REG - Earnings call transcript Q4 2018 | Regency Centers Corporation

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Operator

Greetings and welcome to the Regency Centers Corporation Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. pleasure Markets. your my Vice Laura now Capital President, is to host, introduce Clark, It you. Thank

may You begin.

Laura Clark

Good quarter call. XXXX And earnings morning. welcome conference to Regency's fourth

performance, Joining outcomes Please Director of statements results and On may filings Investments; involve cause Actual and Thompson, future to EVP from expressed important and our statements. risks materially President Hap actual Treasurer. Mike differ forward-looking with identify today's differ CFO; statements. and those Jim could those me discuss Mas, refer Chris Operations; Such and from factors Palmer, SVP which Managing uncertainties. and EVP may we Lisa our Finance; that contained forward-looking our Chairman risk results forward-looking the Chandler, in in SEC, Mac to of today are the of call, CEO; statements. Stein, Leavitt,

our measures supplement, our of website. also comparable GAAP will a provided Investor We reconciliation in release certain We've reference to found on their measures. can be financial earnings and these Relations non-GAAP measures which financial

would Now, I over little as will a the to give overview call today's to it be Hap, a call before different. of you turning quick like

strategic will of followed through XXXX Hap same-property objectives. guidance. same-property XXXX portfolio NOI components our First, NOI discuss Jim of by highlights you then the and will walkthrough take fundamentals, a growth and

for of our guidance portion go utilizing and presentation present slide forward. earnings will XXXX be Lisa call. a Finally, a today's We'll

our link Hap? Relations regencycenters.com. in You website the can the Presentations the view Investor section of through or presentation webcast at

Hap Stein

the our amount deliberate over in our our the space being there's with and are important milestone non-cash which and by corporate balance translated thriving XXXX X% a sheet. responsibility at inaugural X%, consecutive year in XXXX superior This that and of cash year; assets This seventh core a – price in share, and growth increases team's redevelopment, of our our and and, strategy $XXX balance report, allocation and initiatives. another million for release strategy. with notably, on leased really which of and portfolio, through team above strategy also retailers both average areas marked centers successful portfolio investments. executed of chip by the dividend multi-channel new development one-time X.X% free our a nearly located Highlights and managing same-property and value was governance from earnings, ratio. cash certain and Through proactively an morning, NOI a we than or million sales lower-growth by eliminates the available roughly cautious flow of XX% good prospects; demonstrate cost robust. talent continue physical performance. effectively at remain operating $XX year of in centers though our include turn, critical And capital have for sheet, payout showcases funding years. environmental, level the reinvesting growth distribution with fortifying building demand growth the of trade million an for last limited comparable our to is Laura. starts everyone. we modest executed top into of expertly stores Good Thanks, acquisitions exceptional $XXX and sector-leading proven produced compounded renewal supported in $XXX clearly less Regency's over and creatively efforts, repurchases impacts three XXXX social share to growth Even for by Retailers Regency's at at and per redevelopments; nearly expansion, that all component and in vacant blue developments with of low and of

channels for that distribution our that ensuring evolving will We in to the prosper are committed successful and marketplace. centers retailers convenient shopping relevant remain

ongoing accomplishments of to effectively combination strategic distinguish to employing Our successfully company advantages by strategy the of our time-proven unequaled the Regency's achieve effectiveness demonstrate our objectives.

to Our and portfolio, average NOI same-property Regency high philosophy intense fresh-look growth quality will of X%. position asset management

and over and $X.XX deliver capabilities development redevelopment next in attractive enable will us over years. at experienced redevelopments five Our to developments returns the billion

to capital sheet flow I we Our growing the cycles employed financial pristine total X balance Jim? times. debt-to-EBITDA of earnings, in expertly and, flow collectively, team and near turn, and cost sector. effectively cash new the access at as these am dividend providing our or confident cash flexibility by that, investments, target free capabilities fund growth returns are shopping and consistently sustain center will of while will future be top to extremely through shareholder amazing that

Jim Thompson

finish year a another of by executed Hap. same-property growth rent. base to by high and quality solid best-in-class extremely X.X% from team. pleased our our strong same-property supported XXXX growth by X.X% driven NOI with Thanks, I'm was contribution NOI portfolio

were was that This we reassessments Equity by years offsetting the merger, event impacted two from one-time real expense. supplemental we're calls, almost As tax tax anticipated XXXX estate on One our impact growth discussed margins. base absorbing triggered of where one-time the rent previous operating

more Going at to expect normalized forward, margins. we operate

new indicated, to portfolio they are decisions while store rational continues that to openings, healthy retailers. Regency's said, experience Hap contribute retailers continue demand. be healthy and top to As discerning making we supply from demand That will with feel

the left to in support with our growth presentation of fundamentals us we're landscape, the contractual high-single to prospects the same-property over time, I At the on benefit constructive begin incorporating leases. in have our we Centers, same trends attribute Rent and same-property of spreads slide. in Please to stable increases Regency from three expectation long-term. attention that continue enhanced X%-plus portfolio me settled rent a and we your turn like successfully remainder our side and our page into tenants. NOI to from the the objective. X%-plus NOI of to components our with of to said, relates average retail redevelopment get quality the the with our experience bad growth and debt move-outs, follow of that the positive our to pipeline, the underlying to Overall, it As With AR digits. combined view would

First, embedded of come and these to X.X% new rent from X.XX% leasing of Then increases. X.X% spreads. contractual provide another renewal the approximately growth. from is Combined, X.X% in growth X% rent portfolio to coming

given be portfolio is XX% Next, rent at paying, incremental the well leased levels occupancy at not from and gains should XX.X% these expected.

This annual average X% annual the Together, the to Finally, bps and to these averaged redevelopments same-property growth. has due deliveries. contribution equate NOI growth. can uneven from be XX of plus objective typically timing redevelopment size of components of strategic our growth

the slide. the Now, I'd of like right to shift your to side attention

we indicated call, same-property NOI of our growth to in expect range this from impacts. third-quarter X% the resulting year's be to short-term couple we X.X%, a in As of

to bid the box better strong control XXX we're forward Based we to and We approved Sears current box leases could the Two and occupancy, rent-paying gaining are interest continue be to on in still were boxes. from looking Looking for understand initial closure the and get locations one of we two much this boxes. third is at of operations. so, rejected. closed back. the plan Kmart on likely list, have Even the operators, these included have really

of than level is be In a NOI estimated addition basis prudent more this growth. points to to XX Sears, assumptions same-property combined move-out slightly incorporated we've and to impact

be the value. uneven to continue be maximize timing Additionally, given NOI sustain to long-term offline growth has minimal. the been, of from larger, a times. taking and NOI NOI as simply at contribution contribution well will as I be, and to The to could projects. the mentioned transformational before, our especially right decision of case uneven growth this This is the redevelopment vein, part impact In as completions year, making expected the is that more

the of it me our the team the to focus and the of to the prospects to will average expanding contributions over Lisa in to More discussion. come to of to and make The growth these inherent importantly, now X% XXXX forward quality pipeline and the I'll we're about quality enjoying of look visibility growth. good about extremely excited turn XXXX combined from the beyond. going really projects NOI forward our continue feel pipeline portfolio, that guidance the

Lisa Palmer

Thank everyone. Jim. morning, good you, And

around and deck extremely our was First, I'd of where in and feel you'll proud continue exceptionally the like guidance. achieved echo XXXX. page take you Jim's find year We'll initial and should another sentiments I'll slide the team It successes achievements. to gratifying four the their XXXX Hap in to

leasing For costs capitalized the XXXX, that a in related share certain FFO previously includes $X.XX. accounting G&A. guidance per our range $X.XX This is were impact $X.XX be share where standard lease expensed now will new to per to

across or compensation as the but, refer operating which core metric this At the only forward, referred will metric same true using the before, continue we this impact operating to of available eliminates sector. As core Beginning operating change not flow, providing comparability year, time, economic the and this while does does measure going accounting believe non-recurring the FFO We AFFO report previously this business on as certain to cash non-cash guidance to I've and earnings, our impact it not we earnings. influence our performance structure items. and as for earnings, best reported is FFO, will NAREIT this business, does we'll simply not a have or impact we're strategies. said

a investment related to NOI in as growth to X% of just Next, near-term is well incorporates as redevelopments said, to same-property From muted XXXX. the contribution and of Kmart billion in our from an headwinds this expected perspective, redevelopments year. as be five million Sears, over range Jim the we And start into next which X.X%, plan to good years. developments executing we to expect $X.X $XXX billion $X.XX to start million to visibility $XXX have

of Market, have The $XXX to of in recent as of closed, plus minus which reflects well guidance our repurchases. I'd $XX fund of carried additional acquisition the disposition year-end, sales guidance all center million like Our includes fourth-quarter property note Melrose over a sales exceptional near-urban as that to neighborhood share an or million of Seattle. already closing

year expense, interest $X.XX rates. net an for proactively driven executed mentioned XXXX basis, of is incorporates lease G&A advantage essentially as by G&A related this to we interest lower, accounting. expected re-financings net accretive primarily low million, flat to when or to a took I apples-to-apples year-over-year. earlier, G&A, approximately impact, year last On Moving is the $X To be

to are million XXXX items $XX million million a in $XX.X to expected XXXX. non-cash of from range $XX.X Finally, to in decrease

million we non-cash to related $X a recognized acquired we acceleration balance rent one-time XXXX, Toys"R"Us in box item at reminder, below-market the the one income in of for a a auction. As that

highlight page is which I'll rollforward, few to our five, things. Moving guidance a

be development coming First, completions. $X.XX share always, share. NOI to from per to growth, includes will organic $X.XX NOI as the per $X.XX contributing from This earnings $X.XX to contributor growth primary plus

funding impacts our and providing stock of including we're our million XXXX. $XXX of Second, opportunistic of activity, you the repurchase transaction in with incremental nearly

adjusting XXXX. after by Sears contribution for non-recurring that, to Lastly, are and expected bankruptcy note the per items, it's and certain I operating think impact earnings X% the after core X% grow in redevelopments, to the non-cash of important to even share muted from

own the trade as in emphasizing Turning a strategy dividends. at free Also, repurchases our generating pricing six, – selling and were again, and and stock, the like page growth free worth amount – redevelopments, cash acquisitions they to growth the that our of cash when It's of NOI quickly and enables redevelopment XXXX. to modest a compelling, approximately and cash model. are NAV capitals amount this flow lower allocation generate summarized free and after us fund right I'd has, are Today, flow after on and of two-year of capital with finance our to we $XXX page. on will basis. development Together, superior million also leverage-neutral we side fortify continue, developments to our assets funding growth. that review our prospects spend dispositions We've the flow of of and times essentially our

along Over activity This, net XXX earnings earnings will of points translate by into the growing contribute XXX long-term, X-plus-percent. X-plus-percent, points our same-property to to with growth operating NOI to basis expect core we investment basis growth.

of the now your As we dividend return to total we near XXXX welcome growth forward our or and confident to shareholder questions. look to continue sector. ability and and remarks the That deliver remain prepared concludes earnings in at our and we top beyond,

Operator

Instructions]. Thank [Operator you.

Our Yulico with first the of proceed question Scotiabank. with comes your Please from question. line Nick

Nick Yulico

limited and of Thanks. like Based you have dispositions and for redevelopment plenty it on expected development. seems your free cash flow, funding acquisitions,

for? as us there be expected have you leftover can about tell and it cash, guess, the I it how you what what's thinking So, spend you're well? If you'd using just

Hap Stein

the our spend, you closer can free we flow sense that sale opportunities, decisions, affect meaningful our as or it lower covered growth does So, to with stock acquisitions make the as – addition cash development redevelopment to it acquisitions then, sell going decide, extent to and, if indicated, million in superior of lower growth, make assets? contribute in buying tax does back that. and with our indicated. will plays, XXX to and/or hopefully, north just trade, assets, which something $XXX we to Lisa to our million. land in $XXX growth invest million as the was fact, growth points we we sell to earnings And plus $XXX recycle is favorable that play Obviously, cap implied And was the of assets basis it's in that, it And selling make X%. of – is think, sense dispositions, when, rate funds prospects, impact

stock bought important that in front-end also we million note to the I we stock $XXX loaded December. think of when buyback back it's

interesting planned that once dispositions additional – basically buyback. from the And make just make to growth enhance It's we'll – nice to does a standpoint, completed, Regency to that properties that's to it's that in I going have. like growth or rate it fund must selling something we've other lower make our does sense got is, recycle even for the in So, stay and a from standpoint. because are that's of are it a one the though decision, properties important intact then, and note to to year to like not we'd remainder stock effect, sense thing sell assets, that's think

Nick Yulico

year. over just up XX%. last guess, drove spend we related looking of they think about And like were the meaningfully a Okay, for TIs, recurring CapEx increase? that year, in this specifically that's should helpful. What the level how XXXX? then, And I to at expectation

Lisa Palmer

with answer happened I'll the question to in the regards latter and what take let Jim part. then XXXX opening I'll

Jim Thompson

Yeah. we as expected. we Nick, performed On really, about XXXX,

the relocations XXXX, of expensive. months were in which thing centers, a relocations, only the within but driven a QX, XX would we actually, was bit unusual, a the a were anchor XX%, that little of really lower XXXX. think little up couple were you at when which of look which is think, I by note XX% existing be But I I'd tick deals than full little

spend, and side our real we the good So, spend we from leasing. prudent feel think the capital I dollars our on about with are

Lisa Palmer

normal our above NOI activity, total spend And which pushed so, percent going percent run some forward, as rates. had our so a unusual XXXX capital of – kind of

the in been as but, range XX% forward, accounting to to going the will standard NOI we've drop XX% to of that So, X% XX% lease a result change. of

were It And previously down leasing of result that reducing that those be X%. G&A. expensed. So, capitalized are in the will by has commissions now that

Nick Yulico

went just items. Okay, wanted some At least of through on thanks. clarification you guidance. the non-cash a And

burn Is you last year think ongoing in impact non-cash how to benefit years? about million if the and had your related Equity have should going future we reported off – down of your revenue NAREIT remove from year as through And leases kind that, $X merger, Toys"R"Us. $X to that to million. a them You even just you the you all this from FFO as get One of that

Lisa Palmer

was to charge of about So, be decline, one-time, half $X related to that you million the clear, mentioned. the it,

benefit that, the in – the total, remaining that, that XX%, is after in of amortization. reduction half So, mark-to-market a so debt quarter a from remaining XX% of

income, rent primarily with reduction bit So, rent. straight-line then, of in is remainder a little the below-market the a

rent of would create and large this you will, time. all balance, for a to expect – that the One merger we did it So, we complete would going booked when headwinds forward, period you and if Equity we with did mention our we below-market

the be that forward, actually foreseeable we term of to annually remaining some And $X lease million for to million of time years, will and XX significant decline the period because is expect on the these so, future. of a going $X for closer

Nick Yulico

Appreciate it. you. Thank

Hap Stein

you. Thank

Operator

Our BMO question line Markets. comes next Jeremy your from of with with Metz question. proceed the Capital Please

Jeremy Metz

good Hey, morning.

redevelopment contribution. not you're for the looking terms guide, same-store of much In

offline Jim, had lumpy. redevelopments. can You mentioned you from the larger NOI mentioned of be this offset being coming some the

some this So, cadence And XXXX. thinking around go through means pulled have versus same-store we much this for your still what here come? maybe how through, what's of as offline color to NOI already you that

Lisa Palmer

Just Jeremy. reiterating again – you, thank and

range, there of is. and look properties when you this wide been we'd it redeveloping do me online long – And a years have put still increase it our for for uneven in we coming stuff you percentage has, terms managing there it's basis asset NOI at the few it, at about out of it is sort have And if larger offline. the has it in proactively unusual annual time. averaged impact You – that we've is worked points. some active how about what past on And year them really through a but look to management good the XX been a coming

the So, in pulling Jim do the in most happy we've that significant, of than one expect we Abbot have give Verde we couple one. coming which on was year, the almost and a benefit the coming to more of that's just of after going one. NOI also that, year, near more offline. for and that the another future, had which what significant online, past, this got detail is large offset that's But we're really $X very Boston, in And Costa pipeline that it's to the so million wasn't have this or be offline a in Mac We've more equal. is being projects,

are X%. coming go that we those NOI will we will above continue we average those same-property offline, years, benefits realize the the in that and so term will to that, we So, long X% have will but happen, growth we over these of believe the

Jeremy Metz

down up. year-over-year, on And front, was was then, your shop occupancy that. box occupancy actually appreciate occupancy the Yeah,

some calling overall pressure here. further for is Your guidance

about think of I you basis headwind baked in. have XX points

So, known the of today an in and that is shop with box And how tenant expectation much much of vacates fallout? for Firms that? Kmarts Mattress how is occupancy versus lower this for maybe further the

Jim Thompson

philosophy you Jeremy, about sharp that's with Brothers, effectively termination the upgraded management bps that opportunity I'll bps. quite was create to fall-off, decay primarily of color very, merchandising Aaron if fees, took the space the portfolio you aggressive attacked portfolio up has shop on Mattress really XXXX, future. very basis the recapturing as the merchandising a proactively remainder the XX cleaned recaptured we business just and is rest we portfolio, – Quarter-over-quarter, space the And XX was asset proactive some XX points; give Regency so the in that will. and in offsetting get the and basically of past. And in side the been frankly, working Firm

As far metrics the continuing standpoint, be very we major at to solid. that a The forward, from leased. as pipelines we're looking going be are continue historical XX% to

debt, bad AR, of rent metrics relief par are requests with major Our historical measures. on

think today very solid. So, continues solid a from we market XX% very, is really is a XX% the well. perform shop It to leased. feel the standpoint And we

Lisa Palmer

said, is that that in -- one just acquired what that, it when the the One. out from in space, we thing, clarify and to it the Just absolutely left shop properties Equity mostly – he Jim cleaning side was was up

was And team, time it and the Jim in takes the time. of we So, attack, to the if really March to we will, did And portfolio. smooth. of likes the integration, tenants, get quality Regency And, XXXX, standard kind to said, and the yes, took comfortable to you're bring XXXX quality proactively out sort really base understand us weaker closed the company, merging operate. but it you a was that tenant to when with weeded of kudos of extremely as when with

Jeremy Metz

Thanks. right. All

Hap Stein

Jeremy. Thank you,

Operator

Lynch. from proceed Bank Schmidt Merrill question with comes next Please line Our of of Craig with your question. the America

Craig Schmidt

you. I about looking particularly sounds sort a well. a at this since it thank are closed. guess have kind It as process, years Great, new is here? XXXX? strong saw look. headwinds. of you we've XXXX how And of Authority going broader taking Sports given headwinds was like we in then, to consumer two-and-a-half end ago, seeing norm I'm kind an of was had we And Are the of Or

Jim Thompson

to think is Craig, I weeding out. some would say of there just business. that, But I you've anecdotally, been has a the part this of – got meaningful

the be as better, As – been you continue align yourself the and to tenant having followed experience the anything best-in-class is as to not failures, continue share try at And has value, think makes the cetera. I our to there bit says failures. technology, of to have don't – the for anomaly. an And in there a going et little in always the going the only to financial get you are the it, with store tenant key know, to business wherewithal that long but I horizon see lion's portfolio. the up same they to but have, be we've invest operators will But and had and time, of that dollars to that it's on

said, to business. we over of that's expect five of and part Sears last we on Sports Authority, whole between box. Sears the the I – the We've even process throughout this interest and As XX% XX% – have and over six strong averaged leased

roll good plus range when to growth to more going also, Sears, and rent. news we over bad and when in a other it or having about about XX% XX% not, merchandising our is happen, the does to and and be term. average So, thing demand upgrade locations our And with feel does ability the we often replace news X% the good maintain as where, at and than the – tenant happen, occupancy also ability good it's can long or we higher

Craig Schmidt

sort outliers they're like to the to So, feel stores, feeling generally, a they feeling bit when of aggressive? open more that little want you're do more team, talking that, they beyond leasing your

Hap Stein

that the migrating seeing, we towards to the among growth think grow really good board, that again, real retailers the to plays sector to activity we're retailers. continue And in that's would that growth strength. But see and The sectors. I better good across estate. Craig. continue better I the all our growth Yeah, their see platforms. say We

Craig Schmidt

thank Okay, you.

Hap Stein

Thanks, Craig.

Operator

Christy Citi. Please with from next Our of with proceed question comes line question. the McElroy your

Christine McElroy

Good morning, everyone. Hi.

box on your to or what's to early seems process they some read stores. sell those the regarding close What's good happening? there, box? that It third able feel get that you that back, about like from sounds what's coming are growing-concern still of of Just of willing being to recapture Sears, hope out you pretty like sort that it

Jim Thompson

Christy, I'm since XX-XX be is I not about it. of a real in We're sure to bit play. beginning stance us say feel taking that recapturing had little And the keeps been are on I I'm future. The it. But the guess [ph] redevelopment process bankruptcy, rejected, to good least. that the in we closed a that on has that we list ticked strongly two off believe opportunities. suspect, be shop and a whole been funny those the have going the will we two the near

well. to up lot as ourselves. end spin of quite with that that be a activity capture it, a may And to retailers we've had we to war one, if bidding frankly, good trying try third The sell yes, in they real estate and

So, our let two of them of to And and but we like going two on we see, three come and locations. way or have all we'll back them just life. feel know with us to get confident are – wait

Christine McElroy

to would or in you willingness that. of like down again? past, deal? go billion so do $X billion the here it's seems another pipeline road M&A $X.X that factors compel to the enough that five I get what for have for your a next do make what years opportunities, would but process. in It the you Thanks M&A to with given a just you And would Okay. fluid then,

Hap Stein

provided a Francisco. think generate Atlanta significant accretive when to our very, Being the we've with a The able pipeline. NOI integrated say developments/redevelopments we very to our It feel you earnings that, before growth a we make – as a One – cycle, is of robust X% leverage-neutral are on are it. And distraction. very us which, were Miami about better to was It consistent said. in $XXX demographics We sustain high meaningful and a a presence, but and And our able presence and LA got a best. San do New deliver Equity we to set think did It better should I York given – redevelopment expanding bigger growth. NOI markets Equity That's Boston, to rate. was key had One, basis million in were that it where would where easy, not markets those company. translate is our not we And much $XXX strong. markets It I said accretive. and that expanding remains integrated in we and that's there. already bar we where better I to to sure able us growth, critically realized are and into even sheet presence million that Well X-plus-percent year balance made important and – too that of think synergies

there. that bar future that high that out a future any to that's apply would opportunities we for – So any

Christine McElroy

larger they clarification, that same-store same-store these you on and Country as for projects, on just growth, projects pool? from like embark be some Costa the mixed-use and Town densification excluded And X% included will Verde, of or will

Lisa Palmer

and just was recently Town Well, acquired. Country

larger example, been magnitude of is not Like, we've than pool. so even will for that in-depth of our discussing different ones. Costa of Abbot. mentioned It the other really of Verde, because this same-property I the it. the some pretty be So, part internally

metric, I from time, in – on of we're because magnitude $X offline point million. think we coming million the is planning the the it of with $X dilutes be and And all… that because transparent. you pool. clear of Verde sort $X that, year the that what you But of very this quality at have million we same-property Costa believe plus. if But we'll removing for it this really will, it very be Doing

Hap Stein

When adding… you're when and it offline taking you're

Lisa Palmer

Yes.

get on back won't we the it when comes either. So, benefit

the the is of reverse that So, coin. side

we also but get back won't when So, bring it we it -- down, we we online. be won't adding it won't back take

keeping same Beyond at planning in time, the including we're in on Costa everything – point this else pool. Verde, property

Christine McElroy

Okay, sense. you. Thank makes

Operator

proceed from Our question. comes Stanley. next Please Morgan line your Hill your line question with with of the Richard is Mr. live. Hill,

Richard Hill

Christy's covered that you follow-up about direction. about but a I taking was plays, mute. development want of a on Sorry Hap, little opportunities. maybe had maybe to mentioned different M&A, guys. on comment bit land I

M&A. you're of get that and you redevelopment. want not generating of might obviously amount And do NOI there So, lead you are that the guess, splash? you question right could, that? you're only where have I full-scale in? could currently that to footprints more of would to the the are and bigger thinking that fair areas any that, You're country a asking off Is maybe of development if any maybe would a you is, make small there in in areas in about not you now I'm or How country

Hap Stein

the It really we growth included the presence Austin look stem to includes key in in the markets New like in and and and have it cities in or Francisco, Seattle, and could already includes under you markets. XX-hour Florida. and Chicago. a Well, markets It Houston. meaningful markets it – It Diego includes growth It like markets Atlanta have I includes like when markets canvas Denver we San includes LA, stem Raleigh. gateway able those at San really, York, develop, Miami, which markets. we're own, like operate –

a have we're two share those So, offices in. and that markets we dozen in we of lion's already have – market

going a totally one, we I'm balls enhance eye speak, And on we we drive the presence opportunity an to sure don't number to the far presence So, in don't but you keep off to going have not as want that our be major that's some a as of – merger. say so could take I markets of business. there's rule your average, those to the want as where basic big to kind ball our eye today,

cause really pretty our And there, footings got take And do "okay, what's really we're but that I an redevelopment I You going maybe us about we'd we're Abbott. like the to see We feel that to prospects. don't today, don't high. and feel take to development would something would from is say, markets that bar about X%." ignore of And we to it something. of it projects X% out in. good good our future meaningful very asset the grow Boston we've think out opportunity in the our there very,

Richard Hill

Thank much, very guys, the you appreciate Great. I Hap. And, transparency. really

great do think I with it. job a you

So, thank you.

Hap Stein

Thank you.

Lisa Palmer

Thank you.

Jim Thompson

Greatly appreciate it.

Operator

Our question. proceed Johnston with from Please question Derek Bank. of line your with next the Deutsche comes

Derek Johnston

mentioned you tenant? the briefly. can was are What single this going you on be the Good to up. the morning. thank some would Sears Or have And interest. there? you was but you. you I you us thinking boxes? a them Sears potential mark-to-market follow-up just might this, be question said remind Would on of breaking And And there

Hap Stein

several investigating different we in obviously, to X% we're, Derek, opportunities expect to return fall as redevelopment we redevelopment the do, And always range. X% opportunities. those would

centers in that the that total we've Burlington, interest the the grocers As HomeGoods, two highly or of interest, got productive to relocation have redevelopment. within very some expansion has expressed TJX, of REI,

avenues the say, But this pursuing suffice to of point. it a level of very we're is activity lot So, at interest very, different and strong.

so, them create direction the that to figure long-term these the to value And best to really to and out the remerchandise centers to ability through plowing up long-term most we're par. bring

Richard Hill

second bottom best-in-class already guys utilizing for far You of as recycling one development do I demographic is, non-core spending? tier the guess, you my then, see as assets annually And proceeds have and X% a how to and those X% metrics. Okay. redevelopment

here? point, this funding And repurchases? the NOI resulting think Now, of does it and the mechanism? attractive become you there And is of at returns So, a for less in point, terms FFO growth? some same-store reason at share particularly, is what diminishing level do a

Jim Thompson

a where optional Well, been the this has the that we million of a $XXX have free And future type to continue look strategy I we the in that capital with earlier, Louisiana opportunity covered part think assets. on could and is center $XXX basis, starts meaningfully stock that at it think we'll profile we for but the we million capital $XXX indicating I eliminating reinvest recycling, will did the we basis. a fund opportunity then, either free buying we key visibility as an have are Is we of we growth. a and it, it's opportunity, as much cash sold do made thing, the and and of better we that essentially And higher spend front-end at of clear. and as with where trade then, as and favorable portfolio. land part it inherent And assets not there's the inherent on a thank growth growth in last of selling million And it or our to to to indicated, funds as decision $XXX low But of can quality basis. some but want a properties, you shopping which year, position the lower redevelopment continue leverage-neutral back basically end maybe on like starts we effect, take our meaningfully on with far a that loaded in with redevelopment stock that development other to said of flow, to it, play? evaluate evaluate there strategy, that it, of and you something that – basis our where, key assets almost given sell, million

with, is development amount which arrows So, full this best free I of gosh, the fund of great think we but and our we flow highest it of have quiver, redevelopment capital. and can got in our all that cash our starts capital, those use

Richard Hill

great Have a it That's me. Thanks. day. from

Hap Stein

Derek. Thanks,

Operator

proceed your from Golladay line comes RBC. the Wes with Please question. of Our with next question

Wes Golladay

Hey, good to go to just major morning, everyone. redevelopments. I back the want

$X Abbot, year; Regency million is we the mentioned occupancy $X and you But dilution see think well Country the also the average. Costa below million. there. this I background, Town is in Verde, real Peachtree low

I'm XXXX? for and be be in it to an much the issue is will dilution the going from just of of the in less XXXX pipeline wondering how So, redevelopments

Lisa Palmer

talking, same-property to occupancy NOI. going Wes, general you are then And not hit about Peachtree, that's so Again, even because Town and XXXX. not Country is

project even time. we our And We disclosure And will some provide supplemental yet. on of haven't additional the redevelopments did redevelopments. take – in you can stabilization the of the even started

in it's to in which some expect and we the important most be very to XXXX, remember do just plus be contribution think will that that terms XXXX, online. getting from will that near I X% we coming in term, So, redevelopments – will of return while, to be because

I'm or you asked So, about sure not NOI occupancy. if

Wes Golladay

NOI. Total

maybe projects years the are that up occupancy have being properties two-plus year. already down these big So, offline. NOI $X at of the year, to has have looks some like happening for teed of at will This that the road, falling we of one, of looking million these some dilution up some this taken

it was a from on NOI of redevelopment I we next like this a when a me, impacting have see perspective. pipeline, to front-end So, bit to at that's seems load to get total to And little get XXXX if, trying what we year… disproportionately

Lisa Palmer

Absolutely.

it well it said exactly you. than Very what's That's in XXXX. Thank remarks. said. just better You in prepared we our said happening

Wes Golladay

me. all That's for thanks. Well, Okay.

Lisa Palmer

Wes. Thanks,

Operator

Please line of from question. Vince next question Street with the Our proceed Green your comes Advisors. with Tibone

Vincent Tibone

months? any you last you Hey, the Have over noticed the discuss rates cap in trends in transaction few good Can changes morning. market?

Jim Thompson

one. I'm to Vince, answer happy this

is we're and by are widely buyers selling Let's being side it. there out cooperating contract What market. the transacting of prices. accepted start with the at We're selling the

a going We haven't of seen lot re-trading on.

which to being stuff We there have raised buy out the is that commodity-type assets, seen some more typically we're money selling.

change pretty a really or there. sort on rates. that's market, of material It the a not steady cap but meaningful out in So, depends

that you've for, side, heard The look from not a the high-quality as properties lot there's growth we profiles with lot On being that's of not a others, buy the probably market. high traded.

acquired Got impressive in going-in on Melrose remained rate, market low Example but Seattle. be would X.X%. excess have cap very rates in recently a growth cap So, profile quite a those. of low up that we

good the in IRR terrific over Pretty rates a two there. one a but no So, location, quarters. in or real steady on quarter cap change that last out

Vincent Tibone

from helpful color. you. Thank One me. more That's

the You as some you going the up market to Do recent forward may mentioned pick were in expect in relocations retailers there following fourth options have retailer relocation more bankruptcies? activity quarter.

Jim Thompson

of business bit little usual. a It's as

right-size, I again, always flight opportunity think an et quality. taking I to faced to you're tenants think factor But, with to is cetera. the going bigger the be overriding

So, And curve business again, the be it's things the just prepared we ahead to to hopefully and, what as be would take and usual. we've of see kind of best seen coming, try positively us. we of when forever. market the what give It's react

Vincent Tibone

I all That's you. have. thank Okay,

Hap Stein

you. Thank

Operator

the with question. your proceed comes Omotayo next question of with from Our Please line Okusanya Jefferies.

Omotayo Okusanya

have mall concepts if basis. them about curious of broad morning. hear side. of guys quoting? a I have there don't for kind out for on physical you of to shopping But forward it just e-tailers as on just It's Yes. that, need side. sense much Very aggressively quite going Most any be have been and topic think the my how popular more I you of makes one to there Good questions center are around on about that kind the answered. a stores this

Jim Thompson

talked read between a the by are retailers bricks mortar you've we footprint. of native would as difference not surprise on these connection Well, Sure We're are expanding all in expect it's digital digitally it's thing. trend having companies but and it, seeing their different our sector. about sure, that growth. into But, It's in And digital physical signs to many native little of no the sales stages reports maker. continue. how the much out early there and a

it's their expanding. at a look still per another you If store Amazon basis. company pretty in that market is low digitally-native count, is

You've national expanding a attuned that. they seen how to announcement, We're on keenly are basis.

it probably way. how best will impact could So, that's and positive in of our space example think I a the

Omotayo Okusanya

right. Thank you. Got All you.

Hap Stein

Thank you.

Operator

Instructions]. [Operator

Tsai from with comes question next proceed Please your Linda question. line Barclays. with Our the of

Linda Tsai

of under accretion in Foods or benefit you Do XXXX then, Foods NAV And to also acquisitions were coincidence. you a rate Four a the redevelopment. adds not is I'm Whole seven a much how cap have anchored this by of center? a new two made guessing Hi. you Foods. Whole have view Whole

Jim Thompson

growth their and a definitely rent would still command big side just say fans retailers us. of It's quality I they that Well, shop Whole rents, the the in highest It's shop not retailers. presence shopping we're And center. of really side Foods. embrace

Whole So, of are gravitates the reasons terrific like we Foods that's Those in and centers which also one them. redevelopments towards. demographics,

our do similarly. it's business we up portfolio with and lot surprise the It things we quality a that them. So, approach high of matches no of with

On it attributed lot rates Centers, lot cap lower of certainly, – difference the side a with of Whole it the depends. has better of Foods underlying these cap for I their terms of lease stream. do those but to reasons typically cap are and centers the leases. rate, growth A those growth the profiles And of terms have shop because the the income mentioned, of to

But we're XX So, points? give is to It's answer doing depends. one. that XX fans in broad them. it business basis fair brushed is with big and lots not It we're really basis a it points? of

Linda Tsai

any Thanks. configuration store? And these asking the the in I'm the Foods boxes? different I then, boxes of two guess if new layout has existing altered or redevelopment, Amazon ownership format are under Whole or versus size

Jim Thompson

not in all Whole bricks It's but a focus almost that in store their We the consistent. all Foods, really in value grocers the not to innovation, not amount change their there's often support not guess format or different and Whole you're seeing of And experimentation, just really is, expansion stores square hasn't an in-store increase base. size. and R&D, to with been format mortar have in seeing experience, an grocers, service translated on only is but and still have pretty we're Foods, continued seen you're footage. changed what working – I

smaller So, Foods flagship store. in than a change. the is seen Foods. slightly it's Whole a a mainline operates we a whether haven't different formats some depending typical or Point of XX store Whole

development. smaller, a owned years Fairfax bit we've that. a or meaningful that in terrific anything to That's location that look excited off in change XX a and strategy not site for might little on that be one more it's So, like than a but kicking we're

Linda Tsai

Thanks.

Operator

questions to to appears It further we at for now time. I this have floor over you. no Thank would comments. back management turn the like closing

Hap Stein

time a very call, the Day. and hope in the appreciate Valentine's We you have your company nice on interest

Operator

gentlemen, today's and teleconference. conclude Ladies this does

day. disconnect time. for at have lines your you may wonderful and a your Thank this You participation

Regency Centers (REG) 14 Feb 192018 Q4 Earnings call transcript