investing public to understand and evaluate our operational results, and are included in this document:
30
Companies use different depreciable lives and methods, and real estate values historically fluctuate with market conditions. Since Nareit FFO excludes depreciation and amortization and gains on sale and impairments of real estate, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in percent leased, rental rates, operating costs, acquisition and development activities, and financing costs. This provides a perspective of our financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, Nareit FFO is a supplemental non-GAAP financial measure of our operating performance, which does not represent cash generated from operating activities in accordance with GAAP; and, therefore, should not be considered a substitute measure of cash flows from operations. We provide a reconciliation of Net Income Attributable to Common Shareholders to Nareit FFO.
29
We provide Pro-rata financial information because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated partnerships, when read in conjunction with our reported results under GAAP. We believe presenting our Pro-rata share of assets, liabilities, operating results, and other metrics, along with certain other non-GAAP measures, makes comparisons of our operating results to those of other REITs more meaningful. The Pro-rata information provided is not, nor is it intended to be, presented in accordance with GAAP. The Pro-rata supplemental details of assets and liabilities and supplemental details of operations reflect our proportionate economic ownership of the assets, liabilities, and operating results of the properties in our portfolio.
The Pro-rata information is prepared on a basis consistent with the comparable consolidated amounts and is intended to more accurately reflect our proportionate economic interest in the assets, liabilities, and operating results of properties in our portfolio. We do not control the unconsolidated investment partnerships, and the Pro-rata presentations of the assets and liabilities, and revenues and expenses do not represent our legal claim to such items. The partners are entitled to profit or loss allocations and distributions of cash flows according to the operating agreements, which generally provide for such allocations according to their invested capital. Our share of invested capital establishes the ownership interests we use to prepare our Pro-rata share.
31
The presentation of Pro-rata information has limitations which include, but are not limited to, the following:
Because of these limitations, the Pro-rata financial information should not be considered independently or as a substitute for our financial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP financial statements, using the Pro-rata information as a supplement.
30
Overview of Our Strategy
Regency Centers Corporation began operations as a publicly-traded REIT in 1993. All of our operating, investing, and financing activities are performed through our Operating Partnership, Regency Centers, L.P. and its wholly-owned subsidiaries, and through our co-investmentreal estate partnerships. As of JuneSeptember 30, 2023, the Parent Company owned approximately 99.4% of the outstanding common partnership unitsCommon Units and 100% of the Preferred Units of the Operating Partnership.
We are a preeminent national owner, operator, and developer of shopping centers located in suburban trade areas with compelling demographics. As of JuneSeptember 30, 2023, we had full or partial ownership interests in 406481 retail properties. Our properties are high-quality neighborhood and community shopping centers primarily anchored by market leading grocers and principally located in suburban markets within the country's most desirable metro areas and contain approximately 51.356.7 million square feet ("SF") of gross leasable area ("GLA"). Our mission is to create thriving environments for retailers and service providers to connect with surrounding neighborhoods and communities. Our vision is to elevate quality of life as an integral thread in the fabric of our communities. Our portfolio includes thriving properties merchandised with highly productive grocers, restaurants, service providers, and best-in-class retailers that connect to their neighborhoods, communities, and customers.
Our values:
32
Our goals are to:
Risks and Uncertainties
Refer to Item 1, Note 1 to Unaudited Consolidated Financial Statements.
Please also refer to the Risk Factors discussed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2022, and the Risk Factors described in Part II, Item 1A ofthe Form 10-Q reports filed for the quarters ended March 31 and June 30, 2023, respectively, and this Form 10-Q.
31
In addition, please also refer to the risk factors discussed in connection with the Company’s acquisition of UBP, including, without limitation, those described in Amendment No. 1 to the Company’s Form S-4 Registration Statement, which was filed with the SEC on July 10, 2023.
Executing on our Strategy
During the sixnine months ended JuneSeptember 30, 2023, we had Net income attributable to common shareholders of $184.1$273.1 million as compared to $300.0$387.6 million during the sixnine months ended JuneSeptember 30, 2022, which included gains on sale of real estate of $106.2$106.5 million.
During the sixnine months ended JuneSeptember 30, 2023:
33
We continued our development and redevelopment of high quality shopping centers:
We maintained liquidity and financial flexibility to cost effectively fund investment opportunities and debt maturities:
UBP Acquisition
On August 18, 2023, we completed the acquisition of UBP which was structured as multiple mergers. Under the terms of the merger agreement, each share of Urstadt Biddle common stock, and Urstadt Biddle Class A common stock was converted into 0.347 of a share of common stock of the Parent Company. Additionally, each share of UBP’s 6.25% Series H Cumulative Redeemable Preferred Stock and 5.875% Series K Cumulative Redeemable Preferred Stock was converted into one share of Parent Company Series A preferred stock and Parent Company Series B preferred stock, respectively.
The following table provides the components that make up the total purchase price for the UBP acquisition:
(in thousands, except stock price) |
| Purchase Price |
| |
Shares of common stock issued for acquisition |
|
| 13,568 |
|
Closing stock price on August 17, 2023 |
| $ | 61.03 |
|
Value of common stock issued for acquisition |
| $ | 828,025 |
|
Other adjustments |
|
| (9,495 | ) |
Total value of common stock issued |
| $ | 818,530 |
|
Debt repaid |
|
| 39,266 |
|
Preferred stock issuance |
|
| 225,000 |
|
Transaction costs |
|
| 57,197 |
|
Other cash payments |
|
| 68 |
|
Total purchase price |
| $ | 1,140,061 |
|
As part of the acquisition, Regency acquired 74 properties, all considered Non-Same Property, representing 5.3 million square feet of GLA, including 10 properties held through real estate partnerships. The consolidated results of operations of UBP are included in the consolidated financial statements from the closing date, August 18, 2023 through September 30, 2023.
Property Portfolio
The following table summarizes general information related to the consolidated properties in our portfolio:
(GLA in thousands) | June 30, 2023 |
| December 31, 2022 | September 30, 2023 |
|
| December 31, 2022 |
| ||
Number of Properties | 310 |
| 308 | 379 |
| 308 |
| |||
GLA | 39,009 |
| 38,834 |
| 43,559 |
|
|
| 38,834 |
|
% Leased – Operating and Development | 94.5% |
| 94.8% |
| 94.6 | % |
|
| 94.8 | % |
% Leased – Operating | 95.0% |
| 94.9% |
| 94.9 | % |
|
| 94.9 | % |
Weighted average annual effective rent per square foot ("PSF"), net of tenant concessions. | $24.21 |
| $23.95 | $24.55 |
| $23.95 |
|
34
The following table summarizes general information related to the unconsolidated properties owned in co-investmentreal estate partnerships in our portfolio:
(GLA in thousands) | June 30, 2023 |
| December 31, 2022 |
Number of Properties | 96 |
| 96 |
GLA | 12,316 |
| 12,311 |
% Leased – Operating and Development | 95.2% |
| 94.8% |
% Leased –Operating | 95.3% |
| 94.8% |
Weighted average annual effective rent PSF, net of tenant concessions | $23.54 |
| $23.15 |
32
(GLA in thousands) | September 30, 2023 |
|
| December 31, 2022 |
| ||
Number of Properties | 102 |
|
| 96 |
| ||
GLA |
| 13,176 |
|
|
| 12,311 |
|
% Leased – Operating and Development |
| 95.4 | % |
|
| 94.8 | % |
% Leased –Operating |
| 95.4 | % |
|
| 94.8 | % |
Weighted average annual effective rent PSF, net of tenant concessions | $23.85 |
|
| $23.15 |
|
The following table summarizes Pro-rata occupancy rates of our combined consolidated and unconsolidated shopping center portfolio:
| June 30, 2023 |
| December 31, 2022 | September 30, 2023 |
|
| December 31, 2022 |
| ||
Percent Leased – All Properties | 94.6% |
| 94.8% |
| 94.6 | % |
|
| 94.8 | % |
Anchor Space (spaces ≥ 10,000 SF) | 96.0% |
| 96.8% |
| 96.0 | % |
|
| 96.8 | % |
Shop Space (spaces < 10,000 SF) | 92.3% |
| 91.5% |
| 92.3 | % |
|
| 91.5 | % |
The following table summarizes leasing activity, including our Pro-rata share of activity within the portfolio of our co-investmentreal estate partnerships which, for the period ended September 30, 2023, include amounts for leasing activity of properties acquired from UBP beginning August 18, 2023 (totals as a weighted average PSF):
|
| Six months ended June 30, 2023 |
|
| Nine months ended September 30, 2023 |
| ||||||||||||||||||||||||||||||||||
|
| Leasing |
|
| SF (in |
|
| Base Rent |
|
| Tenant |
|
| Leasing |
|
| Leasing |
|
| SF (in |
|
| Base Rent |
|
| Tenant |
|
| Leasing |
| ||||||||||
Anchor Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
New |
|
| 13 |
|
|
| 251 |
|
| $ | 19.44 |
|
| $ | 47.72 |
|
| $ | 5.42 |
|
|
| 23 |
|
|
| 513 |
|
| $ | 19.96 |
|
| $ | 46.57 |
|
| $ | 4.33 |
|
Renewal |
|
| 47 |
|
|
| 1,300 |
|
|
| 16.50 |
|
|
| 0.48 |
|
|
| 0.08 |
|
|
| 79 |
|
|
| 2,090 |
|
|
| 16.90 |
|
|
| 0.45 |
|
|
| 0.10 |
|
Total Anchor Space Leases |
|
| 60 |
|
|
| 1,551 |
|
| $ | 16.97 |
|
| $ | 8.14 |
|
| $ | 0.94 |
|
|
| 102 |
|
|
| 2,603 |
|
| $ | 17.50 |
|
| $ | 9.54 |
|
| $ | 0.93 |
|
Shop Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
New |
|
| 272 |
|
|
| 577 |
|
| $ | 39.42 |
|
| $ | 41.38 |
|
| $ | 13.18 |
|
|
| 417 |
|
|
| 830 |
|
| $ | 37.83 |
|
| $ | 38.90 |
|
| $ | 12.13 |
|
Renewal |
|
| 510 |
|
|
| 873 |
|
|
| 36.92 |
|
|
| 1.62 |
|
|
| 0.60 |
|
|
| 791 |
|
|
| 1,386 |
|
|
| 37.37 |
|
|
| 1.49 |
|
|
| 0.64 |
|
Total Shop Space Leases |
|
| 782 |
|
|
| 1,450 |
|
| $ | 37.92 |
|
| $ | 17.44 |
|
| $ | 5.60 |
|
|
| 1,208 |
|
|
| 2,216 |
|
| $ | 37.54 |
|
| $ | 15.50 |
|
| $ | 4.94 |
|
Total Leases |
|
| 842 |
|
|
| 3,001 |
|
| $ | 27.09 |
|
| $ | 12.63 |
|
| $ | 3.19 |
|
|
| 1,310 |
|
|
| 4,819 |
|
| $ | 26.71 |
|
| $ | 12.28 |
|
| $ | 2.78 |
|
|
| Six months ended June 30, 2022 |
|
| Nine months ended September 30, 2022 |
| ||||||||||||||||||||||||||||||||||
|
| Leasing |
|
| SF (in |
|
| Base Rent |
|
| Tenant |
|
| Leasing |
|
| Leasing |
|
| SF (in |
|
| Base Rent |
|
| Tenant |
|
| Leasing |
| ||||||||||
Anchor Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
New |
|
| 11 |
|
|
| 372 |
|
| $ | 12.94 |
|
| $ | 10.42 |
|
| $ | 5.65 |
|
|
| 17 |
|
|
| 498 |
|
| $ | 14.74 |
|
| $ | 15.12 |
|
| $ | 5.57 |
|
Renewal |
|
| 49 |
|
|
| 1,227 |
|
|
| 18.85 |
|
|
| 1.50 |
|
|
| 0.11 |
|
|
| 88 |
|
|
| 2,592 |
|
|
| 16.39 |
|
|
| 0.87 |
|
|
| 0.17 |
|
Total Anchor Space Leases |
|
| 60 |
|
|
| 1,599 |
|
| $ | 17.47 |
|
| $ | 3.57 |
|
| $ | 1.40 |
|
|
| 105 |
|
|
| 3,090 |
|
| $ | 16.12 |
|
| $ | 3.17 |
|
| $ | 1.04 |
|
Shop Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
New |
|
| 278 |
|
|
| 510 |
|
| $ | 38.71 |
|
| $ | 37.70 |
|
| $ | 11.61 |
|
|
| 419 |
|
|
| 802 |
|
| $ | 37.62 |
|
| $ | 36.41 |
|
| $ | 11.93 |
|
Renewal |
|
| 596 |
|
|
| 1,103 |
|
|
| 36.52 |
|
|
| 1.75 |
|
|
| 0.82 |
|
|
| 950 |
|
|
| 1,737 |
|
|
| 35.98 |
|
|
| 1.69 |
|
|
| 0.89 |
|
Total Shop Space Leases |
|
| 874 |
|
|
| 1,613 |
|
| $ | 37.21 |
|
| $ | 13.12 |
|
| $ | 4.24 |
|
|
| 1,369 |
|
|
| 2,539 |
|
| $ | 36.50 |
|
| $ | 12.66 |
|
| $ | 4.37 |
|
Total Leases |
|
| 934 |
|
|
| 3,212 |
|
| $ | 27.39 |
|
| $ | 8.37 |
|
| $ | 2.83 |
|
|
| 1,474 |
|
|
| 5,629 |
|
| $ | 25.31 |
|
| $ | 7.45 |
|
| $ | 2.55 |
|
The weighted-average base rent on signed Shop Space leases during 2023 was $37.92$37.54 PSF, which is higher than the $35.86$34.89 PSF weighted average annual base rent of all Shop Space leases due to expire during the next 12 months. New and renewal rent spreads, compared to prior rents on these same spaces leased, were positive at 9.2% for the sixnine months ended JuneSeptember 30, 2023, compared to 7.6%7.5% for the sixnine months ended JuneSeptember 30, 2022.
35
The success of our tenants in operating their businesses and their corresponding ability to pay us rent continue to be impactedinfluenced by current economic challenges, which increase their cost of doing business, including, but not limited to, inflation, the cost and availability of labor, shortages, increasing energy prices and interest rates. Additionally, macroeconomic and geopolitical risks, mayincluding the current wars in Ukraine, and involving Israel and Gaza, create challenges that may exacerbate current market conditions in the United States. The policies implemented by the U.S. government to address these issues, including raising interest rates, could result in adverse impacts on the U.S. economy, including a slowing of growth and potentially a recession, thereby impacting consumer spending, tenants' businesses, and/or decreasing future demand for space in shopping centers.
These economic conditions could adversely impact our volume of leasing activity, leasing spreads, and financial results generally, as well as adversely affect the business and financial results of our tenants. The aggregate impacts of these current economic challenges may also negatively affect the overall market for retail space, resulting in decreased demand for space in our centers. This, in turn, could result in downward pressure on rents that we are able to charge to new or renewing tenants, such that future new and renewal rent spreads could be adversely impacted as tenants look to manage total occupancy costs. Further, we may experience higher costs for tenant buildouts, as costs of materials and labor may continue to increase and supply and availability of both may become more limited.
33
Significant Tenants and Concentrations of Risk
We seek to reduce our operating and leasing risks through geographic diversification of our properties and by avoiding dependence on any single property, market, or tenant. Based on percentage of annualized base rent, the following table summarizes our most significant tenants, of which four of the top five are grocers:
|
| June 30, 2023 |
| September 30, 2023 | ||||||||||||
Tenant |
| Number of |
|
| Percentage of |
| Percentage of |
| Number of |
|
| Percentage of |
| Percentage of | ||
Publix |
|
| 67 |
|
| 7.1% |
| 3.3% |
|
| 68 |
|
| 6.5% |
| 3.0% |
Albertsons Companies, Inc. |
|
| 52 |
|
| 4.7% |
| 2.9% | ||||||||
Kroger Co. |
|
| 52 |
|
| 7.1% |
| 3.0% |
|
| 52 |
|
| 6.4% |
| 2.7% |
Albertsons Companies, Inc. |
|
| 46 |
|
| 4.7% |
| 2.9% | ||||||||
Amazon/Whole Foods |
|
| 37 |
|
| 2.9% |
| 2.8% |
|
| 39 |
|
| 2.8% |
| 2.7% |
TJX Companies, Inc. |
|
| 64 |
|
| 3.6% |
| 2.6% |
|
| 70 |
|
| 3.6% |
| 2.7% |
Bankruptcies and Credit Concerns
Our management team devotes significant time to researching and monitoring consumer preferences and trends, customer shopping behaviors, changes in delivery methods, shifts to e-commerce, and changing demographics in order to anticipate the challenges and opportunities impacting our industry. We seek to mitigate these potential impacts through maintaining a high quality portfolio, diversifying our tenant mix, replacing less successful tenants with stronger operators, anchoring our centers with market leading grocery stores that drive customer traffic, and maintaining a presence in suburban trade areas with compelling demographic populations benefiting from high levels of disposal income. The potential for a recession and the severity and duration of any economic downturn could negatively impact our existing tenants and their ability to continue to meet their lease obligations.
Although base rent is derived from long-term lease contracts, tenants that file bankruptcy generally have the legal right to reject any or all of their leases and close related stores. Any unsecured claim we hold against a bankrupt tenant for unpaid rent might be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. As a result, it is likely that we would recover substantially less than the full value of any unsecured claims we hold. Additionally, we may incur significant expense to adjudicate our claim and significant downtime to re-lease the vacated space. In the event that a tenant with a significant number of leases in our shopping centers files bankruptcy and rejects its leases, we could experience a significant reduction in our revenues. Tenants who are currently in bankruptcy and continue to occupy space in our shopping centers represent an aggregate of 0.6% of our Pro-rata annual base rent, including 0.3%0.5% of our Pro-rata annual base rent related to Bed Bath and Beyond.Rite Aid.
36
Results from Operations
Results from operations for the three and nine months ended September 30, 2023, include the results of our acquisition of UBP from August 18, 2023.
Comparison of the three months ended JuneSeptember 30, 2023 and 2022:
Our revenues changed as summarized in the following table:
|
| Three months ended June 30, |
|
|
|
| ||||||
(in thousands) |
| 2023 |
|
| 2022 |
|
| Change |
| |||
Lease income |
|
|
|
|
|
|
|
|
| |||
Base rent |
| $ | 213,977 |
|
|
| 204,353 |
|
|
| 9,624 |
|
Recoveries from tenants |
|
| 74,748 |
|
|
| 68,464 |
|
|
| 6,284 |
|
Percentage rent |
|
| 1,380 |
|
|
| 751 |
|
|
| 629 |
|
Uncollectible lease income |
|
| (343 | ) |
|
| 4,900 |
|
|
| (5,243 | ) |
Other lease income |
|
| 3,066 |
|
|
| 3,310 |
|
|
| (244 | ) |
Straight-line rent |
|
| 2,879 |
|
|
| 5,473 |
|
|
| (2,594 | ) |
Above / below market rent amortization |
|
| 8,751 |
|
|
| 5,613 |
|
|
| 3,138 |
|
Total lease income |
| $ | 304,458 |
|
|
| 292,864 |
|
|
| 11,594 |
|
Other property income |
|
| 2,683 |
|
|
| 2,720 |
|
|
| (37 | ) |
Management, transaction, and other fees |
|
| 7,106 |
|
|
| 6,499 |
|
|
| 607 |
|
Total revenues |
| $ | 314,247 |
|
|
| 302,083 |
|
|
| 12,164 |
|
34
|
| Three months ended September 30, |
|
|
|
| ||||||
(in thousands) |
| 2023 |
|
| 2022 |
|
| Change |
| |||
Lease income |
|
|
|
|
|
|
|
|
| |||
Base rent |
| $ | 227,347 |
|
|
| 207,555 |
|
|
| 19,792 |
|
Recoveries from tenants |
|
| 76,973 |
|
|
| 69,376 |
|
|
| 7,597 |
|
Percentage rent |
|
| 1,868 |
|
|
| 1,884 |
|
|
| (16 | ) |
Uncollectible lease income |
|
| (636 | ) |
|
| 1,110 |
|
|
| (1,746 | ) |
Other lease income |
|
| 4,558 |
|
|
| 3,426 |
|
|
| 1,132 |
|
Straight-line rent |
|
| 2,693 |
|
|
| 6,921 |
|
|
| (4,228 | ) |
Above / below market rent amortization |
|
| 8,118 |
|
|
| 5,484 |
|
|
| 2,634 |
|
Total lease income |
| $ | 320,921 |
|
|
| 295,756 |
|
|
| 25,165 |
|
Other property income |
|
| 2,638 |
|
|
| 2,466 |
|
|
| 172 |
|
Management, transaction, and other fees |
|
| 7,079 |
|
|
| 5,767 |
|
|
| 1,312 |
|
Total revenues |
| $ | 330,638 |
|
|
| 303,989 |
|
|
| 26,649 |
|
Lease income increased by $11.6$25.2 million, on a net basis, primarily driven by the following contractually billable components of rent to the tenants per the lease agreements:
37
Management, transaction, and other fees increased $607,000 primarily$1.3 million due to an increase in debt placement fees.other income related to the UBP acquisition and increased property management and development fees from our real estate partnerships.
Changes in our operating expenses are summarized in the following table:
|
| Three months ended June 30, |
|
|
|
|
| Three months ended September 30, |
|
|
|
| ||||||||||||
(in thousands) |
| 2023 |
|
| 2022 |
|
| Change |
|
| 2023 |
|
| 2022 |
|
| Change |
| ||||||
Depreciation and amortization |
| $ | 83,161 |
|
|
| 79,350 |
|
|
| 3,811 |
|
| $ | 87,505 |
|
|
| 80,270 |
|
|
| 7,235 |
|
Property operating expense |
|
| 54,394 |
|
|
| 47,750 |
|
|
| 6,644 |
|
|
| 59,227 |
|
|
| 49,577 |
|
|
| 9,650 |
|
Real estate taxes |
|
| 38,509 |
|
|
| 36,700 |
|
|
| 1,809 |
|
|
| 40,171 |
|
|
| 37,926 |
|
|
| 2,245 |
|
General and administrative |
|
| 25,065 |
|
|
| 17,645 |
|
|
| 7,420 |
|
|
| 20,903 |
|
|
| 20,273 |
|
|
| 630 |
|
Other operating expenses |
|
| 1,682 |
|
|
| 617 |
|
|
| 1,065 |
|
|
| 3,533 |
|
|
| 949 |
|
|
| 2,584 |
|
Total operating expenses |
| $ | 202,811 |
|
|
| 182,062 |
|
|
| 20,749 |
|
| $ | 211,339 |
|
|
| 188,995 |
|
|
| 22,344 |
|
Depreciation and amortization costs increased by $3.8$7.2 million, on a net basis, as follows:
Property operating expense increased $6.6$9.7 million, on a net basis, as follows:
Real estate taxes increased $1.8$2.2 million, on a net basis, as follows:
General and administrative costs increased $7.4$0.6 million on a net basis, as follows:
Other operating expenses increased $1.1$2.6 million attributable to an increase primarily attributable to $1.5 million of transition costs related to the acquisition of UBP, and increase in development pursuit costs and other professional services.
38
The following table presents the components of other expense (income):
|
| Three months ended June 30, |
|
|
|
|
| Three months ended September 30, |
|
|
|
| ||||||||||||
(in thousands) |
| 2023 |
|
| 2022 |
|
| Change |
|
| 2023 |
|
| 2022 |
|
| Change |
| ||||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest on notes payable |
| $ | 37,177 |
|
|
| 37,274 |
|
|
| (97 | ) |
| $ | 39,000 |
|
|
| 37,187 |
|
|
| 1,813 |
|
Interest on unsecured credit facilities |
|
| 1,342 |
|
|
| 495 |
|
|
| 847 |
|
|
| 1,574 |
|
|
| 524 |
|
|
| 1,050 |
|
Capitalized interest |
|
| (1,284 | ) |
|
| (1,019 | ) |
|
| (265 | ) |
|
| (1,492 | ) |
|
| (1,171 | ) |
|
| (321 | ) |
Hedge expense |
|
| 109 |
|
|
| 109 |
|
|
| — |
|
|
| 109 |
|
|
| 109 |
|
|
| — |
|
Interest income |
|
| (388 | ) |
|
| (160 | ) |
|
| (228 | ) |
|
| (384 | ) |
|
| (288 | ) |
|
| (96 | ) |
Interest expense, net |
| $ | 36,956 |
|
|
| 36,699 |
|
|
| 257 |
|
| $ | 38,807 |
|
|
| 36,361 |
|
|
| 2,446 |
|
Gain on sale of real estate, net of tax |
|
| (81 | ) |
|
| (4,291 | ) |
|
| 4,210 |
|
|
| (184 | ) |
|
| (220 | ) |
|
| 36 |
|
Net investment (income) loss |
|
| (1,742 | ) |
|
| 5,468 |
|
|
| (7,210 | ) | ||||||||||||
Net investment loss |
|
| 1,020 |
|
|
| 1,215 |
|
|
| (195 | ) | ||||||||||||
Total other expense (income) |
| $ | 35,133 |
|
|
| 37,876 |
|
|
| (2,743 | ) |
| $ | 39,643 |
|
|
| 37,356 |
|
|
| 2,287 |
|
Gain on sale of real estate, net of tax, decreased $4.2Interest expense increased $2.4 million primarily due to the following:
Net investment income increased $7.2 million primarily driven by gainshigher average balances on investments held in the non-qualified deferred compensation plan and our captive insurance company. This is partially offset by $6.2 million of greater expense in General and administrative costs related to participant obligations within the deferred compensation plans.
Our equity in income of investments in real estate partnerships changed as follows:
|
|
|
| Three months ended June 30, |
|
|
|
|
|
|
| Three months ended September 30, |
|
|
|
| ||||||||||||
(in thousands) |
| Regency's |
| 2023 |
|
| 2022 |
|
| Change |
|
| Regency's |
| 2023 |
|
| 2022 |
|
| Change |
| ||||||
GRI - Regency, LLC (GRIR) |
| 40.00% |
| $ | 9,111 |
|
|
| 9,031 |
|
|
| 80 |
|
| 40.00% |
| $ | 8,877 |
|
|
| 8,876 |
|
|
| 1 |
|
New York Common Retirement Fund (NYC) (1) |
| 30.00% |
|
| 32 |
|
|
| 8,945 |
|
|
| (8,913 | ) |
| 30.00% |
|
| 43 |
|
|
| (49 | ) |
|
| 92 |
|
Columbia Regency Retail Partners, LLC (Columbia I) |
| 20.00% |
|
| 419 |
|
|
| 422 |
|
|
| (3 | ) |
| 20.00% |
|
| 339 |
|
|
| 452 |
|
|
| (113 | ) |
Columbia Regency Partners II, LLC (Columbia II) |
| 20.00% |
|
| 385 |
|
|
| 361 |
|
|
| 24 |
|
| 20.00% |
|
| 387 |
|
|
| 388 |
|
|
| (1 | ) |
Columbia Village District, LLC |
| 30.00% |
|
| 304 |
|
|
| 434 |
|
|
| (130 | ) |
| 30.00% |
|
| 983 |
|
|
| 454 |
|
|
| 529 |
|
RegCal, LLC (RegCal) (2) |
| 25.00% |
|
| 124 |
|
|
| 3,625 |
|
|
| (3,501 | ) |
| 25.00% |
|
| 127 |
|
|
| 124 |
|
|
| 3 |
|
Other investments in real estate partnerships |
| 31.00% - 50.00% |
|
| 1,494 |
|
|
| 1,024 |
|
|
| 470 |
|
| 11.80% - 66.67% |
|
| 1,761 |
|
|
| 964 |
|
|
| 797 |
|
Total equity in income of investments in real estate partnerships | Total equity in income of investments in real estate partnerships |
| $ | 11,869 |
|
|
| 23,842 |
|
|
| (11,973 | ) | Total equity in income of investments in real estate partnerships |
| $ | 12,517 |
|
|
| 11,209 |
|
|
| 1,308 |
|
36
The following represents the remaining components that comprised net income attributable to common stockholders and unit holders: Three months ended June 30, Three months ended September 30, (in thousands) 2023 2022 Change 2023 2022 Change Net income $ 88,172 105,987 (17,815 ) $ 92,173 88,847 3,326 Income attributable to noncontrolling interests (1,390 ) (1,191 ) (199 ) (1,453 ) (1,269 ) (184 ) Net income attributable to the Company 90,720 87,578 3,142 Preferred stock dividends (1,644 ) — (1,644 ) Net income attributable to common shareholders $ 86,782 104,796 (18,014 ) $ 89,076 $ 87,578 $ 1,498 Net income attributable to exchangeable operating partnership units (550 ) (452 ) (98 ) (520 ) (379 ) (141 ) Net income attributable to common unit holders $ 87,332 105,248 (17,916 ) $ 89,596 87,957 1,639 39 Results from Operations Comparison of the Our revenues changed as summarized in the following table: Six months ended June 30, Nine months ended September 30, (in thousands) 2023 2022 Change 2023 2022 Change Lease income Base rent $ 426,907 403,605 23,302 $ 654,254 611,160 43,094 Recoveries from tenants 145,974 136,238 9,736 222,947 205,614 17,333 Percentage rent 8,410 5,699 2,711 10,278 7,583 2,695 Uncollectible lease income 1,594 11,046 (9,452 ) 958 12,156 (11,198 ) Other lease income 10,282 7,135 3,147 14,840 10,561 4,279 Straight-line rent 5,476 11,484 (6,008 ) 8,169 18,405 (10,236 ) Above / below market rent amortization 14,616 11,302 3,314 22,734 16,786 5,948 Total lease income $ 613,259 586,509 26,750 $ 934,180 882,265 51,915 Other property income 5,821 5,824 (3 ) 8,459 8,290 169 Management, transaction, and other fees 13,144 13,183 (39 ) 20,223 18,950 1,273 Total revenues $ 632,224 605,516 26,708 $ 962,862 909,505 53,357 Total lease income increased 40 Management, transaction, and other fees increased $1.3 million primarily due to other income related to the UBP acquisition and increased property management and development fees from our real estate partnerships. Changes in our operating expenses are summarized in the following table: Six months ended June 30, Nine months ended September 30, (in thousands) 2023 2022 Change 2023 2022 Change Depreciation and amortization $ 165,868 157,192 8,676 $ 253,373 237,462 15,911 Property operating expense 105,416 94,211 11,205 164,643 143,788 20,855 Real estate taxes 76,986 73,569 3,417 117,157 111,495 5,662 General and administrative 50,345 36,437 13,908 71,248 56,710 14,538 Other operating expenses 1,185 2,790 (1,605 ) 4,718 3,739 979 Total operating expenses $ 399,800 364,199 35,601 $ 611,139 553,194 57,945 Depreciation and amortization costs increased Property operating expense increased Real estate taxes increased General and administrative costs increased 41 Other operating expenses The following table presents the components of Other expense (income): Six months ended June 30, Nine months ended September 30, (in thousands) 2023 2022 Change 2023 2022 Change Interest expense, net Interest on notes payable $ 74,087 74,361 (274 ) $ 113,087 111,547 1,540 Interest on unsecured credit facilities 2,329 975 1,354 3,903 1,500 2,403 Capitalized interest (2,534 ) (1,815 ) (719 ) (4,026 ) (2,985 ) (1,041 ) Hedge expense 219 219 — 328 328 — Interest income (752 ) (303 ) (449 ) (1,136 ) (592 ) (544 ) Interest expense, net $ 73,349 73,437 (88 ) $ 112,156 109,798 2,358 Gain on sale of real estate, net of tax (331 ) (106,239 ) 105,908 (515 ) (106,459 ) 105,944 Net investment (income) loss (3,469 ) 7,962 (11,431 ) (2,449 ) 9,177 (11,626 ) Total other expense (income) $ 69,549 (24,840 ) 94,389 $ 109,192 12,516 96,676 Interest expense increased $2.4 million primarily due to the following: During the Net investment income increased Total equity in income of investments in real estate partnerships changed as follows: Six months ended June 30, Nine months ended September 30, (in thousands) Regency's 2023 2022 Change Regency's 2023 2022 Change GRI - Regency, LLC (GRIR) 40.00% $ 18,241 18,404 (163 ) 40.00% $ 27,118 27,280 (162 ) New York Common Retirement Fund (NYC) (1) 30.00% 25 9,211 (9,186 ) 30.00% 68 9,162 (9,094 ) Columbia Regency Retail Partners, LLC (Columbia I) 20.00% 878 943 (65 ) 20.00% 1,217 1,396 (179 ) Columbia Regency Partners II, LLC (Columbia II) 20.00% 913 918 (5 ) 20.00% 1,300 1,307 (7 ) Columbia Village District, LLC 30.00% 757 700 57 30.00% 1,740 1,154 586 RegCal, LLC (RegCal) (2) 25.00% 241 4,251 (4,010 ) 25.00% 369 4,374 (4,005 ) Other investments in real estate partnerships 35.00% - 50.00% 2,730 2,219 511 11.80% - 66.67% 4,490 3,182 1,308 Total equity in income of investments in real estate partnerships $ 23,785 36,646 (12,861 ) $ 36,302 47,855 (11,553 ) 42 The The following represents the remaining components that comprise Net income attributable to common shareholders and unit holders: Six months ended June 30, Nine months ended September 30, (in thousands) 2023 2022 Change 2023 2022 Change Net income $ 186,660 302,803 (116,143 ) $ 278,833 391,650 (112,817 ) Income attributable to noncontrolling interests (2,597 ) (2,779 ) 182 (4,050 ) (4,048 ) (2 ) Net income attributable to the Company 274,783 387,602 (112,819 ) Preferred stock dividends (1,644 ) — (1,644 ) Net income attributable to common shareholders $ 184,063 300,024 (115,961 ) $ 273,139 $ 387,602 $ (114,463 ) Net income attributable to exchangeable operating partnership units (970 ) (1,315 ) 345 (1,490 ) (1,694 ) 204 Net income attributable to common unit holders $ 185,033 301,339 (116,306 ) $ 274,629 389,296 (114,667 ) Supplemental Earnings Information We use certain non-GAAP measures, in addition to certain performance metrics determined under GAAP, as we believe these measures improve the understanding of the our operating results. We believe these non-GAAP measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We provide Pro-rata financial information because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated partnerships, when read in conjunction with our reported results under GAAP. We believe presenting our Pro-rata share of operating results, along with other non-GAAP measures, may assist in comparing our operating results to other REITs. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP measures to determine how best to provide relevant information to the public, and thus such reported non-GAAP measures could change. See "Non-GAAP Measures" at the beginning of this Management's Discussion and Analysis. We do not consider non-GAAP measures an alternative to financial measures determined in accordance with GAAP, rather they supplement GAAP measures by providing additional information we believe to be useful to shareholders. The principal limitation of these non-GAAP measures is they may exclude significant expense and income items that are required by GAAP to be recognized in our Consolidated Financial Statements. In addition, they reflect the exercise of management's judgment about which expense and income items are excluded or included in determining these non-GAAP measures. In order to compensate for these limitations, reconciliations of the non-GAAP measures we use to their most directly comparable GAAP are provided, including as set forth below. Non-GAAP financial measures should not be relied upon in evaluating the financial condition, results of operations, or future prospects. 43 Pro-Rata Same Property NOI: Pro-rata same property NOI, excluding termination fees/expenses, changed as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2023 2022 Change 2023 2022 Change Base rent $ 234,199 225,891 8,308 $ 467,119 449,156 17,963 Recoveries from tenants 82,213 75,332 6,881 160,544 151,556 8,988 Percentage rent 1,721 1,015 706 9,392 6,530 2,862 Termination fees 651 940 (289 ) 5,369 2,888 2,481 Uncollectible lease income (353 ) 5,257 (5,610 ) 1,506 11,891 (10,385 ) Other lease income 2,931 2,895 36 5,780 5,524 256 Other property income 2,117 2,221 (104 ) 4,780 4,750 30 Total real estate revenue 323,479 313,551 9,928 654,490 632,295 22,195 Operating and maintenance 55,044 49,349 5,695 106,838 98,181 8,657 Real estate taxes 41,631 40,288 1,343 83,406 81,358 2,048 Ground rent 2,928 2,951 (23 ) 5,972 5,864 108 Total real estate operating expenses 99,603 92,588 7,015 196,216 185,403 10,813 Pro-rata same property NOI $ 223,876 220,963 2,913 $ 458,274 446,892 11,382 Less: Termination fees 651 940 (289 ) 5,369 2,888 2,481 Pro-rata same property NOI, excluding termination fees $ 223,225 220,023 3,202 $ 452,905 444,004 8,901 Pro-rata same property NOI growth, excluding termination fees 1.5 % 2.0 % Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 Change 2023 2022 Change Base rent $ 235,876 228,761 7,115 $ 702,995 677,917 25,078 Recoveries from tenants 80,327 75,942 4,385 240,872 227,497 13,375 Percentage rent 2,208 2,244 (36 ) 11,600 8,774 2,826 Termination fees 1,037 902 135 6,407 3,790 2,617 Uncollectible lease income (392 ) 1,214 (1,606 ) 1,113 13,105 (11,992 ) Other lease income 3,276 3,081 195 9,056 8,606 450 Other property income 2,023 1,930 93 6,803 6,680 123 Total real estate revenue 324,355 314,074 10,281 978,846 946,369 32,477 Operating and maintenance 55,747 49,544 6,203 162,586 147,725 14,861 Real estate taxes 40,695 41,543 (848 ) 124,100 122,900 1,200 Ground rent 3,153 2,991 162 9,125 8,856 269 Total real estate operating expenses 99,595 94,078 5,517 295,811 279,481 16,330 Pro-rata same property NOI $ 224,760 219,996 4,764 $ 683,035 666,888 16,147 Less: Termination fees 1,037 902 135 6,407 3,790 2,617 Pro-rata same property NOI, excluding termination fees $ 223,723 219,094 4,629 $ 676,628 663,098 13,530 Pro-rata same property NOI growth, excluding termination fees 2.1 % 2.0 % Real estate revenue increased Base rent increased Recoveries from tenants increased Percentage rent increased Termination fees increased Uncollectible lease income decreased Total real estate operating expense increased Operating and maintenance increased Real estate taxes increased 44 Same Property Rollforward: Our Same Property pool includes the following property count, Pro-rata GLA, and changes therein: Three months ended June 30, Three months ended September 30, 2023 2022 2023 2022 (GLA in thousands) Property GLA Property GLA Property GLA Property GLA Beginning same property count 395 42,147 393 41,220 395 42,143 390 41,446 Acquired properties owned for entirety of comparable periods (1) — — — 327 Disposed properties — — (3 ) (103 ) SF adjustments (2) — (4 ) — 2 — 17 — 10 Ending same property count 395 42,143 390 41,446 395 42,160 390 41,456 Six months ended June 30, Nine months ended September 30, 2023 2022 2023 2022 (GLA in thousands) Property GLA Property GLA Property GLA Property GLA Beginning same property count 389 41,382 393 41,294 389 41,383 393 41,294 Acquired properties owned for entirety of comparable periods presented (1) 5 771 — 327 5 771 — 327 Developments that reached completion by the beginning of earliest comparable period presented — — 1 72 — — 1 72 Disposed properties — — (4 ) (191 ) — — (4 ) (191 ) SF adjustments (2) — (10 ) — (56 ) — 6 — (46 ) Change in intended property use 1 — — — 1 — — — Ending same property count 395 42,143 390 41,446 395 42,160 390 41,456 Nareit FFO and Core Operating Earnings: Our reconciliation of net income attributable to common stock and unit holders to Nareit FFO and to Core Operating Earnings is as follows: Three months ended June 30, Six months ended June 30, Three months ended September 30, Nine months ended September 30, (in thousands, except share information) 2023 2022 2023 2022 2023 2022 2023 2022 Reconciliation of Net income to Nareit FFO Net income attributable to common shareholders $ 86,782 104,796 $ 184,063 300,024 $ 89,076 87,578 $ 273,139 387,602 Adjustments to reconcile to Nareit FFO: (1) Depreciation and amortization (excluding FF&E) 89,505 85,738 178,540 169,868 94,011 86,405 272,551 256,273 Gain on sale of real estate, net of tax (64 ) (17,089 ) (305 ) (119,099 ) (827 ) (202 ) (1,132 ) (119,301 ) Exchangeable operating partnership units 550 452 970 1,315 520 379 1,490 1,694 Nareit FFO attributable to common stock and unit holders $ 176,773 173,897 $ 363,268 352,108 $ 182,780 174,160 $ 546,048 526,268 Reconciliation of Nareit FFO to Core Operating Earnings Nareit Funds From Operations $ 176,773 173,897 $ 363,268 352,108 $ 182,780 174,160 $ 546,048 526,268 Adjustments to reconcile to Core Operating Earnings (1): Not Comparable Items Merger transition costs 1,511 — 1,511 — Early extinguishment of debt — — — 176 Certain Non Cash Items 176 176 Straight-line rent (1,784 ) (2,534 ) (4,173 ) (6,012 ) (3,142 ) (3,140 ) (7,315 ) (9,152 ) Uncollectible straight-line rent (1,755 ) (3,071 ) (2,390 ) (5,454 ) 92 (4,156 ) (2,298 ) (9,610 ) Above/below market rent amortization, net (8,554 ) (5,323 ) (14,219 ) (10,715 ) (7,919 ) (5,191 ) (22,138 ) (15,906 ) Debt premium/discount amortization 8 (51 ) — (157 ) Debt and derivative mark-to-market amortization 667 (28 ) 667 (185 ) Core Operating Earnings $ 164,688 163,094 $ 342,486 329,946 $ 173,989 161,645 $ 516,475 491,591 45 Reconciliation of Same Property NOI to Nearest GAAP Measure: Our reconciliation of Net income attributable to common shareholders to Same Property NOI, on a Pro-rata basis, is as follows: Three months ended June 30, Six months ended June 30, Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 2023 2022 2023 2022 Net income attributable to common shareholders $ 86,782 104,796 $ 184,063 300,024 $ 89,076 87,578 $ 273,139 387,602 Less: Management, transaction, and other fees 7,106 6,499 13,144 13,183 7,079 5,767 20,223 18,950 Other (1) 12,799 12,110 22,301 24,731 12,016 13,564 34,317 38,295 Plus: Depreciation and amortization 83,161 79,350 165,868 157,192 87,505 80,270 253,373 237,462 General and administrative 25,065 17,645 50,345 36,437 20,903 20,273 71,248 56,710 Other operating expense 1,682 617 1,185 2,790 3,533 949 4,718 3,739 Other expense (income) 35,133 37,876 69,549 (24,840 ) 39,643 37,356 109,192 12,516 Equity in income of investments in real estate excluded from NOI (2) 11,813 (375 ) 23,598 12,013 11,668 11,754 35,266 23,767 Net income attributable to noncontrolling interests 1,390 1,191 2,597 2,779 1,453 1,269 4,050 4,048 Preferred stock dividends and issuance costs 1,644 — 1,644 — Pro-rata NOI $ 225,121 222,491 $ 461,760 448,481 $ 236,330 220,118 $ 698,090 668,599 Less non-same property NOI (3) 1,245 1,528 3,486 1,589 11,570 122 15,055 1,711 Pro-rata same property NOI $ 223,876 220,963 $ 458,274 446,892 $ 224,760 219,996 $ 683,035 666,888 Liquidity and Capital Resources General We use cash flows generated from operating, investing, and financing activities to strengthen our balance sheet, finance our development and redevelopment projects, fund our investment activities, and maintain financial flexibility. A significant portion of our cash from operations is distributed to our common shareholders in the form of dividends in order to maintain our status as a REIT. Except for $200 million of private placement debt, our Parent Company has no capital commitments other than its guarantees of the commitments of our Operating Partnership. All remaining debt is held by our Operating Partnership, its subsidiaries, or by our We continually assess our available liquidity and our expected cash requirements, including monitoring our tenant rent collections. We have access to and draw on multiple financing sources to fund our operations and our long-term capital needs, including the requirements of our in process and planned developments, redevelopments, other capital expenditures, and the repayment of debt. We expect to meet these needs by using a combination of the following: cash flow from operations after funding our We have no unsecured debt maturities in 2023, $250 million of unsecured debt maturing in 2024, and what we believe is a manageable level of secured mortgage maturities during the next 12 months, including those mortgages within our real estate partnerships. Based upon our available cash balance, sources of capital, our current credit ratings, and the number of high quality, unencumbered properties we own, we believe our available capital resources are sufficient to meet our expected capital needs for the next year, and in the longer term, although we can give no assurances. 46 In addition to our (in thousands) June 30, 2023 September 30, 2023 Line of Credit ATM program Original offering amount $ 500,000 Available capacity $ 500,000 Line of credit Total commitment amount $ 1,250,000 $ 1,250,000 Available capacity $ 1,241,558 $ 1,164,720 Maturity (2) March 23, 2025 March 23, 2025 The declaration of dividends is determined quarterly by our Board of Directors. On While future dividends will be determined at the discretion of our Board of Directors, we plan to continue paying an aggregate amount of distributions to our stock and unit holders that, at a minimum, meet the requirements to allow the Company and Operating Partnerships to each continue qualifying as a REIT for federal income tax purposes. We have historically generated sufficient cash flow from operations to fund our dividend distributions. During the We currently have development and redevelopment projects in various stages of construction, along with a pipeline of potential projects for future development or redevelopment. We estimate that we will require cash during the next 12 months of approximately If we start new developments or redevelopments, commit to property acquisitions, repay debt prior to maturity, declare future dividends, or repurchase shares of our common stock, our cash requirements will increase. If we refinance maturing debt, our cash requirements will decrease. We endeavor to maintain a high percentage of unencumbered assets. As of Our Line and unsecured debt require that we remain in compliance with various covenants, which are described in the Notes to Consolidated Financial Statements included in our 2022 Form 10-K. The debt assumed in conjunction with the UBP acquisition contain covenants that are consistent with our existing debt covenants. We were in compliance with these covenants at 47 Summary of Cash Flow Activity The following table summarizes net cash flows related to operating, investing, and financing activities of the Company: Six months ended June 30, Nine months ended September 30, (in thousands) 2023 2022 Change 2023 2022 Change Net cash provided by operating activities $ 334,677 327,757 6,920 $ 547,685 528,242 19,443 Net cash used in investing activities (91,411 ) (65,262 ) (26,149 ) (231,527 ) (111,867 ) (119,660 ) Net cash used in financing activities (268,934 ) (236,332 ) (32,602 ) (303,864 ) (356,418 ) 52,554 Net (decrease) increase in cash and cash equivalents and restricted cash $ (25,668 ) 26,163 (51,831 ) Net increase in cash and cash equivalents and restricted cash $ 12,294 59,957 (47,663 ) Total cash and cash equivalents and restricted cash $ 43,108 121,190 (78,082 ) $ 81,070 154,984 (73,914 ) Net cash provided by operating activities: Net cash provided by operating activities increased Net cash used in investing activities: Net cash used in investing activities changed by Six months ended June 30, Nine months ended September 30, (in thousands) 2023 2022 Change 2023 2022 Change Cash flows from investing activities: Acquisition of operating real estate, net of cash acquired of $3,061 in 2022 $ — (139,775 ) 139,775 $ (2,033 ) (141,275 ) 139,242 Acquisition of UBP, net of cash acquired of $14,143 (80,488 ) — (80,488 ) Real estate development and capital improvements (100,114 ) (99,470 ) (644 ) (158,982 ) (143,724 ) (15,258 ) Proceeds from sale of real estate and FF&E 3,745 136,421 (132,676 ) 10,338 137,280 (126,942 ) Issuance of notes receivable (4,000 ) — (4,000 ) (4,000 ) — (4,000 ) Investments in real estate partnerships (3,109 ) (11,549 ) 8,440 (9,118 ) (13,573 ) 4,455 Return of capital from investments in real estate partnerships 3,644 48,473 (44,829 ) 3,644 48,473 (44,829 ) Dividends on investment securities 420 214 206 571 336 235 Acquisition of investment securities (2,748 ) (8,313 ) 5,565 (5,206 ) (15,205 ) 9,999 Proceeds from sale of investment securities 10,751 8,737 2,014 13,747 15,821 (2,074 ) Net cash used in investing activities $ (91,411 ) (65,262 ) (26,149 ) $ (231,527 ) (111,867 ) (119,660 ) Significant changes in investing activities include: 48 We plan to continue developing and redeveloping shopping centers for long-term investment. During 2023, we deployed capital of Six months ended June 30, Nine months ended September 30, (in thousands) 2023 2022 Change 2023 2022 Change Capital expenditures: Land acquisitions $ 2,580 11,545 (8,965 ) $ 2,580 11,545 (8,965 ) Building and tenant improvements 30,963 36,468 (5,505 ) 58,549 55,094 3,455 Redevelopment costs 42,745 31,708 11,037 57,384 48,641 8,743 Development costs 17,705 14,075 3,630 30,613 20,252 10,361 Capitalized interest 2,476 1,789 687 3,931 2,922 1,009 Capitalized direct compensation 3,645 3,885 (240 ) 5,925 5,270 655 Real estate development and capital improvements $ 100,114 99,470 644 $ 158,982 143,724 15,258 49 The following table summarizes our development projects in-process and completed: (in thousands, except cost PSF) (in thousands, except cost PSF) June 30, 2023 (in thousands, except cost PSF) September 30, 2023 Property Name Market Ownership (3) Start Estimated Estimated Net GLA (3) Cost PSF % of Costs Incurred Market Ownership (3) Start Estimated Estimated Net GLA (3) Cost PSF % of Costs Incurred Developments In-Process Developments In-Process Developments In-Process Glenwood Green Metro NYC 70% Q1-22 2025 46,172 247 187 59 % Metro NYC 70% Q1-22 2025 46,172 247 187 69 % Baybrook East - Phase 1B Houston, TX 50% Q2-22 2025 10,384 78 133 59 % Houston, TX 50% Q2-22 2025 10,384 78 133 74 % Sienna - Phase 1 Houston, TX 75% Q2-23 2027 9,291 23 404 25 % Houston, TX 75% Q2-23 2027 9,409 23 409 25 % SunVet Long Island, NY 100% Q2-23 2027 86,722 168 516 29 % The Shops at SunVet Long Island, NY 100% Q2-23 2027 86,722 168 516 33 % Total Developments In-Process Total Developments In-Process $ 152,569 516 296 40 % Total Developments In-Process $ 152,687 516 296 46 % The following table summarizes our redevelopment projects in process and completed: (in thousands, except cost PSF) (in thousands, except cost PSF) June 30, 2023 (in thousands, except cost PSF) September 30, 2023 Property Name Market Ownership (3) Start Date Estimated Stabilization Year (1) Estimated Net GLA (3) % of Costs Incurred Market Ownership (3) Start Date Estimated Stabilization Year (1) Estimated Net GLA (3) % of Costs Incurred Redevelopments In-Process Redevelopments In-Process Redevelopments In-Process The Abbot Boston, MA 100% Q2-19 2025 $ 58,979 64 90 % Boston, MA 100% Q2-19 2025 $ 58,973 64 92 % Westbard Square Phase I Bethesda, MD 100% Q2-21 2025 37,000 123 68 % Bethesda, MD 100% Q2-21 2025 37,000 126 68 % Buckhead Landing Atlanta, GA 100% Q2-22 2025 28,033 152 19 % Atlanta, GA 100% Q2-22 2025 28,458 152 25 % Bloom on Third (fka Town and Country Center) Los Angeles, CA 35% Q4-22 2027 24,525 51 10 % Los Angeles, CA 35% Q4-22 2027 24,525 51 12 % Mandarin Landing Jacksonville, FL 100% Q2-23 2025 15,264 136 3 % Jacksonville, FL 100% Q2-23 2025 16,422 140 5 % Serramonte Center - Phase 3 San Francisco, CA 100% Q2-23 2025 36,989 1,072 7 % San Francisco, CA 100% Q2-23 2025 36,989 1,072 13 % Circle Marina Center Los Angeles, CA 100% Q3-23 2025 14,986 118 5 % Various Redevelopments Various 20% - 100% Various Various 57,289 1,650 33 % Various 20% - 100% Various Various 69,911 2,215 30 % Total Redevelopments In-Process Total Redevelopments In-Process $ 258,079 3,248 46 % Total Redevelopments In-Process $ 287,264 3,938 45 % Redevelopments Completed Redevelopments Completed Redevelopments Completed The Crossing Clarendon Metro DC 100% Q4-18 2024 $ 55,679 129 90 % Metro DC 100% Q4-18 2024 $ 55,679 129 92 % Various Properties Various 20% - 100% Various Various 13,750 727 92 % Various 20% - 100% Various Various 18,307 844 95 % Total Redevelopments Completed Total Redevelopments Completed $ 69,429 856 90 % Total Redevelopments Completed $ 73,986 973 92 % Net cash used in financing Net cash flows from financing activities changed by Six months ended June 30, Nine months ended September 30, (in thousands) 2023 2022 Change 2023 2022 Change Cash flows from financing activities: Net proceeds from common stock issuances $ (10 ) 61,284 (61,294 ) $ 4 61,284 (61,280 ) Repurchase of common shares in conjunction with equity award plans $ (7,621 ) (6,388 ) (1,233 ) $ (7,653 ) (6,438 ) (1,215 ) Common shares repurchased through share repurchase program (20,006 ) (71,898 ) 51,892 (20,006 ) (75,419 ) 55,413 Contributions from limited partners in consolidated partnerships, net 1,225 1,234 (9 ) 3,167 1,568 1,599 Dividend payments and operating partnership distributions (223,239 ) (214,818 ) (8,421 ) (334,293 ) (322,897 ) (11,396 ) Proceeds from unsecured credit facilities, net 77,000 — 77,000 Proceeds from debt issuance 15,500 — 15,500 46,500 — 46,500 Debt repayment, including early redemption costs (34,670 ) (5,728 ) (28,942 ) (68,234 ) (14,498 ) (53,736 ) Payment of loan costs (141 ) (82 ) (59 ) (411 ) (82 ) (329 ) Proceeds from sale of treasury stock, net 28 64 (36 ) 62 64 (2 ) Net cash used in financing activities $ (268,934 ) (236,332 ) (32,602 ) $ (303,864 ) (356,418 ) 52,554 Significant financing activities during the Investments in Real Estate Partnerships The following table is a summary of the unconsolidated combined assets and liabilities of our Combined Regency's Share (1) Combined Regency's Share (1) (dollars in thousands) June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Number of Co-investment Partnerships 13 13 Regency's Ownership 20% - 50% 20% - 50% Number of Properties 96 96 Number of real estate partnerships 19 13 Regency's ownership 12% - 67% 20% - 50% Number of properties 102 96 Assets $ 2,605,708 2,608,005 $ 944,298 943,699 $ 2,739,604 2,608,005 $ 1,000,709 943,699 Liabilities 1,522,183 1,497,630 540,745 530,915 1,604,587 1,497,630 570,053 530,915 Equity 1,083,525 1,110,375 403,553 412,784 1,135,017 1,110,375 430,656 412,784 Basis difference Basis difference (61,114 ) (62,407 ) Basis difference (48,356 ) (62,407 ) Investments in real estate partnerships Investments in real estate partnerships $ 342,439 350,377 Investments in real estate partnerships $ 382,300 350,377 Our equity method investments in real estate partnerships consist of the following: (in thousands) Regency's Ownership June 30, 2023 December 31, 2022 Regency's Ownership September 30, 2023 December 31, 2022 GRI-Regency, LLC (GRIR) 40.00% $ 148,545 155,302 40.00% $ 148,596 155,302 New York Common Retirement Fund (NYC) (1) 30.00% 116 674 30.00% 159 674 Columbia Regency Retail Partners, LLC (Columbia I) 20.00% 7,442 7,423 20.00% 7,256 7,423 Columbia Regency Partners II, LLC (Columbia II) 20.00% 41,103 41,757 20.00% 43,553 41,757 Columbia Village District, LLC 30.00% 5,635 5,836 30.00% 6,141 5,836 RegCal, LLC (RegCal) (2) 25.00% 5,572 5,789 25.00% 5,550 5,789 Individual Investors Ballard Blocks 49.90% 61,894 62,624 49.90% 62,000 62,624 Bloom on Third (fka Town and Country Center) 35.00% 41,703 40,409 35.00% 42,417 40,409 Others 50.00% 30,429 30,563 11.80% - 66.67% 66,628 30,563 Total Investment in real estate partnerships $ 342,439 350,377 $ 382,300 350,377 Notes Payable - Investments in Real Estate Partnerships Scheduled principal repayments on notes payable held by our investments in real estate partnerships were as follows: (in thousands) June 30, 2023 September 30, 2023 Scheduled Principal Payments and Maturities by Year: Scheduled Mortgage Unsecured Total Regency’s Scheduled Mortgage Unsecured Total Regency’s 2023 (1) $ 1,037 — — 1,037 340 $ 941 — — 941 284 2024 2,205 33,690 — 35,895 14,298 3,718 33,690 — 37,408 14,678 2025 4,506 143,636 — 148,142 46,314 6,094 146,221 — 152,315 48,005 2026 5,728 223,608 25,800 255,136 82,563 7,393 225,589 39,800 272,782 86,475 2027 5,829 32,800 — 38,629 13,231 7,576 32,800 — 40,376 13,669 Beyond 5 Years 9,894 939,728 — 949,622 352,818 10,956 986,042 1,487 998,485 373,113 Net unamortized loan costs, debt premium / (discount) — (11,485 ) — (11,485 ) (4,094 ) — (11,235 ) — (11,235 ) (4,085 ) Total $ 29,199 1,361,977 25,800 1,416,976 505,470 $ 36,678 1,413,107 41,287 1,491,072 532,139 At We believe that our partners are financially sound and have sufficient capital or access thereto to fund future capital requirements. In the event that a co-investment partner is unable to fund its share of the capital requirements of the Management fee income In addition to earning our Pro-rata share of net income or loss in each of these Three months ended June 30, Six months ended June 30, Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 2023 2022 2023 2022 Asset management, property management, leasing, and other transaction fees $ 7,106 6,499 $ 13,144 13,183 $ 6,322 5,767 $ 19,465 18,950 Recent Accounting Pronouncements See Note 1 to Unaudited Financial Statements. Environmental Matters We are subject to numerous environmental laws and regulations that apply to our shopping centers, which primarily pertain to chemicals historically used by certain current and former dry cleaning and gas station tenants and the existence of asbestos in older shopping centers. We believe that the few tenants who currently operate dry cleaning plants or gas stations do so in accordance with current laws and regulations. Generally, we endeavor to require tenants to remove dry cleaning plants from our shopping centers or convert them to more environmentally friendly systems, in accordance with the terms of our leases. We carry an environmental insurance policy for certain third-party liabilities and remediation costs on shopping centers that currently have no known environmental contamination. We have also secured environmental insurance policies, where appropriate, on a relatively small number of specific properties with known contamination, in order to mitigate our environmental risk. We monitor the shopping centers containing environmental issues and in certain cases voluntarily remediate the sites. We also have legal obligations to remediate certain sites and we are in the process of doing so. As of Item 3. Quantitative and Qualitative Disclosures about Market Risk We continuously monitor the capital markets and evaluate our ability to issue new debt, to repay maturing debt, or fund our commitments. We continue to believe, in light of our credit ratings, the available capacity under our unsecured credit facility, and the number of high quality, unencumbered properties that we own which could collateralize borrowings, we will be able to successfully issue new secured or unsecured debt to fund maturing debt obligations. It is uncertain the degree to which capital market volatility and rising interest rates will adversely impact the interest rates on any new debt that we may issue. Please also refer to the Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022, discussed in Item 1A of Part I thereof, and the Risk Factors described in Part II, Item 1A of this Form 10-Q. Item 4. Controls and Procedures Controls and Procedures (Regency Centers Corporation) Under the supervision and with the participation of the Parent Company's management, including its chief executive officer and chief financial officer, the Parent Company conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on this evaluation, the Parent Company's chief executive officer and chief financial officer concluded that its disclosure controls and procedures were effective as of the end of the periods covered by this quarterly report on Form 10-Q to ensure information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Parent Company in the reports it files or submits is accumulated and communicated to management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. There have been no changes in the Parent Company's internal controls over financial reporting identified in connection with this evaluation that occurred during the Controls and Procedures (Regency Centers, L.P.) Under the supervision and with the participation of the Operating Partnership's management, including the chief executive officer and chief financial officer of its general partner, the Operating Partnership conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act. Based on this evaluation, the chief executive officer and chief financial officer of its general partner concluded that its disclosure controls and procedures were effective as of the end of the periods covered by this quarterly report on Form 10-Q to ensure information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Operating Partnership in the reports it files or submits is accumulated and communicated to management, including the chief executive officer and chief financial officer of its general partner, as appropriate, to allow timely decisions regarding required disclosure. There have been no changes in the Operating Partnership's internal controls over financial reporting identified in connection with this evaluation that occurred during the PART II - OTHER INFORMATION Item 1. Legal Proceedings See Note 12 — Commitments and Contingencies in the Notes for discussion regarding material legal proceedings and contingencies. Except as set forth in such discussion, there have been no material developments in legal proceedings as reported in Item 3. “Legal Proceedings” of our 2022 Form 10-K. Item 1A. Risk Factors In addition to the information set forth in this report, you should carefully consider the risk factors discussed in Item 1A. of Part I of our Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Annual Report”) Unfavorable developments affecting the banking and financial services industry could adversely affect our business, liquidity and financial condition, and overall results of operations. Actual events, concerns or speculation about disruption or instability in the banking and financial services industry, such as liquidity constraints, the failure of individual institutions, or the inability of individual institutions or the banking and financial service industry generally to meet their contractual obligations, could significantly impair our access to capital, delay access to deposits or other financial assets, or cause actual loss of funds subject to cash management arrangements. Similarly, these events, concerns or speculation could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and 54 operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Additionally, our tenants, critical vendors and business partners also could be adversely affected by these risks as described above, which in turn could result in their committing a breach or default under their contractual agreements with us, their insolvency or bankruptcy, or other adverse effects. Any decline in available funding or access to our cash and liquidity resources, or non-compliance of banking and financial services counterparties with their contractual commitments to us could, among other risks, have material adverse impacts on our ability to meet our operating expenses and other financial needs, could result in breaches of our financial and/or contractual obligations, and could have material adverse impacts on our business, financial condition and results of operations. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the The following table represents information with respect to purchases by the Parent Company of its common stock, by month, during the three months ended Period Total number of shares purchased (1) Average price paid per share (1) Total number of shares purchased as part of publicly announced plans or programs (2) Maximum number or approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) (2) April 1 through April 30, 2023 8,761 $ 60.32 — $ 230,000 May 1 through May 31, 2023 109 $ 60.21 — $ 230,000 June 1 through June 30, 2023 — $ — — $ 230,000 Period Total number of shares purchased (1) Average price paid per share (1) Total number of shares purchased as part of publicly announced plans or programs (2) Maximum number or approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) (2) July 1 through July 31, 2023 — $ — — $ 230,000 August 1 through August 31, 2023 341 $ 65.01 — $ 230,000 September 1 through September 30, 2023 649 $ 63.11 — $ 230,000 Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures Not applicable. Item 5. Other Information On September 13, 2023, Martin E. Stein Jr., the (i) Mr. Stein terminated a trading arrangement he had previously adopted with respect to the sale of the Company’s common stock (a “Rule 10b5-1 Trading Plan”). Mr. Stein’s Rule 10b5-1 Trading Plan was adopted on February 23, 2023 and, prior to its termination by Mr. Stein, was to expire by its terms on March 31, 2024. This Rule 10b5-1 Trading Plan provided for the sale of up to 100,000 shares of common stock pursuant to multiple limit orders. As of the date of termination of this plan, Mr. Stein had not sold any shares of common stock under its terms. (ii) Mr. Stein adopted a new Rule 10b5-1 Trading Plan that is intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c) 55 Entry into Material Definitive Agreements Indemnification Agreements On November 2, 2023, the Company entered into an indemnification agreement (an “Indemnification Agreement”) with each current member of its Board of Directors and each of its executive officers (each being referred to as an “Indemnified Party” and collectively as the “Indemnified Parties”). These Indemnification Agreements require the Company, among other things, to indemnify and hold harmless its directors and executive officers against claims, lawsuits, proceedings and liabilities (collectively, “Claims”) that may arise by reason of their status or capacity with, or service to, the Company and its subsidiaries, to the fullest extent permitted by the Company’s Articles of Incorporation, Bylaws and the Florida Business Corporation Act. These Indemnification Agreements also require the Company to advance expenses incurred by the Indemnified Parties in investigating or defending any such Claims, and sets forth various procedures in respect of such advancement and indemnification. The Indemnification Agreements also require the Company to procure customary directors and officers liability insurance, subject to certain conditions. The Company believes that these agreements are appropriate and necessary to attract and retain qualified individuals to serve as directors and executive officers. The foregoing summary of the terms of the Indemnification Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the “form of” Indemnification Agreement, a copy of which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q, and is incorporated herein by reference. Item 6. Exhibits In reviewing any agreements included as exhibits to this Report, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company, its subsidiaries or other parties to the agreements. Each agreement contains representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and: Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. We acknowledge that, notwithstanding the inclusion of the foregoing cautionary statements, we are responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this Report not misleading. Additional information about the Company may be found elsewhere in this Report and the Company's other public filings, which are available without charge through the SEC's website at http://www.sec.gov. Unless otherwise indicated below, the Commission file number to the exhibit is No. 001-12298 (Regency Centers Corporation) and 000-24763 (Regency Centers, L.P.). Ex # Description 1. Underwriting agreement 1.1 1.2 56 1.3 1.4 1.5 1.6 2. Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession 2.1 3. Articles of Incorporation and Bylaws 3.1 3.2 3.3 3.4 3.5 3.6 3.7 10. Material Contracts 10.1 101. Interactive Data Files 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104. Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) * Furnished, not filed. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. REGENCY CENTERS CORPORATION By: /s/ Michael J. Mas Michael J. Mas, Executive Vice President and Chief Financial Officer (Principal Financial Officer) By: /s/ Terah L. Devereaux Terah L. Devereaux, Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) REGENCY CENTERS, L.P. By: Regency Centers Corporation, General Partner By: /s/ Michael J. Mas Michael J. Mas, Executive Vice President and Chief Financial Officer (Principal Financial Officer) By: /s/ Terah L. Devereaux Terah L. Devereaux, Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) $12.0$1.3 million decreaseincrease in our equity in income of investments in real estate partnerships is largely attributable to the following changes:•$8.9$0.8 million decreaseincrease within NYC,Other investments in real estate partnerships, primarily due to gains on the sale of two operating properties during 2022; andrelated to:•o3.50.2 million decrease within RegCal, primarily dueincrease from new partnerships related to the acquisition of UBP;gain on sale of one operatingsingle property during 2022.partnership under redevelopment.sixnine months ended JuneSeptember 30, 2023 and 2022:$26.8$51.9 million primarily driven by the following contractually billable components of rent to the tenants per the lease agreements:23.343.1 million increase from billable Base rent, as follows:1.411.8 million increase from acquisition of UBP;2.93.7 million increase from acquisitions of development properties;other operating properties in 2023 and 2022; and19.125.5 million net increase from same properties, including a $2.1 million increase related to our acquisition and resulting consolidation of four properties previously held in an unconsolidated partnership during 2022, a $5.0 million increase due to redevelopment projects completing and operating, and a $12.0including: in the remaining same properties due to increases from occupancy, rent steps in existing leases, and positive rental spreads on new and renewal leases.leases;9.717.3 million increase from contractual Recoveries from tenants, which represents the tenants' proportionate share of the operating, maintenance, insurance, and real estate tax expenses that we incur to operate our shopping centers. Recoveries from tenants increased, on a net basis, from the following:177,0003.8 million increase from acquisition of UBP;saleacquisition of other operating properties;o$564,000 increase from acquisitions of operating properties;properties in 2022 and 2023; and9.012.4 million net increase from same properties primarily due to higher operating costs in the current year.year and improved recovery rates.379.511.2 million decrease from changes in Uncollectible lease income. AlthoughWhile we continue to see improvements in our collection rates and therefor lower uncollectible lease income, our 2023offsetting recovery from the collections of COVID-19 related reserves have been lower than our 2022 experience resulting in reduceda net negative change from Uncollectible lease income year over year.3.14.3 million increase in Other lease income primarily due to an increase in lease termination fees.6.010.2 million decrease in Straight-line rent due to higher 2022 levels of reinstating straight-line rents from former cash basis tenants upon returning to accrual basis.3.35.9 million increase in Above and below market rent primarily from same properties driven by anaccelerated write offs for early tenant move-out.move-outs.$8.7$15.9 million, on a net basis, as follows:319,0007.6 million increase from developmentsame properties, where tenant spaces became available for occupancy, offsetprimarily driven by decreases from corporate asset depreciation and the sale of operating properties;redevelopment projects;2.05.3 million increase from acquisition of UBP;6.40.5 million increase from samedevelopment properties primarily related to redevelopment projects.where becoming available for occupancy.$11.2$20.9 million, on a net basis, as follows:426,0001.9 million increase from development properties where tenant spaces became available for occupancy, offset by decreasesacquisition of UBP;the sale of operatingdevelopment properties;2.72.9 million increase from insurancehigher claims expense andin our captive insurance company;8.113.8 million increase from same properties primarily attributable to an increase in recoverable common area and tenant related costs.$3.4$5.7 million, on a net basis, mainly due to the following:864,0002.8 million increase from acquisition of UBP;occupancy, offset by decreases from the sale of operating properties;occupancy; and2.61.6 million net increase from same properties primarily due to increases in real estate tax assessments across the portfolio.$13.9$14.5 million, on a net basis, mainly due to the following:9.910.2 million net increase due to changes in the value of participant obligations within the deferred compensation plan, attributable to changes in market values of those investments, reflected within Net investment income;1.71.2 million net increase driven by increases inhigher professional fees and travel related costs;1.73.6 million net increase in compensation costs primarily driven by annual base salary increases, fewer vacant positions and performance based incentive compensation; andpartially offset by523,000 increase0.5 million decrease due to lower development overhead capitalization based on the timing and progress of our development and redevelopment projects.38had a favorable change of $1.6increased $1.0 million, primarily due to a $1.2due to $1.5 million feeincrease for the cancelation of a land contracttransition costs related to a development pursuit, as well as higher 2022 expenses for environmental remediation costs at onethe acquisition of our operating properties.UBP.sixnine months ended JuneSeptember 30, 2023, we recognized gains on sale of $331,000$0.5 million from onetwo land parcel.parcels. During the sixnine months ended JuneSeptember 30, 2022, we recognized gains on sale of $106.2$106.5 million from one operating property and threefour land parcels.$11.4$11.6 million primarily driven by $10.1 million gains on investments held in the non-qualified deferred compensation plan and our captive insurance company. This is partially offset by $9.9 million of greaterwhich have an offsetting expense in General and administrative costs related to participant obligations within the deferred compensation plans.noted above and $1.5 million gains on investments held in our captive insurance company.
Ownership
Ownershipthirdfourth quarter of 2023.JuneSeptember 30, 2023.$12.9$11.6 million decrease, on a net basis, in our equity in income of investments in real estate partnerships is largely attributable to the following changes:9.29.1 million decrease within NYC, primarily due to gains on the sale of two operating properties during 2022; anda gain on sale of one operating property during 2022; partially offset by511,0001.3 million increase within Other investments in real estate partnerships, primarily related to increases in lease income at a single property partnership under redevelopment.3940$9.9$10.3 million and $22.2$32.5 million, on a net basis, during the three and sixnine months ended JuneSeptember 30, 2023 and 2022, respectively, as follows:$8.3$7.1 million and $18.0$25.1 million during the three and sixnine months ended JuneSeptember 30, 2023, respectively, due to rent steps in existing leases, positive rental spreads on new and renewal leases, and increases in occupancy, as well as redevelopment projects completing and operating.$6.9$4.4 million and $9.0$13.4 million during the three and sixnine months ended JuneSeptember 30, 2023, respectively, due to increases in recoverable expenses.$706,000 and $2.9$2.8 million during the three and sixnine months ended JuneSeptember 30, 2023, respectively, due to increases in tenant sales.$2.5$2.6 million during the sixnine months ended JuneSeptember 30, 2023, driven by two anchor terminations that were recognized in 2023.$5.6$1.6 million and $10.4$12.0 million during the three and sixnine months ended JuneSeptember 30, 2023, respectively, primarily driven by the 2022 collection of previously reserved amounts, which have continued to be favorable in 2023, but to a lesser degree.$7.0$5.5 million and $10.8$16.3 million, on a net basis, during the three and sixnine months ended JuneSeptember 30, 2023, respectively, as follows:$5.7$6.2 million and $8.7$14.9 million during the three and sixnine months ended JuneSeptember 30, 2023, respectively, primary due to increases in recoverable costs.Recoverable Costs.$1.3 million and $2.0$1.2 million during the three and sixnine months ended JuneSeptember 30, 2023, respectively, due to an increase in real estate assessments across the portfolio.
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Count4142co-investmentreal estate partnerships. The Operating Partnership is a co-issuer and a guarantor of the $200 million of outstanding debt of our Parent Company. The Parent Company will from time to time access the capital markets for the purpose of issuing new equity, and will simultaneously contribute all of the offering proceeds to the Operating Partnership in exchange for additional partnership units.dividend,common stock and preferred stock dividends, borrowings from our Line, proceeds from the sale of real estate, mortgage loan and unsecured bank financing, distributions received from our co-investmentreal estate partnerships, and when the capital markets are favorable, proceeds from the sale of equity securities or the issuance of new unsecured debt. We continually evaluate alternative financing options, and we believe we can obtain new financing on reasonable terms, although likely at higher interest rates than that of our debt currently outstanding, indue to the current interest rate environment.$39.8$74.4 million of unrestricted cash, we have the following additional sources of capital available:(1)(1)credit.credit issued against our Line of Credit.August 1,November 2, 2023, our Board of Directors declaredDirectors:$0.65$0.67 per share, payable on October 4, 2023,January 3, 2024, to shareholders of record as of SeptemberDecember 14, 2023. 2023;sixnine months ended JuneSeptember 30, 2023 and 2022, we generated cash flow from operations of $334.7$547.7 million and $327.8$528.2 million, respectively, and paid $223.2$334.3 million and $214.8$322.9 million in dividends to our common stock and unit holders, in the same respective periods.$589.5$644.9 million related to leasing commissions, tenant improvements, in-process developments and redevelopments, capital contributions to our co-investmentreal estate partnerships, and repaying maturing debt. These capital requirements are being impacted by current levels of high inflation resulting in increased costs of construction materials, labor, and services from third party contractors and suppliers. In response, we have implemented mitigation strategies such as entering into fixed cost construction contracts, pre-ordering materials, and other planning efforts. Further, continued challenges from permitting delays and labor shortages may extend the time to completion of these projects.43JuneSeptember 30, 2023, 90.4%85.7% of our wholly-owned real estate assets were unencumbered. Our low level of encumbered assets allow us to more readily access the secured and unsecured debt markets and to maintain availability on the Line. Our trailing 12 month fixed charge coverage ratio, including our Pro-rata share of our partnerships, was 4.8x5.0x and 4.7x for the periods ended JuneSeptember 30, 2023, and December 31, 2022, respectively, and our Pro-rata net debt-to-operatingdebt and Preferred Stock-to-operating EBITDAre ratio on a trailing 12 month basis was 4.9x5.5x and 5.0x, respectively, for the same periods.JuneSeptember 30, 2023, and expect to remain in compliance.$6.9$19.4 million due to:4.316.2 million increase in cash from operations due to timing of receipts and payments, and2.73.2 million increase in operating cash flow distributions from Investments in real estate partnerships.$26.1$119.7 million as follows:$139.8$141.3 million to purchase six operating properties, including four properties in which we previously held a 25% interest through an unconsolidated Investment in real estate partnership.$644,000$80.5 million, net of $14.1 million in cash acquired for the acquisition of UBP, including $39.3 million for UBP debt repaid at closing, and $55.3 million in direct transaction and other costs, with an additional $1.9 million in transaction costs outstanding in Accounts payable and other liabilities.onethree land parcelparcels in 2023 for proceeds of $3.7$10.3 million compared to one operating property, twothree land parcels and one development project interest in 2022 for proceeds of $136.4$137.3 million.44$3.1$9.1 million, including:$11.5$13.6 million, including:co-investmentreal estate partnership, and6.17.5 million to fund our share of development and redevelopment activities.sixnine months ended JuneSeptember 30, 2023 we received $3.6 million from our share of proceeds from debt refinancing activities.$100.1$159.0 million for the development, redevelopment, and improvement of our real estate properties, comprised of the following:decreased $5.5increased $3.5 million in 2023, primarily related to the timing of capital projects.$11.0$8.7 million higher in 2023 due to the timing and magnitude of projects currently in process. We intend to continuously improve our portfolio of shopping centers through redevelopment which can include adjacent land acquisition, existing building expansion, facade renovation, new out-parcel building construction, and redevelopment related tenant improvement costs. The size and magnitude of each redevelopment project varies with each redevelopment plan. The timing and duration of these projects could also result in volatility in NOI. See the tables below for more details about our redevelopment projects. slightly higher in 2023 due to the progress towards completion of our development projects in process. See the tables below for more details about our development projects.45
Date
Stabilization
Year (1)
Development
Costs (2) (3)
of GLA (2) (3)
Date
Stabilization
Year (1)
Development
Costs (2) (3)
of GLA (2) (3)
Project Costs (2) (3)
Project Costs (2) (3)4650activities:activities$32.6$52.6 million during 2023, as follows:sixnine months ended JuneSeptember 30, 2023 and 2022, include the following:$7.6$7.7 million and $6.4 million during 2023 and 2022, respectively.$71.9$75.4 million during the same period in 2022 to repurchase 1,234,4171,294,201 common shares.$1.2$3.2 million net from limited partners, including $3.1$8.3 million of contributions for their share of debt repayments and development funding, partially offset by $1.9$5.1 million in distributions during 2023. During 2022, we received $1.2$1.6 million net from limited partners, including $5.0$6.5 million of contributions in a new consolidated partnership, partially offset by $3.8$4.9 million in distributions.$8.4$11.4 million more in dividends as a result of an increase in our dividend rate per share and the number of shares of our common stock outstanding.$15.5$46.5 million in proceeds from a mortgage refinancing,$34.7$68.2 million for debt repayments, including:5.17.9 million in principal mortgage payments, and29.660.3 million to repay fourfor a combination of repaying or refinancing five mortgage loans at maturity.$5.7$8.5 million in principal mortgage payments.payments, and4751co-investmentreal estate partnerships and our Pro-rata share:(3)thirdfourth quarter of 2023.JuneSeptember 30, 2023.
Principal
Payments
Loan
Maturities
Maturities
Pro-Rata
Share
Principal
Payments
Loan
Maturities
Maturities
Pro-Rata
Share4852JuneSeptember 30, 2023, our investments in real estate partnerships had notes payable of $1.4$1.5 billion maturing through 2034, of which 97.1%96.0% had a weighted average fixed interest rate of 3.7%3.8%. The remaining notes payable float with SOFR and had a weighted average variable interest rate of 7.0%7.2%, based on rates as of JuneSeptember 30, 2023. These fixed and variable rate notes payable are all non-recourse, and our Pro-rata share was $505.5$532.1 million as of JuneSeptember 30, 2023. As notes payable mature, they are expected to be repaid from proceeds from new borrowings and/or partner capital contributions. Refinancing debt at maturity in the current interest rate environment could result in higher interest expense in future periods if rates remain elevated.co-investmentreal estate partnership, we would have the right, but not the obligation, to loan the defaulting partner the amount of its capital call which would be secured by the partner's membership interest.co-investmentreal estate partnerships, we receive fees as shown below:JuneSeptember 30, 2023, we had accrued liabilities of $10.7$19.9 million for our Pro-rata share of environmental remediation, including our Investments in real estate partnerships. We believe that the ultimate remediation of currently known environmental matters will not have a material effect on our financial position, cash flows, or results of operations. We can give no assurance that existing environmental studies on our shopping centers have revealed all potential environmental contamination; that our estimate of liabilities will not change as more information becomes available; that any previous owner, occupant or tenant did not create any material environmental condition not known to us; that the current environmental condition of the shopping centers will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties; or that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to us.4953secondthird quarter of 2023 which have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.secondthird quarter of 2023 which have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.50., and the Risk Factors described in Part II, Item 1A of the Form 10-Q reports filed in the quarters ended March 31, and June 30, 2023, respectively, and this form 10Q. There have been no material changes in our risk factors from those described in our 2022 Annual Report except as disclosed in our 424(b)(3) prospectus,Form S-4 Registration Statement, filed with the SEC on July 12,10, 2023, in connection with our pending acquisition of Urstadt Biddle, which contains, among other things,without limitation, additional risk factors relatingin a section of the prospectus entitled “Risks Relating to such acquisition, andRegency After Completion of the additionalMergers”. In addition, we note the risk factor identified during 2023 detailed below:quarterthree months ended JuneSeptember 30, 2023, we issued 3,340 shares of common stock of Regency Centers Corporation in connection with the Operating Partnership issued 338,704 exchangeable operating partnershipredemption of common units to partially fund the acquisition of a development property. Such units were issued pursuant toRegency Centers, L.P. in reliance on the exemption from registration contained in Section 4(a)(2)requirements of the Securities Act of 1933, as amended, as theyafforded by Section 4(a) (2) thereof. There were sold to accredited investors. No underwriting discounts or commissions were paid with respect to such sales.no other unregistered sales of equity securities during the three months ended September 30, 2023.JuneSeptember 30, 2023:authorizeshas authorized a common sharestock repurchase program under which we may purchase, from time to time, up to a maximum of $250 million of our outstanding common stock through open market purchases, and/or in privately negotiated transactions. The timing and price of sharestock repurchases will be dependent upon market conditions and other factors. Any sharesstock repurchased, if not retired, will be treated as treasury shares.stock. Our priorstock repurchase program expired on February 3, 2023 and the Board authorized a new program as of February 8, 2023 which is set towill expire February 7, 2025, unless modified, extended or earlier terminated by the Board.51DuringRule 10b5-1 Trading Plansthree months ended June 30, 2023, there were no modifications,Company’s adoptionsExecutive Chairman or terminations by any directors or officers to any contract, instruction or written plan forof the purchase or sale of securitiesBoard of the Company, took the following actions: or non-Rule. Mr. Stein’s Rule 10b5-1 trading agreements.Trading Plan, which expires on February 15, 2025, provides for the sale of up to 50,000 shares of common stock pursuant to multiple limit orders. Since adoption of this plan, Mr. Stein has not sold any shares of common stock under its terms.52575358August 4,November 6, 2023August 4,November 6, 20235459