REG - Earnings call transcript Q1 2019 | Regency Centers Corporation

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Operator

Greetings, and welcome to the Regency Centers' First Quarter 2019 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Laura Clark, Senior Vice President, Capital Markets. Thank you.

You may begin.

Laura Clark

to quarter welcome call. earnings and morning, Regency's XXXX first conference Good

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

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

call new from updates supplemental. earnings earnings as Hap? include leasing and sale of Before turning changes well gains of accounting the touch and treatment reporting These these disclosure quarter. this in of and hope land, as standard, transition. details over to summarized the that release want adoption are accounting We the impairments the this changes on and effective NAREIT accounting on quarterly the FFO to and I our Hap, and will facilitate to

Hap Stein

Laura. Thanks, Good everyone. morning,

We value-add that is Mac maintaining opportunities, on threats to managing and program, strong portfolio and while outlook about and from capital balance all quarter's high-quality positioned fundamentals this allocation from our our confident and successfully the hear good Regency Jim, our prosper leasing business. and intentionally self-funding the and performance, redevelopment conservative you'll sheet. Lisa, executing and strategy, well by development and navigate feel we As extremely for operating remain

At why and customer been always in business the the an to in and accelerated centers, our competitive $XXX in pace. we touch even over best foot the begins that at has operators time, include occupancy grocery I'd are business cost. really like portfolio remains evolving like This Jim, grocers on sales the grocers of and XX% low of benefit their same our the highly close Still located physical to square country the centerpiece a having per at producing the to fact that average centers. from is turning has and Before the top it more store the with model. having

that of win store the multi-channel likewise as impressive top billion the experience opportunity technology experiences. store importance focus to pleasant employees paramount and for is a focused Kroger a it Joe's, shopping top critical Importantly, extremely And and shopping levels core more It the growth, re-merchandising this Publix creating Restock with initiatives. Grocers a provides no Sprout's, is in-store customer better Whole well achieve a ClickList, their experience, service, Wegmans unique existing their strategic high experience. compelling HEB shopping critical focus well with service Walgreens to more through offerings, customer among organic results customers Their the heightened business. ones. combination result continues that be the of are the examples a customer Trader renovating compelling notable existing investing ones integrating Several size remains centers. include to partnerships value. and to the and is buyers Albertsons/Safeway their on who the new the $X also Opening has of and line sales, and gourmet the new noting are best and support stores create of of annually from Publix's bottom each They're the as Kroger expanding of with the to on of worth one strategy. component to as on and change including base and like footprints. satisfaction. alliances is store in often using and over of technology Ocado Foods, grocer

Coast its improved The in Regency's trade experienced and are again, Albertsons reduction Albertsons highly in store. majority and evolving leader. Jim? centers, desirable Importantly, are are are buy online, benefits West and proven banner markets significant XXXX, in $X.X financial bottom added including debt. anchors their better that areas, sales pickup the where with traffic grocery the our consecutive is market center growth, Albertsons/Safeway daily locations the Furthermore, billion convenience our customers a in margins generating competitive for performance from the position. that EBITDA operators The where line to is in of

Jim Thompson

rent. operating solid X% entirely Thanks nearly property quarter in with NOI same Hap. the Performance first in base portfolio, driven fundamentals were in the by growth

translates are collection and have lot a very of component our low property debt. which is healthy, stabilized to rent success single-digits, to tenants is high of by mid-term into incorporating X% into key same growth. growth the steps historically which high continue leases, in demonstrated NOI rates, strategic Our Rent a objective average we bad our

sequential the we merchandising sits locations, redevelopment was opportunities of the very still of closure but strong quarter appeal a upgrade due and Our are centers. same mix XX% the about this excited primarily The overall property decline portfolio by to Sears two at leased. the

in is want highest note Our to shop the leased, I XX.X% among space is the sector. which

shop quarter, impacted of was a by occupancy This things. couple

in the First, an quarter. slightly higher of expected seasonal is trend as move-outs typical first

acquired of merger. properties in demand those velocity pipeline basis quality shop execute anchor and space regions and feel leasing for opening assets, all tenants aggressive percent proactive to of lastly, their asset many the taking look center is retailers we And seeing in and grocery side categories in recapture to level which decisions timing users shop to regional conjunction healthy. the that remain approach spaces. to on leasing thoughtful We is within local, said, continue in All and as and discerning redevelopment execution management which and our causing take space both depth locations tenant entertainment where repositioning, lease our of off-price, across we believe REIT are restaurants, high-quality shop to good expanding includes of continue are interest, business a they like especially this the our fitness, new upgrade continue successful commit negative we making impact national for And our new decisions. about and stores. centers We deliberate tenants remains points leased as with XX merchandising, longer quarter. to Second, an the the at

forward, robust our as on Mac? opportunities, occupancy our of team Looking redevelopments will by this the we progresses, believe re-anchoring interest. tenant supported pipeline year increase and as executes

Mac Chandler

us be centers adverse identify quarter, opportunities first that and the and recycling tax portfolio and a basis Thanks cash to successful free shopping on impacts of another capital flow allows can executed Regency's million This We inherent sold we extremely after to $XXX our mitigates the $XXX annual cost-effective on as cash The we million. be business efficient are enabling selective Jim. on fully a executing our quarter model. our favorable quality that seven capital compelling had the earnings. redevelopments differentiates fund investment development clearly for capital to free total with with us strategy. allocation In starts flow, dividends, basis. This of and of

in quarter, sales we acquired an high-growth well near an example As Seattle prior-year as share with the growth downtown center interest previously prospects. communicated, acquired is prime Town we during investments Country additional Market, repurchases, the the acquisitions. funded and Los in Angeles. quarter excellent activity exceptional this in Also A as premier Melrose first

and to possibly excited increase early in to more. to plus the place addition shopping tenancy expected cannot square density even is of Our apartments opportunity a country, approximately site of K-Mart and XXX is developed our be about which will interest the The attractive have is include the XX-year now the malls from in creation XX% and one value total center, Redevelopment for anchored former CVS, box, and in of The Grove. we an of more late across to Whole portfolio. this XXXX Partners top-performing XX,XXX be on Holland XX% lease. vibrancy, or by feet located the mid-rise of opportunities ground this We this to new Foods incredibly 'XX, by retail asset, and this start

we Westwood and Costa the the be in generated disclosure and new We in provides quarter, execute of into near-term more pipeline hope plan. Cambridge, this San our incremental will supplemental to to properties Abbot more new started which these This we've This visibility provide types future added subsequent operating of quarter-end; disclosure as in the into Verde redevelopment includes opportunities. transparency our select value opportunities, that depth with Diego. regarding Bethesda;

leasing the pipeline significant $X.XX at starts projects, have billion enable deliveries in in-process and well our above objective performing momentum remain developments leased rates years opportunities at Our that blended nearly redevelopment our top five that XX% to create are future and strong a yielding return X.X% of development us we and shopping and well redevelopments high-quality next of and with should meet and margins value. a centers. comparable On over for cap Lisa?

Lisa Palmer

earnings our another NOI I'd color Thank with you, line is Mac guidance. quarter like everyone. and good begin results morning, with to start around off to expectations. with good XXXX property our first in and additional same

X% of quarterly X.X%, same quarter note reconciliations. We while we NOI X%, provide to next not expect I we in Sears come two the timing range that and it's due in the below guidance, primarily of are property to think and closures do important to maintaining guidance to

from a have to well does X% of previously below objective we communicated, guidance fall contribution same as property Sears due closure as these muted locations, our strategic As our XXXX the redevelopment. range

However, objective long in over feel the our achieve confident we ability X% term. to our

earnings, impact NAREIT $X.XX items negative quarter a we per non-recurring the had Turning share resulting to FFO. in first in two to

offering $X.XX XX financial quarter. The bonds, early over while flexibility weighted maintaining and redemption prepayment the offering XXXX an was our executed share item charge the maturities our following to increased to related of successful further during per our years, the average enhanced our interest bond average rate. XX-year This of a of duration first

much we incurred boxes higher $X.XX at upgrading we non-cash of got of a during rent quarter, per are two where intangibles anchor rate. a recognition that spaces for to both positive impact related addition, below-market In share the we back the

With we FFO have these our updated and guidance accordingly. non-cash two impacts,

FFO Excluding these impacts, is unchanged. our of midpoint guidance the

continue by when range. adjusted the the XXXX accounting in operating first quarter, core X% the we X.X%, we for be to Importantly, lease in change grew earnings X% growth and to expect for to

core performance cash reflects closely of earnings non-cash items. dividend. is a the As eliminate earnings to of this a measure our it our and operating better non-recurring grow more believe as We reminder, certain the and business ability

the reiterate our to Before call turning like over the through questions, strategy continued our combination the execution strategic of for on team's advantages. would I proven

First, intense X% high-quality our growth position and Regency over same-property long portfolio combine to the of to asset term. NOI average management

enable ratio. to low structure, remarks, X% unequal a to we our in Second, X% which from questions. development years. $X.XX That million strong core advantages conservative will shareholder the and X% objectives value-add redevelopments experienced over free payout to average developments and pillars, redevelopment to returns chip And capabilities now and of blue and total This finally, capital of welcome will us concludes long billion self-funding the cash balance earnings over our strategic your flow, prepared the our deliver in term, support generating range. our dividend model the growth combination five XX% a sheet and $XXX next and benefits twin over supporting and

Operator

[Operator is Citi. of McElroy question ahead. Please Instructions] Christy Our from coming first go

Christy McElroy

that in base growth same growth to like seemed NOI, Just overall with driving - so QX. same of was much rent store it regard store

growth rent Just drivers sort you see the down of you usual the that through year? of just of outside of and walk through with the base the occupancy rent that balance year-over-year maybe trending us contractual growth, how could main

Lisa Palmer

the during initial This is maybe the an also our really, is Lisa. that. and earnings of still part we share accurate year, We reflection that - model as of - still guidance was always that

contractual from another Then of obviously come steps. you spreads. So in that that base have is X.X% will item. rent from coming line And rent growth rent that piece

And that's been in high so single-digits. the

So that basis will add another, points. call it, XXX

more then And months X.X%. we the also first so then of get that's of rest that did the Sears quarter, that's actually going in income going two in line to you drag. the gets become impact, item. And that year, the Sears the through a of to So

Christy McElroy

okay. Right,

Lisa Palmer

that So had while the rest one, we quarter year. is to going actually X.X% through of decline for the

Christy McElroy

the do longer. is is you timing Is about observed of and And theme I just is more seeing more then, think it or change more on in that? to why this execution up a you've this think that - taking of Jim, your of wanted sort been if years, what recent sort recent, of what follow comment lease do recent you driving we've

Jim Thompson

it's I the of theme we've think talked about. Christy, continuation a

I it's actually very very they're retailers, what people, think business make survivors being as deliberate of as deliberate. retailers side-shop about state they kind do. various mature, And they're cautious the are they commitments, and those

So execution than I time of that out apparent see we think - but to becoming we more been than it, are to seeing maybe there. it's it's used more

Christy McElroy

Okay.

Thank make to wanted wasn't Just sure you. something new. this

Jim Thompson

yeah, change, - but it's sea incremental. - it's not of It's a kind

Operator

go Rich Morgan Stanley. next from ahead. of Our question Please is Hill coming

Rich Hill

higher a these this was rental than It timing were can about Lisa, there looked line forward. we expecting. a that on rent maybe items but is were a and things for like expense then just little there's know I we you be bit lower annualized income or this bit other that two I'm is expecting ground was follow-up were on we modeling. be going is basis thinking we maybe on, maybe anything lumpy, than focused that question should curious related, little -

Lisa Palmer

you remainder X.X%. of that's year, the year, the other you the my to on But said No, year base items, rent. for line to think base - of primary item yes full going look the if - going the be same rent. is line projections driver those to from when the we the items. at the at for is all its and about And there of impacts the line reconciliations end property will when timing - drive be while individual growth as And income from NOI I other Christy, number, X.X% so remainder the of

quarter, to going While it's to X.X% first drag. continue growth the we're Sears in see

after to mentioned of the saw the Sears for were raise point they past unplanned we we're in kind a actually years, the that did immediately from a you our we first we first in uncertain impactful. growing burn-ups we from quarter, not year. be seasonal every only is and that of XX just year, was in then perspective. We basis the going So do beginning so our as had rent to beginning a part have quarter, which talk move-outs about are in the XX the the not about able experience which bips move-outs numbers typical, those of in very first and Jim full year, are of as those impact And talked And able the did low quarter. That's most this as also business to year, to move-outs. because we two the

Operator

Craig America. from Bank of coming is question next ahead. Schmidt Our Please of go

Craig Schmidt

target you the the I'm or to given the raise the Just pace of and for the the rest dispositions, year slow higher may intention forward? going is of disposition earlier wondering if process

Lisa Palmer

at Mac and other. I each are looking

is argument it. to answer our who's going So

of perspective a color market add So and in can it terms Mac general. in the I'll from take guidance

- a are really So reminder dispositions buyback. these funding share just that last early the year's dispositions

of I'll can regards you let we're the it So for you buyback a our with the expecting dispositions to are look again, there. the Mac remainder funding that But - take see when guidance, just the early reminder and share what at from year.

to hand always However, it with opportunistic. over potentially I'll we're And going Mac. be to that,

Mac Chandler

with point, say don't I accordance I we our Yes, executed that lot to would whole at add a have have that expectations. in but

last little quarter that cap prices, say two. in our or buyer bit and are assets we've these is than seen meeting deeper for stable are the maybe a rates the We pool I'd

to So year. plan confident our our the for of ability we the meet rest about feel

Craig Schmidt

wondered I you're And push rents. how bumps? a higher and but on rent know then are X.X%, follow-up - to was your retailers the just I how, the reacting contractual on X.X% contractual slightly targeting around

Hap Stein

implementing embedded We those continue, success in good really, Craig, to steps. really have

that's of space step the - shop our it's our combine growth. growth - you of sustainable Annual of about and to XX% average. lease X.X% key of X.X% rent that's outline, of NOI with our think kind bedrock I as that around kind and rent

Craig Schmidt

the mean, something portfolio just allowing is or you I of this it else? quality the it's that's And push to

Hap Stein

I continued in fight, mentioned fight for And I doing have - the think and success to a we have we certainly just in the quality. hard we it's field good that.

Craig Schmidt

Okay.

Jim Thompson

negotiating And terms time, getting want to be a tenants issue that leasing from are we big even we're you though the to the of the the is tenants, we and that and of kind may part that achieve selective we in hard want. pushback the

Operator

ISI. from is Samir question. your Evercore go Please question next coming with of Khanal Our ahead

Samir Khanal

So can if to about cushion points you time I you unexpected I'm for I us correct how please, think wrong, me - of much of part as initially guidance? have this remind think account at guess, basis was loss I but credit Lisa, left vacancies reserve? it XXX

Lisa Palmer

- of fact give I'll the you So, facts first. some

Samir Khanal

Yes.

Lisa Palmer

most We basis And XXXX bankruptcies. have the is forward points. move-outs. I'll - first just the the was to and back like with impact I and in or XX the significant Toys Sears to points are quarter "R" Us. uncertain if going will, the And think bankruptcies bring be it impact going basis to regards known impacting known the business the don't full-year to part you cushion, of of again, XX

We that managing What have visibility have are pipeline full great We to move-outs. redevelopments well. of really process of have know that in visibility unplanned a and a all to. in the are leasing lot don't that certainly the we we

consistent really our incorporating, believe prior with X% a that, be to what that's we move-outs X.X% level is guidance with of to So prudent of years.

Samir Khanal

one guess for Hap. I And

the impact we that the have for that's well, the of do in years, into let's peers it's your the the lease shop last that that steps I great an sort future, as front taking XX on the whether a slow you but about segment? in did a last months say think space done impact to minimize how downturn. go to few of we segment? job If and do over on XX are time continue frame, leasing space You've sort guess, months in you you down, as or that what segment

Hap Stein

today downturn say continued to the the in been that's things. has and that the better would - to of of kind 'XX couple this and a are survive of self I The the - continued a been continued or rationalization Number self-policing and happen, there's tenants this as one, operators Well, in step case. 'XX that. be

In much addition to are through initiative, about our side and very through And get retailers. the national more feel to selective fresh-look of analysis that, regional a best and who local, there. we lineup operators in credit shop good we --trying

mean whatever does totally the in face when the much conditions next it we're going that immune think to into So the positioned we're be may but future. No, - we that may better to going economic I downturn occurs?

Operator

Derek your Our Bank. question of question. ahead Johnston next is Please with coming from Deutsche go

Derek Johnston

does has redevelopment billion billion free cash healthy around discussed been And to it $X.X a enable of next $X.X flow, believe your opportunities. I five years. Given pipeline over the

is, priority municipal capital win shake of versus in the it about a pipeline entitlement or your terms pipeline development with of So And spend? the think you where is question your else? out how something do redevelopment more

Mac Chandler

of a ground-up and a Derek, it's different opportunity a They're the opportunities Mac. comes first new ground, for really equally that We in ways. very sense development this income at the the - time. is in many is look out both development

successful look we've finding opportunities. with these been for unique at continue and to our platform, We those

those when give extremely light. the already it like where can us about we is, to redevelopments start we they're locations area, redevelopment, conditions in and them market green For what trade the we well time know we know

straight are whether returns and types we both priority over days, they find are I are sets incremental us would both the just agnostic. but So, have pretty to but very returns from up to strong ground-up. they're opportunities, our the redevelopment returns engaged similar, one they teams in like investments other of or or a returns opportunities. of much say these the a is And

Hap Stein

key $XXX and $XXX the essentially on And like is of as of cash as go you free to fund annual leverage the through $XXX going development math, you million, thing deliveries. million starts mentioned, is I think - neutral million a flow basis

fund compelling very And developments so very redevelopments, those we're to basis. positioned extremely are on and which well an favorable

Derek Johnston

from mean, test isn't can beta increased point you true are secondly, this the fad the several are I point native we a a Just uptake over multi-channel and the next demand or and focused ramp traction where should at proof-of-concept this seeing digitally and we retailers? years? at say firmly

Jim Thompson

that don't I think take to one. it's happy a I'm fad.

came how you're be, stores who it guess, they digital seeing engage over the to you're and seeing I how clearly the of go what's count, and the those their tenants question have think per many more. broad, depth out bricks-and-mortar, is, nationally who native background will of market. store begun would do time will and more more I they

know So playing we'll But really well their is, monitor continue to through through native and areas of itself and that these their data they digital strategy trade one that. through - research. their their is advantage platforms out

in more a actually so probability they store because can a And result, have traditional a reliability success. pay store the than rent they of new on told many bricks-and-mortar and have greater as of ways, they us often

and what's be to see we depth the happening anyway, is, that So determined. of is that

Hap Stein

very ourselves, will to digital to successful expanding million And plus I paid a aggressively Foods, if have is for just call, everybody native be door standpoint. on something a part Amazon the retailer - of else who we from $XX remind very Whole bricks-and-mortar

think I finding digital that is happening. I physical think are of retailers importance the locations. these And that So native

Lisa Palmer

get remember note strategies most or much and and they of whether one, they've any to acknowledged store; And to recognized their native. bricks-and-mortar way acquisition lower is think that. often, - they're And the bricks-and-mortar among - goods in that their think there no are to it's about customers and their they're be just also new than digitally. that, customers, because native to And debate two, retailers the we just is that something all this whether is customer That'd the talk so I I well. profitable I important are with the as are costs have reflecting walk the digitally

Operator

Instructions] next coming Donnelly is Wells Fargo. question. question with proceed Our of [Operator your Please Jeff from

Jeff Donnelly

feel up guys yourself but what curious how concerning just Maybe on informing going you coming that more are decision be the branches your to than you that? in mean, process of are to a runs it going points this years how is I landscape question, it grocery underwriting that I'm key site, is nuance do an and the the differentiation? than earlier to evolve the little retailer and there, is more or like is a real estate

Hap Stein

partnering or to in do of where the track going including generate part history a And we of be that to been think kind want you operators where site doesn't, retailers whether it in record I at, right in balance the retailers to is better happens grocers, know strong want think Foods want HEB have that to that - experience, sites I and and better ability Kroger, They the you if better all I standpoint. do to to it's a the I factors critically got and effect, right standpoint - rent they rent how to themselves. side get have merchandising - Whole And Publix have the critical in shop they're are it business, matters in good it, news and - to of track location retailer it's which model. answer and to better hope and what to to to you - if to know working we back get, the are or is anchor, the strong the important we locations. customer answer good differentiate I because good you news do The also a be we is the have sheets that yes. have be pay And And bad the continuing think the The to becomes and we're evolve. as the better significant today, best-in-class these that if from able our we we and how indicated, self-rationalization all is But then to want Sprout's, to business is, grocery site and or and Like a with from and our retailers, process. our going us invest provide is, look retailer replacement retailers, want those are to they traffic. we'd going what the the the like the matters. retailer from right sites

Jeff Donnelly

that do a model people be sort exploring, think? as I just emerge or of that it's lot store, to a maybe a the of seen that, And follow-up you online formats, on smaller better mean, or do you format, determined, like is yet think the that order you've changes and lot become of clear a bigger concepts are in pickup that is

Hap Stein

square is XX,XXX square is feet, square Joe's from in to So Kroger's XXX,XXX is Publix square feet Trader feet, Foods here HEB XXX,XXX XX,XXX XX,XXX interesting, in is range. is feet Whole square is range ideal is XX,XXX to range, foot foot so that square format the what's feet, XXX,XXX the

to, So model. able all it varies think to in and effect, perfect I been continue their they've

mean I it's shrunk, that think than evolutionary other really noted an process, we've have into interesting things fit - what's formats to one locations. is, infill I their the more but not of

pudding their all performance. proof So, that the the they think in the and Jeff, I with sense all got standpoint been they've adopted, strategies has makes formatting they've from think

Jeff Donnelly

has acceptable out a property go not the really could, faced time seen future to have sectors do shift more maybe when I foresee a there, and just happened retail, more guess may its levels the economy you it recession. could - clearly as Lisa. for investors adds challenges leverage. we've companies but have tolerant their how these has has a in If relatively today? XX fixed who in great haven't income we recession a years Do it's Regency to There's is the or be you, It than actually during lower a where but I retail XX in volatility are lower. to leverage severity. question become some conceptual retail also on and But think the about public, Do guess, you been of shift a that continue last leverage leverage the - extent sheet, seen you could we had where time less leverage question, years balance I shift that equity resilient, to the pressure. lower

Lisa Palmer

We're really significant First We've sheet it off, debt not and sheet, progress proud the level we're the with on we're really just comfortable, just comfortable of improving made of with balance whether today. our be have With it. transparent we slightly strengthening that EBITDA net that the debt the our target with that have. pretty of that of above today we're said, is debt to also then we've times, X been tenure and level that. balance we

actions to to to going we're growth available they're continue drive down that try opportunistic through when So us. and organic to

for go ensure four we crisis survive always of and not markets that a months, zero can time, for year. levels, to ever there XXXX we if are We was the in to monitoring developments, our when were to into excess access acquisitions we we to our commitments capacity had was actually just an period of that that - the a could for actually about capital we that

able I'd to to there heard on a positioned Hap in it that this today, on. a to as don't the position on XXXX, to in be be had that. to And that So of then in advantage continue I've the able were won't we've same like that oftentimes, - the the and blood able when will hindsight to is maintain to capitalize At because like is opportunities, focus opportunities ourselves take presented today, not are And it's really been and is we water time, of are those. that to recession, we thing we to that we hindsight, us were right when think pressure is right, I in we're we that think one count. going say capitalize that

Operator

Wes Golladay Capital Please RBC with is from go next Our your coming of question Markets. ahead question.

Wes Golladay

they these of side for office? from retail Is category live, interest tenant a or projects, and any the to on stand work, mixed-use particular the part do out, comment residential being play. just you extra it have the preference growing, be Can

Mac Chandler

that I'm - happy one. Mac that is here. to This answer

But where well. with mile and or evenings. the help if the tenants really the to too to active office. evening a in quarter tend court interested higher seeing in because are understand be and to Because incomes, part they but office to as locations. boost definitely helps be I of positively on to very powerful to component a quality our within it's site in not in people the is It our restaurant We have lunch walk, can really and react across project, a a traffic restaurant of These certainly are is apartment a that just better one of mixed-use also one big and make is food big better apartments densities, The people street difference. access these who of traffic, tenants having locations enough transit. just

amount opportunity the site, know sizable a in a resonate likely this than customer very a find because longer on the walking we You the customers dine, within But shop, to environment you place more also environment. the would in where spends spend. want mixed-use a patronize, linger, They location ones, all you they to that to it's that other to and more something of over are distance. and to choose that environment to. And do traditional retailers the it's often making need is a that a else density

there's interest definitely So there.

We and are more seeing more. that

Operator

Our Please is Instructions] JPMorgan. Mueller question next Mike go from [Operator of coming ahead.

Mike Mueller

the know each And leasing new a have gone quarters, looks At the quarter. new spreads as have anything to will is spreads it your increasing? be more, the bounce renewal the each like as down we at four it relates quarter. into time, should past spreads the trend renewal spreads I increased looking around same but Looking there

Lisa Palmer

drive right expires, on essentially that. a significant the transaction that you XX-year can a have of primarily stabilized in We a that on It's level rent spreads percentage. new. - actually on We absolutely like renewals terms And could it's impact can and to that have with if just mix. of feel related rolls really you're - really we've that one lease settled in have both and

Operator

ahead. Please question Our next go Robinson Bin Ki Suntrust coming is of Humphrey. Kim from

Ki Bin Kim

versus So and there at you about years for business they're to to obviously, and retailers is was it even relevant mix And are gauge rent. about change to the management you thinking they just enough how dynamic can I those businesses you are but in you see where wanted trying but time, be road. a think if enough, viable business it's and ask not how you down and merchandising just guys - all underwriting are forward-thinking a balance the good it's teams where that XX the Internet-resistant, the underwriting

things? So all how think those do about you

Hap Stein

Ki the goes philosophy. fresh-look core to kind Bin, that our of of

retailers of struggle it looking way the about have that traffic a center mix special and versus to who business It's tenants. we do you key SKUs the look who leasing. of to it, always make at on job are that going neighbor and make We and future we add for get we good and vibe and their credit you you it. can our a value do of difference, create is of on to is really most that do drive a decision whole come the ingredient think to that and your a kind an that's versus who think the pretty shopping go rent help We interesting how kind has that together,

Ki Bin Kim

to maybe a centers yourselves about consideration? where your So think you and thinking also are go. a are you to side, landlords little about little bit a who do the decide taking earlier flip Do comment like - you is bigger a - bit that into bring you retailers that made on more longer

Hap Stein

I I'm not sure that. understood

Lisa Palmer

of in is that us more the mean, selective, I question? - being terms really the

Ki Bin Kim

Basically.

Lisa Palmer

have and really - for Jim mentioned has now, more focused can people we new to shopping to our of we've with that and choices I been fresh-look. have retail - it today pace actually of for because nothing many really centers. change really front don't than to try get last it accelerating, answer they when opened understand the - and environment as are the us. on in he years several several come the so It's that mean, it been we first with - changing they we

So need good the and is it a convenient, Jim shopping place want to a want has not to vibe, It come be our to we're to place centers used word experience. ensure shop, we it's making. making where that they it's and only but convenient

they years focusing our the walls, are are that retailers merchandising of come. And we going same if tenants Our thing. on not to began the that really inside Because the mix has with it to it's grocers being I focusing we several leasing they're much ago the more to. on Once that selective have and good four - retailers and a mentioned begun be experience. not, mean, we're and

Operator

next Our of question from Securities. Lucas Please coming go is Chris CapitalOne ahead.

Chris Lucas

quick a On expectations quarter, for with line one. or in the tenant was Just worse? follow-up that better

Lisa Palmer

I'll for it. the in we expect And those, I've had I repeat we - the decline three to do seasonal for in haven't year years. of and come we occupancy earlier answer. think business XX maybe Every been a for the into year have

maybe assumptions. our we'd with of were and did. outperform kind that hoping line in was we that We it So

to that terms have have what three same with So the consistent to the experienced having we've we're we years. the X% rest And the years we our year level two to of X.X%. a assumptions in of we forward really still of guidance of for move-outs past still moving essentially similar comfortable - - in

Chris Lucas

Lisa, year prior And this year's any rate, year's this that that maybe move-out versus outcome? themes differentiated on

Lisa Palmer

muffled. I'm you're a Chris, little sorry,

Hap Stein

on Themes move-outs.

Chris Lucas

I'm sorry.

Lisa Palmer

mix we are that our and and out that of when in still looked the only are is also at kind surprising closely not just centers same it. our at that consistent. year, really amazingly, We it Yes. even leasing at No, this restaurants, obviously And but me a to. it tenants service looked percentage is actually also we we - the something soft to of looked and our what it we bit of of have goods, moving centers are certainly is we and little what's

Operator

the like Stein turn I'd Mr. comments. At for over closing this back floor time, to to

Hap Stein

have guys and Thank We Regency, weekend. very appreciate you your hope that time wonderful interest and a much. in you

Operator

concludes Ladies and gentlemen, participation, for today's thank conference. you this your

your time You may this wonderful and disconnect day. have lines at a

Regency Centers (REG) 3 May 192019 Q1 Earnings call transcript