Regency Centers (REG) 7 Feb 252024 Q4 Earnings call transcript

Company Profile

Participants

Christy McElroy	executive
Lisa Palmer	executive
Alan Roth	executive
Nicholas Wibbenmeyer	executive
Michael Mas	executive
Andrew Reale	analyst
Nicholas Joseph	analyst
Michael Goldsmith	analyst
Dori Kesten	analyst
Greg McGinniss	analyst
Floris Gerbrand van Dijkum	analyst
Juan Sanabria	analyst
Todd Thomas	analyst
Michael Gorman	analyst
Wesley Golladay	analyst
Ki Bin Kim	analyst
Paulina Rojas Schmidt	analyst
Linda Yu Tsai	analyst
Michael Mueller	analyst

Call transcript

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Operator

Greetings, and welcome to Regency Centers Corporation Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Christy McElroy. Thank you.

You may begin.

Christy McElroy

Good morning, and welcome to Regency Centers' Fourth Quarter 2024 Earnings Conference Call.

Nick Lisa Financial and Region Officer; Chief Officer; are Mike Executive President today President Operating Chief Region Mas, Alan and me Palmer, Investment Chief President Officer; and and Joining Chief West Officer. Wibbenmeyer, Roth, East

today's presentation are are our financial non-GAAP recent our filings reference will detail with our future reminder, in uncertainties. forward-looking XX-K contain are that make. current also on materials, market posted of Relations with earnings conditions. Investor information, may website company's including forward-looking our forward that cause beliefs statements possible on SEC, related more discussion may which risks and Please our in from materially most disclosures forward comparable and earnings included specifically presentation in GAAP financial may results management's and to risks these various to included XX-Q business these These could by from and measures. discussion It's filings. In including be The performance, in note a on materially in have statements website. this we we Form additional the are are differ and actual actual the and earnings to described views a that our those Factors differ As suggested about statements guidance. future results guidance may also we measures posted subject today, expectations quarter's financial today and and certain based

forward-looking these caution presentation statements on materials. to applies Our also

ask one then questions. if have today, the participants of your rejoin the we questions we follow-up to Finally, on and as a number limit the additional kindly respectfully and you reminder, call queue Lisa? you that given have

Lisa Palmer

Thank and morning, everyone. good you, Christy,

drive strength opportunities high growth our which the rent value. our year continued and fourth to our and size new driving X% and and we tenant robust record rates, proud in of dividend, evident leased activity in NOI program earnings demand of another base This increased within and of Same the exceptional quarter performance are to the in our report for strong, growth execution development quarter. were reflective growth, our the continued another strategy. of us property leasing pipeline We was expanding of

fundamentals of operating relative project over from more second in create Our sector with through We supply our hitting has of the our found so has to target million meaningful Regency starts, muted, year benefit last opportunities years. value growth or $XXX XX continue same in the for development. or ground-up a developments. of nearly to part another in the At while new lack supply remained time, half had great year, straight new

of our having lot have We and projects in success million $XXX shadow to close are future process for continuing growth. a to pipeline build today of

Our is, us. differentiator said meaningful be, development I've platform national the development platform and before, for a have And will best we to in the business. continue as

high-quality foundation a acquisitions than and of I'm Our centers, growing high-quality We tailwinds this our our strength share work ahead. continued position, and with and our our continue of will the as maintaining our the the balance closing, success of sheet long-term shopping are we pipeline, about with the believe performance funding serve strong team and more look in our even liquidity as to billion the all XXXX activity hard our momentum to combined experiencing strong business. for excited sector-leading we trends Alan? totaled of appreciative positive combined this so while more accretive generate investment sheet. In opportunistic development I'm all $X.X repurchases, with balance in of impressive

Alan Roth

success record all leasing services several rent Thank were operating wellness, and with across activity with highlighted environment consistent restaurants, rent demand NOI base very driven rent robust tenant and by strong health and strong, by and off-price. growth, results dates. you, XXXX and commencement activity, same-property key by driven Regency's spreads everyone. personal Lisa, and The categories, steps which regions remained good rent embedded accelerating morning, and including was grocers,

Our has This so a of square in record X,XXX I volume than a been deals for success and number comprised proud is Regency. this executing of leasing their team and X.X nearly extraordinarily million busy, leases more year, past of significant feet am high of space.

lease record our occupancy the ending new at same-property set for XX.X%. We lease year shop XX.X%, also year ending at rate, and highs rate our the

basis and in rent with leases. getting continued commenced SNO another while commencing, in property was up points Our progress also the QX newly signed tenants with rate replenishing pipeline XXX open same pipeline the

currently pipeline XXX supporting and of commencement. lease rent, incremental of upcoming $XX points rent million executed occupancy paying Our reflects for momentum basis base

in rent We also rent at cash year the quarter. success in XXXX, trajectory spreads the continue the to upward reflected XX% with spreads have pushing growth, fourth in finishing approximately throughout

the X.X% XX% NOI rent of of and the also COVID and the for nearly renewals XX X% for rate collections our rent the year, record our spreads spreads ability growth, year. reserve for for team's came excluding of than and achieved almost renewal and X% activity for of reflecting shop mark-to-market, at We achieving health the annual levels more strong our steps indicative new rent Our period term the were while lease GAAP full quarter year, environment in the in years. highest capture tenants. Same-property fees to

same driving growth an success rent rate. our property recovery in to improvement also addition commencements, and NOI our expense from benefited rent accelerating In

line you with the bankruptcies we've average, retail XXXX tenant of months. As historical impressive level consider Mike last seen will few in the discuss, is loss if for our which is our credit in forecast

supply, sets our success. team. Regency new of limited fundamentals A very manageable, direct up hard to attributed continued to intense the to work fantastic thriving our a well continued approach our coupled tenants results our of the merchandising exposure closing, with strength is credit environment, for long-term of demand management. In Our asset risk deliberate result and combined with in strategic are retail business, Nick? talented

Nicholas Wibbenmeyer

a productive tenant projects Thank opening million in team evident In XX% nearly nearly This year. development year-end, where in you, projects XX XXXX, the than in a blended quarter. progress $XXX X of a activity last as XX active cap on doubt the quarter, included pipeline pipeline. To within We quarter our Landing but million the public the our returns projects, morning, of project in enabled to our including unequaled amid nearly around great execute are demand decades, These million was with and compared exceptional team's started of combination We us There development XX%. build everyone. as totaling to pipeline attractive to starts investment more in platform had increase foot the in country, ground-up The benefit $XX distinct Lisa's complexities, projects Atlanta, yields Alan, very and than new presents completions, of before continues and during was no nearly we blended relationships process markets half more and very successful to successful deep the Regency. good traffic another business million executing exceeding and numerous celebrated off we in redevelopment fourth currently of our project track the a had make investments of accretive expanding capital for is level to we years. highly the projects December, with commencement. At few than of and we key each industry from for in $XXX Buckhead X%. lease-up value-add unique in is to are $XXX remains XXXX, comments, million. Notably, our this a in including also efforts see highest starting developments. It grand record, long-awaited more recent over the direct development project's was redevelopment more projects challenging year nearly X of strategically its fourth has set encompass differentiator leased significant reiterate in annual expertise, more proven own and completed than $XXX of XX% years. access this on and that

Looking our ahead, optimistic highly we about set. opportunity remain

trade meaningful attractive to demand expect basis. Shifting the on a risk-adjusted areas high-quality we in to We driving growth markets support and and continue acquisitions. where for accretion returns, to space operate

market, see in We in uptick to is activity an team our actively country. transaction and the continue around the opportunities underwriting

University an Center we Commons, within institutional in joint H-E-B-anchored acquired previously long-standing disclosed, partnership. Austin, a As venture

investments to providing our and center This visibility and expand the located contract We over the for a have a looking few Regency our ahead. growth to Regency platform, time. in in momentum we years, in transaction also where desirable believe under to in existing closing, the our in and presence Nashville, details area, last market enhance some is the currently clear we our providing close on been trade redevelopment success of forward we've in within the for proximity years months. In drivers assets, in earnings look well Mike? growth the further coming pipeline center the future, high-quality the positions additional a will into which development especially

Michael Mas

Thank morning, good you, everyone. Nick, and

full Alan Lisa, generating earnings strong As of an year the excluding core year another growth just collections. reported operating Nick and quarter of impact results, X%, have to prior over complete described, exceptional we

rent the portfolio by growth. term X.X% year, property collections fees for produced excluding high-quality same COVID driven period growth, and NOI Our of base primarily

now let's to We continuing XXXX to turn earnings positive but our momentum, are looking guidance. forward this

refer usual, including As outlook. X X midpoint our forward helpful details Pages current to earnings of XXXX of some the our a presentation, to year roll you I'll results on and of

in to We at our year-over-year are FFO X%. property The grow which $X.XX range we reflects the to of which midpoint. a guiding growth of share, a to X% contributor largest same NOI, is expect $X.XX to to per earnings NAREIT range X.X% nearly growth

a our have this entered with of properties our X.X those as reminder, we January of that property X now years quick as now Urstadt past are merger pool year. about Biddle, same Just date

driver low part commenced as XX Alan recent with manageable filings We uptick quality spreads the tenant our Tenant and of Regency's failures credit is will said, occupancy, including the move-outs, quarter rents that total revenues, same-property as portfolio averages. primary merchandising to and indication base unchanged re-leasing and ago, the be credit NOI this average exposure redevelopment well in points higher our our outlook contractual strength our will a growth business, always rent line of contributions. Even referenced, discipline. our in XXX risk loss simply expect historical from and have of range but continued to generated speaks at steps, continue in as bankruptcy from a to basis of of with

as capacity a price average to of balance an work Moving quarter, $XX.XX invest equity In into to liquidity investment $XXX on share. and balance we our forward ATM sheet issuance accretive of basis sheet. opportunities. million at per our we adds fourth the raised the This to capital growth through

have settle We months to sources order and XX to in match uses. fund best

and Our a liquidity is cash capital. generation position free further by strong debt to access supported flow

$X.X billion We have available on more line our than of unsecured credit.

no debt-to-EBITDA. flexibility to to We this X.Xx late within will have be opportunistic, year, low-cost range drive to of growth bond look to believe ready and value. With that and sheet our leverage continue targeted shareholder We create provide we questions. position, forward to ample us access maturities remains unsecured balance capital and liquidity your the X that, until our our with

Operator

Reale Our comes Andrew Instructions] Bank [Operator with question America. of from first

Andrew Reale

of redevelopment blended spend types million projects in-process up yield plan could I adding more And the what just the tick see development value to on forward? And start in you as 'XX? in year, and going you share X% did $XXX you of XXXX. to believe then on what detail So most this

level over you to kind finding opportunities this expect deliver that the to you bit are the long is Or a So little maybe term? even new further? push of

Nicholas Wibbenmeyer

the Andrew, question. Nick. this Really is appreciate

So the spend let's million. start $XXX with your question,

that. the is clear spend to the have So side we equation visibility of

started So XXXX. already that continue through fund that's just forecasting to the we'll project we've

And so as those 'XX, about really we and I in projects started they feel and good continue 'XX that progress. to

In development $XXX spend into finding XXXX and we starts. of opportunities that, another million for redevelopment we as to anticipate do or still addition move

that about team excited make that. and And continues progress so the related to continue be the pipeline to to

the we you X% yield, and pretty, feel been on terms development our see, increased as can We yields in To about we margin. of point, terms of ground-up call being to continue. in comfortable continue as the our In I'd it, those that And in plus, come waves, the they've really starts. on side, and redevelopment steady your would for but they've to bit digits, double know, a can you we range. then in returns little been solve expect of have that low

digit single when basis, X. high the blended you a on combine So

to done to we've and excited about so list. And what date that about excited XXXX, adding

Operator

from comes question next Our Citi. with Craig Mailman

Nicholas Joseph

I kind guidance FFO what was considerations run are of hoping you terms drivers Nick discussed could now drove for previously Craig. the through was growth? the that and It's earnings what of the with in same-store Joseph here above year-over-year growth of

Michael Mas

to And that the earnings for Sure. of And you will to and point, year some that But been you which also is headwinds the acquisition we impact transactions reference interest this of only bond -- it's And X.X% half outlook 'XX. that some outlook be That's X% About our growth, item. the in which coming net majority on again, same of for through. We last or materials X then point placed increase then of the supplemental half right? that to capital we note headwind that in growth our mix already of repurchases primarily here think and line share delivering tell activity, here. add occurred due our rate to even about both that 'XX, And on expected. allocation, 'XX, beyond the I provided, is pretty 'XX. do driving the building the the 'XX. property contribution to to by the I'll have pipeline to cleanly. our in NOI foundationally is accretive developments is $X.XX Page of So driven that of is that net we have that, largely story

expense interest is attributed item actually the So allocation refinance. accretive a activity. And that of that of to that line full cap balance year impact

going So to that's capital accretively invest forward. continuing

-- that Lastly, may capitalize you to stems as again, G&A item, unusual. growing identify the to and result in is take success this business. continue this see a that our I a as just to G&A, But result to directly overhead opportunity back contribution this expense line a will from positive development of and opportunity

that's increasing capitalization. It's 'XX. that in It -- helpful in out. more also with grow our growth point share, to So topping is P&L added rate this starts, rate out our of spend, added The that's reasonable should it's forward. component a at from topping

Operator

comes UBS. question from Michael next Our with Goldsmith

Michael Goldsmith

Can And through felt or of the anything you pressure thought quarter? points? watching credit XX have XXX process quantify reserve loss can XXXX? And the tenants that, walk in you any from visibility for are around to fourth within you you basis the in

Michael Mas

Yes.

then about start with Let specifics. Alan talk me the guidance and can component

of lease we think about maybe loss, it's very credit items, So this. item. line reiterate classic right? expense we've It's just uncollectible through been P&L how that about and to bad clear X really on income, rolling debt a So combination your

is year Actually, better plus at points. that. average did XX 'XX, or basis about points. historical the XX than Our we minus in We ended basis about

of is historically you more the We forward. Then a are as year a going rent that, planning for result component, add second which average to bankruptcy base lost filings.

what's still to to of is clarity, -- is where range, can given but And happen that XX some to and more points. our -- combination these supporting XXX to color we an balance but so however, XX that speculative. so the We going timing the up. And have bankruptcy range have the over current will Sorry, all basis occurred But points. input. holidays. our basis it's is that filings, it's XX through -- Alan fill learn that, the do out we for what's that filings of This

Alan Roth

assets that we approach I think a in testament limited certainly Michael, as to have I Yes, I would our reiterate, exposure. tenant where durability health, traffic too, deliberate are and said of And ARs manageable remarks, this and bring sales known in is the again we just do back I our to low, how to very that up. occupancy. But the our do our that, also trend would terms and continue of manage

is limited Our are objective. many time pipeline the strong. having Supply meeting growth a remains and retailers hard

secure retailers And anxious are are estate. going have so back, real great great to and instance that great estate, in where we real believe space to get that we we

Operator

with from next comes Our Wells question Fargo. Kesten Dori

Dori Kesten

year's the I versus pieces The I'm year I I guess definitely than same through just but But range like store wider? walked also know the a starting wider off it what is guess, last NOI it's for bit. on expected, spread, guide. driving slightly the better was wondering you've

Michael Mas

one, first -- Historically you. feedback head our thank than it better Dori, I'm slightly -- There your comment, number is some is sorry. there.

Okay. our quarter last We're current outlook or compare good. Dori, nod we ] minus [ midpoint of guidance, X.X%. does head gave X.X% that to the plus

we're in leasing with that slightly had positive fourth like given I we So a feel the line great perspective. from quarter

as wide in in guidance is we've -- history, This tight XX basis XX. ranges we've initial had as points. XXX our basis On the as range, points, as various

So I and consistent loss, The timing be year factor finish. kind and it how going past. to it's So where both of largely to in on up -- credit perspective right? with you volumes dictate we the feel those handled of move-outs going end the is a like both on is where we've biggest in from

Operator

Our Greg next from Scotiabank. question comes with McGinniss

Greg McGinniss

development you Given whether view market pipeline, any to could opportunities ground-up cap on and rates you might seeing you instead would compares years recent disclose if and the discuss to the just be transaction on acquire, how ground-up you're your some That could as idea developments trade appreciated after so broadly? And value we where creation? more have can also completion, well. think that

Lisa Palmer

this. to Before going I in and -- is answer jump know Nick

and on meets acquisition priority. Nick's when changed. act asking focus to all lot reiterate of we've our is redevelopment he given could now. Before wanted that that as said, properties objectives. saw acquisition And -- #X a increased and be of kind But we'll of just hasn't and as could investment on lot more of a development it or M&A, be been guidance. our the we've -- We already could a opportunities And acquisitions, continue right be done. overnight that which playbook property, it small portfolio, the to of our about on the I does, I always case, a just our has acted portfolio also single will addressed always compelling notes we've

want there's that's So I nothing changed that just to make sure here.

playbook same. investments the is Our

to accretively. questions. actually in answer let more our And investing strategy I'll remain capital your directly Our is disciplined Nick

Michael Mas

neighborhood you, grocery, you, appetite is we're investor now no. for Greg. community Absolutely, and Lisa. centers. right There's Thank anchor centers no extremely healthy Thank the question pursuing,

said, just development Lisa as But transaction so about are we in funding And and and the really very market. good that. feel we redevelopment our program, we're and first foremost, still active

as so, been And we've our opportunity believe and we successful is before, future that. growth quality doing that in. And our said to find accretively, we an we've we profile can we can fund when going lean and are in equal that to

quarter Nashville opportunities profile, getting assets, again, in basis core point when about at good we more As feel now X% terms really we we're as now given future what really, then checking good it spread. north boxes, the funding talk And up market And what a those in it. buying cap of its some next we in you our a we are to success. had can And XXX we've we question, you see yield. to on pursuing. accretively the in one you grocery-anchored detail those I really again, given mentioned growth related XXXX, solving in look feel question your guidance we'll the to announce mark-to-market of Yes, and 'XX, really again, on about of good plus I good after is as and opportunities. And feel we're about, But about previous feel rates. buying ground

X% And to the deals to so on you developing. solve mid X.X% we're can a

about that And creation value so gate. the of feel good straight out really

we that that's prioritizing are so why capital. And

Operator

Floris next with comes Our Dijkum from Compass question Van Point.

Floris Gerbrand van Dijkum

projects redevelopment the in it necessarily is that you presumably, to your in capital returns the appears up first getting would you're talk infill those? maybe is you juicy shadow little presumably mixed doing -- touch you portfolio? spring some be use maybe And Cheshire first that -- development of some have parties the those pursuing could talk suburb ring you of is of recycling you're a of to really about first assets. And ring mixed a actually develop But just then But the in you how away. do more on big more to that allocation, suburbs. pipeline development or Oakley on use any the the can are third So entitlements ground offload do could your if the looking on like about third potentially -- where locations. Could by to redevelopment scope you're your the accretive potentially further parties. about not and of offloading mixed-use talk of you

Nicholas Wibbenmeyer

Sure.

with So about Floris, the I'll is Nick is and question, again. start this your redevelopment. which first development really

you, would I our we're geographic active tell in so all of And territory. aspects

you've as of are first so or And some some redevelopments our ring infill, second alluded, are suburbs.

to are we hyper-focused on lever pull so And that opportunities. continuing at all

wouldn't redevelopments And more I infill developments so than necessarily. articulate our are

some development opportunities. have We

on currently are working We that.

our I infill some core the think of those you'll to we see in markets. are announced future, very

the so use related projects. and our And redevelopments. And developments think very geographic may do highest of mixed-use you we on feel we terms focused good been to that then complicated have your retail. Projects different than territory entire best as and are aware, and we loud question, be continue are not mixed-use in to about something

tell will are small I bring component. a a you, would in But those We partner.

for the As use our the you you on bit comes ground years. the moving look where horizontal forward, aspect would we're more may on hyper mixed-use we program mixed where a there is be business. I our components in what we've at ups, play in tell partner, some focused a will redevelopment bring of done core to which retail potential little

we've different the developments last no so. large those decade than over that's or handled So how

Operator

question BMO next Juan comes Sanabria with from Our Markets. Capital

Juan Sanabria

was be occupancy how if to kind in build on maybe same-store able comment expect the to if versus -- of 'XX? much think know as out I then something a the to was question And was economic in a be the you'd and Just topping G&A, what part it growth could comment would or the I you B. capture There XXXX. just like a redevelopment rate it's don't but potential there? And

see So pressures would if was offset inflationary to that Just like clarify to wanted to that was portion the I to capitalized reference like wanted some pressures? that G&A interest just in that. helping

Michael Mas

take these. of Juan, most I'll I think

of occupancy we're and credit at So perspective, an leased, to as from peak So some mentioned, loss percent we're right? a guidance -- we of earnings our overall although to of and the the activity, demand. Rent-paying driver line, to all think I'm encouraging higher have occupancy forecasting likelihood same-property this in continue to guide is normal meaningful XXXX. hitting to we of kind we the and and been calls. We've with really in team to about -- -- lease on make these on churn previous we're losing anticipating both space, tenants centers which are quarters year top the not headway going great growth, to subsequent occupancy, growth in great level

occupancy I we opportunity rent-paying maybe by in basis. average even basis XX points, on to think an have XXXX move the more,

So quickly rate of think going average higher get and think fact, that have the to basis. in can I that that about the we forward. benefit And number in year run average pretty

been to that. outlook developments have forecasting that expected basis really there's growth redevelopment a rate component and for be the to points. that delivered, is those We've reiterate year a same is a going now. about impact largely growth that will our north forward. I And property of XXX on So meaningful of basis good visibility into our same-property

Lastly, capitalized G&A kind to Number one, of overhead it that. G&A, isn't interest of your in question. is is, pivoting but expense a and component

in 'XX, capitalized X make and was that increases invested we've what in and long team into topping this capacity, because at has all over deliver we've And But highlight continue should growing continue kind targeted speak. that resulted leveling rate meaningfully clear range time. And from hitting is starts. and limits, operating years off. in our then top to last centers a to overhead. of the aspects on of to of in strategically That pretty results we're the hitting has kind will to and off [ we those in P&L $XXX-plus growth our meaningfully so we're can million X going grown more We're and -- a pipeline significantly, you for perspective, our capitalized see of benefiting are it of full that been to hopefully we that. ] So off is we business -- overhead our in trying I our development increases

Lisa Palmer

rate we're to we expect -- me let which will our growth think capitalized if I it normal overhead about continue that Regency the be, of maybe just growth able capitalizing. people to will we easy are to, we -- way the basis million is are starts sustainable think a G&A it's than that because rate $XXX the mirror on that working within

not will a normal It's will best stop along It the probably way it to G&A year-to-year. in about growing. increase think that just that's it. grow with So

Operator

Our Markets. question with next Capital comes Thomas KeyBanc Todd from

Todd Thomas

which in You quarter leasing and general, touched spreads on renewal have elevated. spreads the in been

on and then do spreads, in expirations color can changes material 'XX? And year perhaps also either lease they spreads? XX.X%, renewal trend you some can at expectations 'XX, whether rate might you relative XXXX particularly see how the to provide around through any talk there? you throughout And changes in see tenant portfolio's about work newer retention you leased with you any As the

Alan Roth

you for is thank Todd, This the Alan. question.

prior spreads XX% see significant rent, of the to said, total what in this emphasizing both spreads let's emphasize positive GAAP really increase GAAP new strong opening leasing really momentum, environment both is So success through with all bring a the which drives north to know, and quarter, continue in an in rent we steps. new in always XX%, better we transactions which growth. And rent I'll team with contribution that are is to had as and with back is of limited a steps. as in that we coupled for measure of growth sales, supply the which But spreads we to the we've like where having we and rent the sustainable And with spreads that remarks, certainly start I mentioned was quarters. to

really that. deals to to good end stay of that number thriving a the that your And necessarily I'm So XX%, I but strategy portfolio, percent the retention opportunity comfortable And cycle At through we replace. historically keep very relevant. momentum guide wouldn't a that retention feel that question, retailers gives behind XX-ish I per it's about day, and are to the stays the also the but are that intentionally, our from perspective. I deliberate us that. To those part with would us say the for within of important are se,

Operator

from Our with Michael Gorman comes next BTIG. question

Michael Gorman

Just have development We've ask merchant heard opportunities curious turn space recent that relationships back in driving more just you're Obviously, little got space? Obviously, with and I'm capital to retailer any maybe moderating is competition seeing? developer years, And than there's at a minute wanted if here that's these activity tenant opportunities. into maybe at side great about more aggressively demand quite even started on for But margins, see costs at you've the the the some you to now still come to bit. the development competition. margin, construction back robust. conversations also a the the institutional about looking

Nicholas Wibbenmeyer

question I Nick. Michael. very This is astute appreciate And a the question, definitively.

our customers. And so say, some our and look, of first I'd is foremost, competition biggest

active to no be there's self-development own Publix, in program. very H-E-B, so Kroger, they And their question. continue

your very on and is we'll relationships competition and and real our really just that. But the do in unusual well developers. close the is find we good point, work good development, to and wake good up of owners local working astute day business with opportunities the them And have side really, operators and continue to so is to and as we to out. news And operating isn't the day this the in margin,

real And a to very we pep small [ they there involved than which But backyard. ] months I year you, year articulated. they they and step the study ones as so have tell to active, done very lot successfully in continue they in a and X X their we little be developers gotten local a last are which And year do have project where developments continue every happened, have in more or their of weren't. And were would we a ago. ones or out, challenges thorough X you that with, months, of did XX over

to have you have and for the have you even X those puzzle pieces locals are that expertise to have and have capital, the to You the relationships, put have are hard together. to the

even we set than forward. share really that's our in more So on increase getting the opportunity competition with locally, fair good of moving feel margin, continue we about that why the

Lisa Palmer

Yes. Very well said, Nick.

we our why fragmented. that's really And when the sector, it for you think -- is operating as true that's good for well well true Nick it's about operating of for I said, as And and our industry there of to portfolio both true benefits the are well development. -- think the that the development as platform really to to positioned bring real we about portfolio feel because that as scale how national are as the because our able program. operating we're

Operator

Wes from comes with Golladay question Baird. Our next

Wesley Golladay

X at there over opportunity to It development. size I just growing value. look about the the driven? million, go I $XXX enterprise set from seems going Is guess it when the higher? X Is X.X% from to where we pipeline, a it's perspective What's want stick could years? it driving from that risk of to next governor it's a year-end? been like of the

Lisa Palmer

on now color And point forward. Nick going a a consecutive sustainable and for the to that program we've this expect likes. for in if in, objective exceptional we've up meet continue I'll to it jump development And hard the second us to done that $XXX to it can see million At grocery-anchored he and really year. our I where working to that year. continue been bread-and-butter -- building this getting us team work done has to focusing

So lot of work easy, it's Nick -- that. and a has not said, to do it's as taken

we and to certainly are capitalize we then the So be. resource To say opportunity the sheet, we the the extent work it well point, on the set at I -- have human can significantly, we capital that, factor. -- see have set increasing has balance has positioned And opportunity would challenge this to been grow that the that. continue through been limiting that we would so

set it's trust And this driven. that about point, me, changes, if opportunity to it. us So hear talk you'll been

Nicholas Wibbenmeyer

That's that. add Lisa. to good to have I a nothing answer,

Operator

comes Our next ISI. question Evercore from Steve with Sakwa

Unknown Analyst

to number? Are there's what on better in that for conservative a that, the this backfill? circle would loss back is a us going to get and how in helpful. you the understanding point or case the color the before there base quickly back outlined basis on room And credit that get help can a forming This to just XX you also share included revenue in of -- is allowance I Steve. how XX is That to wanted given question much any assumption. I I assumption exposure just that's be many the have you assumption loss the stores is just assumptions. to like touched bankruptcies what Manas assume on how know just on for loss it, base have? credit understand you Or terms you with base you super specific call wanted into from

Michael Mas

I what do if as I characterized it's helpful. be process. it super a But I'll assumption know don't can. ground-up will

space-by-space, think of is capturing we're component handicapping trying rent put through sites do a not this likelihood we'll hope call this our -- frankly, plan, exists. risk, bankruptcy We're all where rejected. We're roll. necessarily And very But our tenants those core. control. and we're a what on our the we and see better forth identifying to look know We're I we risk taking rejected the to to assumptions. And known to are how the well we be of in we a are all analysis. we're lot that end potential the And at year. tenant-by-tenant than everyone we of that. So that believe that out making where outlook assuming reality of practical we're be of

Operator

with comes question Kim next from Ki Truist Our Securities. Bin

Ki Bin Kim

full not your grew for even X%. at operating the it year-over-year only year, looking So same-store expenses

expenses? issue are some provide you're is that some a initiatives comp curious, there a are lid on on of just on -- working details was that I there's keeping if So that operating going your can on? Or any maybe you

Michael Mas

team. perspective. I Yes. because good property the our delivering advantages, level of a in tenants, managing our that contract Little as know our very of we're be service to years It's consumers your simple will appreciative the will But team good, I -- to We to negotiation as operations at appreciate benefit, work just I that diligent that. calibrate It's the service noticing a that. high it's price environment hard last point, to Bin, have say do really several bit rising scale the ensure levels P&L. work Ki of just hard end by also while and from over that. the our Lisa's to

Ki Bin Kim

your too. sure it, I'm tenants appreciate

Operator

Instructions] Our Street. Paulina Rojas from next with question [Operator Green comes

Paulina Rojas Schmidt

And there around significant immigration my question and tariffs. policies is is really uncertainty big Today, picture.

it's finally have your think clarity So for around, retail specific more or how implemented. two, general business one, you and could relevant you to how any not on policies retailer I'm topic, cost, more on what a for your variables what do profitability sensitive certainly other the monitor? to are I'm these could sector be category the don't thoughts And direction on see for position a -- the much tenant a Whether interested be Regency? And specific take? it construction in on really impactful do asking factor? position we

Lisa Palmer

And not recessions we for likely the positioned. seat think wouldn't is I'm glad different. But doing similar that I more that prediction well it impact to because in the the be we the not I if about to in past to because is are so I'd today, a that asked material question, the I'm do think And expect something appreciate we for economic a sitting could I way sitting than and cycles, Paulina. I there be position or Regency portfolio. predict, you be

take trade those so high price And past, you we been areas in trade increases. operate, that inflationary years, -- one, in very even If inflationary it areas in absorb to resilient. has -- able the the consumer is which the very

then to environments operating our perform in. cycles. pay in better You merchandising rent quality larger to that the think of about therefore, tend sales, afford are value, centers of those on inflationary quality have themselves necessity, to if and the come producing sales. portfolios consumers to the through within we scale producing the those tend portfolio, you're because can our you of categories economic mix, better And the higher and focus service, And units continue our of the tenants

don't impacts we to would are cycles, at believe I what material. immune impact So with looking will that are neither say this from be we will to, tenants be. tariffs, forward our I that But the economic never time, that

pay It's if squeezed, some they rent, is their tenants and think the If too, margins how resilient grow and our and think and we are to really they've grow make their that to grow they have I to continue sales, sales a they continue continue can win-win. difficult and rent. collect they other rent. times operated been. survived. being about thing, They adaptive flexible we and have money Even through

do expect significant. not So to that be it I for

anytime and achieving something that go a something and impacts, years, us, and have returns. and side development -- up. it's for supply it potential development with. X dealt achieving We've the immigration supply is On and still the labor costs the been very it's challenge past construction our for the our goals with Again, we've dealt successful we

have So and an be could, could we'll expect there There again, to impact? success. continue I

Operator

Our next Tsai with Linda from Jefferies. question comes

Linda Yu Tsai

construction? cost X labor X years, developments the yield as being On yield acquisitions, a that spread and getting or plus how look out of you spread north to given X% bps over of rising just is stable XXX and

Nicholas Wibbenmeyer

question. this Linda, I the Nick. is appreciate

alluded maintain doing best yields and our just costs more little unpredictable. Lisa to, we're hyper even to environments focused As in on those a are when

our that on in underwriting take we into account transactions. so And those

next several in really, does by face than because really the years. But several actually these can increases the look what last can. not our years team has derisking over outperformed of saw as of, in and we've over project you a And the and thoughtful years, deliver, couple so don't pipeline we cost you our as end of looking job transactions one, our that's the project more margin, much on what shoulder see process as I hope to the those even last times we team the been able over at

and estate close, real the before effort are on to, appropriately before inputs and there we acceptable time we start hand. And bids we don't and controlled going have believe in diligence that we forward. cost construction, money increases is we drawings while we spend perfect have where visibility getting what significant So and underwrite we

that to lot a do have as those results. years. so said, it Lisa really the We're have of delivering forward, to nice over teams to our going do done we and going had job several a And likely just last

Operator

to question-and-answer We At the the turn point, call to for the session. Lisa of end I'd like over comments. this have reached back Palmer closing

Lisa Palmer

in It queue, I more looks think. the person one we like have

Operator

JPMorgan. next Our is from that jumped question queue into with Mueller Mike the

Michael Mueller

a quickie that occupancy At you can essentially is out more small any here. Just of squeeze leased, Or shops? XX.X% the full?

Lisa Palmer

Alan. I just say Can ahead, Go yes?

Alan Roth

And question. after crack we quarter, comment. appreciate similar records a after to I said to going was broken. I quarter be quarter do meant have the are

we stopped can go. thinking So where that about

can. They're lease to the going hyper of to of the estate advantage much to the space Our in. are as environment teams continue of They as that quality and real take focused. quality we're going are the they

So we keep shareholders are going our portfolio. to and pushing for the for

Operator

at time. this questions no There further are

Now back over to for call comments. I'd to like Palmer closing turn Lisa the

Lisa Palmer

comment, I results you just XXXX. you these Thank you since your And with better it. an all I Alan looking exceptional of say to thank I thank time. Regency to team you, you. ended to before and for Thank forward entire all even say Thanks. appreciate that the for

Operator

participation, conference. today's lines your for your this at you time. disconnect you and concludes We thank may This

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