Regency Centers (REG) 4 Aug 202020 Q2 Earnings call transcript

Company Profile

Participants

Laura Clark	Senior Vice President, Capital Markets
Lisa Palmer	President and CEO
Mike Mas	Chief Financial Officer
Mac Chandler	Chief Investment Officer
Jim Thompson	Chief Operating Officer
Chris Leavitt	Senior Vice President and Treasurer
Christy McElroy	Citi
Derek Johnston	Deutsche Bank
Craig Schmidt	Bank of America
Greg McGinnis	Scotiabank
Brian Hawthorne	RBC Capital Markets
Ron Kamdem	Morgan Stanley
Mike Mueller	JP Morgan
Floris van Dijkum	Compass Point
Michael Gorman	BTIG
Ki Bin Kim	Truist Financial
Linda Tsai	Jefferies
Chris Lucas	Capital One Securities

Call transcript

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Operator

Greetings. And welcome to the Regency Centers Corporation Second Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. to conference like host, to now Ms. would turn over the your I Vice for Capital Clark, President, Laura Senior Markets Regency Centers. Thank you.

You begin. may

Laura Clark

And second Regency’s welcome earnings morning. call. quarter conference Good XXXX to

and today Chief Financial Lisa Mac Investment Officer; Chief Chief Jim Chandler, me SVP and Joining Palmer, Chris Officer; Executive Mike Leavitt, Mas, are Officer; Chief Thompson, Operating Officer; President and Treasurer.

today performance. subject current discussion contains measures. have Factors measures that company’s this financial COVID-XX statements COVID-XX financial risks and materially an non-GAAP presentation with presentation with financial our are on of are our the on GAAP additional we comparable also expectations uncertainties. forward-looking and our earnings future website management’s today disclosure from quarter’s in this on are about have Relations supplemental regarding posted The today’s our filings that provided These statements reminder, Impacts. SEC. and a based a the in Investor note which could Business discussion to results As and Lisa? package posted cause these on all and are to and included business risks information and are materials, quarter’s also actual differ additional Updates in Please included website. contains The

Lisa Palmer

you, Good as I morning, hope everyone. possible. you’re Thank Laura. well all doing as

and for incredibly dedication acknowledge the this Regency amazing the extremely our demonstrated thank and open and I just want grateful and time. to First, team. I’m team challenging proud during commitment has

and the the that great well deferral being while negotiations. members, fellow entire in the our several also collections assisting re-openings, the the rent improved property team to communities tenants our people Regency serve, has team through continued rent prioritized with their navigate and last we’ve tenants and progress making As successful of months,

encouraged we’ve As success few states by have experienced. over have been lifted these tenants markets months, and our the restrictions last that

was or spread continue vaccine. be We will know, in tenants innovate additional an of able of without towards virus are reopen, support we to to combination how progress a XX% confident tenants don’t of made, uncertainty of aware Despite maybe be some build treatment advantages based that once deferral affords difficult adapt some consumers there’s predict opportunity and behaviors. disruption as today. and and will our that need quality and But withstand been second how more firsthand success. time know has The prior portfolio that we we to the tenants time. to tenants to than so is Regency we certain will more difficult to are sense July. return We’ve normal combination strategic including to are seen as nearly this the predict and collections rent Regency’s order that or long do that consumers survive. the base in It or retailers worked I’m eager never quarter important it situation the is to emerge we shopping their was necessity us and the can’t we’ve future, our of continue able of effective keenly Our the future resilient have means lot what this to is and resuming diverse will XX% agreements we that still what executed prolonged. unequaled comprised some for for more will will well-positioned for over ahead. been geographically to know We evolve as challenging This even look this future of how have

add to flexibility. projects of a was provide timing pipeline exciting program financial development value and structured is Our

sheet balance the position most perhaps, four great we’ve team rock absorb achieving solid the environment, business that engaged body importantly, results endured right and doing a to blows enabling way, that pandemic, the past entering the liquidity us highly and months. in was while Our today’s

over Given Board our declared level. balance will our quarterly again at of payment strong sheet our same dividend and improve continue our the rent that time, belief collections to

at the Board, Our ability performance appear position of the have our current on to at industry is our dividend time. stabilized our also up and a projections actual a to future starting financial low circumstances direction. level continue and ratio, and output of while strong certainly combined that to not will based with closely in but be only monitor not to economic the metrics to Working in a make decisions trending positive trends, levels we addition facts dividend an with very will that payout historic we and results

handing to I’d on corporate like continued commitment to Jim, Before responsibility. touch Regency’s to over

risks addition core In had commitment values strategy our the the a guided our in business business right, ensuring communities values is those sustainability what ago. we’re By to strategic always business. has and were right Regency for of company. is effectively of our our is our success areas, strong over what founded these set to managing years and XX advantages, environment, have doing that Among our a core we since do and people, each of

all a along with continue Annual confident across what I culture. initiatives the shopping going ingrained is will right these commitment our implementation sector Jim? at position forward. Responsibility As occurs be I’m the and saw to report, Corporate you center published this to hope do departments combination to in our Regency that in recently unequal of leader our advantages in Regency is strategic of

Jim Thompson

morning. Thanks, Lisa. Good

tenants being of remains priority As and Lisa said, our our team, well top communities. the

and signage implementing in procedures extra retailers Regency two stores. wayfinding. tenants, of consumer and safety cleanliness anticipated is welcomed As taking encouraged installing measures that working side and to experienced reopened increased feel of compared them ago. have enhanced are help open, by safe tenants our months initial The are better that majority XX% side of XX% had precautions and appreciate than with also July, and to tenants reception. been of our Customers end their including and success the by

feel and to and will continue comfortable. safe and make customers our adjustments to We additional help modifications their tenants

update highlighted posted our QX, website, July, XX% as for we executed rent end of have of As the deferrals. collected business our including of in base on

Looking rent basis. July XX% on that beyond end, of collected quarter base same we have

We respective are encouraged trended April, July collections point have as that ahead June time same of those the at and for May in months.

our deferrals have We negotiating approach a with very purposely taken to deliberate rent tenants.

operate they we As would better visibility understand position able opening to financial and open, on or their were tenants when began open be needs successfully. to in to have

as deferral to requiring that non-monetary lifting agreements, they enhanced has terms restrictions, how limited their co-tenancy or important, Regency such and certain seeing the able waiving this obtain dining they we reporting. extending Even operate better still full operate are Just due clauses, with can as and been service, time. that fitness sales are use operators including are successfully able creative to circumstances are the government in categories, how concessions businesses to our in to orders, on adapt during tenants

tenants in operators we areas hair since creatively in example, such that have outdoor been and the At salons place, have work-from-home and customer’s even and parking have outdoor are fitness and more are accommodate restrictions many that restaurants spaces, additional last their using hours to back modified in time, the times made For class that put nail for progress in a are additional hosting same the extended unfortunately seating, many have regression schedules. over several classes clients. that as markets accommodate certain sidewalks had adding experienced months. order normal they but to reopened, operating

these did we the as work and with and restrictions during flexibility will Just we in support impose initial to navigate as evolving they tenants March, provide continue the to shutdowns environment.

in teams pandemic, we negotiate new tenants We throughout our XX%. including restaurants. with banks, improvement, signed and are this focused primarily Kmart quarter, feet operations with price, with a new including providing in rent square retailer XXX,XXX in over been and over our over -- space support grocers, a growth of anchor rent also continuing have Florida lease former the new home home to service a improvement execute users While leases on off retailers place X,XXX to leases

Although, our spreads. of leases that rent to million limited square X.X down net worthwhile to nearly leasing mention, quarter renewed volumes this with positive activity, feet it’s were new leasing due we

to more our no of and questions there’s me in tenant begun and or QX we team falling are of expectations, certainly pre-COVID, interest op pre-COVID papering Mike? majority -- hint interest seeing is keenly signed while the rents to our modifications. new and focused due leases new lease energizing This teams. it leasing While collecting is terms similar on lease

Mike Mas

good everyone. and Jim, Thanks, morning,

amounts added pages, already. understand and disclosure specifically encourage meaningfully are results And on To collections I’m you As were in comments strongly by impact, level. balance low with impacted uncollected we supplemental focus the reference results, sheet going its that pre-pandemic I’ll on to you NOI. some rents to those those remained property recognized position. our know, comments in I earnings our better both and enhanced our we’ve haven’t rent our finish liquidity if my QX and and same how

Given looking million. be this continued uncertainty, over the we guidance and Uncollected rents pro-rata $XX at totaled forward in recoveries not will quarter providing second time. billed

use received. multitude inputs, Following revenue a recoveries quarter likely on Again, second even with as billed not as XX% includes common more will and $XX million these as and were recognized tenant a for contractually as cash approximately rents rents, performance, end. description, based we that attributes, basis. rents accounting and of review, if operational the in chain balance of nearly recognized deferred credit and pro-rata accrued in tenants other cash the factors from uncollected was tenant revenue a be the deemed carried was only receivable collectability the Meaning being deferred. on location category, quarter uncollectible. these contractually relevant a of and this warranting financial be and income and at quarter, an host a when including communications The To to extensive we’re of rating, receivables if

Importantly, to tenants second recognized resulted when XX% per million. charged a negatively impacted Together, of to quarter this total accounting uncollectible the straight including income of accrued together income. a $XX cash recorded recoveries, lease line share. basis billings NAREIT approximately of rents equating in are in collected $X.XX quarter, with FFO Again, uncollectible reversal Regency previously has On other by lease The billings, second by charges current a and moving quarter. quarterly quarter basis, non-cash income revenue also the impacting and rent. this

our the the a took enhance additional full by our sheet, quarter of million $X.X our during repaying XX-year to credit of position bring we measures balance draw on and defensive line to Moving billion. we made to QX in already strong line bonds liquidity in back the $XXX capacity issuing

we on progress retire also the rent expense. end, rates redeem cash As our combined in and cash on than in we of million making us Together, the quarter bonds $XXX intent with our use anticipated balances $XXX announcement, collection to noticed to our approximately we the of tenant of of confidence million gives negotiations, material stronger are added earnings the to entirety hand. The with the portion maturing quarter, XXXX. debt of our interest near-term this eliminate are carrying

We progress a and our XXXX. monitor maturing evolving term fully bond $XXX obligations. outstanding of over remain near-term commitments with following will landscape XXXX and continue loan balances the million liquidity well-positioned additional retire available With to forma our in more before our any next credit billion development, through deciding line very retail cash debt and pro several have to than $X.X we months redevelopment covering the the over and maturities redemption, of we

exceptional are on your everyone Regency thank your to happy With and questions. Before to will this had for Land Clark be and luck, Laura while watch Best grow. could team, within we leaving will to Laura’s a not of was as opportunity she happier Regency call be Laura, this mention there we and Regency career that, be significant, been take to one continue REIT special you. knows to of deserving missed, questions, we your an contributions quarter. your turn for likely her. from be person excited we’d

Operator

Thank from your with the Please Christy Citi. Instructions] first question comes proceed McElroy with Our line you. [Operator of question.

Christy McElroy

deferrals Thank that your maybe morning. specifically dealing XX% but been those discuss comprised Good Hi. There’s Can rent, to It agreed collect only your tenants attempting looks local of and your of on. the with you like restaurants. to about sort you. approach tenants you’ve concerns own that local of rent, ABR of XX% of rent restaurant mitigate lot strategy for within collect about loss press that There’s lot just a vacancy. into that permanent also trying portfolio? get closures. occupancy potential reports I’m to a a potentially of non-payment sense to but obviously turns both your

Mike Mas

is This Christy. Hey, Sure. Mike.

think, pass collection local there. to than our I’d as in then tenants little then both that quarter, I’m our as question. highlighted and like collection it more to for note, rate we Let on me the Jim We you July found rates of have start with your and however, also directly, disclosure local a and national did we I going to highlight local our have a on decline exposure that bit answer later for the see well been one, in tenants. payers to our

to measuring rates the this have month little that bit later one payment distinction versus has just So been, that, a in make local of want local months been three environment. tenants I paying

that that all the to April, up, we directional portfolio. see some May rates that the our fact, positive collection in June we’re July, point sequentially the our rate for time at and other with months, follow actually Jim of as four and is is months let local by changes feel seeing in consistent In With if at momentum you’ll give that that pretty and increased you were same you color. I’ll collection in like looking respect

Jim Thompson

proactive been I’d tenants. really eight last focused our the Yeah. smaller the very, over shop asset is, of years, XX quality years XX and Christy, say our what merchandising years, enhancing management we’ve of very in

within in they’re shopping as as really significant the they’re and group at So, whole, good livelihood, important game invested. is the very merchandising we entrepreneurs, business that their players look that a they’re center. They’ve skin so got -- the that

by and these get to opening on assist as I back they’re our I to So, said feet. the environment, their -- in actively engaged teams our remarks, they’ve nimble, well deferral reacted changing plans folks the large, think, are in

We’re post-pandemic. everything the them retailers but survive and end at fallout do these clearly best and going can by and and we day, to of large, doing to the thrive do well pre-pandemic have the want we help were to some

Lisa Palmer

moving that if to think dining, I to continue you the and hardest believe do people will, state, more is in sort And going continue fine whole. if probably news a to of to which lot work-from-home a you’re we close people failures permanent there’s see I the as be that neighborhoods, And really perhaps, tip. reading we’re the that But numbers lot forward. I less looking those America their I shopping think even that But high the I a having going any category. people are positioned, like people’s our restaurants for still community as forward from work-from-home, reports at to have that we’re close as that closures, And I also as and have think options an may homes. restaurant don’t you our a going we’re an at the the just to doubt -- standpoint, where to part in mix of exposure important that merchandising the homes, that close quickly center, are neighborhood in address going portfolio see of to quality really restaurant

Christy McElroy

helpful. including the performance And pushing higher then remarks, you any that pushing have you the down national of and for of just performance road regional your Okay. here tenants, comments Jim, mentioned abatements keep deferral about desire deals, so overall, at that to terms in bucket about and, doing thoughtful what litigation that, rent looking going to-date? broader, deferral being is eventually? That’s and those unresolved in future done the agreements, And and percentage in deferral opening versus future about your thinking thinking

Jim Thompson

opening approach kind it. deferral to on process up I’d like Christy, answer the playbook our our And that a that’s and by of whole to great question.

the we out retailers last XX% request original want that their deliberate. get that we patient to and I create as plan fair we’re us. have visibility moved we today, the rational win-win both We for at both better in I concessions ground in environment non-monetary rather started to a of As didn’t XX% And when in April being much on a there’s and slot needs. landlord, engage we’ll our rent trade tenant now think, good of address now of common between and said And from more offs visibility. open and to finding April we for relief them needs clarity of repayment we’re quarter, back tenants, both to open end and March prestart

was retailers So one that as and of of XX% in -- agreements. first can about to rewind the we’re operating open every work where our of prioritized kind out national as XX% tenants, kind modifications deferral that which XXX ABR our as on open we retailers, engaged evidence you we needed and process, top But today, went actively represents we priority early with agreements. in see local our we sit here, executed group initially the and of actively of the and XX% crafting strategy out

So that services. restaurants, situation. fitness we mirrors hit the Obviously, full how the uses, categories that related hardest entertainment, theaters, child exactly service are attacked

We these with limited uses or occupancy. continue patient under are in of operating be levels group, closed to very this as still general

So, see deal but to majority resolve. it we the the will today, X% to take reiterate, We with But is investor will bucket, continue in to evidenced we’ve deck have and that again, continue stat individually the for the been might uncollected agreements. dialogue as this tenants on in each sent. and rent to close the relationship to of ongoing executed gap is nature by have yet we papering that very just pay slide believe but time from delivered in uncollected process, that deferral you that the we

Christy McElroy

Thank you.

Jim Thompson

these thing, agreements one I is think, -- add the I -- Well, will it’s tracking deferral important. will these add exact I important.

are that The just the binding lose receivable the way the deferrals can’t leases contracts want other to programs. coming and is of of out the this really collectability we outlining see to sight and payback existing modifications our the key really outstanding the success really are You pandemic side it.

Christy McElroy

so Thanks color. for the much

Operator

Thank you.

Lisa Palmer

Christy. Thanks,

Operator

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

Derek Johnston

going in we of seems we declines as tenants When lower Should Hi, lower you now that Thank at our cadence the you. a base. occupancy are than as NOI out, forward, and models? NOI from How expect everybody. a about -- for operating and it better the the indicates? to we should decline possibly look growing occupancy up that say fair held move lag it’s think you

Lisa Palmer

mean, right. are you I Derek,

not provide NOI We future reflecting, have Even tenants, declines been, we negotiations to Jim the she expect the today. would And that going eye terms to tenants. there to haven’t any as the I’m in the not are from do that fail are of just some that is that. reflecting are Laura’s day, last evicting given with and described know I’m so allowed we to But, reserves we our that. refrain be see been going going absolutely, of that be occupancy NOI will many certainly and guidance, me

Derek Johnston

Okay. Actually, helpful. thank That’s you.

positive, standard how increasing gold How you emerging really trends little for strategy positioning navigating are in capture omnichannel is and of bringing to your demand as a the facilitating something tenants wallet And with the you feeling post-COVID for the tenants the retailers. omnichannel focus? now and more sales are efforts share or Regency and

Lisa Palmer

we to are, people those and XX,XXX omnichannel strategy. -- prior portfolio U.S. about like a about we continue, accelerate has because centers productive, remains innovate pandemic portfolio critical -- What the that it have are most XX,XXX the this and time really of really highest presence remarks, for we’re retailers accelerated -- that are forced them customers have and done quality really And fact We to to it going to that are see really most most to high have physical in retailers shopping now. even take satisfy I’d to that advantage to quality, our are so world, know shoppers. best with faster. like to move just to for long has can neighborhoods. that do going institutionally But for What saying What they’ve going partner continue keep mentioned our can close retailer, centers his we this really and prepared the as we shopping the well-positioned that. are that store and this we Jim, their we publicly the our we we’ve we’re been To such are well facilitate we trend. a closures. which in the there to that And even in touch a as been that can to customers, them continue these component to that. ask enable is stores our going we’re owned all to and

Derek Johnston

lastly, development rate? thinking redevelopment anticipate and at projects to Okay. and value returning enhancing moving more how offense do When And projects? the Great. you forward rapid are a back you about

Mac Chandler

Hi, Mac. This is Derek.

on to of adjusted continue based that these lot of is a Each shown. it’s factors, evaluate is experience, project location, a We a end the some discipline a of really projects the a risk when at of of the lot one we day. some the a it’s its one lot of start pre-leasing, return time. it And we’ve at takes of always some format,

a to ready go advance entitlements start. setting to ready that are to in go, up we’re to aren’t and put continuing that but some ourselves so projects to And we’re position

that we So light a position position, a we’ll be green have when to in start. visibility to

costs will to you have when it’s yield which start going experience and each So projects. think well. in but on our today, when case to we’ll help advantage And tell case basis to tough know I by of project we’ll start be is of to as a declining this lots a take also able construction exactly we

local ready we’re and up platform offices well, we to teams sharpshooters setting local throughout have having go. where country so of this ourselves And the

really gives I a distinct think advantage. us

when and conditions these that So present about be excited start themselves. we’re teams projects the will to ready

Derek Johnston

Thank you.

Mike Mas

Hey, Mike. Derek. is This

at is on a in think, property and are as and as level it preparing am probably team balance, Mac Mac’s fact, -- the making. tenant to demand, Just follow-up well comments, that much because of will drive I and decision I going

with thinking being right? both pandemic, cash to our prior know, the funding, about side. as funding we sources capital, access new that growth in have with source free And of of on with opportunity of multiple or opportunity but the align to equity. the development development, the also We’re of our property to whether assets the pipeline, may the So funding even form be need primary change, we capital potentially that sales debt you lower flow or

We’re preparing on that front as well.

Derek Johnston

Thanks, everybody.

Lisa Palmer

you. Thank

Operator

Thank you.

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

Craig Schmidt

you. Thank

use, some to Just see some release you dining, fitness thoughts of do those uses exposure decreasing personal through those not maybe to and go regarding as to fine exposure your and as you’re possibly you by process as again? shakeout your of quick maybe services, the

Mike Mas

I I’ll as comments the think, fine only exposed category. jump dining, X% or to Lisa with start a one, we’re Jim and first couple in will well. Number on

fitness X%, on item line small disclosure, it’s that actually of our roll. long in still being in the very a run. And component included it’s we our rent although, So, remain

still and highlighting pretty a even health personal pandemic fitness that is think is the on and think -- certainly We’re We probably even fitness category. secular this more. I bullish trend

centers. that our will like good fitness, to still for shopping idea we continue going we be Boutique forward. So a believe use

that something again, still service a fashion. On the long personal side, have positive view in a on we

consumers to our necessity So our we centers we that well. think really -- provide and think shopping

Lisa Palmer

about think, is -- property hit that is and of one it, I just available. always most In type. thinking reminding our I of certain kind thing it’s Mike that mean, that

will for will see concepts some know I you’re we those don’t our as failures if concepts, fade long as you from may and I we’ve those will probably I’ve concepts what away. and leasing And and innovation as but been been I new we to of include in this we have older expect that leasing the concepts. disruption. will continually as imagine future seeing then are long For the new Jim’s business, -- business, And -- that continue new in will, that yet,

Craig Schmidt

And Okay. Thank you. then just…

Jim Thompson

Rest on… model you can

Lisa Palmer

Yeah.

Craig Schmidt

of a you the in given am spending … Texas last are of if and reduction Florida, terms couple spike California, seeing I the good discretionary in in wondering weeks?

Lisa Palmer

I that falling will, everything really again What permanent did the mean, we read a tried I I recovered as -- table reservation. probably drop mentioned, all pretty mobility temporary Craig, report, I can think all do, spots I gosh, those very to And there data tell. to did you kind see too it’s and quickly. I open any research early in traffic. Whether then reduction see exact of but in is think, we increased we

think to to really resilient, foot which used really surprising how much tell. to traffic been some traffic the been, -- positively has instances consumer they’ve I Any early has too been to that’s But track encouraging in as is tool us. has data that we’ve honestly, recovered.

Craig Schmidt

Okay. Thank you.

Operator

Thank you.

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

Greg McGinnis

you mentioned versus to decline. of wondering the uncollectable short- some is I Nick. that on if might you the reflects long-term expected of context on some McGinnis occupancy expected the provide with reserve more And Lisa, Greg This able am rents. impact QX Hi. be

of run much out create we differently, how is QX? from QX rate rent maybe a but that So, to basically, rent viable still uncollectable said much how rent is today, or could abatement, the a effectively to maybe and in the strip tenant pay what will of survive rent

Lisa Palmer

Okay. that. address I’ll let Mike

Mike Mas

I the Great. appreciate question.

give for. difficult that appreciate response. to some you’re It’s of you’ll think the those looking very you I directions

you help me here. Let

of to For moved tenants basis a the our effectively quarter, XX% of end cash accounting. we -- about of the we quarter at

July, cash right? on trended at data XX%, rates Collection XX% bucket that same leaves the have to in they within and XX% fact, were that So collection accrual, basis pull in when rates. you

forward XX% of most to you that about is uncollected that element for good accrual those important where our effectively reserved we our And how perspective, basis that accruing XX% the in you perspective, From to revenue within because think, a an as equal exposure. XX% we’re I bottomline, think rent our well eyes So recognize what total collected a on. I operational potential that an is like focused and quarter, are feel think about of the that’s consider as perspective, from was was of obviously, that how representing rent. look we XX% as to rent we about that tenants category. credit portfolio, of for But, we that felt our

continues progress the bringing as cash good team of by about and collectability actual contracts make visibility Jim’s either he XX% modifying towards As good represented of and articulated, rents with feel deferrals we collections our that or that. to

Greg McGinnis

just trending is clarity kind is Appreciate out rent the of at on uncollectible how this this [ph]. to bankruptcies due actually down, Thank Okay. point? curious I’m still just the curious that move disclosure. of much, much I’m piece you occupancy and But said, tenant And you. said how you

Mike Mas

to amount. I reserve certainly couple I extent we’ve occupancy a reflected too to there the questions little. levels early a for they’re rents will very reserve XXXX be here any with by time. going basis point in is just recognized cash are basis about only answer, Again, but abatements zero this not effectively on of any it true. beyond. changes point that received, to to abatements there’s be is the give been is to only But accounting, It’s the had they’re and mean, To there. fallout tell completely any extent would in

Greg McGinnis

Mike. Thanks, right. All

Operator

you. Thank

next Our of RBC question question. your from proceed Markets. Capital Brian line with comes with Hawthorne Please

Brian Hawthorne

Hi.

leases? three are like negotiating quarters are only that paid of So tenants of the the rent couple have or new negotiating categories a leases rent. two-thirds leases, signing you Like that paying currently? not with Are that you’re there with within

Jim Thompson

No. This Brain. Jim, is No.

not. We’re

Brian Hawthorne

Good Okay. answer.

looking I Okay. then, certain pads. a change center. guys there for seen demand locations within there? demand mean of have Is higher And you at kind shopping

Mike Mas

brought that was about the today. wants certainly reality I a drive-throughs, drive-through think pandemic is everybody the

a future I So to pad have with for and a a been must, than the think, be going think, to that, of going is very, sought active very drive-through, highly their be banks But user. the very type pad it’s attribute. other I

is of pretty always depth and So tenant pads very generally to deep. that are resilient pad seemed the be like

So work pads with. to are pretty easy

Brian Hawthorne

it. Got

Thank you. Okay.

Lisa Palmer

you. Thank

Operator

Thank you.

of Hill Stanley. proceed Morgan Our line next with Richard comes question question. with from your Please

Ron Kamdem

Hi.

Richard for got Hill. Ron You on Kamdem

there bad debt to and think all the not debt, going figure obviously, back coming. is quick trying asking we’re one, we’re another guidance. Just if out of sort for two charge But to bad I

exercise So to worse of Are your July in out when I and any what’s the of we’re we your at reserve was I about to through same sort get better that’s uncollected try either this is how to to looking there you about think it? against think reason there’s something the when XQ. really figure And the have going that uncollected end or think and to is, to question much go and XX%. mix XQ it guess to report I at

high So, again, just asking going for not debt little a how forward think level color, guidance, how maybe we bit? about bad that should

Mike Mas

Ron. Hey, Sure.

for can’t you foremost, reserve billed that been rent hasn’t and First yet.

reserved. your continue So, basis you cash rent going in have tenants quarter third of example, and to the the have you’re -- you in by space, shopping haven’t would extent paid centers to billing that you’re and occupy an they way

our thoughts, move what won’t that income. they of you thoughts, no come out. out, extent have will debt expense, that have to it the down To or rent percentage either your will anyone’s thoughts to individual pay but So move exposure you’ll start around

So the impact would be the same.

there idea that’s we no So hope be debt expense. that will how how and bad helpful longer the -- I and

how the XX% that tenants? hope It rent basis performance what the perspective. context basis So is the the we XX% those I our best cash a is of in we than think the I materially pay did it’s a of really collect in idea be statistic is cash XX%, that’s think did they point as rent about percentages misleading. XX% time, second around -- on helpful. opening looking should Again, quarter well. being -- think, in months helpful this of three from can were give July, higher forward ago. Put At that’s I as our of about

Ron Kamdem

ratio follow-up Got it. Does sense? I for am could I missing that, a just I based what you ask is did on if about, And helpful. if right. on I XX% bad that, uncollected thinking what guess, just XX% about -- your I did and if debt, it That’s the put XQ that in thought make

Mike Mas

comment It assumption. makes mean, an that -- and We can on… that be sense I can’t

Ron Kamdem

Okay.

Mike Mas

…whether a… that’s

Ron Kamdem

Yeah.

Mike Mas

assumption. …fair or unfair

Ron Kamdem

it. Got

Lisa Palmer

what know. how That’s cash did those we don’t know is tenants you for not that basis Well, what begin know many we of and don’t today? that reserved pay we don’t that’s what

Mike Mas

Right.

Ron Kamdem

sense That you and I lot appreciate a navigating that. of Okay. make

in bad or line question guess, giving straight that The of was going think on, should there the a overlap similar something how rent other I without reversed about similar forward the that reversal there sort straight an was line -- well is is up? we XQ. of be just Is charge rents XQ. that debt of question, expecting should we can sort sort in mitigate

Mike Mas

This is good one This question. different. Yeah. is is yeah. It a -- No.

standard, straight one-time reversal from the one-time that balance the of So line of move that’s a cash the to is a rent. accrual decision basis for to the tenant

the of as quarters. noise, in would remains extent to XX% assess be straight collect that’ll tenants remain XX%, to line -- speak how is rent is, anticipate by so forward. going split those we way the tenancy So But you future dependent as on assess less

in will very a high this pretty -- meet quarter-over-quarter, of of at month-to-month, at is perspective, So forward, from assessment a the stone is of from that their tenants into thinking point amount contract. about not there changing you again end of lot point while make material environment. a we’re our third. anticipate procedural about level say or so the a XX% time. this lot XX% they a And But we -- probability pretty from will That’s this set high bar. A perspective, in the so we a thinking I in the will quarter better I and don’t unusual standard a demand the that put time change XX%,

Ron Kamdem

helpful. Thank had. Very all you. I Got it. That’s

Mike Mas

Sure.

Operator

Thank you.

from Our JP Please line of with Mueller proceed Mike your question with question. next Morgan. comes

Mike Mueller

what guess, the Yeah. level? does dividend current Hi. benefit I the the at to Board holding on of sees the

Lisa Palmer

we We downturn. I’m I quite this ourselves never expected just economic remind I the intentionally next one, to position you, like the to to weather going will want to strengthened -- balance sheet one. that -- quite a storm

Mike Mueller

Yeah.

Lisa Palmer

us. the balance and think position a really remember this, coming to that our I it that for really strength So differentiator financial sheet it’s into true was important of

payout the in FFO XXs. low ratio Our was

with back ratio of alluded provided capital payout in free us was even to $XXX AFFO million Mike XXs. cash earlier. spend flow That pulled low Our that We the early.

And a that, amount deferred really million essentially cushion capital almost for like of this us. spend. we provided So $XXX a really big

and that declare essentially to really, allowed we an we our so collections believe us projections rent fact dividend And our future in going our full improvement what is the to payments, is dividends. it And see backdrop that with cover to which the forward, be continue which objective.

not reiterate future output. that’s why quarter are we have payment so this decisions That’s future to The to payments. deliberate. really that just decision it. to a just is It’s And dividend be it. I’ll it, going paid fact. a hold The our doesn’t hold an guarantee

all continue We sit starting they seeing weigh facts have with But makes today, our happen. position with to on and based what where pay as sense and it to results, actual we the to with the are circumstances dividend. we

part and income return total important of return. the our that’s As is of a return an total REIT part

Mike Mueller

Got it.

of you color Was the shop that? give bit or us based Can out Okay. that was little small concentrated? fairly it just broad And curiosity, then, a of on decline. occupancy sequential

Mike Mas

BK. we’ve XXX XX in expect we was Mike, which and we ‘XX have store either yeah, got or in filed, add, have reject. gosh, basically we’ve out likely of We locations have rejected of at brands think, point individual wrapped up that that, will I XX this that that XX -- got

primarily decline at So point. is this the BK

Mike Mueller

Got it.

was That it. Thank Okay. you.

Lisa Palmer

Mike. Thanks,

Operator

you. Thank

question comes proceed Floris question. next your of Dijkum the with from Please van with line Compass Our Point.

Floris van Dijkum

that on, rate. Good involved and in you valuing see are It’s is your on with assets. what the morning, there how is on cap NOI in costs. any obviously, cap you And see comment think of guys. think -- asset what rates. markets for maybe also values where and you in view valuation, the is -- you your rates about things Question and sticky are me going the cap on as think are public going your Do movement or terms what for in you two

Mac Chandler

the Mac. and take is question back Hi, hand of it Floris. half first This I’ll over to Mike. the

couple of ones for are sell starters, been marketplace. neighborhood capital cap the a holding that There not to there are underwrite smaller product. historical strong. value sell sort cash our a cap they’re out because for and scarcity is seeing the think, really I the just you’re not then buyers sellers willing seeing bit A -- they’re amount portfolio figure of Owners in in we’re tight. cautiously has underwriting quite And for year to are whole But them, growth these and quality to is those really that of to how up of The high really best of a they’re hold that are them. lot the best trying of willing little three, forward that’s demand But the to of grocery-anchored norms. centers. is flows. terms for properties There back rates next the limited really recognize rates, properties, that years typically, of They’re long-term the properties, In types representative.

properties put at available seeing are the have we’re XX% loans long to for to we of market debt a allowing long, There execute, lot we’ve that that’s seen have is we on some time. XX% So demand. than and better people rates, permanent a demand tremendous also

holding So really for I’ll that our well. talk relates Mike let up to quite type of about And NAV. are product, our values how

Lisa Palmer

retail community I said And has important think it you’re prepared than seeing are how and I a -- that I’ll still as quite that, neighborhood is more we’ve is questions, jump. break. centers actually bit. think, the I give Mac rates today. I never of essential that remarks Mike responding. it and is in think I shopping that said about cap something There tossing too, all been this talking I’ll a well, Since it my with keep reserve been well,

cash So what��s really there the they’re is to going and the NOI that’s even amount cap applied we TI what be happen know to significant is more recapture to I while in expect have rate, require NOI also -- difficult spend. do stream we change going to stream much there a the going not future in the release. that -- do of to that’s is releasing as Because is

does I there’s -- -- come NOI settle does really yet. much we provide. mean, still -- a of from we’ve uncertainty. can’t we and where information the know It’s I So we’re that -- still provided valuation it’s to all perspective, don’t not could too down It that

that So was it and settle of out will earlier. we do kind -- there, growth pointed have as base expect where we’ll does have I new that obviously then from

starting We’re base. at lower a

above period same probably of to our going to it We’re NOI portfolio that. take see property do time. to will But and capital a we’ll in average release for continue growth

just clarity then your and I So answer from estimates going Floris, that everyone’s -- didn’t I to to to there. we be need are as can we we when over really different and start are is but a exactly questions know little recover more this

Floris van Dijkum

for me. Thanks, it That’s Lisa.

Operator

you. Thank

Our comes BTIG. Please of next Gorman with line question proceed your Michael the from question. with

Michael Gorman

side bit, trends especially on maybe earlier their of about I rollout the maybe stores can maybe newer they’re they’re a Yeah. the e-commerce and just they kind omnichannel market have e-commerce if have with tenants how higher your now? Lisa, to your right within you’re strategy about thinking bit e-commerce like you -- Thanks. of on they much conversations how space approaching and down could Good comments where back maybe in ecommerce grocery, morning. go and those of talk technologies about just having the they’re a for you little how drill grocery are approaching some MSCs elsewhere portfolio and and the top productivity looking locations or MSCs each allocating on

Lisa Palmer

much. profitable fulfilment Sure. focused they’re manner. while centers. is on conversations in those the can Kroger the in Walgreens. they’re Ahold, the -- most operators -- with I automated their I probably focused would larger robotic the And changed haven’t focusing micro best they already warehouses really think, partnerships on customers how better again, on Albertsons most say, The were serve

them then Amazon then that Whole All Go opening. know doing stores and rumored all and and real Foods grocery of they’re with the what Amazon we traditional is and

most best them profitable most to bring their way way never in the and in serve customer that store. in the change today, are still the on is it’s the of profitable absolutely argument But to how the today never. All there future focused customers no say because that

them all to sending an said, serving operators again, we So are conversations. that means the all way, more see the extent come you fashion, they’re on store. And see still With you the different that more in technology investing their happening. of the better is focused into which the possible the to omnichannel in profitable but in to customer very do spending on that, and continue have most

We continue to them. partner with

And delivery We shopping continue help that we continue goods. It’s centers. our their facilitate going I I don’t can to them mean evolve. to of to where literally, within to mean,

We’re in going continue the see to consolidation grocery. to

I think that scale matters.

having cash that’s will money winners that think their the invest in in and flow I technology and to customers, serving the the invest to be. and where invest and innovate

Michael Gorman

the the more playing guess I market to intact productivity speak just -- not is your clarifying. to them stores that or and grocers, technological for is I kind when those make in of solutions leave the it elsewhere mean, look a helpful. in likely role? portfolio you of high their That’s

Lisa Palmer

about profitability. the typically, to It’s stores going productive plays stores. clearly, about Well, be role And profitable. their more their when they most are think it profitable a more

could So stores something use is and of service it that certainly center out customers the or to particular to fulfilment store. that They continue a about plays little to a even network around role core will centers. the the of as smaller going you micro as close add of when network of They that a if be thinking very are and they’re fulfilment their reluctant profitable. to that store

is variable. So absolutely an a it and input

Michael Gorman

much Excellent. Thanks Lisa. so

Lisa Palmer

Thank you.

Operator

you. Thank

Our Kim line Bin proceed your next with from of with question. Ki Financial. comes question Truist Please

Ki Bin Kim

morning. Good Thanks.

the XX% is these from how helping tenants So going to of ways reserves, How? healthy about revenue back the pre-COVID? tenants? how decently much thinking these impacting And of for rents this you’re

Mike Mas

Bin. Yes. I Ki appreciate the question,

it way. answer me let think I this

basis, cash only basis a we our that had on percentage ABR our the cash of X%. pre-COVID was So

that to we’ve XX% a our on basis. earlier, I identified rent now stated cash roll equates a about tenants of of collection is as Now,

watch think tenants. basically BK was I So by extension and primarily X% that list

anything of majority on is all that actually changed the And paying perspective, want again tenant some is to extension, to So not in severity tenants local Jim, question the it’s a perspective as currently don’t that through of that earlier answer answer -- that. know, I the are say, cases of circumstances, operate I inability July. that’s rent time challenging. pretty can’t would But healthy. at by it from those you a I to least, storm XX% Jim kind if -- has to at this of them still your But is right were now our a spend add them some reiterate the that classification for standpoint. and XX% from

Jim Thompson

you. No. Thank

Mike Mas

it. Got

Ki Bin Kim

basically these Okay. Some would out tenant that and right, fact thinking are lump not of tenants built deferring some paying little these written if when deferral lot the just think into ball arrangements And local even about to local to -- And your on. appreciate shackle you bit and perspective to worth deferrals in of are year. you back on make a some rents, it and sum here easy of it I I base? I in tenants paper mean, pay are lot is I’m tenants. just maybe sense How a to it’s of these cases, a a a a are give your ranges the that only myself deferral of putting X%. for second? of

Jim Thompson

the their going that can. fit. time and try employ out figure them take a that to we best That’s operator. We Bin, We’ll goes best how outlook toolkit. see we for make And bend over want a dollars would best in to -- it make their the Ki can of But these I and we as into tenants really great to got if all done understand our always the one there successful. can. just exactly to we’ll where them is are what put they’re the backwards all tools the go we It’s credit we result. they situation, play. of lot at capabilities, to operators and they be their to and that -- said future, talk a get really decision XX-year I’m tenant as part

Mike Mas

plan puts me Yeah. I business. we’re deferral many will he going out a because told a tenant many, say times, many, not this for of them that put into to is Jim,

Jim Thompson

Right.

Mike Mas

I you’re making. think, And point Bin, Ki that’s the

So we’ll tools. those be hit

However, bit of either whatever in maybe stretching abatement. payments are sprinkling little they a out even or

right all decision success to setting the the for and going right normalcy. We’re into in they’re And long-term emerge and have we tenant make ourselves mind up the some our after sort and of snowflakes. up portfolio for we

Ki Bin Kim

Okay. Thank you.

Operator

Our Instructions] question. with of proceed Tsai question with the [Operator next comes your Please Thank Jefferies. Linda you. from line

Linda Tsai

the of have might or sense been options? likely that backfill those spaces local Of is the back brands expect brands Hi. in filed the rejected, tenants to you in spaces get rejected to the more you’d any be and when XX whether demands have or see XX earliest as national

Jim Thompson

Jim. Linda. is This

so. next days XX or the probably We will in some be getting, I those think, rejections of

far we obviously instance, for As had demand, in, lot as Tier pre-COVID, a interest X. of

several We are in dialogue those. of with

I interest. think still there’s

estate. At the you interest dramatically high the into have document same. think is will historically speed operated said, very market day, end of tenants portfolio we within real the the Lisa I think if our and that got slowed executed converting to I expect levels. at great of we’ve an The

and going back, demand our get As think allows to to going have and We of in more if returning product it, good than business. fair centers, good we’re it’s space market supply opportunities. a the share we we’re get

Linda Tsai

dispositions that for have then one low post-COVID thinking the about lot around in versus pre- other, And parameters environment. might just color. a post-COVID? Thanks changed growth you how are How

Mac Chandler

can are a look It’s do up it we we certainly, properties historically. I be to that start have properties with. been being that speak. to properties just When We non-strategic, for to Linda, going basis. so like miss disposed, take we’re might not we low consider growth, ground that non-core that

would sure we think today’s make properties. at a in some going Will accurately forward. I take world, growth change? that certainly, second forecast So to we’ll Sure, that look

on that. compared little times. it But continue dismiss to But look take a at soon well. them. good as perfect assessment are case, growth we’ll of a have don’t by to forward I a want too to we’ll So properties pre-COVID these case to to have probably,

buyers wish I of think properties we done have them well quite well. the our and

So I’ll let others update as needed.

Mike Mas

they back hear the to to plan our To plan be Mike. sales funding It’s a I’d most Hey. is sure lever Mac. likely go and in one you disciplined. I’ll make kind funding that very be. like will exempt Thanks, our we’ll and property thing of a are

to on disciplined valuation. going Mac the a very right. I And We’re exactly be think is

our own of is And the forward have funding other stream that if of asset value us we’re point. to we make Well, will hold we decisions we’ll and going deserve. We’re choose the these that we asset to not and that view properties. to believe hold NOI from appropriate market the prepared giving

portfolio. We have a large portfolio, a diverse

lot a again vibrant a what -- have forward. vibrant set going optionality fund portfolio and to within plan have we redevelopment We a that to development of opportunities as

Lisa Palmer

still absolutely a commitment -- we and believe if Again, owned well, growth, portfolio. top we that lower believe has XX% in and, the have lower their quality of do, as a are quality companies everyone the and most we -- high dispositions to have of the publicly We’ve U.S. I I owned what’s always really as in do had even

always that fortify growth future rate. we’ve NOI improve so continually quality the to important of that portfolio continually an our strategy. It’s of commitment and maintained our to part And

Linda Tsai

Thanks. Good luck.

Lisa Palmer

Yeah. Thank you.

Operator

Thank you.

line Securities. your Capital with Lucas with question comes question. next the from One of proceed Please Our Chris

Chris Lucas

morning, Good guess I Hi. now, everybody, afternoon sorry. or

does play role more same drive guess, were on geography just Just particularly thought, a as you that? geography couple of line pursuing sort as it that well? of to, rent And of collection in challenged the I then, guys a the of lines Does guess, on quick relates ones, I litigation, when business. geography

Jim Thompson

Chris. It’s Jim.

that really as collection on there into come think, is certainly, play. rates, far As three I impact things

have mandated will play. We’ve that kind country obviously. certainly areas recovery, still. got drive mix, comes of the aware, essential got as well within Geography category into that you’re got closure we’ve higher You’ve the which

So that is I with will mix, kind of the have a strategy now. we’re in last big group our impact. the to local group right as national referred that then that And engaged local earlier,

impact the same question So that rate. that of have part collection two will Well, was…. on

Chris Lucas

geographies? litigation It’s related to and

Jim Thompson

Litigation? Oh!

Chris Lucas

Yeah.

Jim Thompson

payments that at effective for that have discussion. least bringing one, to is, we’re to have and in folks are not warranted, ability we through has many or In either action further become legal or the in approach of the chosen taking where cases, or door to Chris, as this getting the have, if pretty unreasonable tenants late tenants. number pay non-responsive table

Chris Lucas

with And kind then, you’re rent Mike, guess, dealing to have quarter was collected Okay. third how I’m just second that? I of curious, just applicable in, that you curious quarter,

Mike Mas

Yeah.

I $X think the about what call I million. crossover rents

we in if that you So -- July quarter owed on was collected that two.

XX%, our a that as percent to about want it think billings would you move Chris. reserve if to of from So XX%

Chris Lucas

Okay. of the I the what the accounting? have And -- $X, a guess, you then, was cash between do split on a basis

Mike Mas

to have I’d with for. you that that one. follow-up have on don’t I

Chris Lucas

Okay.

have Thank you. all this morning. Great. I That’s Okay.

Lisa Palmer

Chris. Thanks,

Mike Mas

Chris. Thanks

Operator

you. Instructions] [Operator Thank Ladies that… you. and gentlemen Thank

Lisa Palmer

Okay. Thanks…

Operator

back to it turn I’ll Lisa sorry. … I’m

Lisa Palmer

you Yeah. in. Lisa. Thank time jump today. to all going just was Thanks I for your

all team. interest in your living hope appreciate the wear mask. Regency, you safe, Your you in is do to all I continued really we’re I really thank do of time hard Regency that a support, this that And for stay again, us.

thank Laura. everyone good Thank to you So and you.

Operator

you. Thank This conference. today’s concludes

your this time. for disconnect Thank may lines at You you your participation.

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