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REGENCY CENTERS CORP - Annual Report: 2014 (Form 10-K)

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             

Commission File Number 1-12298 (Regency Centers Corporation)
Commission File Number 0-24763 (Regency Centers, L.P.)

REGENCY CENTERS CORPORATION
REGENCY CENTERS, L.P.
(Exact name of registrant as specified in its charter)
FLORIDA (REGENCY CENTERS CORPORATION)
 
59-3191743
DELAWARE (REGENCY CENTERS, L.P.)
 
59-3429602
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
 
One Independent Drive, Suite 114
Jacksonville, Florida 32202
 
(904) 598-7000
(Address of principal executive offices) (zip code)
 
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Regency Centers Corporation
Title of each class
 
Name of each exchange on which registered
Common Stock, $.01 par value
 
New York Stock Exchange
6.625% Series 6 Cumulative Redeemable Preferred Stock, $.01 par value
 
New York Stock Exchange
6.000% Series 7 Cumulative Redeemable Preferred Stock, $.01 par value
 
New York Stock Exchange
 
 
 
 
 
 
Regency Centers, L.P.
Title of each class
 
Name of each exchange on which registered
None
 
N/A
________________________________
Securities registered pursuant to Section 12(g) of the Act:
Regency Centers Corporation: None
Regency Centers, L.P.: Class B Units of Partnership Interest
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act
Regency Centers Corporation              YES  o    NO   x                    Regency Centers, L.P.              YES  o    NO  x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o



Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Regency Centers Corporation              YES  x    NO  o                     Regency Centers, L.P.              YES  x    NO  o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Regency Centers Corporation                  x                     Regency Centers, L.P.                  x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Regency Centers Corporation:
Large accelerated filer
x
 
Accelerated filer
o
Non-accelerated filer
o
 
Smaller reporting company
o
Regency Centers, L.P.:
Large accelerated filer
o
  
Accelerated filer
x
Non-accelerated filer
o
  
Smaller reporting company
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Regency Centers Corporation              YES  o    NO   x                    Regency Centers, L.P.              YES  o    NO  x
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants' most recently completed second fiscal quarter.
Regency Centers Corporation              $5,045,698,716               Regency Centers, L.P.              N/A
The number of shares outstanding of the Regency Centers Corporation’s voting common stock was 94,127,031 as of February 18, 2015.
Documents Incorporated by Reference
Portions of Regency Centers Corporation's proxy statement in connection with its 2015 Annual Meeting of Stockholders are incorporated by reference in Part III.
 





EXPLANATORY NOTE
This report combines the annual reports on Form 10-K for the year ended December 31, 2014 of Regency Centers Corporation and Regency Centers, L.P. Unless stated otherwise or the context otherwise requires, references to “Regency Centers Corporation” or the “Parent Company” mean Regency Centers Corporation and its controlled subsidiaries; and references to “Regency Centers, L.P.” or the “Operating Partnership” mean Regency Centers, L.P. and its controlled subsidiaries. The term “the Company” or “Regency” means the Parent Company and the Operating Partnership, collectively.
The Parent Company is a real estate investment trust (“REIT”) and the general partner of the Operating Partnership. The Operating Partnership's capital includes general and limited common Partnership Units (“Units”). As of December 31, 2014, the Parent Company owned approximately 99.8% of the Units in the Operating Partnership and the remaining limited Units are owned by investors. The Parent Company owns all of the Series 6 and 7 Preferred Units of the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has exclusive control of the Operating Partnership's day-to-day management.
The Company believes combining the annual reports on Form 10-K of the Parent Company and the Operating Partnership into this single report provides the following benefits:
 
Enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;  

Eliminates duplicative disclosure and provides a more streamlined and readable presentation; and  

Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports. 
Management operates the Parent Company and the Operating Partnership as one business. The management of the Parent Company consists of the same individuals as the management of the Operating Partnership. These individuals are officers of the Parent Company and employees of the Operating Partnership.
The Company believes it is important to understand the few differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its ownership of partnership interests of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership. The Parent Company does not hold any indebtedness, but guarantees all of the unsecured public debt and approximately 15% of the secured debt of the Operating Partnership. The Operating Partnership holds all the assets of the Company and retains the ownership interests in the Company's joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates all remaining capital required by the Company's business. These sources include the Operating Partnership's operations, its direct or indirect incurrence of indebtedness, and the issuance of partnership units.
Stockholders' equity, partners' capital, and noncontrolling interests are the main areas of difference between the consolidated financial statements of the Parent Company and those of the Operating Partnership. The Operating Partnership's capital includes general and limited common Partnership Units, as well as Series 6 and 7 Preferred Units owned by the Parent Company. The limited partners' units in the Operating Partnership owned by third parties are accounted for in partners' capital in the Operating Partnership's financial statements and outside of stockholders' equity in noncontrolling interests in the Parent Company's financial statements. The Series 6 and 7 Preferred Units owned by the Parent Company are eliminated in consolidation in the accompanying consolidated financial statements of the Parent Company and are classified as preferred units of general partner in the accompanying consolidated financial statements of the Operating Partnership.
In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements, controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. 

As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have assets other than its investment in the Operating Partnership. Therefore, while stockholders' equity and partners' capital differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements.




TABLE OF CONTENTS
 
Item No.
 
Form 10-K
Report Page
 
 
 
 
PART I
 
 
 
 
1.
 
 
 
1A.
 
 
 
1B.
 
 
 
2.
 
 
 
3.
 
 
 
4.
 
 
 
 
PART II
 
 
 
 
5.
 
 
 
6.
 
 
 
7.
 
 
 
7A.
 
 
 
8.
 
 
 
9.
 
 
 
9A.
 
 
 
9B.
 
 
 
 
PART III
 
 
 
 
10.
 
 
 
11.
 
 
 
12.
 
 
 
13.
 
 
 
14.
 
 
 
 
PART IV
 
 
 
 
15.
 
 
 
 
SIGNATURES
 
 
 
 
16.






Forward-Looking Statements    

In addition to historical information, the following information contains forward-looking statements as defined under federal securities laws. These forward-looking statements include statements about anticipated changes in our revenues, the size of our development and redevelopment program, earnings per share and unit, returns and portfolio value, and expectations about our liquidity. These statements are based on current expectations, estimates and projections about the real estate industry and markets in which the Company operates, and management's beliefs and assumptions. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties are described further in the Item 1A. Risk Factors below. The following discussion should be read in conjunction with the accompanying Consolidated Financial Statements and Notes thereto of Regency Centers Corporation and Regency Centers, L.P. appearing elsewhere herein. We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or uncertainties after the date hereof or to reflect the occurrence of uncertain events.

PART I
Item 1.    Business

Regency Centers began its operations as a publicly-traded REIT in 1993, and currently owns direct or partial interests in 322 shopping centers, the majority of which are grocery-anchored community and neighborhood centers. Our centers are located in the top markets of 23 states and the District of Columbia, and contain 38.2 million square feet of gross leasable area, or 28.4 million square feet when including only our pro rata share of the 120 centers partially owned through co-investment partnerships.
Our mission is to be the preeminent grocery-anchored shopping center owner and developer through:
First-rate performance of our exceptionally merchandised and located national portfolio;
Value-enhancing services of the best team of professionals in the business;
Creation of superior growth in shareholder value.

Our Strategy is to:
Sustain average annual 3% net operating income (“NOI”) growth from a high-quality portfolio of community and neighborhood shopping centers;
Develop new high quality shopping centers at attractive returns on investment from a disciplined development program;
Cost-effectively enhance our already strong balance sheet to reduce our cost of capital, provide financial flexibility and weather economic downturns;
Engage a talented and dedicated team that operates efficiently and is recognized as a leader in the real estate industry and sustainability initiatives.

Sustain average annual 3% NOI growth from high-quality portfolio of community and neighborhood shopping centers:
Own and develop centers that are located at key corners in our nation’s most attractive metro areas;
Target trade areas characterized by their strong demographics and consumer buying power, and draw shoppers to our centers with highly productive anchor tenants;
Attract the best national, regional and local retailers and restaurants;
Pursue initiatives that reinforce the underlying quality of our portfolio and maximize long-term growth such as “Fresh Look,” an operating philosophy that guides our merchandising and place-making programs;
Fortify future NOI growth by rigorously reviewing our portfolio to identify low growth assets for disposition;
Opportunistically upgrade our portfolio by acquiring high quality shopping centers with superior upside in NOI growth funded from the sale of low growth assets.

Develop new high quality shopping centers at attractive returns on investment from a disciplined development program:
We have an existing presence in our key markets with in-house expertise and anchor relationships;
Long-term ownership of shopping center developments located in desirable infill markets;
Anchor developments with dominant, national and regional chains and high volume specialty grocers;
Limit size of program to manage total development exposure and risk;
Create additional value through redevelopment of existing centers to benefit the operating portfolio;
Fund development program primarily from the sale of low-growth assets in the existing portfolio.

Cost-effectively enhance an already strong balance sheet to reduce our cost of capital, provide financial flexibility and weather economic downturns:
We have access to multiple sources of debt and equity through the capital markets and co-investment partnerships;

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Fund development and acquisitions from free cash flow, a disciplined match-funding strategy of selling low growth assets, and accessing favorably priced equity;
Further reduce leverage when appropriate through organic growth in earnings and accessing the capital markets prudently;
Rigorously manage our $800 million line of credit and maintain substantial uncommitted capacity;
Maintain a large pool of unencumbered assets and excellent relationships with mortgage lenders;
Maintain a well laddered debt maturity profile.

Engage a talented and dedicated team that operates efficiently and is recognized as a leader in the real estate industry and sustainability initiatives:
We reflect our values by executing and successfully meeting our commitments to our people and our communities, a tradition we have embraced for over 50 years;
Foster a values-based culture, offering a comprehensive benefits package and an engaging workplace environment;
Believe in unwavering standards of honesty and integrity and build our reputation by maintaining the highest ethical principles.
Offer a challenging, safe and dynamic work environment and support the professional development and the personal life of each employee.
Encourage employees to achieve their personal health goals through a robust wellness program focused on education, awareness and prevention.
Contribute to the betterment of our communities by supporting philanthropic programs with employee contribution matching and paid time off to volunteer.

    
Sustainability

We recognize the importance of operating in a sustainable manner and are committed to reducing our environmental impact, including energy and water use, greenhouse gas emissions, and waste.  We are committed to transparency with regard to our sustainability performance, risks and opportunities, and will continue to increase disclosure using industry accepted reporting frameworks.   We believe our commitment to sustainability supports the Company in achieving key strategic objectives, leads to better risk management, enhances our relationships with key stakeholders, and is in the best interest of our shareholders. 

Competition
 
We are among the largest owners of shopping centers in the nation based on revenues, number of properties, GLA, and market capitalization. There are numerous companies and individuals engaged in the ownership, development, acquisition, and operation of shopping centers that compete with us in our targeted markets, including grocery store chains that also anchor some of our shopping centers. This results in competition for attracting anchor tenants, as well as the acquisition of existing shopping centers and new development sites. We believe that our competitive advantages are driven by:
our locations within our market areas;
the design and high quality of our shopping centers;
the strong demographics surrounding our shopping centers;
our relationships with our anchor tenants and our side-shop and out-parcel retailers;
our practice of maintaining and renovating our shopping centers; and,
our ability to source and develop new shopping centers.
  
Employees
 
Our headquarters are located at One Independent Drive, Suite 114, Jacksonville, Florida. We presently maintain 17 market offices nationwide, where we conduct management, leasing, construction, and investment activities. As of December 31, 2014, we had 370 employees and we believe that our relations with our employees are good.

 Compliance with Governmental Regulations
 
Under various federal, state and local laws, ordinances and regulations, we may be liable for the cost to remove or remediate certain hazardous or toxic substances at our shopping centers. These laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence of the hazardous or toxic substances. The cost of required remediation and the owner's liability for remediation could exceed the value of the property and/or the aggregate assets of the owner. The presence of such substances, or the failure to properly remediate such substances, may adversely affect our ability to sell or lease the property or borrow using the property as collateral. While we have a number of properties that could require

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or are currently undergoing varying levels of environmental remediation, known environmental remediation is not currently expected to have a material financial impact on us due to insurance programs designed to mitigate the cost of remediation, various state-regulated programs that shift the responsibility and cost to the state, and existing accrued liabilities for remediation.
 
Executive Officers
 
Our executive officers are appointed each year by our Board of Directors. Each of our executive officers has been employed by us in the position indicated in the list or positions indicated in the pertinent notes below. Each of our executive officers has been employed by us for more than five years.

Name
Age
Title
Executive Officer in Position Shown Since
Martin E. Stein, Jr.
62
Chairman and Chief Executive Officer
1993
Brian M. Smith
60
President and Chief Operating Officer
2009
Lisa Palmer
47
Executive Vice President and Chief Financial Officer
    2013 (1)
Dan M. Chandler, III
48
Managing Director - West
2009
John S. Delatour
55
Managing Director - Central
1999
James D. Thompson
59
Managing Director - East
1993

(1) Ms. Palmer served as Senior Manager of Investment Services in 1996 and assumed the role of Vice President of Capital Markets in 1999. She served as Senior Vice President of Capital Markets from 2003 to 2012 until assuming the role of Executive Vice President and Chief Financial Officer in January 2013.


Company Website Access and SEC Filings

Our website may be accessed at www.regencycenters.com. All of our filings with the Securities and Exchange Commission (“SEC”) can be accessed free of charge through our website promptly after filing; however, in the event that the website is inaccessible, we will provide paper copies of our most recent annual report on Form 10-K, the most recent quarterly report on Form 10-Q, current reports filed or furnished on Form 8-K, and all related amendments, excluding exhibits, free of charge upon request. These filings are also accessible on the SEC's website at www.sec.gov.

General Information

Our registrar and stock transfer agent is Wells Fargo Bank, N.A. (“Wells Fargo Shareowner Services”), Mendota Heights, MN. We offer a dividend reinvestment plan (“DRIP”) that enables our stockholders to reinvest dividends automatically, as well as to make voluntary cash payments toward the purchase of additional shares. For more information, contact Wells Fargo Shareowner Services toll free at (800) 468-9716 or our Shareholder Relations Department at (904) 598-7000.

Our independent registered public accounting firm is KPMG LLP, Jacksonville, Florida. Our legal counsel is Foley & Lardner LLP, Jacksonville, Florida.

Annual Meeting

Our annual meeting will be held at The Ponte Vedra Inn & Club, 200 Ponte Vedra Blvd, Ponte Vedra Beach, Florida, at 8:30 a.m. on Tuesday, May 12, 2015.


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Item 1A. Risk Factors

Risk Factors Related to Our Industry and Real Estate Investments

A shift in retail shopping from brick and mortar stores to internet sales may have an adverse impact on our revenues and cash flow.

Many retailers operating brick and mortar stores have made Internet sales a vital piece of their business. Although many of the retailers in our shopping centers either provide services or sell groceries, such that their customer base does not have a tendency toward online shopping, the shift to internet sales may adversely impact our retail tenants' sales causing those retailers to adjust the size or number of retail locations in the future. This shift could adversely impact our occupancy and rental rates, which would impact our revenues and cash flows.

Downturns in the retail industry likely will have a direct adverse impact on our revenues and cash flow.

Our properties consist primarily of grocery-anchored shopping centers. Our performance therefore is generally linked to economic conditions in the market for retail space. The market for retail space could be adversely affected by any of the following:

Weakness in the national, regional and local economies, which could adversely impact consumer spending and retail sales and in turn tenant demand for space and lead to increased store closings;
Adverse financial conditions for grocery and retail anchors;
Continued consolidation in the retail sector;
Excess amount of retail space in our markets;
Reduction in the demand by tenants to occupy our shopping centers as a result of reduced consumer demand for certain retail categories;
The growth of super-centers and warehouse club retailers, such as those operated by Wal-Mart and Costco, and their adverse effect on traditional grocery chains;
The impact of changing energy costs on consumers and its consequential effect on retail spending; and
Consequences of any armed conflict involving, or terrorist attack against, the United States.

To the extent that any of these conditions occur, they are likely to impact market rents for retail space, occupancy in the operating portfolios, our ability to sell, acquire or develop properties, and our cash available for distributions to stock and unit holders.

Our revenues and cash flow could be adversely affected if economic or market conditions deteriorate where our properties are geographically concentrated, which may impede our ability to generate sufficient income to pay expenses and maintain our properties.

The economic conditions in markets in which our properties are concentrated greatly influence our financial performance. During the year ended December 31, 2014, our properties in California, Florida, and Texas accounted for 30.6%, 11.3%, and 10.0%, respectively, of our net operating income from Consolidated Properties plus our pro-rata share from Unconsolidated Properties ("pro-rata basis"). Our revenues and cash available to pay expenses, maintain our properties, and for distributions to stock and unit holders could be adversely affected by this geographic concentration if market conditions, such as supply of or demand for retail space, deteriorate in California, Florida, or Texas relative to other geographic areas.

Our success depends on the success and continued presence of our “anchor” tenants.

Anchor tenants occupy large amounts of square footage, pay a significant portion of the total rents at a property and contribute to the success of other tenants by drawing significant numbers of customers to a property. We derive significant revenues from anchor tenants such as Kroger, Publix, and Safeway, who accounted for 4.5%, 3.8%, and 2.3%, respectively, of our total annualized base rent on a pro-rata basis, for the year ended December 31, 2014. Our net income could be adversely affected by the loss of revenues in the event a significant tenant:

Becomes bankrupt or insolvent;
Experiences a downturn in its business;
Materially defaults on its leases;
Does not renew its leases as they expire; or
Renews at lower rental rates.

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Some anchors have the right to vacate and prevent re-tenanting by paying rent for the balance of the lease term. Vacated anchor space, including space owned by the anchor, can reduce rental revenues generated by the shopping center because of the loss of the departed anchor tenant's customer drawing power. If a significant tenant vacates a property, co-tenancy clauses in select centers may allow other tenants to modify or terminate their rent or lease obligations. Co-tenancy clauses have several variants: they may allow a tenant to postpone a store opening if certain other tenants fail to open their stores; they may allow a tenant to close its store prior to lease expiration if another tenant closes its store prior to lease expiration; or more commonly, they may allow a tenant to pay reduced levels of rent until a certain number of tenants open their stores within the same shopping center.

A significant percentage of our revenues are derived from smaller shop tenants and our net income could be adversely impacted if our smaller shop tenants are not successful.

A significant percentage of our revenues are derived from smaller shop tenants (those occupying less than 10,000 square feet). Smaller shop tenants may be more vulnerable to negative economic conditions as they have more limited resources than larger tenants. Such tenants continue to face increasing competition from non-store retailers and growing e-commerce. In addition, some of these retailers may seek to reduce their store sizes as they increasingly rely on alternative distribution channels, including internet sales, and adjust their square footage needs accordingly. The types of smaller shop tenants vary from retail shops to service providers. If we are unable to attract the right type or mix of smaller shop tenants into our centers, our net income could be adversely impacted.

We may be unable to collect balances due from tenants in bankruptcy.

Although minimum rent is supported by long-term lease contracts, tenants who file bankruptcy have the legal right to reject any or all of their leases and close related stores. In the event that a tenant with a significant number of leases in our shopping centers files bankruptcy and rejects its leases, we could experience a significant reduction in our revenues and may not be able to collect all pre-petition amounts owed by that party.

Our real estate assets may be subject to impairment charges.

Our long-lived assets, primarily real estate held for investment, are carried at cost unless circumstances indicate that the carrying value of the assets may not be recoverable. We evaluate whether there are any indicators, including property operating performance and general market conditions, that the value of the real estate properties (including any related amortizable intangible assets or liabilities) may not be recoverable. Through the evaluation, we compare the current carrying value of the asset to the estimated undiscounted cash flows that are directly associated with the use and ultimate disposition of the asset. Our estimated cash flows are based on several key assumptions, including rental rates, costs of tenant improvements, leasing commissions, anticipated holding periods, and assumptions regarding the residual value upon disposition, including the exit capitalization rate. These key assumptions are subjective in nature and could differ materially from actual results. Changes in our disposition strategy or changes in the marketplace may alter the holding period of an asset or asset group, which may result in an impairment loss and such loss could be material to the Company's financial condition or operating performance. To the extent that the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over fair value.

The fair value of real estate assets is subjective and is determined through comparable sales information and other market data if available, or through use of an income approach such as the direct capitalization method or the traditional discounted cash flow approach. Such cash flow projections consider factors, including expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors, and therefore are subject to management judgment. Changes in those factors could impact the determination of fair value. In estimating the fair value of undeveloped land, we generally use market data and comparable sales information.

These subjective assessments have a direct impact on our net income because recording an impairment charge results in an immediate negative adjustment to net income. There can be no assurance that we will not take additional charges in the future related to the impairment of our assets. Any future impairment could have a material adverse effect on our net income in the period in which the charge is taken.

Adverse global market and economic conditions could cause us to recognize additional impairment charges or otherwise harm our performance.

We are unable to predict the timing, severity, and length of adverse market and economic conditions. Adverse market and economic conditions may impede our ability to generate sufficient operating cash flow to pay expenses, maintain properties, pay distributions to our stock and unit holders, and refinance debt. During adverse periods, there may be significant uncertainty in the valuation of our properties and investments that could result in a substantial decrease in their value. No

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assurance can be given that we would be able to recover the current carrying amount of all of our properties and investments in the future. Our failure to do so would require us to recognize additional impairment charges for the period in which we reached that conclusion, which could materially and adversely affect us and the market price of our common stock.

Unsuccessful development activities or a slowdown in development activities could have a direct impact on our revenues, revenue growth, and/or net income.

We actively pursue development opportunities. Development activities require various government and other approvals for entitlements and any delay in such approvals may significantly delay the development process. We may not recover our investment in development projects for which approvals are not received. We incur other risks associated with development activities, including:

The risk that we may be unable to lease developments to full occupancy on a timely basis;
The risk that occupancy rates and rents of a completed project will not be sufficient to make the project profitable;
The risk that development costs of a project may exceed original estimates, possibly making the project unprofitable;
The risk that delays in the development and construction process could increase costs;
The risk that we may abandon development opportunities and lose our investment in such opportunities;
The risk that the size of our development pipeline will strain the organization's capacity to complete the developments within the targeted timelines and at the expected returns on invested capital;
Changes in the level of future development and redevelopment activity could have an adverse impact on operating results by reducing the amount of capitalizable internal costs for development projects; and
The lack of cash flow during the construction period.

Our acquisition activities may not produce the returns that we expect.

Our investment strategy includes investing in high-quality shopping centers that are leased to market-dominant grocers, category-leading anchors, specialty retailers, or restaurants located in areas with high barriers to entry and above average household incomes and population densities. The acquisition of properties and/or companies entails risks that include, but are not limited to, the following, any of which could adversely affect our results of operations and our ability to meet our obligations:

Properties we acquire may fail to achieve the occupancy or rental rates we project, within the time frames we estimate, which may result in the properties' failure to achieve the returns we projected;
Our pre-acquisition evaluation of the physical condition of each new investment may not detect certain defects or identify necessary repairs until after the property is acquired, which could significantly increase our total acquisition costs or decrease cash flow from the property;
Our investigation of a company, property or building prior to our acquisition, and any representations we may receive from such seller, may fail to reveal various liabilities, which could reduce the cash flow from the acquisition or increase our acquisition costs;
Our estimate of the costs to improve, reposition or redevelop a property may prove to be too low, or the time we estimate to complete the improvement, repositioning or redevelopment may be too short, either of which could result in the property failing to achieve the returns we have projected, either temporarily or for a longer time;
We may not recover our costs from an unsuccessful acquisition;
Our acquisition activities may distract our management and generate significant costs; and
We may not be able to integrate an acquisition into our existing operations successfully.

We may experience difficulty or delay in renewing leases or re-leasing space.

We derive most of our revenue from rent received from our tenants. We are subject to the risks that, upon expiration or termination of leases, leases for space in our properties may not be renewed, space may not be re-leased, or the terms of renewal or re-lease, including the cost of required renovations or concessions to tenants, may be less favorable than current lease terms. As a result, our results of operations and our net income could be adversely impacted.





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We may be unable to sell properties when appropriate because real estate investments are illiquid.

Real estate investments generally cannot be sold quickly. Our inability to respond promptly to unfavorable changes in the performance of our investments could have an adverse effect on our ability to meet our obligations and make distributions to our stock and unit holders.

Geographic concentration of our properties makes our business vulnerable to natural disasters and severe weather conditions, which could have an adverse effect on our cash flow and operating results.

A significant portion of our property gross leasable area is located in areas that are susceptible to earthquakes, tropical storms, hurricanes, tornadoes, wildfires, and other natural disasters. As of December 31, 2014, approximately 23.6%, 15.0%, and 10.5% of our property gross leasable area, on a pro-rata basis, was located in California, Florida, and Texas, respectively. Intense weather conditions during the last decade have caused our cost of property insurance to increase significantly. We recognize that the frequency and / or intensity of extreme weather events may continue to increase due to climate change, and as a result, our exposure to these events could increase.  These weather conditions also disrupt our business and the business of our tenants, which could affect the ability of some tenants to pay rent and may reduce the willingness of residents to remain in or move to the affected area. Therefore, as a result of the geographic concentration of our properties, we face risks, including higher costs, such as uninsured property losses and higher insurance premiums, and disruptions to our business and the businesses of our tenants.

Should we decide in the future to expand into new markets, we may not be successful, which could adversely affect our
financial condition, results of operations and cash flows.

If opportunities arise, we may explore acquisitions of properties in new markets. Each of the risks applicable to our
ability to acquire and integrate successfully and operate properties in our current markets is also applicable in new markets. In
addition, we may not possess the same level of familiarity with the dynamics and market conditions of the new markets we may
enter, which could adversely affect the results of our expansion into those markets, and we may be unable to achieve our desired return on our investments in new markets. If we are unsuccessful in expanding into new markets, it could adversely affect our financial condition, results of operations and cash flows.

An uninsured loss or a loss that exceeds the insurance coverage on our properties could subject us to loss of capital or revenue on those properties.

We carry comprehensive liability, fire, flood, extended coverage, rental loss, and environmental insurance for our properties with policy specifications and insured limits customarily carried for similar properties. We believe that the insurance carried on our properties is adequate and consistent with industry standards. There are, however, some types of losses, such as losses from hurricanes, terrorism, wars or earthquakes, for which the insurance levels carried may not be sufficient to fully cover catastrophic losses impacting multiple properties. In addition, tenants generally are required to indemnify and hold us harmless from liabilities resulting from injury to persons or damage to personal or real property, on or off the premises, due to activities conducted by tenants or their agents on the properties (including without limitation any environmental contamination), and at the tenant's expense, to obtain and keep in full force during the term of the lease, liability and property damage insurance policies. However, our tenants may not properly maintain their insurance policies or have the ability to pay the deductibles associated with such policies. Should a loss occur that is uninsured or in an amount exceeding the combined aggregate limits for the policies noted above, or in the event of a loss that is subject to a substantial deductible under an insurance policy, we could lose all or part of our capital invested in, and anticipated revenue from, such properties, which could have a material adverse effect on our operating results and financial condition, as well as our ability to make distributions to stock and unit holders.

Loss of our key personnel could adversely affect our business and operations.

We depend on the efforts of our key executive personnel. Although we believe qualified replacements could be found for our key executives, the loss of their services could adversely affect our business and operations.


7





We face competition from numerous sources, including other REITs and other real estate owners.

The ownership of shopping centers is highly fragmented. We face competition from other REITs and well capitalized institutional investors, as well as from numerous small owners in the acquisition, ownership, and leasing of shopping centers. We also compete to develop shopping centers with other REITs engaged in development activities as well as with local, regional, and national real estate developers. This competition may:

reduce the number of properties available for acquisition or development;
increase the cost of properties available for acquisition or development;
hinder our ability to attract and retain tenants, leading to increased vacancy rates and/or reduced rents; and
adversely affect our ability to minimize our expenses of operation.

If we cannot successfully compete in our targeted markets, our cash flow, and therefore distributions to stock and unit holders, may be adversely affected.

Costs of environmental remediation could reduce our cash flow available for distribution to stock and unit holders.

Under various federal, state and local laws, an owner or manager of real property may be liable for the costs of removal or remediation of hazardous or toxic substances on the property. These laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence of hazardous or toxic substances. The cost of any required remediation could exceed the value of the property and/or the aggregate assets of the owner or the responsible party. The presence of, or the failure to properly remediate, hazardous or toxic substances may adversely affect our ability to sell or lease a contaminated property or to use the property as collateral for a loan. Any of these developments could reduce cash flow and our ability to make distributions to stock and unit holders.

Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unintended expenditures.

All of our properties are required to comply with the Americans with Disabilities Act (“ADA”), which generally requires that buildings be made accessible to people with disabilities. Compliance with ADA requirements could require removal of access barriers, and noncompliance could result in imposition of fines by the U.S. government or an award of damages to private litigants, or both. While the tenants to whom we lease properties are obligated by law to comply with the ADA provisions, and typically under tenant leases are obligated to cover costs associated with compliance, if required changes involve greater expenditures than anticipated, or if the changes must be made on a more accelerated basis than anticipated, the ability of these tenants to cover costs could be adversely affected. In addition, we are required to operate the properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental entities and become applicable to the properties. We may be required to make substantial capital expenditures to comply with these requirements, and these expenditures could have a material adverse effect on our ability to meet our financial obligations and make distributions to our stock and unit holders.

If we do not maintain the security of tenant-related information, we could incur substantial costs and become subject to litigation.

We have implemented an online payment system where we receive certain information about our tenants that depends upon secure transmissions of confidential information over public networks, including information permitting cashless payments. A compromise of our security systems that results in information being obtained by unauthorized persons could adversely affect our operations, results of operations, financial condition and liquidity, and could result in litigation against us or the imposition of penalties. In addition, a security breach could require us to expend significant resources related to our information security systems and could result in a disruption of our operations.

We rely extensively on computer systems to process transactions and manage our business and disruptions in both our primary and secondary (back-up) systems could harm our ability to run our business.

Although we have independent, redundant and physically separate primary and secondary computer systems, it is critical that we maintain uninterrupted operation of our business-critical computer systems. Our computer systems, including our back-up systems, are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, catastrophic events such as fires, tornadoes and hurricanes, and usage errors by our employees. If our computer systems and our back-up systems are damaged or cease to function properly, we may have to make a significant investment to repair or replace them, and we may suffer interruptions in our operations in the interim. Any

8



material interruption in both of our computer systems and back-up systems may have a material adverse effect on our business or results of operations.




Risk Factors Related to Our Co-investment Partnerships and Acquisition Structure

We do not have voting control over our joint venture investments, so we are unable to ensure that our objectives will be pursued.

We have invested substantial capital as a partner in a number of joint venture investments for the acquisition or development of properties. These investments involve risks not present in a wholly-owned project as we do not have voting control over the ventures, although we do have approval rights over major decisions. The other partner may (i) have interests or goals that are inconsistent with our interests or goals or (ii) otherwise impede our objectives. The other partner also may become insolvent or bankrupt. These factors could limit the return that we receive from such investments or cause our cash flows to be lower than our estimates.

The termination of our co-investment partnerships could adversely affect our cash flow, operating results, and our ability to make distributions to stock and unit holders.

If co-investment partnerships owning a significant number of properties were dissolved for any reason, we would lose the asset and property management fees from these co-investment partnerships, which could adversely affect our operating results and our cash available for distribution to stock and unit holders.


Risk Factors Related to Funding Strategies and Capital Structure

Higher market capitalization rates for our properties could adversely impact our ability to sell properties and fund developments and acquisitions, and could dilute earnings.

As part of our funding strategy, we sell operating properties that no longer meet our investment standards or those with a limited future growth profile. These sales proceeds are used to fund the construction of new developments, redevelopments and acquisitions. An increase in market capitalization rates could cause a reduction in the value of centers identified for sale, which would have an adverse impact on the amount of cash generated. In order to meet the cash requirements of our development program, we may be required to sell more properties than initially planned, which could have a negative impact on our earnings.

We depend on external sources of capital, which may not be available in the future on favorable terms or at all.

To qualify as a REIT, the Parent Company must, among other things, distribute to its stockholders each year at least 90% of its REIT taxable income (excluding any net capital gains). Because of these distribution requirements, we may not be able to fund all future capital needs with income from operations. We therefore will have to rely on third-party sources of capital, which may or may not be available on favorable terms or at all. Our access to third-party sources of capital depends on a number of things, including the market's perception of our growth potential and our current and potential future earnings. Our access to debt depends on our credit rating, the willingness of creditors to lend to us and conditions in the capital markets.  In addition to finding creditors willing to lend to us, we are dependent upon our joint venture partners to contribute their pro rata share of any amount needed to repay or refinance existing debt when lenders reduce the amount of debt our joint ventures are eligible to refinance.

In addition, our existing debt arrangements also impose covenants that limit our flexibility in obtaining other financing, such as a prohibition on negative pledge agreements. Additional equity offerings may result in substantial dilution of stockholders' interests and additional debt financing may substantially increase our degree of leverage.

Without access to external sources of capital, we would be required to pay outstanding debt with our operating cash flows and proceeds from property sales.  Our operating cash flows may not be sufficient to pay our outstanding debt as it comes due and real estate investments generally cannot be sold quickly at a return we believe is appropriate.  If we are required to deleverage our business with operating cash flows and proceeds from property sales, we may be forced to reduce the amount of, or eliminate altogether, our distributions to stock and unit holders or refrain from making investments in our business.



9




Our debt financing may adversely affect our business and financial condition.

Our ability to make scheduled payments or to refinance our indebtedness will depend primarily on our future performance, which to a certain extent is subject to economic, financial, competitive and other factors beyond our control. In addition, we do not expect to generate sufficient funds from operations to make balloon principal payments on our debt when due. If we are unable to refinance our debt on acceptable terms, we may be forced (i) to dispose of properties, which might result in losses, or (ii) to obtain financing at unfavorable terms, either of which could reduce the cash flow available for distributions to stock and unit holders. If we cannot make required mortgage payments, the mortgagee could foreclose on the property securing the mortgage.

Covenants in our debt agreements may restrict our operating activities and adversely affect our financial condition.

Our unsecured notes, unsecured term loan, and unsecured line of credit contain customary covenants, including compliance with financial ratios, such as ratio of total debt to gross asset value and fixed charge coverage ratio. Fixed charge coverage ratio is defined as earnings before interest, taxes, depreciation and amortization ("EBITDA") divided by the sum of interest expense and scheduled mortgage principal paid to our lenders plus dividends paid to our preferred stockholders. Our debt arrangements also restrict our ability to enter into a transaction that would result in a change of control. These covenants may limit our operational flexibility and our acquisition activities. Moreover, if we breach any of the covenants in our debt agreements, and do not cure the breach within the applicable cure period, our lenders could require us to repay the debt immediately, even in the absence of a payment default. Many of our debt arrangements, including our unsecured notes, unsecured term loan, and unsecured line of credit are cross-defaulted, which means that the lenders under those debt arrangements can put us in default and require immediate repayment of their debt if we breach and fail to cure a default under certain of our other material debt obligations. As a result, any default under our debt covenants could have an adverse effect on our financial condition, our results of operations, our ability to meet our obligations, and the market value of our stock.

Increases in interest rates would cause our borrowing costs to rise and negatively impact our results of operations.
    
Although a significant amount of our outstanding debt has fixed interest rates, we do borrow funds at variable interest rates under our credit facilities. Increases in interest rates would increase our interest expense on any variable rate debt to the extent we have not hedged our exposure to changes in interest rates. In addition, increases in interest rates will affect the terms under which we refinance our existing debt as it matures, to the extent we have not hedge our exposure to changes in interest rates. This would reduce our future earnings and cash flows, which could adversely affect our ability to service our debt and meet our other obligations and also could reduce the amount we are able to distribute to our stock and unit holders.

We may acquire properties or portfolios of properties through tax-deferred contribution transactions, which could result in stockholder dilution and limit our ability to sell such assets.

We may acquire properties or portfolios of properties through tax deferred contribution transactions in exchange for
partnership interests in our operating partnership, which may result in stockholder dilution. This acquisition structure may have
the effect of, among other things, reducing the amount of tax depreciation we could deduct over the tax life of the acquired
properties, and may require that we agree to protect the contributors’ ability to defer recognition of taxable gain through
restrictions on our ability to dispose of the acquired properties and/or the allocation of partnership debt to the contributors to
maintain their tax bases. These restrictions could limit our ability to sell an asset at a time, or on terms, that would be favorable
absent such restrictions.

Hedging activity may expose us to risks, including the risks that a counterparty will not perform and that the hedge will
not yield the economic benefits we anticipate, which could adversely affect us.

From time to time, we manage our exposure to interest rate volatility by using interest rate hedging arrangements that
involve risk, such as the risk that counterparties may fail to honor their obligations under these arrangements, and that these
arrangements may not be effective in reducing our exposure to interest rate changes. There can be no assurance that our hedging arrangements will qualify for hedge accounting or that our hedging activities will have the desired beneficial impact on our results of operations. Should we desire to terminate a hedging agreement, there could be significant costs and cash requirements involved to fulfill our obligations under the hedging agreement. Failure to hedge effectively against interest rate changes may adversely affect our results of operations.






10



Risk Factors Related to the Market Price for Our Debt and Equity Securities

Changes in economic and market conditions could adversely affect the market price of our securities.

The market price of our debt and equity securities may fluctuate significantly in response to many factors, many of which are out of our control, including:

Actual or anticipated variations in our operating results;
Changes in our funds from operations or earnings estimates;
Publication of research reports about us or the real estate industry in general and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REIT's;
The ability of our tenants to pay rent and meet their other obligations to us under current lease terms and our ability to re-lease space as leases expire;
Increases in market interest rates that drive purchasers of our stock to demand a higher dividend yield;
Changes in market valuations of similar companies;
Adverse market reaction to any additional debt we incur in the future;
Any future issuances of equity securities;
Additions or departures of key management personnel;
Strategic actions by us or our competitors, such as acquisitions or restructurings;
Actions by institutional stockholders;
Changes in our dividend payments;
Speculation in the press or investment community; and
General market and economic conditions.

These factors may cause the market price of our securities to decline, regardless of our financial condition, results of operations, business or prospects. It is impossible to ensure that the market price of our securities, including our common stock, will not fall in the future. A decrease in the market price of our common stock could reduce our ability to raise additional equity in the public markets. Selling common stock at a decreased market price would have a dilutive impact on existing stockholders.

We cannot assure you we will continue to pay dividends at historical rates.

Our ability to continue to pay dividends at historical rates or to increase our dividend rate will depend on a number of factors, including, among others, the following:
  
Our financial condition and results of future operations;
The terms of our loan covenants; and
Our ability to acquire, finance, develop or redevelop and lease additional properties at attractive rates.

If we do not maintain or periodically increase the dividend on our common stock, it could have an adverse effect on the market price of our common stock and other securities.

Changes in accounting standards may adversely impact our financial results.

The Financial Accounting Standards Board ("FASB"), in conjunction with the SEC, has several key projects on their agenda that could impact how we currently account for our material transactions, including lease accounting and other convergence projects with the International Accounting Standards Board. At this time, we are unable to predict with certainty which, if any, proposals may be passed or what level of impact any such proposal could have on the presentation of our consolidated financial statements, our results of operations and our financial ratios required by our debt covenants.
 
Risk Factors Related to Federal Income Tax Laws

If the Parent Company fails to qualify as a REIT for federal income tax purposes, it would be subject to federal income tax at regular corporate rates.

We believe that the Parent Company qualifies for taxation as a REIT for federal income tax purposes, and we plan to operate so that we can continue to meet the requirements for taxation as a REIT. If the Parent Company continues to qualify as a REIT, it generally will not be subject to federal income tax on income that we distribute to our stockholders. Many REIT requirements, however, are highly technical and complex. The determination that the Parent Company is a REIT requires an analysis of various factual matters and circumstances, some of which may not be totally within our control and some of which

11



involve questions of interpretation. For example, to qualify as a REIT, at least 95% of our gross income must come from specific passive sources, like rent, that are itemized in the REIT tax laws. There can be no assurance that the Internal Revenue Service (“IRS”) or a court would agree with the positions we have taken in interpreting the REIT requirements. We are also required to distribute to our stockholders at least 90% of our REIT taxable income, excluding capital gains. The fact that we hold many of our assets through co-investment partnerships and their subsidiaries further complicates the application of the REIT requirements. Furthermore, Congress and the IRS might make changes to the tax laws and regulations, and the courts might issue new rulings, that make it more difficult, or impossible, for the Parent Company to remain qualified as a REIT.

Also, unless the IRS granted relief under certain statutory provisions, the Parent Company would remain disqualified as a REIT for four years following the year it first failed to qualify. If the Parent Company failed to qualify as a REIT (currently and/or with respect to any tax years for which the statute of limitations has not expired), we would have to pay significant income taxes, reducing cash available to pay dividends, which would likely have a significant adverse effect on the value of our securities. In addition, we would no longer be required to pay any dividends to stockholders. Although we believe that the Parent Company qualifies as a REIT, we cannot assure you that the Parent Company will continue to qualify or remain qualified as a REIT for tax purposes.

Even if the Parent Company qualifies as a REIT for federal income tax purposes, we are required to pay certain federal, state and local taxes on our income and property. For example, if we have net income from “prohibited transactions,” that income will be subject to a 100% tax. In general, prohibited transactions include sales or other dispositions of property held primarily for sale to customers in the ordinary course of business. The determination as to whether a particular sale is a prohibited transaction depends on the facts and circumstances related to that sale. While we have undertaken a significant number of asset sales in recent years, we do not believe that those sales should be considered prohibited transactions, but there can be no assurance that the IRS would not contend otherwise.

Dividends paid by REITs generally do not qualify for reduced tax rates.

Subject to limited exceptions, dividends paid by REITs (other than distributions designated as capital gain dividends or returns of capital) are not eligible for reduced rates for qualified dividends paid by "C" corporations and are taxable at ordinary income tax rates. The more favorable rates applicable to regular corporate qualified dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including the shares of our capital stock.

Foreign stockholders may be subject to U.S. federal income tax on gain recognized on a disposition of our common stock if we do not qualify as a "domestically controlled" REIT.

A foreign person disposing of a U.S. real property interest, including shares of a U.S. corporation whose assets consist principally of U.S. real property interests is generally subject to U.S. federal income tax on any gain recognized on the disposition. This tax does not apply, however, to the disposition of stock in a REIT if the REIT is "domestically controlled." In general, we will be a domestically controlled REIT if at all times during the five-year period ending on the applicable stockholder’s disposition of our stock, less than 50% in value of our stock was held directly or indirectly by non-U.S. persons. If we were to fail to qualify as a domestically controlled REIT, gain recognized by a foreign stockholder on a disposition of our common stock would be subject to U.S. federal income tax unless our common stock was traded on an established securities market and the foreign stockholder did not at any time during a specified testing period directly or indirectly own more than 5% of our outstanding common stock.

Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.

The REIT provisions of the Code limit our ability to hedge our liabilities. Generally, income from a hedging transaction we enter into either to manage risk of interest rate changes with respect to borrowings incurred or to be incurred to acquire or carry real estate assets, or to manage the risk of currency fluctuations with respect to any item of income or gain (or any property which generates such income or gain) that constitutes “qualifying income” for purposes of the 75% or 95% gross income tests applicable to REITs, does not constitute “gross income” for purposes of the 75% or 95% gross income tests, provided that we properly identify the hedging transaction pursuant to the applicable sections of the Code and Treasury Regulations. To the extent that we enter into other types of hedging transactions, or fail to make the proper tax identifications, the income from those transactions is likely to be treated as non-qualifying income for purposes of both gross income tests. As a result of these rules, we may need to limit our use of otherwise advantageous hedging techniques or implement those hedges through a taxable REIT subsidiary, or TRS. The use of a TRS could increase the cost of our hedging activities (because our TRS would be subject to tax on income or gain resulting from hedges entered into by it) or expose us to greater risks than we would otherwise want to bear. In addition, net losses in a TRS will generally not provide any tax benefit except for being carried forward for use against future taxable income in the TRS.

12





Risk Factors Related to Our Ownership Limitations and the Florida Business Corporation Act

Restrictions on the ownership of the Parent Company's capital stock to preserve its REIT status could delay or prevent a change in control.

Ownership of more than 7% by value of our outstanding capital stock is prohibited, with certain exceptions, by the Parent Company's articles of incorporation, for the purpose of maintaining its qualification as a REIT. This 7% limitation may discourage a change in control and may also (i) deter tender offers for our capital stock, which offers may be attractive to our stockholders, or (ii) limit the opportunity for our stockholders to receive a premium for their capital stock that might otherwise exist if an investor attempted to assemble a block in excess of 7% of our outstanding capital stock or to affect a change in control.

The issuance of the Parent Company's capital stock could delay or prevent a change in control.

The Parent Company's articles of incorporation authorize our Board of Directors to issue up to 30,000,000 shares of preferred stock and 10,000,000 shares of special common stock and to establish the preferences and rights of any shares issued. The issuance of preferred stock or special common stock could have the effect of delaying or preventing a change in control. The provisions of the Florida Business Corporation Act regarding control share acquisitions and affiliated transactions could also deter potential acquisitions by preventing the acquiring party from voting the common stock it acquires or consummating a merger or other extraordinary corporate transaction without the approval of our disinterested stockholders.

Item 1B. Unresolved Staff Comments

None.


13



Item 2.    Properties

The following table is a list of the shopping centers, summarized by state and in order of largest holdings, presented for Consolidated Properties (excludes properties owned by unconsolidated co-investment partnerships):
 
 
 
December 31, 2014
 
December 31, 2013
Location
 
Number of Properties
 
GLA (in thousands)
 
Percent of Total
GLA
 
Percent Leased
 
Number of Properties
 
GLA (in thousands)
 
Percent of Total
GLA
 
Percent Leased
California
 
43

 
5,692

 
24.5
%
 
95.4
%
 
42

 
5,500

 
24.5
%
 
96.2
%
Florida
 
38

 
4,025

 
17.3
%
 
93.8
%
 
40

 
4,159

 
18.6
%
 
91.2
%
Texas
 
21

 
2,689

 
11.5
%
 
96.1
%
 
18

 
2,384

 
10.6
%
 
96.0
%
Georgia
 
15

 
1,390

 
6.0
%
 
93.5
%
 
15

 
1,385

 
6.2
%
 
94.6
%
Ohio
 
9

 
1,307

 
5.6
%
 
98.8
%
 
9

 
1,297

 
5.8
%
 
97.8
%
Colorado
 
15

 
1,266

 
5.5
%
 
90.7
%
 
15

 
1,261

 
5.6
%
 
89.5
%
Illinois
 
6

 
920

 
4.0
%
 
96.8
%
 
5

 
872

 
3.9
%
 
94.1
%
North Carolina
 
10

 
895

 
3.9
%
 
94.9
%
 
10

 
903

 
4.0
%
 
95.3
%
Virginia
 
6

 
841

 
3.6
%
 
95.3
%
 
5

 
744

 
3.3
%
 
97.4
%
Washington
 
5

 
606

 
2.6
%
 
99.8
%
 
5

 
605

 
2.7
%
 
98.4
%
Oregon
 
6

 
563

 
2.4
%
 
97.2
%
 
7

 
617

 
2.7
%
 
95.8
%
Massachusetts
 
3

 
519

 
2.2
%
 
92.5
%
 
3

 
506

 
2.3
%
 
96.3
%
Missouri
 
4

 
408

 
1.8
%
 
100.0
%
 
4

 
408

 
1.8
%
 
100.0
%
Pennsylvania
 
4

 
325

 
1.4
%
 
99.6
%
 
4

 
325

 
1.4
%
 
99.6
%
Tennessee
 
3

 
317

 
1.4
%
 
96.1
%
 
5

 
392

 
1.7
%
 
96.7
%
Connecticut
 
3

 
315

 
1.4
%
 
96.8
%
 

 

 
%
 
%
Arizona
 
2

 
274

 
1.2
%
 
95.1
%
 
2

 
274

 
1.2
%
 
87.1
%
Indiana
 
3

 
240

 
1.0
%
 
96.1
%
 
4

 
209

 
0.9
%
 
90.8
%
Delaware
 
1

 
232

 
1.0
%
 
92.0
%
 
2

 
243

 
1.1
%
 
94.8
%
Michigan
 
2

 
118

 
0.5
%
 
96.4
%
 
2

 
118

 
0.5
%
 
53.4
%
Maryland
 
1

 
113

 
0.5
%
 
97.2
%
 
1

 
88

 
0.4
%
 
100.0
%
Alabama
 
1

 
85

 
0.4
%
 
89.9
%
 
1

 
85

 
0.4
%
 
84.5
%
South Carolina
 
1

 
60

 
0.3
%
 
100.0
%
 
2

 
74

 
0.3
%
 
100.0
%
Kentucky
 

 

 
%
 
%
 
1

 
23

 
0.1
%
 
100.0
%
Total
 
202
 
23,200
 
100.0%
 
95.3%
 
202
 
22,472
 
100.0%
 
94.5%
    
Certain Consolidated Properties are encumbered by mortgage loans of $541.6 million, excluding debt premiums and discounts, as of December 31, 2014.

The weighted average annual effective rent for the consolidated portfolio of properties, net of tenant concessions, is $18.30 and $17.40 per square foot ("SqFT") as of December 31, 2014 and 2013, respectively.

14



The following table is a list of the shopping centers, summarized by state and in order of largest holdings, presented for Unconsolidated Properties (includes properties owned by unconsolidated co-investment partnerships):
 
 
 
December 31, 2014
 
December 31, 2013
Location
 
Number of Properties
 
GLA (in thousands)
 
Percent of Total
GLA
 
Percent Leased
 
Number of Properties
 
GLA (in thousands)
 
Percent of Total
GLA
 
Percent Leased
California
 
21
 
2,782
 
18.6%
 
97.5%
 
21
 
2,782
 
17.9%
 
96.9%
Virginia
 
19
 
2,643
 
17.6%
 
97.4%
 
21
 
2,685
 
17.3%
 
96.6%
Maryland
 
13
 
1,490
 
9.9%
 
93.6%
 
13
 
1,490
 
9.6%
 
97.0%
North Carolina
 
8
 
1,272
 
8.5%
 
95.2%
 
8
 
1,272
 
8.2%
 
97.3%
Illinois
 
8
 
1,067
 
7.1%
 
94.5%
 
8
 
1,067
 
6.9%
 
97.3%
Texas
 
7
 
934
 
6.2%
 
97.5%
 
8
 
1,070
 
6.9%
 
98.6%
Colorado
 
5
 
862
 
5.8%
 
92.8%
 
5
 
862
 
5.6%
 
95.1%
Florida
 
8
 
682
 
4.6%
 
97.5%
 
9
 
720
 
4.6%
 
95.3%
Minnesota
 
5
 
674
 
4.5%
 
99.3%
 
5
 
677
 
4.4%
 
97.6%
Pennsylvania
 
6
 
661
 
4.4%
 
90.1%
 
6
 
661
 
4.3%
 
92.3%
Washington
 
5
 
621
 
4.1%
 
95.5%
 
4
 
477
 
3.1%
 
91.5%
Connecticut
 
1
 
186
 
1.2%
 
99.8%
 
1
 
180
 
1.2%
 
99.8%
South Carolina
 
2
 
162
 
1.1%
 
98.5%
 
2
 
162
 
1.0%
 
100.0%
New Jersey
 
2
 
158
 
1.1%
 
94.5%
 
2
 
157
 
1.0%
 
92.6%
New York
 
1
 
141
 
0.9%
 
100.0%
 
1
 
141
 
0.9%
 
100.0%
Indiana
 
2
 
138
 
0.9%
 
92.3%
 
2
 
139
 
0.9%
 
86.5%
Wisconsin
 
1
 
133
 
0.9%
 
92.8%
 
2
 
269
 
1.7%
 
93.2%
Arizona
 
1
 
108
 
0.7%
 
93.4%
 
1
 
108
 
0.7%
 
94.1%
Oregon
 
1
 
93
 
0.6%
 
98.1%
 
1
 
93
 
0.6%
 
94.8%
Georgia
 
1
 
86
 
0.6%
 
100.0%
 
1
 
86
 
0.6%
 
96.3%
Delaware
 
1
 
67
 
0.4%
 
90.1%
 
1
 
67
 
0.4%
 
96.1%
Dist. of Columbia
 
2
 
40
 
0.3%
 
97.0%
 
2
 
40
 
0.3%
 
100.0%
Massachusetts
 
 
 
—%
 
—%
 
1
 
184
 
1.2%
 
97.6%
Alabama
 
 
 
—%
 
—%
 
1
 
119
 
0.7%
 
73.9%
    Total
 
120
 
15,000
 
100.0%
 
96.0%
 
126
 
15,508
 
100.0%
 
96.2%

Certain Unconsolidated Properties are encumbered by mortgage loans of $1.4 billion, excluding debt premiums and discounts, as of December 31, 2014.

The weighted average annual effective rent for the unconsolidated portfolio of properties, net of tenant concessions, is $17.85 and $17.34 per SqFT as of December 31, 2014 and 2013, respectively.












15



The following table summarizes the largest tenants occupying our shopping centers for Consolidated Properties plus our pro-rata share of Unconsolidated Properties, as of December 31, 2014, based upon a percentage of total annualized base rent exceeding or equal to 0.5% (GLA and dollars in thousands):

Tenant
 
GLA
 
Percent of Company Owned GLA
 
Annualized Base Rent
 
Percent of Annualized Base Rent
 
Number of Leased Stores
 
Anchor Owned Stores (1)
Kroger
 
2,424
 
8.5%
$
22,818

 
4.5%
 
50
 
5
Publix
 
1,831
 
6.5%
 
19,212

 
3.8%
 
45
 
1
Safeway
 
1,170
 
4.1%
 
11,610

 
2.3%
 
38
 
6
TJX Companies
 
756
 
2.7%
 
9,981

 
2.0%
 
35
 
Whole Foods
 
552
 
1.9%
 
9,875

 
1.9%
 
17
 
CVS
 
505
 
1.8%
 
8,194

 
1.6%
 
45
 
PETCO
 
321
 
1.1%
 
7,043

 
1.4%
 
43
 
Ahold/Giant
 
419
 
1.5%
 
5,884

 
1.2%
 
13
 
H.E.B.
 
344
 
1.2%
 
5,439

 
1.1%
 
5
 
Albertsons
 
396
 
1.4%
 
4,959

 
1.0%
 
11
 
1
Ross Dress For Less
 
306
 
1.1%
 
4,877

 
1.0%
 
16
 
Trader Joe's
 
179
 
0.6%
 
4,699

 
0.9%
 
19
 
JPMorgan Chase Bank
 
67
 
0.2%
 
4,126

 
0.8%
 
26
 
Bank of America
 
84
 
0.3%
 
4,031

 
0.8%
 
30
 
Wells Fargo Bank
 
79
 
0.3%
 
4,006

 
0.8%
 
38
 
Starbucks
 
99
 
0.4%
 
3,900

 
0.8%
 
78
 
Roundys/Marianos
 
219
 
0.8%
 
3,820

 
0.8%
 
5
 
Sears Holdings
 
409
 
1.4%
 
3,279

 
0.6%
 
6
 
1
Panera Bread
 
97
 
0.3%
 
3,210

 
0.6%
 
27
 
Walgreens
 
121
 
0.4%
 
3,083

 
0.6%
 
12
 
SUPERVALU
 
265
 
0.9%
 
3,042

 
0.6%
 
11
 
Wal-Mart
 
466
 
1.6%
 
3,026

 
0.6%
 
5
 
2
Sports Authority
 
134
 
0.5%
 
2,973

 
0.6%
 
3
 
Subway
 
90
 
0.3%
 
2,928

 
0.6%
 
98
 
Target
 
359
 
1.3%
 
2,884

 
0.6%
 
4
 
11
(1) Stores owned by anchor tenant that are attached to our centers.

Our leases for tenant space under 5,000 square feet generally have terms ranging from three to five years. Leases greater than 10,000 square feet generally have lease terms in excess of five years, mostly comprised of anchor tenants. Many of the anchor leases contain provisions allowing the tenant the option of extending the term of the lease at expiration. Our leases provide for the monthly payment in advance of fixed minimum rent, additional rents calculated as a percentage of the tenant's sales, the tenant's pro-rata share of real estate taxes, insurance, and common area maintenance (“CAM”) expenses, and reimbursement for utility costs if not directly metered.







    

16



The following table summarizes lease expirations for the next ten years and thereafter, for our Consolidated and Unconsolidated Properties, assuming no tenants renew their leases (GLA and dollars in thousands):

Lease Expiration Year
 
Number of Tenants with Expiring Leases
 
Expiring GLA
 
Percent of Total Company GLA
 
Minimum Rent Expiring Leases (2)
 
Percent of Minimum Rent (2)
(1)
 
155

 
166

 
0.6
%
 
$
3,691

 
0.8
%
2015
 
909

 
1,827

 
6.9
%
 
40,326

 
8.3
%
2016
 
1,034

 
2,708

 
10.2
%
 
51,713

 
10.6
%
2017
 
1,106

 
3,303

 
12.5
%
 
68,925

 
14.1
%
2018
 
874

 
2,778

 
10.5
%
 
54,309

 
11.1
%
2019
 
808

 
3,180

 
12.0
%
 
60,525

 
12.4
%
2020
 
375

 
1,851

 
7.0
%
 
32,144

 
6.6
%
2021
 
202

 
1,360

 
5.1
%
 
22,841

 
4.7
%
2022
 
242

 
1,646

 
6.2
%
 
26,763

 
5.5
%
2023
 
214

 
1,199

 
4.5
%
 
23,483

 
4.8
%
2024
 
247

 
1,527

 
5.7
%
 
28,696

 
5.8
%
Thereafter
 
507

 
4,979

 
18.8
%
 
75,100

 
15.3
%
Total
 
6,673

 
26,524

 
100.0
%
 
$
488,516

 
100.0
%
(1) Leases currently under month-to-month rent or in process of renewal.
(2) Minimum rent includes current minimum rent and future contractual rent steps, but excludes additional rent such as percentage rent, common area maintenance, real estate taxes and insurance reimbursements.

During 2015, we have a total of 909 leases expiring, representing 1.8 million square feet of GLA. These expiring leases have an average base rent of $22.07 per SqFT. The average base rent of new leases signed during 2014 was $22.02 per SqFT. During periods of recession or when occupancy is low, tenants have more bargaining power, which may result in rental rate declines on new or renewal leases. In periods of recovery and/or when occupancy levels are high, landlords have more bargaining power, which generally results in rental rate growth on new and renewal leases. Based on current economic trends and expectations, and pro-rata percent leased of 95.4%, we expect to see an overall increase in rental rate on new and renewal leases during 2015. Exceptions may arise in certain geographic areas or at specific shopping centers based on the local economic situation, competition, location, and size of the space being leased, among other factors. Additionally, significant changes or uncertainties affecting micro- or macroeconomic climates may cause significant changes to our current expectations.


17



See the following property table and also see Item 7, Management's Discussion and Analysis for further information about our Consolidated and Unconsolidated Properties.


Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
ALABAMA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shoppes at Fairhope Village
 
Mobile
 
 
 
2008
 
2008
 
$—
 
84,740
 
89.9%
 
$14.52
 
Publix
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (AL)
 
 
 
 
 
 
 
 
 
 
84,740
 
89.9%
 
14.52
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ARIZONA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Palm Valley Marketplace
 
Phoenix-Mesa-Scottsdale
 
20%
 
2001
 
1999
 
11,000
 
107,633
 
93.4%
 
13.91
 
Safeway
 
 
Pima Crossing
 
Phoenix-Mesa-Scottsdale
 
 
 
1999
 
1996
 
 
238,275
 
98.5%
 
14.50
 
Golf & Tennis Pro Shop, Inc., SteinMart
 
Life Time Fitness, Paddock Pools Store, Pier 1 Imports, Fight Ready
Shops at Arizona
 
Phoenix-Mesa-Scottsdale
 
 
 
2003
 
2000
 
 
35,710
 
72.4%
 
10.66
 
 
 
Ace Hardware
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (AZ)
 
 
 
 
 
 
 
 
 
11,000
 
381,618
 
95.0%
 
14.11
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CALIFORNIA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4S Commons Town Center
 
San Diego-Carlsbad-San Marcos
 
85%
 
2004
 
2004
 
62,500
 
240,060
 
97.6%
 
30.17
 
Ralphs, Jimbo's...Naturally!
 
Bed Bath & Beyond, Cost Plus World Market, CVS, Griffin Ace Hardware, Ulta
Amerige Heights Town Center
 
Los Angeles-Long Beach-Santa Ana
 
 
 
2000
 
2000
 
16,580
 
89,443
 
100.0%
 
27.59
 
Albertsons, (Target)
 
 
Auburn Village
 
Sacramento--Arden-Arcade--Roseville
 
40%
 
2005
 
1990
 
 
133,944
 
87.8%
 
17.58
 
Bel Air Market
 
Dollar Tree, Goodwill Industries, Dollar Tree (CVS)
Balboa Mesa Shopping Center
 
San Diego-Carlsbad-San Marcos
 
 
 
2012
 
1969
 
 
207,147
 
100.0%
 
23.48
 
Von's Food & Drug, Kohl's
 
CVS
Bayhill Shopping Center
 
San Francisco-Oakland-Fremont
 
40%
 
2005
 
1990
 
21,632
 
121,846
 
97.2%
 
22.05
 
Mollie Stone's Market
 
CVS
Blossom Valley
 
San Jose-Sunnyvale-Santa Clara
 
20%
 
1999
 
1990
 
10,256
 
93,316
 
100.0%
 
24.77
 
Safeway
 
CVS
Brea Marketplace (7)
 
Los Angeles-Long Beach-Santa Ana
 
40%
 
2005
 
1987
 
49,124
 
352,226
 
97.6%
 
17.03
 
Sprout's Markets, Target
 
24 Hour Fitness, Big 5 Sporting Goods, Beverages & More!, Childtime Childcare, Golfsmith

18




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Clayton Valley Shopping Center
 
San Francisco-Oakland-Fremont
 
 
 
2003
 
2004
 
 
260,205
 
94.3%
 
20.72
 
Fresh & Easy, Orchard Supply Hardware
 
Longs Drugs, Dollar Tree, Ross Dress For Less
Corral Hollow
 
Stockton
 
25%
 
2000
 
2000
 
21,300
 
167,184
 
100.0%
 
16.55
 
Safeway, Orchard Supply & Hardware
 
Longs Drug
Costa Verde Center
 
San Diego-Carlsbad-San Marcos
 
 
 
1999
 
1988
 
 
178,623
 
94.5%
 
34.58
 
Bristol Farms
 
Bookstar, The Boxing Club
Diablo Plaza
 
San Francisco-Oakland-Fremont
 
 
 
1999
 
1982
 
 
63,265
 
96.9%
 
35.27
 
(Safeway)
 
(CVS), Beverages & More
East Washington Place
 
Santa Rosa-Petaluma
 
 
 
2011
 
2011
 
 
203,313
 
97.9%
 
23.43
 
(Target), Dick's Sporting Goods, TJ Maxx
 
 
El Camino Shopping Center
 
Los Angeles-Long Beach-Santa Ana
 
 
 
1999
 
1995
 
 
135,740
 
99.5%
 
25.42
 
Von's Food & Drug
 
Sav-On Drugs
El Cerrito Plaza
 
San Francisco-Oakland-Fremont
 
 
 
2000
 
2000
 
38,694
 
256,035
 
95.6%
 
27.45
 
(Lucky's), Trader Joe's
 
(Longs Drug), Bed Bath & Beyond, Barnes & Noble, Jo-Ann Fabrics, PETCO, Ross Dress For Less
El Norte Pkwy Plaza
 
San Diego-Carlsbad-San Marcos
 
 
 
1999
 
1984
 
 
90,549
 
95.2%
 
16.61
 
Von's Food & Drug
 
CVS
Encina Grande
 
San Francisco-Oakland-Fremont
 
 
 
1999
 
1965
 
 
102,413
 
96.5%
 
24.56
 
Safeway
 
Walgreens
Five Points Shopping Center
 
Santa Barbara-Santa Maria-Goleta
 
40%
 
2005
 
2014
 
27,609
 
144,553
 
97.3%
 
26.10
 
Albertsons
 
Longs Drug, Ross Dress for Less, Big 5 Sporting Goods, PETCO
Folsom Prairie City Crossing
 
Sacramento--Arden-Arcade--Roseville
 
 
 
1999
 
1999
 
 
90,237
 
91.7%
 
19.37
 
Safeway
 
 
French Valley Village Center
 
Riverside-San Bernardino-Ontario
 
 
 
2004
 
2004
 
 
98,752
 
97.4%
 
24.24
 
Stater Bros.
 
CVS
Friars Mission Center
 
San Diego-Carlsbad-San Marcos
 
 
 
1999
 
1989
 
141
 
146,898
 
100.0%
 
31.07
 
Ralphs
 
Longs Drug
Gateway 101
 
San Francisco-Oakland-Fremont
 
 
 
2008
 
2008
 
 
92,110
 
100.0%
 
32.05
 
(Home Depot), (Best Buy), Sports Authority, Nordstrom Rack
 
 
Gelson's Westlake Market Plaza
 
Oxnard-Thousand Oaks-Ventura
 
 
 
2002
 
2002
 
 
85,485
 
92.2%
 
21.20
 
Gelson's Markets
 
 
Golden Hills Promenade
 
San Luis Obispo-Paso Robles
 
 
 
2006
 
2006
 
 
241,846
 
98.1%
 
6.93
 
Lowe's
 
Bed Bath & Beyond, TJ Maxx
Granada Village
 
Los Angeles-Long Beach-Santa Ana
 
40%
 
2005
 
1965
 
39,983
 
226,488
 
100.0%
 
21.48
 
Sprout's Markets
 
Rite Aid, TJ Maxx, Stein Mart, PETCO, Homegoods
Hasley Canyon Village
 
Los Angeles-Long Beach-Santa Ana
 
20%
 
2003
 
2003
 
8,361
 
65,801
 
100.0%
 
23.56
 
Ralphs
 
 
Heritage Plaza (7)
 
Los Angeles-Long Beach-Santa Ana
 
 
 
1999
 
1981
 
 
230,506
 
98.6%
 
31.73
 
Ralphs
 
CVS, Daiso, Mitsuwa Marketplace, Total Woman

19




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Indio Towne Center
 
Riverside-San Bernardino-Ontario
 
 
 
2006
 
2010
 
 
179,505
 
91.1%
 
17.81
 
(Home Depot), (WinCo), Toys R Us
 
CVS, 24 Hour Fitness, PETCO, Party City
Jefferson Square
 
Riverside-San Bernardino-Ontario
 
 
 
2007
 
2007
 
 
38,013
 
55.7%
 
14.48
 
 
 
CVS
Juanita Tate Marketplace
 
Los Angeles-Long Beach-Santa Ana
 
 
 
2013
 
2013
 
 
77,096
 
100.0%
 
23.44
 
Northgate Market
 
CVS
Laguna Niguel Plaza
 
Los Angeles-Long Beach-Santa Ana
 
40%
 
2005
 
1985
 
9,082
 
41,943
 
100.0%
 
25.41
 
(Albertsons)
 
CVS
Loehmanns Plaza California
 
San Jose-Sunnyvale-Santa Clara
 
 
 
1999
 
1983
 
 
113,310
 
77.5%
 
19.29
 
(Safeway)
 
Longs Drug
Marina Shores
 
Los Angeles-Long Beach-Santa Ana
 
20%
 
2008
 
2001
 
11,248
 
67,727
 
100.0%
 
32.93
 
Whole Foods
 
PETCO
Mariposa Shopping Center
 
San Jose-Sunnyvale-Santa Clara
 
40%
 
2005
 
1957
 
20,901
 
126,658
 
100.0%
 
18.92
 
Safeway
 
Longs Drug, Ross Dress for Less
Morningside Plaza
 
Los Angeles-Long Beach-Santa Ana
 
 
 
1999
 
1996
 
 
91,212
 
100.0%
 
21.34
 
Stater Bros.
 
 
Navajo Shopping Center
 
San Diego-Carlsbad-San Marcos
 
40%
 
2005
 
1964
 
8,528
 
102,139
 
98.0%
 
13.41
 
Albertsons
 
Rite Aid, O'Reilly Auto Parts
Newland Center
 
Los Angeles-Long Beach-Santa Ana
 
 
 
1999
 
1985
 
 
149,140
 
97.2%
 
21.30
 
Albertsons
 
 
Oakbrook Plaza
 
Oxnard-Thousand Oaks-Ventura
 
 
 
1999
 
1982
 
 
83,286
 
92.7%
 
16.49
 
Albertsons
 
(Longs Drug)
Oak Shade Town Center
 
Sacramento--Arden-Arcade--Roseville
 
 
 
2011
 
1998
 
9,692
 
103,762
 
100.0%
 
19.99
 
Safeway
 
Office Max, Rite Aid
Persimmon Place (4)
 
San Francisco-Oakland-Fremont
 
 
 
2014
 
2014
 
 
153,054
 
78.0%
 
29.37
 
Whole Foods, Nordstrom Rack
 
Homegoods
Plaza Hermosa
 
Los Angeles-Long Beach-Santa Ana
 
 
 
1999
 
1984
 
13,800
 
94,717
 
100.0%
 
24.57
 
Von's Food & Drug
 
Sav-On Drugs
Pleasant Hill Shopping Center
 
San Francisco-Oakland-Fremont
 
40%
 
2005
 
1970
 
29,063
 
227,681
 
100.0%
 
23.72
 
Target, Toys "R" Us
 
Barnes & Noble, Ross Dress for Less
Point Loma Plaza
 
San Diego-Carlsbad-San Marcos
 
40%
 
2005
 
1987
 
26,966
 
212,652
 
93.8%
 
19.45
 
Von's Food & Drug
 
Sport Chalet 5, 24 Hour Fitness, Jo-Ann Fabrics
Powell Street Plaza
 
San Francisco-Oakland-Fremont
 
 
 
2001
 
1987
 
 
165,928
 
97.0%
 
31.10
 
Trader Joe's
 
PETCO, Beverages & More!, Ross Dress For Less, DB Shoe Company, Marshalls
Raley's Supermarket
 
Sacramento--Arden-Arcade--Roseville
 
20%
 
2007
 
1964
 
 
62,827
 
100.0%
 
5.41
 
Raley's
 
 
Rancho San Diego Village
 
San Diego-Carlsbad-San Marcos
 
40%
 
2005
 
1981
 
23,239
 
153,256
 
94.2%
 
20.84
 
Von's Food & Drug
 
(Longs Drug), 24 Hour Fitness
Rona Plaza
 
Los Angeles-Long Beach-Santa Ana
 
 
 
1999
 
1989
 
 
51,760
 
100.0%
 
19.16
 
Superior Super Warehouse
 
 

20




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
San Leandro Plaza
 
San Francisco-Oakland-Fremont
 
 
 
1999
 
1982
 
 
50,432
 
100.0%
 
32.67
 
(Safeway)
 
(Longs Drug)
Seal Beach
 
Los Angeles-Long Beach-Santa Ana
 
20%
 
2002
 
1966
 
 
96,858
 
96.7%
 
23.38
 
Von's Food & Drug
 
CVS
Sequoia Station
 
San Francisco-Oakland-Fremont
 
 
 
1999
 
1996
 
21,100
 
103,148
 
100.0%
 
36.90
 
(Safeway)
 
Longs Drug, Barnes & Noble, Old Navy, Pier 1
Silverado Plaza
 
Napa
 
40%
 
2005
 
1974
 
10,438
 
84,916
 
99.8%
 
15.93
 
Nob Hill
 
Longs Drug
Snell & Branham Plaza
 
San Jose-Sunnyvale-Santa Clara
 
40%
 
2005
 
1988
 
13,934
 
92,352
 
96.9%
 
16.65
 
Safeway
 
 
South Bay Village
 
Los Angeles-Long Beach-Santa Ana
 
 
 
2012
 
2012
 
 
107,706
 
100.0%
 
19.11
 
Wal-Mart, Orchard Supply Hardware
 
Homegoods
Strawflower Village
 
San Francisco-Oakland-Fremont
 
 
 
1999
 
1985
 
 
78,827
 
98.5%
 
19.17
 
Safeway
 
(Longs Drug)
Tassajara Crossing
 
San Francisco-Oakland-Fremont
 
 
 
1999
 
1990
 
19,800
 
146,140
 
98.9%
 
22.06
 
Safeway
 
Longs Drug, Tassajara Valley Hardware
Twin Oaks Shopping Center
 
Los Angeles-Long Beach-Santa Ana
 
40%
 
2005
 
1978
 
10,302
 
98,399
 
96.6%
 
16.94
 
Ralphs
 
Rite Aid
Twin Peaks
 
San Diego-Carlsbad-San Marcos
 
 
 
1999
 
1988
 
 
207,741
 
98.9%
 
17.74
 
Albertsons, Target
 
 
The Hub Hillcrest Market (fka Uptown District)
 
San Diego-Carlsbad-San Marcos
 
 
 
2012
 
1990
 
 
148,806
 
90.6%
 
33.75
 
Ralphs, Trader Joe's
 
 
Valencia Crossroads
 
Los Angeles-Long Beach-Santa Ana
 
 
 
2002
 
2003
 
 
172,856
 
100.0%
 
25.24
 
Whole Foods, Kohl's
 
 
Village at La Floresta (4)
 
Los Angeles-Long Beach-Santa Ana
 
 
 
2014
 
2014(3) 
 
 
86,925
 
50.6%
 
18.67
 
Whole Foods
 
 
West Park Plaza
 
San Jose-Sunnyvale-Santa Clara
 
 
 
1999
 
1996
 
 
88,104
 
100.0%
 
17.15
 
Safeway
 
Rite Aid
Westlake Village Plaza and Center
 
Oxnard-Thousand Oaks-Ventura
 
 
 
1999
 
1975
 
 
197,375
 
95.2%
 
32.60
 
Von's Food & Drug and Sprouts
 
(CVS)
Woodman Van Nuys
 
Los Angeles-Long Beach-Santa Ana
 
 
 
1999
 
1992
 
 
107,614
 
100.0%
 
14.54
 
El Super
 
 
Woodside Central
 
San Francisco-Oakland-Fremont
 
 
 
1999
 
1993
 
 
80,591
 
97.9%
 
22.40
 
(Target)
 
Chuck E. Cheese, Marshalls
Ygnacio Plaza
 
San Francisco-Oakland-Fremont
 
40%
 
2005
 
1968
 
28,367
 
109,701
 
96.2%
 
35.81
 
Sports Basement, Fresh & Easy
 
Sports Basement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (CA)
 
 
 
 
 
 
 
 
 
552,639
 
8,472,142
 
95.7%
 
23.86
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COLORADO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

21




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Applewood Shopping Center
 
Denver-Aurora
 
40%
 
2005
 
1956
 
 
381,041
 
87.5%
 
11.07
 
King Soopers, Wal-Mart
 
Applejack Liquors, PetSmart, Wells Fargo Bank
Arapahoe Village
 
Boulder
 
40%
 
2005
 
1957
 
14,388
 
159,197
 
93.0%
 
16.32
 
Safeway
 
Jo-Ann Fabrics, PETCO, Pier 1 Imports, HomeGoods
Belleview Square
 
Denver-Aurora
 
 
 
2004
 
1978
 
 
117,331
 
100.0%
 
16.89
 
King Soopers
 
 
Boulevard Center
 
Denver-Aurora
 
 
 
1999
 
1986
 
 
78,522
 
92.7%
 
25.39
 
(Safeway)
 
One Hour Optical
Buckley Square
 
Denver-Aurora
 
 
 
1999
 
1978
 
 
116,147
 
96.4%
 
9.54
 
King Soopers
 
Ace Hardware
Centerplace of Greeley III Phase I
 
Greeley
 
 
 
2007
 
2007
 
 
119,012
 
96.4%
 
13.90
 
Sports Authority
 
Best Buy, TJ Maxx
Cherrywood Square
 
Denver-Aurora
 
40%
 
2005
 
1978
 
4,442
 
96,501
 
98.3%
 
9.09
 
King Soopers
 
 
Crossroads Commons
 
Boulder
 
20%
 
2001
 
1986
 
16,997
 
142,589
 
100.0%
 
25.32
 
Whole Foods
 
Barnes & Noble, Bicycle Village
Falcon Marketplace
 
Colorado Springs
 
 
 
2005
 
2005
 
 
22,491
 
78.7%
 
21.01
 
(Wal-Mart)
 
 
Hilltop Village
 
Denver-Aurora
 
 
 
2002
 
2003
 
7,500
 
100,030
 
91.0%
 
8.36
 
King Soopers
 
 
Kent Place
 
Denver-Aurora
 
 
 
2011
 
2011
 
8,250
 
48,175
 
100.0%
 
19.18
 
King Soopers
 
 
Littleton Square
 
Denver-Aurora
 
 
 
1999
 
1997
 
 
99,282
 
96.4%
 
8.52
 
King Soopers
 
 
Lloyd King Center
 
Denver-Aurora
 
 
 
1998
 
1998
 
 
83,418
 
96.9%
 
11.47
 
King Soopers
 
 
Marketplace at Briargate
 
Colorado Springs
 
 
 
2006
 
2006
 
 
29,075
 
94.8%
 
27.85
 
(King Soopers)
 
 
Monument Jackson Creek
 
Colorado Springs
 
 
 
1998
 
1999
 
 
85,263
 
100.0%
 
11.45
 
King Soopers
 
 
Ralston Square Shopping Center
 
Denver-Aurora
 
40%
 
2005
 
1977
 
4,442
 
82,750
 
98.0%
 
9.98
 
King Soopers
 
 
Shops at Quail Creek
 
Denver-Aurora
 
 
 
2008
 
2008
 
 
37,579
 
100.0%
 
26.38
 
(King Soopers)
 
 
South Lowry Square
 
Denver-Aurora
 
 
 
1999
 
1993
 
 
119,916
 
40.5%
 
15.24
 
 
 
 
Stroh Ranch
 
Denver-Aurora
 
 
 
1998
 
1998
 
 
93,436
 
95.3%
 
11.79
 
King Soopers
 
 
Woodmen Plaza
 
Colorado Springs
 
 
 
1998
 
1998
 
 
116,233
 
94.8%
 
12.81
 
King Soopers
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (CO)
 
 
 
 
 
 
 
 
 
56,019
 
2,127,988
 
91.0%
 
14.07
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONNECTICUT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Black Rock
 
Bridgeport-Stamford-Norwalk
 
80%
 
2014
 
1996
 
20,124
 
98,331
 
95.9%
 
30.64
 
 
 
GAP, Old Navy, The Clubhouse
Brick Walk (7)
 
Bridgeport-Stamford-Norwalk
 
80%
 
2014
 
2007
 
31,823
 
123,520
 
95.1%
 
41.28
 
 
 
 
Corbin's Corner
 
Hartford-West Hartford-East Hartford
 
40%
 
2005
 
1962
 
41,024
 
185,921
 
99.8%
 
26.20
 
Trader Joe's, Toys "R" Us, Best Buy
 
Toys "R" Us, Best Buy, Old Navy, Office Depot, Pier 1 Imports

22




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Fairfield Center (7)
 
Bridgeport-Stamford-Norwalk
 
80%
 
2014
 
2000
 
20,250
 
92,716
 
100.0%
 
32.63
 
 
 
Fairfield University Bookstore, Merril Lynch
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (CT)
 
 
 
 
 
 
 
 
 
113,221
 
500,488
 
97.4%
 
33.53
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
WASHINGTON D.C.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shops at The Columbia
 
Washington-Arlington-Alexandria
 
25%
 
2006
 
2006
 
 
22,812
 
100.0%
 
37.07
 
Trader Joe's
 
 
Spring Valley Shopping Center
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1930
 
13,003
 
16,835
 
92.9%
 
90.90
 
 
 
CVS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (DC)
 
 
 
 
 
 
 
 
 
13,003
 
39,647
 
96.2%
 
65.23
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DELAWARE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pike Creek
 
Philadelphia-Camden-Wilmington
 
 
 
1998
 
1981
 
 
231,562
 
92.0%
 
13.52
 
Acme Markets, K-Mart
 
Rite Aid
Shoppes of Graylyn
 
Philadelphia-Camden-Wilmington
 
40%
 
2005
 
1971
 
 
66,808
 
90.1%
 
22.86
 
 
 
Rite Aid
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (DE)
 
 
 
 
 
 
 
 
 
 
298,370
 
91.8%
 
14.47
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FLORIDA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Anastasia Plaza
 
Jacksonville
 
 
 
1993
 
1988
 
 
102,342
 
93.7%
 
12.19
 
Publix
 
 
Aventura Shopping Center
 
Miami-Fort Lauderdale-Miami Beach
 
 
 
1994
 
1974
 
 
102,876
 
75.5%
 
19.52
 
Publix
 
CVS
Berkshire Commons
 
Naples-Marco Island
 
 
 
1994
 
1992
 
7,500
 
110,062
 
95.9%
 
13.43
 
Publix
 
Walgreens
Bloomingdale Square
 
Tampa-St. Petersburg-Clearwater
 
 
 
1998
 
1987
 
 
267,736
 
97.7%
 
9.27
 
Publix, Wal-Mart, Bealls
 
 Ace Hardware
Boynton Lakes Plaza
 
Miami-Fort Lauderdale-Miami Beach
 
 
 
1997
 
1993
 
 
105,820
 
94.6%
 
15.47
 
Publix
 
Citi Trends, Pet Supermarket
Brooklyn Station on Riverside (fka Shoppes on Riverside) (4)
 
Jacksonville
 
 
 
2013
 
2013
 
 
49,994
 
84.3%
 
24.54
 
The Fresh Market
 
 

23




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Caligo Crossing (7)
 
Miami-Fort Lauderdale-Miami Beach
 
 
 
2007
 
2007
 
 
10,763
 
100.0%
 
43.78
 
(Kohl's)
 
 
Canopy Oak Center
 
Ocala
 
50%
 
2006
 
2006
 
 
90,041
 
91.8%
 
18.80
 
Publix
 
 
Carriage Gate
 
Tallahassee
 
 
 
1994
 
1978
 
 
74,330
 
88.5%
 
21.06
 
Trader Joe's
 
TJ Maxx
Chasewood Plaza
 
Miami-Fort Lauderdale-Miami Beach
 
 
 
1993
 
1986
 
 
151,157
 
93.6%
 
23.35
 
Publix
 
Pet Smart
Corkscrew Village
 
Cape Coral-Fort Myers
 
 
 
2007
 
1997
 
7,923
 
82,011
 
97.3%
 
13.23
 
Publix
 
 
Courtyard Shopping Center
 
Jacksonville
 
 
 
1993
 
1987
 
 
137,256
 
100.0%
 
3.33
 
(Publix), Target
 
 
Fleming Island
 
Jacksonville
 
 
 
1998
 
2000
 
 
132,163
 
98.2%
 
14.41
 
Publix, (Target)
 
PETCO, Planet Fitness
Fountain Square (4)
 
Miami-Fort Lauderdale-Miami Beach
 
 
 
2013
 
2013
 
 
177,231
 
88.8%
 
23.63
 
Publix
 
Ross Dress for Less, TJ Maxx, Ulta
Garden Square
 
Miami-Fort Lauderdale-Miami Beach
 
 
 
1997
 
1991
 
 
90,258
 
98.7%
 
15.87
 
Publix
 
CVS
Grande Oak
 
Cape Coral-Fort Myers
 
 
 
2000
 
2000
 
 
78,784
 
98.2%
 
14.84
 
Publix
 
 
Hibernia Pavilion
 
Jacksonville
 
 
 
2006
 
2006
 
 
51,298
 
87.1%
 
15.53
 
Publix
 
 
Hibernia Plaza
 
Jacksonville
 
 
 
2006
 
2006
 
 
8,400
 
—%
 
 
 
 
(Walgreens)
John's Creek Center
 
Jacksonville
 
20%
 
2003
 
2004
 
7,739
 
75,101
 
98.1%
 
13.46
 
Publix
 
 
Julington Village
 
Jacksonville
 
20%
 
1999
 
1999
 
9,500
 
81,820
 
100.0%
 
14.93
 
Publix
 
(CVS)
Lynnhaven
 
Panama City-Lynn Haven
 
50%
 
2001
 
2001
 
 
63,871
 
95.6%
 
12.33
 
Publix
 
 
Marketplace Shopping Center
 
Tampa-St. Petersburg-Clearwater
 
 
 
1995
 
1983
 
 
90,296
 
82.5%
 
17.96
 
LA Fitness
 
 
Millhopper Shopping Center
 
Gainesville
 
 
 
1993
 
1974
 
 
75,621
 
100.0%
 
16.11
 
Publix
 
 
Naples Walk Shopping Center
 
Naples-Marco Island
 
 
 
2007
 
1999
 
15,022
 
124,973
 
86.9%
 
14.91
 
Publix
 
 
Newberry Square
 
Gainesville
 
 
 
1994
 
1986
 
 
180,524
 
83.2%
 
7.03
 
Publix, K-Mart
 
 
Nocatee Town Center
 
Jacksonville
 
 
 
2007
 
2007
 
 
79,209
 
96.0%
 
14.73
 
Publix
 
 
Northgate Square
 
Tampa-St. Petersburg-Clearwater
 
 
 
2007
 
1995
 
 
75,495
 
100.0%
 
13.49
 
Publix
 
 
Oakleaf Commons
 
Jacksonville
 
 
 
2006
 
2006
 
 
73,717
 
92.4%
 
13.72
 
Publix
 
(Walgreens)
Ocala Corners (7)
 
Tallahassee
 
 
 
2000
 
2000
 
5,025
 
86,772
 
100.0%
 
14.05
 
Publix
 
 
Old St Augustine Plaza
 
Jacksonville
 
 
 
1996
 
1990
 
 
232,459
 
92.5%
 
7.75
 
Publix, Burlington Coat Factory, Hobby Lobby
 
 
Pebblebrook Plaza
 
Naples-Marco Island
 
50%
 
2000
 
2000
 
 
76,767
 
100.0%
 
14.06
 
Publix
 
(Walgreens)
Pine Tree Plaza
 
Jacksonville
 
 
 
1997
 
1999
 
 
63,387
 
97.8%
 
13.05
 
Publix
 
 
Plantation Plaza
 
Jacksonville
 
20%
 
2004
 
2004
 
10,500
 
77,747
 
93.3%
 
15.38
 
Publix
 
 

24




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Regency Square
 
Tampa-St. Petersburg-Clearwater
 
 
 
1993
 
1986
 
 
351,687
 
98.3%
 
15.39
 
AMC Theater, Michaels, (Best Buy), (Macdill)
 
Dollar Tree, Marshalls, Shoe Carnival, Staples, TJ Maxx, PETCO, Ulta
Seminole Shoppes
 
Jacksonville
 
50%
 
2009
 
2009
 
9,958
 
76,821
 
98.2%
 
21.55
 
Publix
 
 
Shoppes @ 104
 
Miami-Fort Lauderdale-Miami Beach
 
 
 
1998
 
1990
 
 
108,192
 
96.7%
 
16.79
 
Winn-Dixie
 
Navarro Discount Pharmacies
Shoppes at Bartram Park
 
Jacksonville
 
50%
 
2005
 
2004
 
 
126,483
 
100.0%
 
17.59
 
Publix, (Kohl's)
 
(Tutor Time)
Shops at John's Creek
 
Jacksonville
 
 
 
2003
 
2004
 
 
15,490
 
100.0%
 
19.02
 
 
 
 
Starke (7)
 
Other
 
 
 
2000
 
2000
 
 
12,739
 
100.0%
 
24.65
 
 
 
CVS
Suncoast Crossing (7)
 
Tampa-St. Petersburg-Clearwater
 
 
 
2007
 
2007
 
 
117,885
 
92.0%
 
6.00
 
Kohl's, (Target)
 
 
Town Square
 
Tampa-St. Petersburg-Clearwater
 
 
 
1997
 
1999
 
 
44,380
 
100.0%
 
28.09
 
 
 
PETCO, Pier 1 Imports
Village Center
 
Tampa-St. Petersburg-Clearwater
 
 
 
1995
 
2014
 
 
186,605
 
95.0%
 
17.79
 
Publix
 
Walgreens, Stein Mart
Welleby Plaza
 
Miami-Fort Lauderdale-Miami Beach
 
 
 
1996
 
1982
 
 
109,949
 
93.4%
 
12.17
 
Publix
 
Bealls
Wellington Town Square
 
Miami-Fort Lauderdale-Miami Beach
 
 
 
1996
 
1982
 
12,800
 
107,325
 
94.3%
 
20.39
 
Publix
 
CVS
Westchase
 
Tampa-St. Petersburg-Clearwater
 
 
 
2007
 
1998
 
7,243
 
78,998
 
98.5%
 
14.41
 
Publix
 
 
Willa Springs
 
Orlando
 
20%
 
2000
 
2000
 
7,021
 
89,930
 
100.0%
 
18.43
 
Publix
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (FL)
 
 
 
 
 
 
 
 
 
100,231
 
4,706,765
 
94.0%
 
14.81
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GEORGIA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ashford Place
 
Atlanta-Sandy Springs-Marietta
 
 
 
1997
 
1993
 
 
53,449
 
100.0%
 
19.92
 
 
 
Harbor Freight Tools
Briarcliff La Vista
 
Atlanta-Sandy Springs-Marietta
 
 
 
1997
 
1962
 
 
39,204
 
100.0%
 
19.67
 
 
 
Michaels
Briarcliff Village (7)
 
Atlanta-Sandy Springs-Marietta
 
 
 
1997
 
1990
 
 
189,634
 
98.4%
 
15.23
 
Publix
 
Office Depot, Party City, Shoe Carnival, TJ Maxx
Brighten Park (fka Loehmanns Plaza Georgia)
 
Atlanta-Sandy Springs-Marietta
 
 
 
1997
 
1986
 
 
137,815
 
84.5%
 
22.65
 
The Fresh Market
 
Office Max, Dance 101
Buckhead Court
 
Atlanta-Sandy Springs-Marietta
 
 
 
1997
 
1984
 
 
48,317
 
80.8%
 
15.98
 
 
 
 

25




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Cambridge Square
 
Atlanta-Sandy Springs-Marietta
 
 
 
1996
 
1979
 
 
71,429
 
100.0%
 
14.03
 
Kroger
 
 
Cornerstone Square
 
Atlanta-Sandy Springs-Marietta
 
 
 
1997
 
1990
 
 
80,406
 
100.0%
 
15.12
 
Aldi
 
CVS, Hancock Fabrics, Concentra
Delk Spectrum
 
Atlanta-Sandy Springs-Marietta
 
 
 
1998
 
1991
 
 
98,675
 
90.4%
 
14.43
 
Publix
 
Eckerd
Dunwoody Hall
 
Atlanta-Sandy Springs-Marietta
 
20%
 
1997
 
1986
 
6,856
 
85,899
 
100.0%
 
17.31
 
Publix
 
Eckerd
Dunwoody Village
 
Atlanta-Sandy Springs-Marietta
 
 
 
1997
 
1975
 
 
120,758
 
93.4%
 
17.94
 
The Fresh Market
 
Walgreens, Dunwoody Prep
Howell Mill Village (7)
 
Atlanta-Sandy Springs-Marietta
 
 
 
2004
 
1984
 
 
92,294
 
96.0%
 
18.92
 
Publix
 
Eckerd
Paces Ferry Plaza (7)
 
Atlanta-Sandy Springs-Marietta
 
 
 
1997
 
1987
 
 
61,696
 
70.7%
 
32.76
 
 
 
 
Powers Ferry Square
 
Atlanta-Sandy Springs-Marietta
 
 
 
1997
 
1987
 
 
100,076
 
100.0%
 
27.02
 
 
 
CVS, PETCO
Powers Ferry Village
 
Atlanta-Sandy Springs-Marietta
 
 
 
1997
 
1994
 
 
78,896
 
100.0%
 
12.51
 
Publix
 
Mardi Gras, Brush Creek Package
Russell Ridge
 
Atlanta-Sandy Springs-Marietta
 
 
 
1994
 
1995
 
 
101,438
 
91.6%
 
12.39
 
Kroger
 
 
Sandy Springs
 
Atlanta-Sandy Springs-Marietta
 
 
 
2012
 
2006
 
16,079
 
116,303
 
92.6%
 
20.66
 
Trader Joe's
 
Trader Joe's, Pier 1, Party City
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (GA)
 
 
 
 
 
 
 
 
 
22,935
 
1,476,289
 
93.6%
 
18.16
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ILLINOIS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Civic Center Plaza
 
Chicago-Naperville-Joliet
 
40%
 
2005
 
1989
 
25,751
 
264,973
 
98.9%
 
10.98
 
Super H Mart, Home Depot
 
O'Reilly Automotive, King Spa
Clybourn Commons
 
Chicago-Naperville-Joliet
 
 
 
2014
 
1999
 
 
32,350
 
100.0%
 
34.43
 
 
 
PetCo
Geneva Crossing
 
Chicago-Naperville-Joliet
 
20%
 
2004
 
1997
 
10,900
 
123,182
 
96.7%
 
13.27
 
 
 
Goodwill
Glen Gate
 
Chicago-Naperville-Joliet
 
 
 
2013
 
2013
 
 
103,323
 
94.8%
 
25.66
 
Mariano's Fresh Market
 
 
Glen Oak Plaza
 
Chicago-Naperville-Joliet
 
 
 
2010
 
1967
 
 
62,616
 
96.6%
 
22.59
 
Trader Joe's
 
Walgreens, ENH Medical Offices
Hinsdale
 
Chicago-Naperville-Joliet
 
 
 
1998
 
1986
 
 
179,099
 
93.9%
 
13.47
 
Whole Foods
 
Goodwill, Cardinal Fitness

26




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
McHenry Commons Shopping Center
 
Chicago-Naperville-Joliet
 
40%
 
2005
 
1988
 
8,958
 
99,448
 
91.1%
 
7.22
 
Hobby Lobby
 
Goodwill
Riverside Sq & River's Edge
 
Chicago-Naperville-Joliet
 
40%
 
2005
 
1986
 
15,569
 
169,435
 
91.1%
 
15.64
 
Mariano's Fresh Market
 
Dollar Tree, Party City
Roscoe Square
 
Chicago-Naperville-Joliet
 
40%
 
2005
 
1981
 
11,753
 
140,451
 
97.5%
 
19.48
 
Mariano's Fresh Market
 
Walgreens, Toys "R" Us
Shorewood Crossing
 
Chicago-Naperville-Joliet
 
20%
 
2004
 
2001
 
 
87,705
 
92.2%
 
14.37
 
Mariano's Fresh Market
 
 
Shorewood Crossing II
 
Chicago-Naperville-Joliet
 
20%
 
2007
 
2005
 
7,026
 
86,276
 
100.0%
 
13.60
 
Babies R Us
 
Babies R Us, Staples, PETCO, Factory Card Outlet
Stonebrook Plaza Shopping Center
 
Chicago-Naperville-Joliet
 
40%
 
2005
 
1984
 
8,309
 
95,825
 
82.0%
 
11.74
 
Jewel-Osco
 
 
Westchester Commons (fka Westbrook Commons)
 
Chicago-Naperville-Joliet
 
 
 
2001
 
2014
 
 
138,632
 
98.0%
 
17.12
 
Mariano's Fresh Market
 
Goodwill
Willow Festival (7)
 
Chicago-Naperville-Joliet
 
 
 
2010
 
2007
 
39,505
 
403,876
 
97.9%
 
16.46
 
Whole Foods, Lowe's
 
CVS, DSW Warehouse, HomeGoods, Recreational Equipment, Best Buy
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (IL)
 
 
 
 
 
 
 
 
 
127,772
 
1,987,191
 
96.1%
 
16.73
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INDIANA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Airport Crossing
 
Chicago-Naperville-Joliet
 
88%
 
2006
 
2006
 
 
11,924
 
88.6%
 
17.72
 
(Kohl's)
 
 
Augusta Center
 
Chicago-Naperville-Joliet
 
96%
 
2006
 
2006
 
 
14,533
 
90.1%
 
22.48
 
(Menards)
 
 
Shops on Main
 
Chicago-Naperville-Joliet
 
91%
 
2013
 
2013
 
 
213,988
 
96.9%
 
14.49
 
Whole Foods, Gordmans
 
Ross Dress for Less, HomeGoods, DSW
Willow Lake Shopping Center
 
Indianapolis
 
40%
 
2005
 
1987
 
 
85,923
 
87.6%
 
16.70
 
(Kroger)
 
 
Willow Lake West Shopping Center
 
Indianapolis
 
40%
 
2005
 
2001
 
8,949
 
52,961
 
100.0%
 
24.07
 
Trader Joe's
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (IN)
 
 
 
 
 
 
 
 
 
8,949
 
379,329
 
95.4%
 
16.01
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MASSACHUSETTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

27




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Fellsway Plaza
 
Boston-Cambridge-Quincy
 
75%
 
2013
 
1959
 
29,839
 
157,717
 
89.9%
 
22.77
 
Stop & Shop
 
Modells Sporting Goods, Planet Fitness
Shops at Saugus
 
Boston-Cambridge-Quincy
 
 
 
2006
 
2006
 
 
86,855
 
90.9%
 
28.36
 
Trader Joe's
 
La-Z-Boy, PetSmart
Twin City Plaza
 
Boston-Cambridge-Quincy
 
 
 
2006
 
2004
 
39,745
 
274,280
 
94.4%
 
17.04
 
Shaw's, Marshall's
 
Rite Aid, K&G Fashion, Dollar Tree, Gold's Gym, Extra Space Storage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (MA)
 
 
 
 
 
 
 
 
 
69,584
 
518,852
 
92.5%
 
20.67
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MARYLAND
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bowie Plaza
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1966
 
 
102,904
 
96.1%
 
20.08
 
 
 
CVS, Fitness 4 Less
Burnt Mills (7)
 
Washington-Arlington-Alexandria
 
20%
 
2013
 
2004
 
7,028
 
31,316
 
100.0%
 
34.42
 
Trader Joe's
 
 
Clinton Park
 
Washington-Arlington-Alexandria
 
20%
 
2003
 
2003
 
 
206,050
 
72.2%
 
9.44
 
Sears, (Toys "R" Us)
 
Fitness For Less
Cloppers Mill Village
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1995
 
 
137,098
 
98.6%
 
17.18
 
Shoppers Food Warehouse
 
CVS
Festival at Woodholme
 
Baltimore-Towson
 
40%
 
2005
 
1986
 
21,632
 
81,016
 
90.7%
 
36.50
 
Trader Joe's
 
 
Firstfield Shopping Center
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
2014
 
 
22,328
 
95.5%
 
36.14
 
 
 
 
King Farm Village Center
 
Washington-Arlington-Alexandria
 
25%
 
2004
 
2001
 
27,500
 
118,326
 
90.8%
 
24.51
 
Safeway
 
 
Parkville Shopping Center
 
Baltimore-Towson
 
40%
 
2005
 
1961
 
11,995
 
162,434
 
98.6%
 
14.57
 
Giant Food
 
Parkville Lanes, Castlewood Realty (Sub: Herit)
Southside Marketplace
 
Baltimore-Towson
 
40%
 
2005
 
1990
 
14,908
 
125,146
 
96.2%
 
18.29
 
Shoppers Food Warehouse
 
Rite Aid
Takoma Park
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1960
 
 
104,079
 
97.6%
 
12.27
 
Shoppers Food Warehouse
 
 
Valley Centre
 
Baltimore-Towson
 
40%
 
2005
 
1987
 
19,313
 
219,549
 
99.0%
 
15.02
 
TJ Maxx
 
TJ Maxx, Ross Dress for Less, HomeGoods, Staples, PetSmart
Village at Lee Airpark (7)
 
Baltimore-Towson
 
 
 
2005
 
2005
 
 
113,469
 
97.2%
 
27.74
 
Giant Food, (Sunrise)
 
 
Watkins Park Plaza
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1985
 
 
111,142
 
100.0%
 
23.24
 
LA Fitness
 
CVS
Woodmoor Shopping Center
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1954
 
6,747
 
68,886
 
98.1%
 
28.23
 
 
 
CVS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

28




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Subtotal/Weighted Average (MD)
 
 
 
 
 
 
 
 
 
109,123
 
1,603,743
 
95.6%
 
20.62
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MICHIGAN
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fenton Marketplace
 
Flint
 
 
 
1999
 
1999
 
 
97,275
 
95.7%
 
6.93
 
Family Farm & Home
 
Michaels
State Street Crossing
 
Ann Arbor
 
 
 
2006
 
2006
 
 
21,049
 
100.0%
 
18.98
 
(Wal-Mart)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (MI)
 
 
 
 
 
 
 
 
 
 
118,324
 
96.4%
 
9.15
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MISSOURI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brentwood Plaza
 
St. Louis
 
 
 
2007
 
2002
 
 
60,452
 
100.0%
 
10.27
 
Schnucks
 
 
Bridgeton
 
St. Louis
 
 
 
2007
 
2005
 
 
70,762
 
100.0%
 
11.96
 
Schnucks, (Home Depot)
 
 
Dardenne Crossing
 
St. Louis
 
 
 
2007
 
1996
 
 
67,430
 
100.0%
 
10.83
 
Schnucks
 
 
Kirkwood Commons
 
St. Louis
 
 
 
2007
 
2000
 
11,038
 
209,703
 
100.0%
 
9.73
 
Wal-Mart, (Target), (Lowe's)
 
TJ Maxx, HomeGoods, Famous Footwear
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (MO)
 
 
 
 
 
 
 
 
 
11,038
 
408,347
 
100.0%
 
10.38
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MINNESOTA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Apple Valley Square
 
Minneapolis-St. Paul-Bloomington
 
25%
 
2006
 
1998
 
16,000
 
184,841
 
100.0%
 
12.18
 
Rainbow Foods, Jo-Ann Fabrics, (Burlington Coat Factory)
 
Savers, PETCO
Calhoun Commons
 
Minneapolis-St. Paul-Bloomington
 
25%
 
2011
 
1999
 
3,685
 
66,150
 
100.0%
 
24.18
 
Whole Foods
 
 
Colonial Square
 
Minneapolis-St. Paul-Bloomington
 
40%
 
2005
 
2014
 
9,946
 
93,248
 
100.0%
 
21.65
 
Lund's
 
 
Rockford Road Plaza
 
Minneapolis-St. Paul-Bloomington
 
40%
 
2005
 
1991
 
 
204,157
 
99.4%
 
11.94
 
Kohl's
 
PetSmart, HomeGoods, TJ Maxx
Rockridge Center
 
Minneapolis-St. Paul-Bloomington
 
20%
 
2011
 
2006
 
14,255
 
125,213
 
97.0%
 
13.18
 
Cub Foods
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (MN)
 
 
 
 
 
 
 
 
 
43,886
 
673,609
 
99.4%
 
14.89
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

29




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
NORTH CAROLINA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cameron Village
 
Raleigh-Cary
 
30%
 
2004
 
2014
 
60,000
 
555,547
 
94.0%
 
19.24
 
Harris Teeter, The Fresh Market
 
Eckerd, Talbots, Wake County Public Library, Great Outdoor Provision Co., York Properties, The Bargain Box, K&W Cafeteria, Johnson-Lambe Sporting Goods, Pier 1 Imports, Bevello, The Cheshire Cat Gallery
Carmel Commons
 
Charlotte-Gastonia-Concord
 
 
 
1997
 
1979
 
 
132,651
 
94.4%
 
18.12
 
The Fresh Market
 
Chuck E. Cheese, Party City, Rite Aid, Planet Fitness
Cochran Commons
 
Charlotte-Gastonia-Concord
 
20%
 
2007
 
2003
 
5,748
 
66,020
 
95.6%
 
15.29
 
Harris Teeter
 
(Walgreens)
Colonnade Center
 
Raleigh-Cary
 
 
 
2009
 
2009
 
 
57,637
 
98.1%
 
26.51
 
Whole Foods
 
 
Glenwood Village
 
Raleigh-Cary
 
 
 
1997
 
1983
 
 
42,864
 
100.0%
 
14.75
 
Harris Teeter
 
 
Harris Crossing
 
Raleigh-Cary
 
 
 
2007
 
2007
 
 
65,150
 
92.9%
 
8.65
 
Harris Teeter
 
 
Holly Park
 
Raleigh-Cary
 
99%
 
2013
 
1969
 
 
159,871
 
99.3%
 
14.42
 
Trader Joe's
 
Ross Dress For Less, Staples, US Fitness Products, Overton's, Jerry's Arystsms, Pet Supplies Plus, RX Uniform
Lake Pine Plaza
 
Raleigh-Cary
 
 
 
1998
 
1997
 
 
87,690
 
95.2%
 
11.75
 
Kroger
 
 
Maynard Crossing
 
Raleigh-Cary
 
20%
 
1998
 
1997
 
8,934
 
122,782
 
84.5%
 
14.41
 
Kroger
 
 
Phillips Place
 
Charlotte-Gastonia-Concord
 
50%
 
2012
 
2005
 
44,500
 
133,059
 
100.0%
 
31.17
 
Dean & Deluca
 
Phillips Place Theater, Dean & Deluca
Providence Commons
 
Charlotte-Gastonia-Concord
 
25%
 
2010
 
1994
 
 
74,315
 
100.0%
 
17.45
 
Harris Teeter
 
Rite Aid
Shops at Erwin Mill (fka Erwin Square)
 
Durham-Chapel Hill
 
55%
 
2012
 
2012
 
10,000
 
87,340
 
95.4%
 
16.57
 
Harris Teeter
 
 
Shoppes of Kildaire
 
Raleigh-Cary
 
40%
 
2005
 
1986
 
18,207
 
145,101
 
96.1%
 
16.86
 
Trader Joe's
 
Home Comfort Furniture, Fitness Connection, Staples
Southpoint Crossing
 
Durham-Chapel Hill
 
 
 
1998
 
1998
 
 
103,240
 
100.0%
 
15.31
 
Kroger
 
 
Sutton Square
 
Raleigh-Cary
 
20%
 
2006
 
1985
 
 
101,025
 
100.0%
 
16.77
 
The Fresh Market
 
Rite Aid
Village Plaza
 
Durham-Chapel Hill
 
20%
 
2012
 
1975
 
8,000
 
74,530
 
100.0%
 
16.96
 
Whole Foods
 
PTA Thrift Shop
Willow Oaks (4)
 
Charlotte-Gastonia-Concord
 
 
 
2014
 
2014
 
 
68,798
 
71.4%
 
14.25
 
Publix
 
 
Woodcroft Shopping Center
 
Durham-Chapel Hill
 
 
 
1996
 
1984
 
 
89,833
 
96.2%
 
12.05
 
Food Lion
 
Triangle True Value Hardware
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (NC)
 
 
 
 
 
 
 
 
 
155,389
 
2,167,453
 
95.1%
 
16.93
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

30




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
NEW JERSEY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Plaza Square
 
New York-Northern New Jersey-Long Island
 
40%
 
2005
 
1990
 
13,809
 
103,891
 
98.1%
 
22.14
 
Shop Rite
 
 
Haddon Commons
 
Philadelphia-Camden-Wilmington
 
40%
 
2005
 
1985
 
1,509
 
53,889
 
87.5%
 
6.18
 
Acme Markets
 
CVS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (NJ)
 
 
 
 
 
 
 
 
 
15,318
 
157,780
 
94.5%
 
17.09
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NEW YORK
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lake Grove Commons
 
New York-Northern New Jersey-Long Island
 
40%
 
2012
 
2008
 
32,618
 
141,382
 
100.0%
 
31.28
 
Whole Foods, LA Fitness
 
PETCO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (NY)
 
 
 
 
 
 
 
 
 
32,618
 
141,382
 
100.0%
 
31.28
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OHIO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cherry Grove
 
Cincinnati-Middletown
 
 
 
1998
 
1997
 
 
195,513
 
100.0%
 
10.86
 
Kroger
 
Hancock Fabrics, Shoe Carnival, TJ Maxx
East Pointe
 
Columbus
 
 
 
1998
 
2014
 
 
103,860
 
100.0%
 
9.28
 
Kroger
 
 
Hyde Park
 
Cincinnati-Middletown
 
 
 
1997
 
1995
 
 
396,720
 
98.1%
 
14.90
 
Kroger, Remke Markets
 
Walgreens, Jo-Ann Fabrics, Ace Hardware, Michaels, Staples
Kroger New Albany Center
 
Columbus
 
50%
 
1999
 
1999
 
 
93,286
 
100.0%
 
11.36
 
Kroger
 
 
Maxtown Road (Northgate)
 
Columbus
 
 
 
1998
 
1996
 
 
85,100
 
100.0%
 
11.04
 
Kroger, (Home Depot)
 
 
Red Bank Village
 
Cincinnati-Middletown
 
 
 
2006
 
2006
 
 
164,318
 
99.2%
 
6.24
 
Wal-Mart
 
 
Regency Commons
 
Cincinnati-Middletown
 
 
 
2004
 
2004
 
 
34,315
 
95.0%
 
21.40
 
 
 
 
Westchester Plaza
 
Cincinnati-Middletown
 
 
 
1998
 
1988
 
 
88,181
 
96.9%
 
9.38
 
Kroger
 
 
Windmiller Plaza Phase I
 
Columbus
 
 
 
1998
 
1997
 
 
145,563
 
98.6%
 
8.96
 
Kroger
 
Sears Hardware
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (OH)
 
 
 
 
 
 
 
 
 
 
1,306,856
 
98.8%
 
11.34
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OREGON
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

31




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Corvallis Market Center
 
Corvallis
 
 
 
2006
 
2006
 
 
84,535
 
100.0%
 
19.60
 
Trader Joe's
 
TJ Maxx, Michael's
Greenway Town Center
 
Portland-Vancouver-Beaverton
 
40%
 
2005
 
2014
 
9,877
 
93,101
 
98.1%
 
13.60
 
Whole Foods
 
Rite Aid, Dollar Tree
Murrayhill Marketplace
 
Portland-Vancouver-Beaverton
 
 
 
1999
 
1988
 
 
148,967
 
96.1%
 
15.65
 
Safeway
 
 
Northgate Marketplace
 
Medford
 
94%
 
2011
 
2011
 
 
80,953
 
100.0%
 
21.23
 
Trader Joe's
 
REI, PETCO, Ulta Salon
Sherwood Crossroads
 
Portland-Vancouver-Beaverton
 
 
 
1999
 
1999
 
 
87,966
 
97.1%
 
10.93
 
Safeway
 
 
Tanasbourne Market (7)
 
Portland-Vancouver-Beaverton
 
 
 
2006
 
2006
 
 
71,000
 
100.0%
 
27.39
 
Whole Foods
 
 
Walker Center
 
Portland-Vancouver-Beaverton
 
 
 
1999
 
1987
 
 
89,610
 
91.8%
 
18.82
 
Bed Bath and Beyond
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (OR)
 
 
 
 
 
 
 
 
 
9,877
 
656,132
 
97.3%
 
18.04
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PENNSYLVANIA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allen Street Shopping Center
 
Allentown-Bethlehem-Easton
 
40%
 
2005
 
1958
 
 
46,228
 
92.0%
 
13.44
 
Ahart's Market
 
 
City Avenue Shopping Center
 
Philadelphia-Camden-Wilmington
 
40%
 
2005
 
1960
 
20,870
 
159,406
 
77.3%
 
19.44
 
Ross Dress for Less
 
Ross Dress for Less, TJ Maxx
Gateway Shopping Center
 
Philadelphia-Camden-Wilmington
 
 
 
2004
 
1960
 
 
214,423
 
99.3%
 
26.50
 
Trader Joe's
 
Staples, TJ Maxx, Famous Footwear, Jo-Ann Fabrics
Hershey (7)
 
Harrisburg-Carlisle
 
 
 
2000
 
2000
 
 
6,000
 
100.0%
 
30.41
 
 
 
 
Kulpsville Village Center
 
Philadelphia-Camden-Wilmington
 
 
 
2006
 
2006
 
 
14,820
 
100.0%
 
30.36
 
 
 
Walgreens
Lower Nazareth Commons
 
Allentown-Bethlehem-Easton
 
 
 
2007
 
2007
 
 
90,210
 
100.0%
 
25.86
 
(Wegmans), (Target), Sports Authority
 
PETCO
Mercer Square Shopping Center
 
Philadelphia-Camden-Wilmington
 
40%
 
2005
 
1988
 
11,202
 
91,400
 
100.0%
 
21.57
 
Weis Markets
 
 
Newtown Square Shopping Center
 
Philadelphia-Camden-Wilmington
 
40%
 
2005
 
1970
 
11,008
 
140,789
 
86.1%
 
17.43
 
Acme Markets
 
 
Stefko Boulevard Shopping Center (7)
 
Allentown-Bethlehem-Easton
 
40%
 
2005
 
1976
 
 
133,899
 
96.6%
 
7.54
 
Valley Farm Market
 
Dollar Tree, Retro Fitness
Warwick Square Shopping Center
 
Philadelphia-Camden-Wilmington
 
40%
 
2005
 
1999
 
9,850
 
89,680
 
98.0%
 
19.95
 
Giant Food
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (PA)
 
 
 
 
 
 
 
 
 
52,930
 
986,855
 
95.3%
 
22.39
 
 
 
 

32




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SOUTH CAROLINA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Buckwalter Village
 
Hilton Head Island-Beaufort
 
 
 
2006
 
2006
 
 
59,601
 
100.0%
 
14.67
 
Publix
 
 
Merchants Village
 
Charleston-North Charleston
 
40%
 
1997
 
1997
 
9,996
 
79,649
 
97.0%
 
14.68
 
Publix
 
 
Queensborough Shopping Center
 
Charleston-North Charleston
 
50%
 
1998
 
1993
 
 
82,333
 
100.0%
 
10.21
 
Publix
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (SC)
 
 
 
 
 
 
 
 
 
9,996
 
221,583
 
99.3%
 
13.28
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TENNESSEE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Harpeth Village Fieldstone
 
Nashville-Davidson--Murfreesboro
 
 
 
1997
 
1998
 
 
70,091
 
100.0%
 
14.29
 
Publix
 
 
Northlake Village
 
Nashville-Davidson--Murfreesboro
 
 
 
2000
 
1988
 
 
137,807
 
91.0%
 
12.68
 
Kroger
 
PETCO
Peartree Village
 
Nashville-Davidson--Murfreesboro
 
 
 
1997
 
1997
 
7,465
 
109,506
 
100.0%
 
18.10
 
Harris Teeter
 
PETCO, Office Max
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (TN)
 
 
 
 
 
 
 
 
 
7,465
 
317,404
 
96.1%
 
14.97
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TEXAS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Alden Bridge
 
Houston-Baytown-Sugar Land
 
20%
 
2002
 
1998
 
12,871
 
138,935
 
98.8%
 
18.91
 
Kroger
 
Walgreens
Bethany Park Place
 
Dallas-Fort Worth-Arlington
 
20%
 
1998
 
1998
 
5,746
 
98,906
 
100.0%
 
11.48
 
Kroger
 
 
CityLine Market (4)
 
Dallas-Fort Worth-Arlington
 
 
 
2014
 
2014
 
 
79,718
 
76.0%
 
22.92
 
 
 
 
Cochran's Crossing
 
Houston-Baytown-Sugar Land
 
 
 
2002
 
1994
 
 
138,192
 
96.0%
 
16.92
 
Kroger
 
CVS
Hancock
 
Austin-Round Rock
 
 
 
1999
 
1998
 
 
410,438
 
98.2%
 
14.46
 
H.E.B., Sears
 
Twin Liquors, PETCO, 24 Hour Fitness
Hickory Creek Plaza
 
Dallas-Fort Worth-Arlington
 
 
 
2006
 
2006
 
 
28,134
 
93.6%
 
25.22
 
(Kroger)
 
 

33




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Hillcrest Village
 
Dallas-Fort Worth-Arlington
 
 
 
1999
 
1991
 
 
14,530
 
100.0%
 
44.40
 
 
 
 
Indian Springs Center
 
Houston-Baytown-Sugar Land
 
 
 
2002
 
2003
 
 
136,625
 
100.0%
 
22.31
 
H.E.B.
 
 
Keller Town Center
 
Dallas-Fort Worth-Arlington
 
 
 
1999
 
1999
 
 
120,319
 
95.8%
 
14.72
 
Tom Thumb
 
 
Lebanon/Legacy Center
 
Dallas-Fort Worth-Arlington
 
 
 
2000
 
2002
 
 
56,435
 
94.7%
 
22.86
 
(Wal-Mart)
 
 
Market at Preston Forest
 
Dallas-Fort Worth-Arlington
 
 
 
1999
 
1990
 
 
96,353
 
100.0%
 
19.58
 
Tom Thumb
 
 
Market at Round Rock
 
Austin-Round Rock
 
 
 
1999
 
1987
 
 
122,646
 
87.3%
 
17.85
 
Sprout's Markets
 
Office Depot
Mockingbird Common
 
Dallas-Fort Worth-Arlington
 
 
 
1999
 
1987
 
10,300
 
120,321
 
95.4%
 
16.09
 
Tom Thumb
 
Ogle School of Hair Design
North Hills
 
Austin-Round Rock
 
 
 
1999
 
1995
 
 
144,020
 
97.7%
 
21.27
 
H.E.B.
 
 
Panther Creek
 
Houston-Baytown-Sugar Land
 
 
 
2002
 
1994
 
 
166,077
 
97.8%
 
18.20
 
Randall's Food
 
CVS, Sears Paint & Hardware (Sublease Morelands), The Woodlands Childrens Museum
Prestonbrook
 
Dallas-Fort Worth-Arlington
 
 
 
1998
 
1998
 
6,800
 
91,537
 
100.0%
 
13.69
 
Kroger
 
 
Preston Oaks (7)
 
Dallas-Fort Worth-Arlington
 
 
 
2013
 
1991
 
 
103,503
 
93.8%
 
29.78
 
H.E.B. Central Market
 
Pier 1 Imports
Shiloh Springs
 
Dallas-Fort Worth-Arlington
 
20%
 
1998
 
1998
 
6,856
 
110,040
 
91.6%
 
14.34
 
Kroger
 
 
Shops at Mira Vista
 
Austin-Round Rock
 
 
 
2014
 
2002
 
257
 
68,340
 
100.0%
 
19.97
 
Trader Joe's
 
Champions Westlake Gymnastics & Cheer
Signature Plaza
 
Dallas-Fort Worth-Arlington
 
 
 
2003
 
2004
 
 
32,414
 
84.6%
 
20.64
 
(Kroger)
 
 
Southpark at Cinco Ranch
 
Houston-Baytown-Sugar Land
 
 
 
2012
 
2012
 
 
260,167
 
95.5%
 
11.92
 
Kroger, Academy Sports
 
PETCO
Sterling Ridge
 
Houston-Baytown-Sugar Land
 
 
 
2002
 
2000
 
13,900
 
128,643
 
100.0%
 
19.21
 
Kroger
 
CVS
Sweetwater Plaza
 
Houston-Baytown-Sugar Land
 
20%
 
2001
 
2000
 
11,248
 
134,045
 
100.0%
 
16.69
 
Kroger
 
Walgreens
Tech Ridge Center
 
Austin-Round Rock
 
 
 
2011
 
2001
 
9,644
 
187,350
 
94.8%
 
20.70
 
H.E.B.
 
Office Depot, Petco
Weslayan Plaza East
 
Houston-Baytown-Sugar Land
 
40%
 
2005
 
1969
 
 
169,693
 
99.0%
 
16.48
 
Berings
 
Berings, Ross Dress for Less, Michaels, Berings Warehouse, Chuck E. Cheese, The Next Level Fitness, Spec's Liquor, Bike Barn
Weslayan Plaza West
 
Houston-Baytown-Sugar Land
 
40%
 
2005
 
1969
 
39,296
 
185,963
 
100.0%
 
17.62
 
Randall's Food
 
Walgreens, PETCO, Jo Ann's, Office Max, Tuesday Morning

34




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Westwood Village
 
Houston-Baytown-Sugar Land
 
 
 
2006
 
2006
 
 
183,547
 
99.0%
 
18.06
 
(Target)
 
Gold's Gym, PetSmart, Office Max, Ross Dress For Less, TJ Maxx
Woodway Collection
 
Houston-Baytown-Sugar Land
 
40%
 
2005
 
2014
 
9,011
 
96,224
 
88.8%
 
26.16
 
Whole Foods
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (TX)
 
 
 
 
 
 
 
 
 
125,930
 
3,623,115
 
96.2%
 
18.14
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
VIRGINIA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ashburn Farm Market Center
 
Washington-Arlington-Alexandria
 
 
 
2000
 
2000
 
 
91,905
 
100.0%
 
23.33
 
Giant Food
 
 
Ashburn Farm Village Center
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1996
 
 
88,897
 
97.3%
 
14.45
 
Shoppers Food Warehouse
 
 
Belmont Shopping Center (4)
 
Washington-Arlington-Alexandria
 
 
 
2014
 
2014
 
 
90,608
 
80.8%
 
26.00
 
 
 
Cooper's Hawk Winery
Braemar Shopping Center
 
Washington-Arlington-Alexandria
 
25%
 
2004
 
2004
 
11,814
 
96,439
 
100.0%
 
20.50
 
Safeway
 
 
Centre Ridge Marketplace
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1996
 
13,790
 
104,100
 
97.3%
 
17.69
 
Shoppers Food Warehouse
 
Sears
Culpeper Colonnade
 
Culpeper
 
 
 
2006
 
2006
 
 
171,446
 
100.0%
 
15.21
 
Martin's, Dick's Sporting Goods, (Target)
 
PetSmart, Staples
Fairfax Shopping Center
 
Washington-Arlington-Alexandria
 
 
 
2007
 
1955
 
 
75,711
 
86.3%
 
14.18
 
 
 
Direct Furniture
Festival at Manchester Lakes (7)
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1990
 
23,659
 
168,630
 
100.0%
 
24.80
 
Shoppers Food Warehouse
 
 
Fox Mill Shopping Center
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1977
 
16,563
 
103,269
 
100.0%
 
22.47
 
Giant Food
 
 
Gayton Crossing
 
Richmond
 
40%
 
2005
 
1983
 
 
158,317
 
89.5%
 
14.47
 
Martin's, (Kroger)
 
 
Greenbriar Town Center
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1972
 
51,276
 
339,939
 
96.2%
 
24.00
 
Giant Food
 
CVS, HMY Roomstore, Total Beverage, Ross Dress for Less, Marshalls, PETCO
Hanover Village Shopping Center
 
Richmond
 
40%
 
2005
 
1971
 
 
88,006
 
100.0%
 
8.90
 
Aldi
 
Tractor Supply Company, Floor Trader
Hollymead Town Center
 
Charlottesville
 
20%
 
2003
 
2004
 
21,283
 
153,739
 
96.0%
 
21.73
 
Harris Teeter, (Target)
 
Petsmart
Kamp Washington Shopping Center
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1960
 
 
71,924
 
95.0%
 
36.89
 
Golfsmith
 
Golfsmith
Kings Park Shopping Center
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1966
 
13,996
 
92,905
 
100.0%
 
19.75
 
Giant Food
 
CVS

35




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Lorton Station Marketplace
 
Washington-Arlington-Alexandria
 
20%
 
2006
 
2005
 
24,375
 
132,445
 
100.0%
 
21.33
 
Shoppers Food Warehouse
 
Advanced Design Group
Saratoga Shopping Center
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1977
 
11,298
 
113,013
 
98.2%
 
18.57
 
Giant Food
 
 
Shops at County Center
 
Washington-Arlington-Alexandria
 
 
 
2005
 
2005
 
 
96,695
 
96.8%
 
19.97
 
Harris Teeter
 
 
Shops at Stonewall
 
Washington-Arlington-Alexandria
 
 
 
2007
 
2011
 
 
314,355
 
97.2%
 
16.19
 
Wegmans, Dick's Sporting Goods
 
Staples, Ross Dress For Less, Bed Bath & Beyond, Michaels
Signal Hill
 
Washington-Arlington-Alexandria
 
20%
 
2003
 
2004
 
12,576
 
95,172
 
100.0%
 
21.44
 
Shoppers Food Warehouse
 
 
Town Center at Sterling Shopping Center
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1980
 
 
186,531
 
97.4%
 
18.97
 
Giant Food
 
Fitness Evolution, Hockey Giant
Village Center at Dulles
 
Washington-Arlington-Alexandria
 
20%
 
2002
 
1991
 
42,320
 
297,572
 
99.2%
 
23.93
 
Shoppers Food Warehouse, Gold's Gym
 
CVS, Advance Auto Parts, Chuck E. Cheese, Staples, Goodwill, Tuesday Morning
Village Shopping Center
 
Richmond
 
40%
 
2005
 
1948
 
16,306
 
111,177
 
96.3%
 
22.48
 
Martin's
 
CVS
Willston Centre I
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1952
 
 
105,376
 
95.9%
 
24.56
 
 
 
CVS, Baileys Health Care
Willston Centre II
 
Washington-Arlington-Alexandria
 
40%
 
2005
 
1986
 
27,000
 
135,862
 
95.4%
 
22.36
 
Safeway, (Target)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (VA)
 
 
 
 
 
 
 
 
 
286,256
 
3,484,033
 
96.3%
 
19.64
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
WASHINGTON
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aurora Marketplace
 
Seattle-Tacoma-Bellevue
 
40%
 
2005
 
1991
 
11,829
 
106,921
 
92.4%
 
15.39
 
Safeway
 
TJ Maxx
Broadway Market (7)
 
Seattle-Tacoma-Bellevue
 
20%
 
2014
 
1988
 
10,000
 
140,240
 
94.0%
 
24.01
 
Quality Food Centers
 
Gold's Gym, Urban Outfitters
Cascade Plaza
 
Seattle-Tacoma-Bellevue
 
20%
 
1999
 
1999
 
14,620
 
214,872
 
96.6%
 
12.43
 
Safeway
 
Jo-Ann Fabrics, Ross Dress For Less, Big Lots, Fitness Evolution, Big 5 Sporting Goods
Eastgate Plaza
 
Seattle-Tacoma-Bellevue
 
40%
 
2005
 
1956
 
10,428
 
78,230
 
100.0%
 
23.24
 
Albertsons
 
Rite Aid
Grand Ridge
 
Seattle-Tacoma-Bellevue
 
 
 
2012
 
2012
 
11,309
 
326,243
 
100.0%
 
22.50
 
Safeway, Regal Cinemas
 
Port Blakey
Inglewood Plaza
 
Seattle-Tacoma-Bellevue
 
 
 
1999
 
1985
 
 
17,253
 
100.0%
 
34.77
 
 
 
 
Overlake Fashion Plaza (7)
 
Seattle-Tacoma-Bellevue
 
40%
 
2005
 
1987
 
12,340
 
80,555
 
94.7%
 
23.18
 
(Sears)
 
Marshalls

36




Property Name
 
CBSA (1)
 
Ownership Interest (2)
 
Year Acquired
 
Year Construct-ed or Last Renovated
 
Mortgages or Encumberances (in 000's)
 
Gross Leasable Area (GLA)
 
Percent Leased (3)
 
Average Base Rent (Per Sq Ft)(5)
 
Grocer & Major Tenant(s) >40,000 Sq Ft (6)
 
Other JuniorAnchor(s) >10,000 Sq Ft
Pine Lake Village
 
Seattle-Tacoma-Bellevue
 
 
 
1999
 
1989
 
 
102,900
 
99.1%
 
22.19
 
Quality Foods
 
Rite Aid
Sammamish-Highlands
 
Seattle-Tacoma-Bellevue
 
 
 
1999
 
1992
 
 
101,289
 
99.5%
 
28.36
 
(Safeway)
 
Bartell Drugs
Southcenter
 
Seattle-Tacoma-Bellevue
 
 
 
1999
 
1990
 
 
58,282
 
100.0%
 
25.53
 
(Target)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (WA)
 
 
 
 
 
 
 
 
 
70,526
 
1,226,785
 
98.8%
 
22.94
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
WISCONSIN
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Whitnall Square Shopping Center
 
Milwaukee-Waukesha-West Allis
 
40%
 
2005
 
1989
 
 
133,421
 
92.8%
 
8.01
 
Pick 'N' Save
 
Harbor Freight Tools, Dollar Tree
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal/Weighted Average (WI)
 
 
 
 
 
 
 
 
 
 
133,421
 
92.8%
 
8.01
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total/Weighted Average
 
 
 
 
 
 
 
 
 
$2,005,705
 
38,200,241
 
95.4%
 
$18.60
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) CBSA refers to Core Based Statistical Area.
(2) Represents our ownership interest in the property, if not wholly owned.
(3) Includes properties where we have not yet incurred at least 90% of the expected costs to complete and 95% occupied or the anchor has not yet been open for at least two calendar years ("development properties" or "properties in development"). If development properties are excluded, the total percentage leased would be 95.9% for our Combined Portfolio of shopping centers.
(4) Property in development.
(5) Average base rent per SFT is calculated based on annual minimum contractual base rent per the tenant lease, excluding percentage rent and recovery revenue.
(6) A retailer that supports our shopping center and in which we have no ownership is indicated by parentheses.
(7) The ground underlying the building and improvements are not owned by Regency or its unconsolidated real estate partnerships, but is subject to a ground lease.

37



Item 3.    Legal Proceedings

We are a party to various legal proceedings that arise in the ordinary course of our business. We are not currently involved in any litigation nor to our knowledge, is any litigation threatened against us, the outcome of which would, in our judgment based on information currently available to us, have a material adverse effect on our financial position or results of operations.

Item 4.    Mine Safety Disclosures
    
None.


PART II

Item 5.
Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

Our common stock is traded on the New York Stock Exchange under the symbol "REG." The following table sets forth the high and low sales prices and the cash dividends declared on our common stock by quarter for 2014 and 2013.

 
 
2014
 
2013
Quarter Ended
 
High Price
 
Low Price
 
Cash Dividends Declared
 
High Price
 
Low Price
 
Cash Dividends Declared
March 31
 
$
51.49

 
45.41

 
0.47

 
$
53.55

 
47.19

 
0.4625

June 30
 
56.11

 
50.55

 
0.47

 
59.35

 
45.32

 
0.4625

September 30
 
57.99

 
53.28

 
0.47

 
54.69

 
45.63

 
0.4625

December 31
 
65.72

 
53.55

 
0.47

 
53.48

 
45.31

 
0.4625


We have determined that the dividends paid during 2014 and 2013 on our common stock qualify for the following tax treatment:
 
 
Total Distribution per Share
 
Ordinary Dividends
 
Total Capital Gain Distributions
 
Nontaxable Distributions
 
Qualified Dividends (included in Ordinary Dividends)
Unrecapt Sec 1250 Gain
2014
 
$
1.8800

 
1.3160

 
0.3008

 
0.2632

 

0.0564

2013
 
1.8500

 
1.7390

 
0.1110

 

 
0.4440


As of January 27, 2015, there were approximately 12,436 holders of common equity.
We intend to pay regular quarterly distributions to Regency Centers Corporation's common stockholders. Future distributions will be declared and paid at the discretion of our Board of Directors and will depend upon cash generated by operating activities, our financial condition, capital requirements, annual dividend requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, and such other factors as our Board of Directors deems relevant. In order to maintain Regency Centers Corporation's qualification as a REIT for federal income tax purposes, we are generally required to make annual distributions at least equal to 90% of our real estate investment trust taxable income for the taxable year. Under certain circumstances, which we do not expect to occur, we could be required to make distributions in excess of cash available for distributions in order to meet such requirements. We have a dividend reinvestment plan under which shareholders may elect to reinvest their dividends automatically in common stock. Under the plan, we may elect to purchase common stock in the open market on behalf of shareholders or may issue new common stock to such shareholders.
 
Under the loan agreement of our line of credit, in the event of any monetary default, we may not make distributions to stockholders except to the extent necessary to maintain our REIT status.

There were no unregistered sales of equity securities, and we did not repurchase any of our equity securities during the quarter ended December 31, 2014.

38




The following table represents information with respect to purchases by the Parent Company of its common stock during the months in the three month period ended December 31, 2014:
Period
Total number of shares purchased (1)
Average price paid per share
Total number of shares purchased as part of publicly announced plans or programs
Maximum number or approximate dollar value of shares that may yet be purchased under the plans or programs
October 1, 2014 through October 31, 2014
$

$

November 1, 2014 through November 30, 2014
53
$
62.19

$

December 1, 2014 through December 31, 2014
102
$
61.88

$


(1) Represents shares delivered in payment of withholding taxes in connection with option exercises or restricted stock vesting by participants under Regency's Long-Term Omnibus Plan.


    

39




The performance graph furnished below shows Regency's cumulative total stockholder return to the S&P 500 Index and the FTSE NAREIT Equity REIT Index since December 31, 2009. The stock performance graph should not be deemed filed or incorporated by reference into any other filing made by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate the stock performance graph by reference in another filing.

 
 
12/09
12/10
12/11
12/12
12/13
12/14
 
 
 
 
 
 
 
 
Regency Centers Corporation
 
$
100.00

126.63

117.96

153.79

156.57

223.17

S&P 500
 
100.00

115.06

117.49

136.30

180.44

205.14

FTSE NAREIT Equity REITs
 
100.00

127.96

138.57

163.60

167.63

218.16

FTSE NAREIT Equity Shopping Centers
 
100.00

130.78

129.83

162.31

170.41

221.47





Item 6.    Selected Financial Data
(in thousands, except per share and unit data, number of properties, and ratio of earnings to fixed charges)

The following table sets forth Selected Financial Data for the Company on a historical basis for the five years ended December 31, 2014 (in thousands except per share data). This historical Selected Financial Data has been derived from the audited consolidated financial statements. This information should be read in conjunction with the consolidated financial statements of Regency Centers Corporation and Regency Centers, L.P. (including the related notes thereto) and Management's Discussion and Analysis of the Financial Condition and Results of Operations, each included elsewhere in this Form 10-K.

40




Parent Company
 
 
2014
 
2013
 
2012
 
2011
 
2010
Operating data:
 
 
 
 
 
 
 
 
 
 
Revenues
$
537,898

 
489,007

 
473,929

 
470,449

 
440,725

Operating expenses
 
353,348

 
324,687

 
307,493

 
303,976

 
292,413

Total other expense (income) (3)
 
83,046

 
111,741

 
131,240

 
136,317

 
140,275

Income before equity in income of investments in real estate partnerships and income taxes
 
101,504

 
52,579

 
35,196

 
30,156

 
8,037

Equity in income of investments in real estate partnerships
 
31,270

 
31,718

 
23,807

 
9,643

 
(12,884
)
Income tax (benefit) expense of taxable REIT subsidiary
 
(996
)
 

 
13,224

 
2,994

 
(1,333
)
Income from continuing operations (3)
 
133,770

 
84,297

 
45,779

 
36,805

 
(3,514
)
Income (loss) from discontinued operations (4)
 

 
65,285

 
(21,728
)
 
16,579

 
15,522

Gain on sale of real estate, net of tax
 
55,077

 
1,703

 
2,158

 
2,404

 
993

Net income
 
188,847

 
151,285

 
26,209

 
55,788

 
13,001

Income attributable to noncontrolling interests
 
(1,457
)
 
(1,481
)
 
(342
)
 
(4,418
)
 
(4,185
)
Net income attributable to the Company
 
187,390

 
149,804

 
25,867

 
51,370

 
8,816

Preferred stock dividends
 
(21,062
)
 
(21,062
)
 
(32,531
)
 
(19,675
)
 
(19,675
)
Net income (loss) attributable to common stockholders
$
166,328

 
128,742

 
(6,664
)
 
31,695

 
(10,859
)
 
 
 
 
 
 
 
 
 
 
 
FFO(1)
 
269,149

 
240,621

 
222,100

 
220,318

 
151,321

Core FFO (1)
 
261,506

 
241,619

 
230,937

 
213,148

 
199,357

 
 
 
 
 
 
 
 
 
 
 
Income (loss) per common share - diluted (note 15):
 
 
 
 
 
 
 
 
 
 
Continuing operations
$
1.80

 
0.69

 
0.16

 
0.16

 
(0.33
)
Discontinued operations (4)
 

 
0.71

 
(0.24
)
 
0.19

 
0.19

Net income (loss) attributable to common stockholders
$
1.80

 
1.40

 
(0.08
)
 
0.35

 
(0.14
)
 
 
 
 
 
 
 
 
 
 
 
Other information:
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
277,742

 
250,731

 
257,215

 
217,633

 
138,459

Net cash (used in) provided by investing activities
 
(210,290
)
 
(9,817
)
 
3,623

 
(77,723
)
 
(184,457
)
Net cash used in financing activities
 
(34,360
)
 
(182,579
)
 
(249,891
)
 
(145,569
)
 
(32,797
)
Dividends paid to common stockholders
 
172,900

 
168,095

 
164,747

 
160,479

 
149,117

Common dividends declared per share
 
1.88

 
1.85

 
1.85

 
1.85

 
1.85

Common stock outstanding including exchangeable operating partnership units
 
94,262

 
92,499

 
90,572

 
90,099

 
81,717

Ratio of earnings to fixed charges (2)
 
2.6

 
1.8

 
1.6

 
1.5

 
1.3

Ratio of earnings to combined fixed charges and preference dividends (2)
 
2.2

 
1.5

 
1.4

 
1.3

 
1.1

 
 
 
 
 
 
 
 
 
 
 
Balance sheet data:
 
 
 
 
 
 
 
 
 
 
Real estate investments before accumulated depreciation
$
4,743,053

 
4,385,380

 
4,352,839

 
4,488,794

 
4,417,746

Total assets
 
4,197,170

 
3,913,516

 
3,853,458

 
3,987,071

 
3,994,539

Total debt
 
2,021,357

 
1,854,697

 
1,941,891

 
1,982,440

 
2,094,469

Total liabilities
 
2,260,688

 
2,052,382

 
2,107,547

 
2,117,417

 
2,250,137

Total stockholders’ equity
 
1,906,592

 
1,843,354

 
1,730,765

 
1,808,355

 
1,685,177

Total noncontrolling interests
 
29,890

 
17,780

 
15,146

 
61,299

 
59,225

(1) See Item 7, Supplemental Earnings Information, for the definition of funds from operations and core funds from operations and a reconciliation to the nearest GAAP measure.
(2) See Exhibit 12.1 for additional information regarding the computations of ratio of earnings to fixed charges and ratio of earnings to combined fixed charges and preference dividends.
(3) During the year ended December 31, 2014, the Company recognized a gain on remeasurement of investment in real estate partnership of $18.3 million, which is included in Total other expense (income) and Income from continuing operations, upon the acquisition of the remaining 50% interest in a single operating property, resulting in consolidation of the property as a business combination. The gain on remeasurement was calculated based on the difference between the carrying value and the fair value of the previously held equity interest.
(4) On January 1, 2014, the Company prospectively adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the requirements for reporting discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. No property disposals in 2014 qualify as discontinued operations, therefore prior period amounts were not reclassified for 2014 property sales.

41



Operating Partnership
 
 
2014
 
2013
 
2012
 
2011
 
2010
Operating data:
 
 
 
 
 
 
 
 
 
 
Revenues
$
537,898

 
489,007

 
473,929

 
470,449

 
440,725

Operating expenses
 
353,348

 
324,687

 
307,493

 
303,976

 
292,413

Total other expense (income) (3)
 
83,046

 
111,741

 
131,240

 
136,317

 
140,275

Income before equity in income of investments in real estate partnerships and income taxes
 
101,504

 
52,579

 
35,196

 
30,156

 
8,037

Equity in income of investments in real estate partnerships
 
31,270

 
31,718

 
23,807

 
9,643

 
(12,884
)
Income tax (benefit) expense of taxable REIT subsidiary
 
(996
)
 

 
13,224

 
2,994

 
(1,333
)
Income from continuing operations (3)
 
133,770

 
84,297

 
45,779

 
36,805

 
(3,514
)
Income (loss) from discontinued operations (4)
 

 
65,285

 
(21,728
)
 
16,579

 
15,522

Gain on sale of real estate, net of tax
 
55,077

 
1,703

 
2,158

 
2,404

 
993

Net income
 
188,847

 
151,285

 
26,209

 
55,788

 
13,001

Income attributable to noncontrolling interests
 
(1,138
)
 
(1,205
)
 
(865
)
 
(590
)
 
(376
)
Net income attributable to the Partnership
 
187,709

 
150,080

 
25,344

 
55,198

 
12,625

Preferred unit distributions
 
(21,062
)
 
(21,062
)
 
(31,902
)
 
(23,400
)
 
(23,400
)
Net income (loss) attributable to common unit holders
$
166,647

 
129,018

 
(6,558
)
 
31,798

 
(10,775
)
 
 
 
 
 
 
 
 
 
 
 
FFO (1)
 
269,149

 
240,621

 
222,100

 
220,318

 
151,321

Core FFO (1)
 
261,506

 
241,619

 
230,937

 
213,148

 
199,357

 
 
 
 
 
 
 
 
 
 
 
Income (loss) per common unit - diluted (note 15):
 
 
 
 
 
 
 
 
 
 
Continuing operations
$
1.80

 
0.69

 
0.16

 
0.16

 
(0.33
)
Discontinued operations (4)
 

 
0.71

 
(0.24
)
 
0.19

 
0.19

Net income (loss) attributable to common unit holders
$
1.80

 
1.40

 
(0.08
)
 
0.35

 
(0.14
)
 
 
 
 
 
 
 
 
 
 
 
Other information:
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
277,742

 
250,731

 
257,215

 
217,633

 
138,459

Net cash (used in) provided by investing activities
 
(210,290
)
 
(9,817
)
 
3,623

 
(77,723
)
 
(184,457
)
Net cash used in financing activities
 
(34,360
)
 
(182,579
)
 
(249,891
)
 
(145,569
)
 
(32,797
)
Distributions paid on common units
 
172,900

 
168,095

 
164,747

 
160,479

 
149,117

Ratio of earnings to fixed charges (2)
 
2.6

 
1.8

 
1.6

 
1.5

 
1.3

Ratio of combined fixed charges and preference dividends to earnings (2)
 
2.2

 
1.5

 
1.4

 
1.3

 
1.1

 
 
 
 
 
 
 
 
 
 
 
Balance sheet data:
 
 
 
 
 
 
 
 
 
 
Real estate investments before accumulated depreciation
$
4,743,053

 
4,385,380

 
4,352,839

 
4,488,794

 
4,417,746

Total assets
 
4,197,170

 
3,913,516

 
3,853,458

 
3,987,071

 
3,994,539

Total debt
 
2,021,357

 
1,854,697

 
1,941,891

 
1,982,440

 
2,094,469

Total liabilities
 
2,260,688

 
2,052,382

 
2,107,547

 
2,117,417

 
2,250,137

Total partners’ capital
 
1,904,678

 
1,841,928

 
1,729,612

 
1,856,550

 
1,733,573

Total noncontrolling interests
 
31,804

 
19,206

 
16,299

 
13,104

 
10,829

(1) See Item 7, Supplemental Earnings Information, for the definition of funds from operations and core funds from operations and a reconciliation to the nearest GAAP measure.
(2) See Exhibit 12.1 for additional information regarding the computations of ratio of earnings to fixed charges and ratio of earnings to combined fixed charges and preference dividends.
(3) During the year ended December 31, 2014, the Company recognized a gain on remeasurement of investment in real estate partnership of $18.3 million, which is included in Total other expense (income) and Income from continuing operations, upon the acquisition of the remaining 50% interest in a single operating property, resulting in consolidation of the property as a business combination. The gain on remeasurement was calculated based on the difference between the carrying value and the fair value of the previously held equity interest.
(4) On January 1, 2014, the Company prospectively adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the requirements for reporting discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. No property disposals in 2014 qualify as discontinued operations, therefore prior period amounts were not reclassified for 2014 property sales.

42




Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Regency Centers Corporation began its operations as a REIT in 1993 and is the managing general partner of Regency Centers, L.P. All of our operating, investing, and financing activities are performed through the Operating Partnership, its wholly-owned subsidiaries, and through its co-investment partnerships. As of December 31, 2014, the Parent Company owned approximately 99.8% of the outstanding common partnership units of the Operating Partnership.

As of December 31, 2014, we directly owned 202 Consolidated Properties located in 21 states representing 23.2 million square feet of GLA. Through co-investment partnerships, we own partial ownership interests in 120 Unconsolidated Properties located in 23 states and the District of Columbia representing 15.0 million square feet of GLA.

We earn revenues and generate cash flow by leasing space in our shopping centers to grocery stores, major retail anchors, restaurants, side-shop retailers, and service providers, as well as ground leasing or selling out-parcels to these same types of tenants. We experience growth in revenues by increasing occupancy and rental rates in our existing shopping centers and by acquiring and developing new shopping centers.

We grow our shopping center portfolio through acquisitions of operating centers and new shopping center development. We will continue to use our development capabilities, market presence, and anchor relationships to invest in value-added new developments and redevelopments of existing centers. We fund our acquisition and development activity from various capital sources including operating cash flow, property sales, equity offerings, new financing, and co-investment real estate partnerships. Co-investment real estate partnerships provide us with an additional capital source for shopping center acquisitions, developments, and redevelopments, as well as the opportunity to earn fees for asset management, property management, and other investing and financing services.

Critical Accounting Policies and Estimates

Knowledge about our accounting policies is necessary for a complete understanding of our financial statements. The preparation of our financial statements requires that we make certain estimates that impact the balance of assets and liabilities as of a financial statement date and the reported amount of income and expenses during a financial reporting period. These accounting estimates are based upon, but not limited to, our judgments about historical and expected future results, current market conditions, and interpretation of industry accounting standards. They are considered to be critical because of their significance to the financial statements and the possibility that future events may differ from those judgments, or that the use of different assumptions could result in materially different estimates. We review these estimates on a periodic basis to ensure reasonableness; however, the amounts we may ultimately realize could differ from such estimates.

Accounts Receivable and Straight Line Rent

Minimum rent, percentage rent, and expense recoveries from tenants for common area maintenance costs, insurance and real estate taxes are the Company's principal source of revenue. As a result of generating this revenue, we will routinely have accounts receivable due from tenants. We are subject to tenant defaults and bankruptcies that may affect the collection of outstanding receivables. To address the collectability of these receivables, we analyze historical write-off experience, tenant credit-worthiness and current economic trends when evaluating the adequacy of our allowance for doubtful accounts and straight line rent reserve. Although we estimate uncollectible receivables and provide for them through charges against income, actual experience may differ from those estimates.

43




Real Estate Investments

Acquisition of Real Estate Investments

Upon acquisition of real estate operating properties, the Company estimates the fair value of acquired tangible assets (consisting of land, building, building improvements and tenant improvements) and identified intangible assets and liabilities (consisting of above and below-market leases and in-place leases), assumed debt, and any noncontrolling interest in the acquiree at the date of acquisition, based on evaluation of information and estimates available at that date. Based on these estimates, the Company allocates the estimated fair value to the applicable assets and liabilities. Fair value is determined based on an exit price approach, which contemplates the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. If, up to one year from the acquisition date, information regarding fair value of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments are made to the purchase price allocation on a retrospective basis. The Company expenses transaction costs associated with business combinations in the period incurred.

We strategically co-invest with partners to own, manage, acquire, develop and redevelop operating properties. We analyze our investments in real estate partnerships in order to determine whether the entity should be consolidated. If it is determined that these investments do not require consolidation because the entities are not variable interest entities (“VIEs”), we are not considered the primary beneficiary of the entities determined to be VIEs, we do not have voting control, and/or the limited partners (or non-managing members) have substantive participatory rights, then the selection of the accounting method used to account for our investments in real estate partnerships is generally determined by our voting interests and the degree of influence we have over the entity. Management uses its judgment when making these determinations. We use the equity method of accounting for investments in real estate partnerships when we own 20% or more of the voting interests and have significant influence but do not have a controlling financial interest, or if we own less than 20% of the voting interests but have determined that we have significant influence. Under the equity method, we record our investments in and advances to these entities as investments in real estate partnerships in our consolidated balance sheets, and our proportionate share of earnings or losses earned by the joint venture is recognized in equity in income (loss) of investments in real estate partnerships in our consolidated statements of operations.
 
Development of Real Estate Assets and Cost Capitalization

We capitalize the acquisition of land, the construction of buildings, and other specifically identifiable development costs incurred by recording them in properties in development in our accompanying Consolidated Balance Sheets. Other specifically identifiable development costs include pre-development costs essential to the development process, as well as, interest, real estate taxes, and direct employee costs incurred during the development period. Once a development property is substantially complete and held available for occupancy, these indirect costs are no longer capitalized.

Pre-development costs are incurred prior to land acquisition during the due diligence phase and include contract deposits, legal, engineering, and other professional fees related to evaluating the feasibility of developing a shopping center. If we determine it is probable that a specific project undergoing due diligence will not be developed, we immediately expense all related capitalized pre-development costs not considered recoverable.
Interest costs are capitalized to each development project based on applying our weighted average borrowing rate to that portion of the actual development costs expended. We cease interest cost capitalization when the property is no longer being developed or is available for occupancy upon substantial completion of tenant improvements, but in no event would we capitalize interest on the project beyond 12 months after the anchor opens for business. During the years ended December 31, 2014, 2013, and 2012, we capitalized interest of $7.1 million, $6.1 million, and $3.7 million, respectively, on our development projects.
Real estate taxes are capitalized to each development project over the same period as we capitalize interest.
We have a staff of employees who directly support our development program. All direct internal costs attributable to these development activities are capitalized as part of each development project. The capitalization of costs is directly related to the actual level of development activity occurring. During the years ended December 31, 2014, 2013, and 2012, we capitalized $16.1 million, $11.7 million, and $10.3 million, respectively, of direct internal costs incurred to support our development program.

Valuation of Real Estate Investments

We evaluate whether there are any indicators that have occurred, including property operating performance and general market conditions, that would result in us determining that the carrying value of our real estate properties (including any related amortizable intangible assets or liabilities) may not be recoverable. If such indicators occur, we compare the current carrying value of the asset to the estimated undiscounted cash flows that are directly associated with the use and ultimate

44



disposition of the asset. Our estimated cash flows are based on several key assumptions, including rental rates, costs of tenant improvements, leasing commissions, anticipated hold period, and assumptions regarding the residual value upon disposition, including the exit capitalization rate. These key assumptions are subjective in nature and the resulting impairment, if any, could differ from the actual gain or loss recognized upon ultimate sale in an arm's length transaction. If the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over fair value. Changes in our disposition strategy or changes in the marketplace may alter the hold period of an asset or asset group, which may result in an impairment loss and such loss could be material to the Company's financial condition or operating performance.

We evaluate our investments in real estate partnerships for impairment whenever there are indicators, including underlying property operating performance and general market conditions, that the value of our investments in real estate partnerships may be impaired. An investment in a real estate partnerships is considered impaired only if we determine that its fair value is less than the net carrying value of the investment in that real estate partnerships on an other-than-temporary basis. Cash flow projections for the investments consider property level factors, such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors. We consider various qualitative factors to determine if a decrease in the value of our investment is other-than-temporary. These factors include the age of the real estate partnerships, our intent and ability to retain our investment in the entity, the financial condition and long-term prospects of the entity and relationships with our partners and banks. If we believe that the decline in the fair value of the investment is temporary, no impairment charge is recorded. If our analysis indicates that there is an other-than-temporary impairment related to the investment in a particular real estate partnership, the carrying value of the investment will be adjusted to an amount that reflects the estimated fair value of the investment.

The fair value of real estate investments is subjective and is determined through comparable sales information and other market data if available, or through use of an income approach such as the direct capitalization or the traditional discounted cash flow methods. Such cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors, and therefore are subject to management judgment and changes in those factors could impact the determination of fair value. In estimating the fair value of undeveloped land, we generally use market data and comparable sales information.

Derivative Instruments

The Company utilizes financial derivative instruments to manage risks associated with changing interest rates. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or future payment of known and uncertain cash amounts, the amount of which are determined by interest rates.  The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash payments principally related to the Company's borrowings.  For additional information on the Company’s use and accounting for derivatives, see Notes 1 and 10 to the Consolidated Financial Statements.

The Company assesses effectiveness of our cash flow hedges both at inception and on an ongoing basis. The effective portion of changes in fair value of the interest rate swaps associated with our cash flow hedges is recorded in other comprehensive income which is included in accumulated other comprehensive loss on our consolidated balance sheet and our consolidated statement of equity. Our cash flow hedges become ineffective if critical terms of the hedging instrument and the debt instrument do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and LIBOR rate.  If a cash flow hedge is deemed ineffective, the ineffective portion of changes in fair value of the interest rate swaps associated with our cash flow hedges is recognized in earnings in the period affected.

The fair value of the Company's interest rate derivatives is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative.  This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities.  The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements. 


Recent Accounting Pronouncements

See Note 1 to Consolidated Financial Statements.




45





Shopping Center Portfolio

The following table summarizes general information related to the Consolidated Properties in our shopping center portfolio (GLA in thousands):

 
 
December 31,
2014
 
December 31,
2013
Number of properties
 
202
 
202
Properties in development
 
7
 
6
Gross leasable area
 
23,200
 
22,472
% leased - operating and development
 
95.3%
 
94.5%
% leased - operating
 
95.9%
 
95.0%
Weighted average annual effective rent per SqFT (1)
 
$18.30
 
17.40
(1) Net of tenant concessions.

The following table summarizes general information related to the Unconsolidated Properties owned in co-investment partnerships in our shopping center portfolio (GLA in thousands):

 
 
December 31,
2014
 
December 31,
2013
Number of properties
 
120
 
126
Gross leasable area
 
15,000
 
15,508
% leased - operating
 
96.0%
 
96.2%
Weighted average annual effective rent per SqFT (1)
 
$17.85
 
17.34
(1) Net of tenant concessions.

The following table summarizes pro-rata occupancy rates of our combined Consolidated and Unconsolidated shopping center portfolio:

 
 
December 31,
2014
 
December 31,
2013
% Leased – Operating
 
95.9%
 
95.2%
≥ 10,000 SqFT
 
98.8%
 
98.6%
< 10,000 SqFT
 
91.2%
 
89.9%
    
Leasing activity was strong in 2014 with pro-rata occupancy gains of 70 basis points driven primarily by new leasing in the less than 10,000 SqFT category, but also supported by high renewal activity of expiring leases in both categories as summarized in the leasing activity table below, and lower than historical move-out rates. We believe our high-quality, grocery anchored shopping centers located in densely populated, desirable infill trade areas create attractive spaces for retail tenants. Improvements in the economy, combined with historically low levels of new supply and robust tenant demand, allow us to focus on merchandising of our centers to ensure the right mix of operators and unique retailers, which draws more retail customers to our centers.

46




The following table summarizes leasing activity for the years ended December 31, 2014 and 2013, including our pro-rata share of activity within the portfolio of our co-investment partnerships:

2014
 
 
Leasing Transactions (1)
 
SqFT (in thousands)
 
Base Rent PSF (2)
 
Tenant Improvements PSF (2)
 
Leasing Commissions PSF (2)
New leases
 
 
 
 
 
 
 
 
 
 
≥ 10,000 SqFT
 
28
 
793
 
$
14.49

 
$
5.54

 
$
4.62

< 10,000 SqFT
 
477
 
828
 
$
29.24

 
$
8.76

 
$
13.72

Total New Leases
 
505
 
1,621
 
$
22.02

 
$
7.19

 
$
9.27

Renewals
 
 
 
 
 
 
 
 
 
 
≥ 10,000 SqFT
 
59
 
1,173
 
$
11.80

 
$
0.20

 
$
1.07

< 10,000 SqFT
 
854
 
1,281
 
$
28.80

 
$
0.76

 
$
3.61

Total Renewal Leases
 
913
 
2,454
 
$
20.67

 
$
0.49

 
$
2.39



2013
 
 
Leasing Transactions (1)
 
SqFT (in thousands)
 
Base Rent PSF (2)
 
Tenant Improvements PSF (2)
 
Leasing Commissions PSF (2)
New leases
 
 
 
 
 
 
 
 
 
 
≥ 10,000 SqFT
 
30
 
629
 
$
14.51

 
$
5.10

 
$
3.68

< 10,000 SqFT
 
573
 
1,012
 
$
25.94

 
$
8.26

 
$
11.18

Total New Leases
 
603
 
1,641
 
$
21.56

 
$
6.72

 
$
8.30

Renewals
 
 
 
 
 
 
 
 
 
 
≥ 10,000 SqFT
 
55
 
1,141
 
$
11.12

 
$
0.24

 
$
1.02

< 10,000 SqFT
 
913
 
1,301
 
$
28.69

 
$
0.49

 
$
3.67

Total Renewal Leases
 
968
 
2,442
 
$
20.48

 
$
0.36

 
$
2.44

(1) Number of leasing transactions reported at 100%; all other statistics reported at pro-rata share.
(2) Totals for base rent, tenant improvements, and leasing commissions reflect the weighted average per square foot ("PSF").

In the greater than or equal to 10,000 SqFT category, base rent PSF on new leases remained constant in 2014. In the under 10,000 SqFT category for both new new leases and renewals, base rent PSF continued to increase on leases executed in 2014.

Significant Tenants and Concentrations of Risk

We seek to reduce our operating and leasing risks through geographic diversification and by avoiding dependence on any single property, market, or tenant. The following table summarizes our three most significant tenants, each of which is a grocery tenant, occupying our shopping centers at December 31, 2014: 

Grocery Anchor
 
Number of
Stores (1)
 
Percentage of
Company
Owned GLA (2)
 
Percentage of
Annualized
Base Rent (2) 
Kroger
 
55
 
8.5%
 
4.5%
Publix
 
46
 
6.5%
 
3.8%
Safeway
 
44
 
4.1%
 
2.3%
(1) Includes stores owned by grocery anchors that are attached to our centers.
(2) Includes our pro-rata share of Unconsolidated Properties and excludes those owned by anchors.

47




In January 2015, Safeway Inc. and AB Acquisition LLC (Albertsons) completed their proposed merger announced in March 2014. In addition to the centers anchored by Safeway above, we have 12 shopping centers anchored by Albertsons, representing 1.4% of company owned GLA and 1.0% of annualized base rent on a pro-rata basis. The Federal Trade Commission ("FTC") is requiring that they divest 168 stores. Of these, six are in our shopping centers and are under contract to be purchased by Haggen.

Bankruptcies

Although base rent is supported by long-term lease contracts, tenants who file bankruptcy may have the legal right to reject any or all of their leases and close related stores. In the event that a tenant with a significant number of leases in our shopping centers files bankruptcy and cancels its leases, we could experience a significant reduction in our revenues. We monitor the operating performance and rent collections of all tenants in our shopping centers, especially those tenants operating retail formats that are experiencing significant changes in competition, business practice, and store closings in other locations. We are not currently aware of the pending bankruptcy or announced store closings of any tenants in our shopping centers that would individually cause a material reduction in our revenues, and no tenant represents more than 5% of our annual base rent on a pro-rata basis.

Our management team devotes significant time to monitoring consumer preferences, shopping behaviors, and demographics to anticipate both challenges and opportunities in the changing retail industry that may affect our tenants. As a result of our findings, we may reduce new leasing, suspend leasing, or curtail the allowance for the construction of leasehold improvements within a certain retail category or to a specific retailer.



48




Liquidity and Capital Resources

Our Parent Company has no capital commitments other than its guarantees of the commitments of our Operating Partnership. The Parent Company will from time to time access the capital markets for the purpose of issuing new equity and will simultaneously contribute all of the offering proceeds to the Operating Partnership in exchange for additional partnership units. All debt is issued by our Operating Partnership or by our co-investment partnerships. The following table represents the remaining available capacity under our at the market ("ATM") equity program and our unsecured credit facilities as of December 31, 2014 (in thousands):
 
 
December 31, 2014
ATM equity program (see note 12) (1)
 
 
Total capacity
 
$
200,000

Remaining capacity
 
$
96,000

 
 
 
Term Loan (see note 9) (2)
 
 
Total capacity
 
$
165,000

Remaining capacity
 
$
90,000

 
 
 
Line of Credit (the "Line") (see note 9)
 
 
Total capacity
 
$
800,000

Remaining capacity (3)
 
$
794,096

Maturity (4)
 
September 2016
(1) Pursuant to the Forward Sale Agreement dated January 14, 2015, we have agreed that, subject to certain limited exceptions, we will not directly or indirectly for 60 days after the issuance of our forward equity offering on January 14, 2015 (1) sell or otherwise transfer or dispose of any shares of common stock or any securities exercisable or exchangeable for common stock or (2) enter into any swap or other arrangement that transfers to another any economic consequences of ownership of the common stock.

Notwithstanding the foregoing, if (1) during the last 17 days of the 60-day restricted period, we issue an earnings release, material news or a material event relating to our company occurs; or (2) prior to the expiration of the 60-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 60-day period, the restrictions described above will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

Accordingly, we are prohibited from issuing shares under our ATM program during the period stated above.

(2)  On June 27, 2014, the Company amended its existing senior unsecured term loan facility (the "Term Loan"). The amendment established a new Term Loan size of $165.0 million, extended the maturity date to June 27, 2019 and reduced the applicable interest rate. The Term Loan bears interest at LIBOR plus a ratings based margin of 1.15% per annum, subject to adjustment from time to time based on changes to the Company's corporate credit rating, and is subject to a fee of 0.20% per annum on the undrawn balance. The Company has $75.0 million outstanding and may utilize the additional $90.0 million through August 31, 2015.

(3) Net of letters of credit.
 
 
(4) May be extended to September 2017 for a fee, at the Company's option.
    
In January 2015, the Parent Company entered into an underwritten public offering for 2.875 million shares of its common stock at a price of $67.40 per share which will result in gross proceeds of approximately $193.8 million, before any underwriting discount and offering expenses. In connection with this offering, the Parent Company entered into a forward sale agreement with an affiliate of Wells Fargo Securities, LLC for the underwritten shares. The forward sale agreement will settle on one or more dates occurring no later than approximately 12 months after the date of the offering.

    






49



The following table summarizes net cash flows related to operating, investing, and financing activities of the Company for the years ended December 31, 2014, 2013, and 2012 (in thousands): 
 
 
2014
 
2013
 
2012
Net cash provided by operating activities
 
$
277,742

 
250,731

 
257,215

Net cash (used in) provided by investing activities
 
(210,290
)
 
(9,817
)
 
3,623

Net cash used in financing activities
 
(34,360
)
 
(182,579
)
 
(249,891
)
Net increase in cash and cash equivalents
 
33,092

 
58,335

 
10,947

Total cash and cash equivalents
 
$
113,776

 
80,684

 
22,349


Net cash provided by operating activities:

Net cash provided by operating activities increased by $27.0 million for the year ended December 31, 2014, as compared to the year ended December 31, 2013 due to:
$27.9 million increase in cash from operating income; offset by
$3.0 million net decrease in cash due to timing of cash receipts and payments related to operating activities;
$2.6 million decrease in operating cash flow distributions from our unconsolidated real estate partnerships due to liquidating three partnerships and reinvesting cash in another; and
$4.6 million received upon settlement of the treasury hedges in May 2014 in connection with our bond issuance.
We operate our business such that we expect net cash provided by operating activities will provide the necessary funds to pay our distributions to our common and preferred stock and unit holders, which were $194.0 million and $189.2 million for the years ended December 31, 2014 and 2013, respectively. Our dividend distribution policy is set by our Board of Directors who monitor our financial position. Our Board of Directors recently declared our common stock quarterly dividend of $0.485 per share, payable on March 5, 2015. Future dividends will be declared at the discretion of our Board of Directors and will be subject to capital requirements and availability. We plan to continue paying an aggregate amount of distributions to our stock and unit holders that, at a minimum, meet the requirements to continue qualifying as a REIT for federal income tax purposes.

Net cash used in investing activities:

Net cash used in investing activities increased by $200.5 million due to lower real estate dispositions during 2014 within our consolidated and unconsolidated portfolio coupled with a slight increase in acquisitions and development activity, which were funded from sales proceeds and financing activity.
 
 
2014
 
2013
 
Change
Cash flows from investing activities:
 
 
 
 
 
 
Acquisition of operating real estate
$
(112,120
)
 
(107,790
)
 
(4,330
)
Real estate development and capital improvements
 
(238,237
)
 
(213,282
)
 
(24,955
)
Proceeds from sale of real estate investments
 
118,787

 
212,632

 
(93,845
)
Collection (issuance) of notes receivable
 

 
27,354

 
(27,354
)
Investments in real estate partnerships (note 4)
 
(23,577
)
 
(10,883
)
 
(12,694
)
Distributions received from investments in real estate partnerships
 
37,152

 
87,111

 
(49,959
)
Dividends on investments
 
243

 
194

 
49

Acquisition of securities
 
(23,760
)
 
(19,144
)
 
(4,616
)
Proceeds from sale of securities
 
31,222

 
13,991

 
17,231

Net cash used in investing activities
$
(210,290
)
 
(9,817
)
 
(200,473
)
    
Significant investing and divesting activities included:

We acquired four shopping centers in 2014, compared to three during 2013;

We sold eleven shopping centers and six out-parcels in 2014, compared to twelve shopping centers and ten out-parcels during 2013;

We received proceeds of $27.4 million upon the collection and sale of notes receivable in 2013;

50




We invested $23.6 million in our unconsolidated partnerships to acquire an operating property and to fund redevelopment activity during 2014. In 2013, we invested $10.9 million primarily for mortgage maturities, one operating property acquisition, and redevelopment activity.

Distributions from our unconsolidated partnerships in 2014 were primarily driven by real estate sales proceeds of $32.1 million and $5.1 million from refinancing a loan. Distributions in 2013 were primarily from real estate sales proceeds of $32.7 million, $6.9 million net proceeds from debt refinancing, and $47.5 million distributions upon redemption of preferred interest.

Acquisition of securities and proceeds from sale of securities include investments in equity securities. In 2014, we paid $14.3 million for the acquisition of AmREIT, Inc. ("AmREIT") common stock, and received $22.1 million in proceeds upon the subsequent sale. The remaining securities investing activity, during both 2014 and 2013, primarily relates to our deferred compensation plan.

We plan to continue developing and redeveloping shopping centers for long-term investment purposes and have a staff of employees who directly support our development and redevelopment program. Internal costs attributable to these development and redevelopment activities are capitalized as part of each project. During 2014, we paid $238.2 million for the development, redevelopment, and improvement of our real estate properties as comprised of the following (in thousands):
 
 
2014
 
2013
 
Change
Capital expenditures:
 
 
 
 
 
 
Land acquisitions for development / redevelopment
$
34,650

 
28,320

 
6,330

Building and tenant improvements
 
35,759

 
43,196

 
(7,437
)
Redevelopment costs
 
48,853

 
19,964

 
28,889

Development costs
 
98,367

 
104,662

 
(6,295
)
Capitalized interest
 
7,141

 
6,078

 
1,063

Capitalized direct compensation
 
13,467

 
11,062

 
2,405

Real estate development and capital improvements
$
238,237

 
213,282

 
24,955


During 2014 we acquired six land parcels for new development projects as compared to five in 2013.

Building and tenant improvements decreased $7.4 million during the year ended December 31, 2014 primarily related to timing of capital projects and renovations.

The $28.9 million increase in redevelopment costs were due to an increase in the number and magnitude of redevelopments, primarily driven by our Westlake and Westchester redevelopment projects.

The $6.3 million decrease in our development projects expenditures was due to the size of and progress on developments. See the tables below for a detail of current and recently completed development projects.

Capitalized direct compensation represents overhead costs of our development and construction team directly related to the development projects, with the majority of capitalizable direct compensation costs incurred at or near inception of a development project. The increased number and size of projects starting in 2014 as compared to 2013 resulted in the increase in capitalized compensation costs. During 2014 we started $239.2 million of development and redevelopment projects as compared to $194.3 million in 2013. Changes in the level of future development and redevelopment activity could adversely impact results of operations by reducing the amount of internal costs for development and redevelopment projects that may be capitalized. A 10% reduction in development and redevelopment activity without a corresponding reduction in the compensation costs directly related to our development and redevelopment activities could result in an additional charge to net income of approximately $1.6 million.

51




As of December 31, 2014, we had seven development projects that were either under construction or in lease up, compared to six such development projects as of December 31, 2013. The following table summarizes our development projects as of December 31, 2014 (in thousands, except cost per SqFT):
Property Name
 
Location
 
Development Start Date
 
Estimated Net Development Costs After JV Buyout (1)
 
% of Costs Incurred
 
GLA
 
Cost PSF GLA
 
Estimated/Actual Anchor Opens
Fountain Square
 
Miami, FL
 
Q3-13
 
$
56,309

 
77%
 
177

 
$
318

 
Dec-14
Brooklyn Station on Riverside
 
Jacksonville, FL
 
Q4-13
 
15,129

 
66%
 
50

 
303

 
Oct-14
Persimmon Place
 
Dublin, CA
 
Q1-14
 
59,976

 
58%
 
153

 
392

 
May-15
Willow Oaks Crossing
 
Concord, NC
 
Q2-14
 
12,888

 
31%
 
69

 
187

 
Sept-15
Belmont Shopping Center
 
Ashburn, VA
 
Q3-14
 
28,189

 
30%
 
91

 
310

 
Aug-15
CityLine Market
 
Richardson, TX
 
Q3-14
 
26,606

 
26%
 
80

 
333

 
Feb-16
The Village at La Floresta
 
Brea, CA
 
Q4-14
 
33,116

 
26%
 
87

 
381

 
Jan-16
Total
 
 
 
 
 
$
232,213

 
50%
 
707

 
$
328

(2) 
 
(1) Amount represents costs, including leasing costs, net of tenant reimbursements.
(2) Amount represents a weighted average.

The following table summarizes our development projects completed during the year ended December 31, 2014 (in thousands, except cost per SqFT):
Property Name
 
Location
 
Completion Date
 
Net Development Costs (1)
 
GLA
 
Cost PSF GLA
Juanita Tate Marketplace
 
Los Angeles, CA
 
Q2-14
 
$
17,289

 
77

 
$
225

Shops at Erwin Mill
 
Durham, NC
 
Q3-14
 
14,530

 
87

 
167

Shops on Main
 
Schererville, IN
 
Q4-14
 
37,867

 
214

 
177

Glen Gate
 
Glenview, IL
 
Q4-14
 
29,390

 
103

 
285

Total
 
 
 
 
 
$
99,076

 
481

 
$
206

(1) Includes leasing costs, net of tenant reimbursements.

Net cash used in financing activities:
 
Net cash used in financing activities decreased by $148.2 million primarily due to proceeds from the net issuance of unsecured notes in 2014 and net repayments on the credit facilities in 2013. The following table presents changes in our primary categories of financing activity:
 
 
2014
 
2013
 
Change
Cash flows from financing activities:
 
 
 
 
 
 
Equity issuances
$
102,453

 
99,753

 
2,700

Stock redemption
 
(300
)
 

 
(300
)
(Distributions to) contributions from limited partners in consolidated partnerships, net
 
(5,303
)
 
1,514

 
(6,817
)
Dividend payments
 
(193,962
)
 
(189,157
)
 
(4,805
)
Unsecured credit facilities, net
 

 
(95,000
)
 
95,000

Debt issuance
 
258,378

 
35,767

 
222,611

Debt repayment
 
(195,626
)
 
(35,490
)
 
(160,136
)
Other
 

 
34

 
(34
)
Net cash used in financing activities
$
(34,360
)
 
(182,579
)
 
148,219


    

52



Significant financing activities during the year ended December 31, 2014 include:

During 2014, the Parent Company issued approximately 1.7 million shares of common stock through our ATM program at an average price of $60.00 per share, as compared to 1.9 million shares at $53.35 per share in 2013. In both years, the proceeds were used to fund investment activities.

The $6.8 million change in net distributions to limited partners is primarily related to 2014 distribution of proceeds from sales and debt financing.

During 2014 we increased our dividend distribution rates on our common stock and operating partnership units.

During 2013, we paid down our Line and Term Loan $95.0 million, net.

The $222.6 million net change in debt issuance is primarily related to the $250 million of new 3.75% ten-year unsecured public debt issued in May 2014, which matures in June 2024. In connection with the bond offering, we settled the previously locked forward starting interest rate swaps, receiving net cash proceeds of $4.6 million. These proceeds will offset bond interest expense over the life of the bonds, resulting in a lower effective interest rate of 3.59%.

The $160.1 million net change in debt repayment is primarily driven by the repayment of $150 million of 4.95% ten-year unsecured public debt at maturity. in April 2014.

We endeavor to maintain a high percentage of unencumbered assets. As of December 31, 2014, 76.8% of our wholly-owned real estate assets were unencumbered. Such assets allow us to access the secured and unsecured debt markets and to maintain significant availability on the Line. Our coverage ratio, including our pro-rata share of our partnerships, was 2.5 times for the year ended December 31, 2014, as compared to 2.4 times for the year ended December 31, 2013. We define our coverage ratio as earnings before interest, taxes, investment transaction profits net of deal costs, depreciation and amortization (“Core EBITDA”) divided by the sum of the gross interest and scheduled mortgage principal paid to our lenders plus dividends paid to our preferred stockholders.

Through 2015, we estimate that we will require approximately $622.7 million of cash, including $179.2 million to complete in-process developments and redevelopments, $426.2 million to repay maturing debt, and approximately $17.3 to fund our pro-rata share of estimated capital contributions to our co-investment partnerships for repayment of debt. If we start new developments or redevelop additional shopping centers, our cash requirements will increase. If we refinance maturing debt, our cash requirements will decrease. To meet our cash requirements, we will utilize cash generated from operations, borrowings from our Line and Term Loan, proceeds from the sale of real estate, cash receipts from our forward equity offering, and when the capital markets are favorable, proceeds from the sale of equity and the issuance of debt.     

We have $350.0 million of fixed rate, unsecured debt maturing in August 2015 and $400.0 million of fixed rate, unsecured debt maturing in June 2017. In order to mitigate the risk of interest rate volatility, we previously entered into $220.0 million of forward starting interest rate swaps to partially hedge the new debt expected to be issued in 2015 and an additional $220.0 million of forward starting interest rate swaps to partially hedge the new debt expected to be issued in 2017. These interest rate swaps lock in the 10-year treasury rate and swap spread at a weighted average fixed rate of 2.67% and 3.48%, respectively. A current market based credit spread applicable to Regency will be added to the locked in fixed rate at time of issuance that will determine the final bond yield. We will cash settle these forward starting interest rate swaps when we issue the new debt. The actual cash settlement may differ from the current fair value of these interest rate swaps based on movements in interest rates.

We continuously monitor the capital markets and evaluate our ability to issue new debt to repay maturing debt or fund our commitments. Based upon the current capital markets, our current credit ratings, and the number of high quality, unencumbered properties that we own which could collateralize borrowings, we currently expect that we will successfully issue new secured or unsecured debt to fund our obligations, as needed.

Our Line, Term Loan, and unsecured loans require we remain in compliance with various covenants, which are described in Note 9 to the Consolidated Financial Statements. We are in compliance with these covenants at December 31, 2014 and expect to remain in compliance.






53



Investments in Real Estate Partnerships

As of December 31, 2014 and 2013, we had investments in real estate partnerships of $333.2 million and $358.8 million, respectively, as discussed further in Note 4 to the Consolidated Financial Statements. The following table is a summary of unconsolidated combined assets and liabilities of these co-investment partnerships and our pro-rata share as of December 31, 2014 and 2013 (dollars in thousands): 
 
 
2014
 
2013
Number of co-investment partnerships
 
13
 
17
Regency's ownership
 
 20%-50%
 
 20%-50%
Number of properties
 
120
 
126
Combined assets
 
$
2,807,502

 
2,939,599

Combined liabilities
 
$
1,558,874

 
1,617,920

Combined equity
 
$
1,248,628

 
1,321,679

Regency’s Share of (1):
 
 
 
 
Assets
 
$
981,359

 
1,035,842

Liabilities
 
$
539,310

 
567,743

Equity (2)
 
$
442,049

 
468,099

(1) Pro-rata financial information is not, and is not intended to be, a presentation in accordance with GAAP. However, management believes that providing such information is useful to investors in assessing the impact of its investments in real estate partnership activities on our operations, which includes such items on a single line presentation under the equity method in its consolidated financial statements.

(2) The difference between our share of the net assets of the co-investment partnerships and our investments in real estate partnerships per the accompanying Consolidated Balance Sheets relates primarily to differences in inside/outside basis as further described in Note 4 to the Consolidated Financial Statements.

In addition to earning our pro-rata share of net income or loss in each of these co-investment partnerships, we receive fees, as shown below, for each of the years ended December 31, 2014, 2013, and 2012 (dollars in thousands): 
 
 
2014
 
2013
 
2012
Asset management, property management, leasing, and investment and financing services
 
$
22,983

 
24,153

 
25,423





54



Contractual Obligations

We have debt obligations related to our mortgage loans, unsecured notes, unsecured credit facilities and interest rate swap obligations as described further below and in Note 9 and Note 10 to the Consolidated Financial Statements. We have shopping centers that are subject to non-cancelable long-term ground leases where a third party owns and has leased the underlying land to us to construct and/or operate a shopping center. In addition, we have non-cancelable operating leases pertaining to office space from which we conduct our business.

The following table of Contractual Obligations summarizes our debt maturities, including our pro-rata share of obligations within co-investment partnerships, (in thousands) as of December 31, 2014, and excludes the following:

Recorded debt premiums or discounts that are not obligations;

Obligations related to construction or development contracts, since payments are only due upon satisfactory performance under the contracts;

Letters of credit of $5.9 million issued to cover performance obligations on certain development projects, which will be satisfied upon completion of the development projects; and,

Obligations for retirement savings plans due to uncertainty around timing of participant withdrawals, which are solely within the control of the participant, and are further discussed in Note 14 to the Consolidated Financial Statements. 
 
 
Payments Due by Period
 
 
 
 
2015
 
2016
 
2017
 
2018
 
2019
 
Beyond 5 Years
 
Total
Notes payable:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regency (1)
 
$
515,481

 
129,207

 
586,415

 
109,253

 
225,273

 
841,876

 
$
2,407,505

Regency's share of joint ventures (1) (2)
 
50,928

 
134,186

 
44,069

 
44,418

 
36,882

 
320,460

 
630,943

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regency
 
4,382

 
3,847

 
2,135

 
989

 
732

 
1,572

 
13,657

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subleases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regency
 
(106
)
 
(32
)
 

 

 

 

 
(138
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ground leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regency
 
3,959

 
3,978

 
3,939

 
4,017

 
4,022

 
193,420

 
213,335

Regency's share of joint ventures
 
336

 
336

 
336

 
336

 
336

 
20,175

 
21,855

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
574,980

 
271,522

 
636,894

 
159,013

 
267,245

 
1,377,503

 
$
3,287,157

(1) Includes interest payments.
(2) We are obligated to contribute our pro-rata share to fund maturities if they are not refinanced. We believe that our partners are financially sound and have sufficient capital or access thereto to fund future capital requirements.  In the event that a co-investment partner was unable to fund its share of the capital requirements of the co-investment partnership, we would have the right, but not the obligation, to loan the defaulting partner the amount of its capital call. 



55




Off-Balance Sheet Arrangements

We do not have off-balance sheet arrangements, financings, or other relationships with other unconsolidated entities (other than our co-investment partnerships) or other persons, also known as variable interest entities, not previously discussed. Our co-investment partnership properties have been financed with non-recourse loans. We have no guarantees related to these loans.

Results from Operations

Comparison of the years ended December 31, 2014 and 2013:

Our revenues increased in 2014, as compared to 2013, as summarized in the following table (in thousands): 
 
 
2014
 
2013
 
Change
Minimum rent
 
$
390,697

 
353,833

 
36,864

Percentage rent
 
3,488

 
3,583

 
(95
)
Recoveries from tenants and other income
 
119,618

 
106,494

 
13,124

Management, transaction, and other fees
 
24,095

 
25,097

 
(1,002
)
Total revenues
 
$
537,898

 
489,007

 
48,891


Minimum rent increased as follows:

$29.1 million increase due to the acquisitions of operating properties and operations beginning at development properties;

$9.9 million increase in minimum rent from same properties, which was driven by rental rate and occupancy growth and increases from contractual rent steps in existing leases. Same property includes operating properties owned for the entirety of both periods being presented;

These increases were offset by a $2.2 decrease from operating properties sold in 2014 that no longer are reported as discontinued operations.

Recoveries from tenants and other income represent reimbursements from tenants for their pro-rata share of the operating, maintenance, and real estate tax expenses that we incur to operate our shopping centers, as well as other income earned at our operating properties. Increases are due to the following:

$6.9 million increase due to the acquisition of operating properties and operations beginning at development properties during 2014 and 2013; and,

$6.2 million increase in recoveries at same properties, which was driven by an increase in occupancy and by an increase in recoverable costs, and $1.4 million increase in other income primarily related to settlements and termination fees;

Offset by a $1.4 million decrease from operating properties sold in 2014 that no longer are reported as discontinued operations.

We earned fees, at market-based rates, for asset management, property management, leasing, acquisition, and financing services that we provided to our co-investment partnerships and third parties as follows (in thousands): 
    
 
 
2014
 
2013
 
Change
Asset management fees
 
$
6,013

 
6,205

 
(192
)
Property management fees
 
13,020

 
13,692

 
(672
)
Leasing commissions and other fees
 
5,062

 
5,200

 
(138
)
 
 
$
24,095

 
25,097

 
(1,002
)
    

Asset and property management fees decreased due to the liquidation of one unconsolidated real estate partnership consisting of nine properties during the third quarter of 2013, partially offset by higher asset and property management fees from our other partnerships.

56



    

Our operating expenses increased in 2014, as compared to 2013, as summarized in the following table (in thousands): 
 
 
2014
 
2013
 
Change
Depreciation and amortization
 
$
147,791

 
130,630

 
17,161

Operating and maintenance
 
77,788

 
71,018

 
6,770

General and administrative
 
60,242

 
61,234

 
(992
)
Real estate taxes
 
59,031

 
53,726

 
5,305

Other operating expenses
 
8,496

 
8,079

 
417

Total operating expenses
 
$
353,348

 
324,687

 
28,661


Depreciation and amortization increased $17.2 million. The increase is largely attributable to the following: $9.9 million from acquisitions, $5.5 million from new development operations and $2.6 million at same properties due to redevelopments and capital improvements, offset by a decrease of approximately $800,000 from disposals.

Operating and maintenance increased $6.8 million. The increase relates to the following: $2.0 million from acquisitions, $2.6 million from new development operations, and $2.4 million at same property driven by an increase in snow removal costs, offset by approximately $200,000 from sold properties.

General and administrative expenses decreased approximately $1.0 million largely due to greater capitalization of development overhead costs by $4.4 million, stemming from higher volume of development projects, offset by an increase of $4.6 million of higher incentive compensation expense during 2014. Additionally, changes in participant obligations within the deferred compensation plan resulted in a $1.9 million decrease in expense.

Real estate taxes increased $5.3 million. The increase largely consists of the following: $2.6 million from acquisitions, $1.6 million from new development operations, and $1.4 million at same properties from higher assessed values, partially offset by approximately $300,000 from sold properties.

The following table presents the components of other expense (income) (in thousands):
 
 
2014
 
2013
 
Change
Interest expense, net
 
$
109,491

 
108,966

 
525

Provision for impairment
 
1,257

 
6,000

 
(4,743
)
Early extinguishment of debt
 
18

 
32

 
(14
)
Net investment (income) loss
 
(9,449
)
 
(3,257
)
 
(6,192
)
Gain on remeasurement of investment in real estate partnership
 
(18,271
)
 

 
(18,271
)
Total other expense (income)
 
$
83,046

 
111,741

 
(28,695
)

See table below for a discussion of interest expense.

During the year ended December 31, 2014, we recognized a $175,000 impairment on two parcels of land held and $1.1 million of loss on the disposal of one operating property and one land parcel. During the year ended December 31, 2013, we recognized a $6.0 million impairment on a single operating property.

Net investment income increased $6.2 million, largely driven by an $8.1 million gain realized on the sale of available for sale securities offset by a $1.9 million decrease in net investment income from deferred compensation plan related to the change in the fair value of plan assets.

During the year ended December 31, 2014, we acquired the remaining 50% interest and gained control of a previously unconsolidated investment in real estate partnership that owns a single operating property. As the operating property constitutes a business, acquisition of control was accounted for as a step acquisition, and the net assets acquired were recognized at fair value. The gain of $18.3 million was recognized as the difference between the fair value and carrying value of the Company's previously held equity interest, using an income approach to measure fair value.



57




The following table presents the change in net interest expense (in thousands): 
 
 
2014
 
2013
 
Change
Interest on notes payable
 
$
104,938

 
103,143

 
1,795

Interest on unsecured credit facilities
 
3,539

 
3,937

 
(398
)
Capitalized interest
 
(7,142
)
 
(6,078
)
 
(1,064
)
Hedge interest
 
9,366

 
9,607

 
(241
)
Interest income
 
(1,210
)
 
(1,643
)
 
433

 
 
$
109,491

 
108,966

 
525

    
Our total interest expense increased mainly due to the $77.8 million of mortgage debt assumed with the Fairfield Portfolio acquisition in the first quarter of 2014.

Our equity in income of investments in real estate partnerships increased in 2014, as compared to 2013, as follows (in thousands): 
 
 
Ownership
 
2014
 
2013
 
Change
GRI - Regency, LLC (GRIR)
 
40.00%
 
$
13,727

 
12,789

 
938

Macquarie CountryWide-Regency III, LLC (MCWR III) (1)
 
—%
 

 
53

 
(53
)
Columbia Regency Retail Partners, LLC (Columbia I)
 
20.00%
 
1,431

 
1,727

 
(296
)
Columbia Regency Partners II, LLC (Columbia II)
 
20.00%
 
233

 
1,274

 
(1,041
)
Cameron Village, LLC (Cameron)
 
30.00%
 
1,008

 
662

 
346

RegCal, LLC (RegCal)
 
25.00%
 
966

 
332

 
634

Regency Retail Partners, LP (the Fund) (2)
 
20.00%
 
27

 
7,749

 
(7,722
)
US Regency Retail I, LLC (USAA)
 
20.01%
 
567

 
487

 
80

BRE Throne Holdings, LLC (BRET) (3)
 
—%
 

 
4,499

 
(4,499
)
Other investments in real estate partnerships
 
50.00%
 
13,311

 
2,146

 
11,165

Total investments in real estate partnerships
 
 
 
$
31,270

 
31,718

 
(448
)
 
 
 
 
 
 
 
 
 
(1) As of December 31, 2012, our ownership interest in MCWR III was 24.95%. The liquidation of MCWR III was complete effective March 20, 2013.
(2) On August 13, 2013, Regency Retail Partners, LP (the "Fund") sold 100% of its interest in its entire portfolio of shopping centers to a third party. The Fund was dissolved following the final distribution of proceeds in 2014.
(3) On October 23, 2013, the Company sold 100% of its interest in the BRET unconsolidated real estate partnership and received a capital distribution of $47.5 million, its share of the undistributed income of the partnership, and a redemption premium. Regency no longer has any interest in the BRET partnership.

The decrease in our equity in income of investments in real estate partnerships is principally due to the following:

$947,000 of pro-rata gains on one operating property disposed of within GRIR.

$1.0 million decrease within Columbia II due to $424,000 of pro-rata impairment losses recognized upon sale of two properties in 2014 and $830,000 of gains recognized in 2013 on the sale of 4 operating properties and one land parcel;
$654,000 of pro-rata gains on one operating property disposed of within RegCal in 2014;
The Fund sold all its operating properties in August 2013 for pro-rata gains of $7.4 million. The only activity in 2014 was collection of remaining receivables and the final distribution;
$4.5 million decrease from liquidating our ownership interest in BRET in October 2013; and,
$11.2 million increase within our Other investment partnerships driven by the 2014 gains on sale of two land parcels and two operating properties.

58




The following represents the remaining components that comprised net income attributable to the common stockholders and unit holders for the year ended December 31, 2014, as compared to the year ended December 31, 2013, (in thousands):
 
 
2014
 
2013
 
Change
Income from continuing operations before tax
 
$
132,774

 
84,297

 
48,477

Income tax (benefit) expense of taxable REIT subsidiary
 
(996
)
 

 
(996
)
Discontinued operations
 
 
 
 
 
 
Gain on sale of operating properties, net of tax
 

 
57,953

 
(57,953
)
Operating income
 

 
7,332

 
(7,332
)
Income (loss) from discontinued operations
 

 
65,285

 
(65,285
)
Gain on sale of real estate, net of tax
 
55,077

 
1,703

 
53,374

Income attributable to noncontrolling interests
 
(1,457
)
 
(1,481
)
 
24

Preferred stock dividends
 
(21,062
)
 
(21,062
)
 

Net income (loss) attributable to common stockholders
 
$
166,328

 
128,742

 
37,586

Net income attributable to exchangeable operating partnership units
 
319

 
276

 
43

Net income (loss) attributable to common unit holders
 
$
166,647

 
129,018

 
37,629


A $1.0 million tax benefit was recognized in 2014 upon the receipt of a state tax refund from amending our prior tax returns. We recognized $55.1 million of gains on sale of real estate, net of taxes, in 2014 attributable to the sale of eleven operating properties and six land parcels.

Comparison of the years ended December 31, 2013 and 2012:

Our revenues increased as summarized in the following table (in thousands):
 
 
2013
 
2012
 
Change
Minimum rent
 
$
353,833

 
340,940

 
12,893

Percentage rent
 
3,583

 
3,323

 
260

Recoveries from tenants and other income
 
106,494

 
103,155

 
3,339

Management, transaction, and other fees
 
25,097

 
26,511

 
(1,414
)
Total revenues
 
$
489,007

 
473,929

 
15,078


Minimum rent increased as follows:

$22.5 million increase due to the acquisitions of operating properties and operations beginning at development properties; and

$8.2 million increase in minimum rent from same properties, which was driven by rental rate and occupancy growth and increases from contractual rent steps in existing leases. Same property includes operating properties owned for the entirety of both periods being presented.

These increases were offset by a $17.8 million decrease due to the sale of a 15-property portfolio in July 2012 not considered discontinued operations.

Recoveries from tenants and other income represent reimbursements from tenants for their pro-rata share of the operating, maintenance, and real estate tax expenses that we incur to operate our shopping centers, as well as other income earned at our operating properties. Increases are due to the following:

$4.7 million increase due to the acquisition of operating properties and operations beginning at development properties during 2013 and 2012; and

$6.1 million increase in recoveries at same properties, which was driven primarily by an increase in occupancy and an increase in recoverable costs.


59



These increases were offset by a $5.1 million decrease due to the sale of a 15-property portfolio in July 2012 not considered discontinued operations.

Other income decreased by $2.2 million as a result of final distributions from our terminated third party managed captive insurance program and establishing a consolidated captive insurance subsidiary during 2012.

We earned fees, at market-based rates, for asset management, property management, leasing, acquisition, disposition and financing services that we provided to our co-investment partnerships and third parties as follows (in thousands): 
 
 
2013
 
2012
 
Change
Asset management fees
 
$
6,205

 
6,488

 
(283
)
Property management fees
 
13,692

 
14,224

 
(532
)
Leasing commissions and other fees
 
5,200

 
5,799

 
(599
)
 
 
$
25,097

 
26,511

 
(1,414
)

Asset and property management fees decreased approximately $815,000 due to the liquidation of two unconsolidated real estate partnerships during 2013, resulting in $1.1 million reduction in asset and property management fees, partially offset by higher asset and property management fees from our other partnerships. Leasing commissions and other fees decreased during 2013, as compared to 2012, due to the two liquidations discussed above and a decrease in leasing activities performed for co-investment partnerships and third parties during 2013, as occupancy levels stabilize and less vacant GLA was available for lease.

Our operating expenses increased as summarized in the following table (in thousands): 
 
 
2013
 
2012
 
Change
Depreciation and amortization
 
$
130,630

 
119,008

 
11,622

Operating and maintenance
 
71,018

 
66,687

 
4,331

General and administrative
 
61,234

 
61,700

 
(466
)
Real estate taxes
 
53,726

 
52,911

 
815

Other operating expenses
 
8,079

 
7,187

 
892

Total operating expenses
 
$
324,687

 
307,493

 
17,194

    
Depreciation and amortization increased $11.6 million. The increase is largely attributable to the following: $8.3 million from acquisitions, $6.5 million at same properties, and $4.7 million from new development operations, offset by $7.5 million decrease from the sale of a 15 property portfolio in July 2012 not considered discontinued operations.

Operating and maintenance increased $4.3 million. The increase substantially relates to the following: $4.0 million from acquisitions, $1.6 million from new development operations, and $3.0 million at same properties, offset by $4.3 million from the sale of a 15 property portfolio in July 2012 not considered discontinued operations.

General and administrative expenses decreased approximately $466,000 largely due to greater capitalization of development overhead costs of approximately $1.4 million, due to higher volume of development projects, offset by a decrease in capitalization of leasing overhead costs of $1.2 million as occupancy levels stabilize and less vacant GLA was available to lease. The net change in compensation and other overhead costs resulted in additional savings of approximately $200,000.

Real estate taxes increased approximately $815,000. The increase largely consists of the following: $2.4 million from acquisitions and new development operations, $1.3 million at same properties from higher assessed values, offset by $2.9 million from the sale of a 15 property portfolio in July 2012 not considered discontinued operations.

Other operating expenses increased approximately $892,000 primarily due to an increase in environmental remediation reserves, offset by decreases in bad debt expense and acquisition and pursuit costs.

    







60






The following table presents the components of other expense (income) (in thousands):

 
 
2013
 
2012
 
Change
Interest expense, net
 
$
108,966

 
112,129

 
(3,163
)
Provision for impairment
 
6,000

 
20,316

 
(14,316
)
Early extinguishment of debt
 
32

 
852

 
(820
)
Net investment (income) loss
 
(3,257
)
 
(2,057
)
 
(1,200
)
Total other expense (income)
 
$
111,741

 
131,240

 
(19,499
)

See table below for a discussion of interest expense.

During the year ended December 31, 2013, we recognized a $6.0 million impairment on a single operating property. During the year ended December 31, 2012, we recognized total impairments of $20.3 million, including $18.1 million related to the 15-property portfolio sold in July 2012, and $2.2 million related to three land parcels.

During 2013, we repaid two mortgages early with minimal remaining unamortized loan costs. On July 20, 2012, we repaid $150.0 million of our Term Loan, and as a result of this early extinguishment of debt, we expensed approximately $852,000 in remaining unamortized loan costs.

The $1.2 million increase in net investment income from deferred compensation plan related to the change in the fair value of plan assets from December 31, 2012 to December 31, 2013 and is consistent with the change in plan liabilities, included in general and administrative expenses above.

The following table presents the change in interest expense (in thousands): 
 
 
2013
 
2012
 
Change
Interest on notes payable
 
$
103,143

 
103,610

 
(467
)
Interest on unsecured credit facilities
 
3,937

 
4,388

 
(451
)
Capitalized interest
 
(6,078
)
 
(3,686
)
 
(2,392
)
Hedge interest
 
9,607

 
9,492

 
115

Interest income
 
(1,643
)
 
(1,675
)
 
32

 
 
$
108,966

 
112,129

 
(3,163
)

Our interest expense decreased primarily due to paying down our unsecured credit facilities and mortgages, coupled with greater interest capitalization on development projects, driven by the increase in cumulative development project costs over the prior year.

    















61




Our equity in income of investments in real estate partnerships increased in 2013, as compared to 2012, as follows (in thousands): 

 
 
Ownership
 
2013
 
2012
 
Change
GRI - Regency, LLC (GRIR)
 
40.00%
 
$
12,789

 
9,311

 
3,478

Macquarie CountryWide-Regency III, LLC (MCWR III) (1)
 
—%
 
53

 
(22
)
 
75

Columbia Regency Retail Partners, LLC (Columbia I)
 
20.00%
 
1,727

 
8,480

 
(6,753
)
Columbia Regency Partners II, LLC (Columbia II)
 
20.00%
 
1,274

 
290

 
984

Cameron Village, LLC (Cameron)
 
30.00%
 
662

 
596

 
66

RegCal, LLC (RegCal)
 
25.00%
 
332

 
540

 
(208
)
Regency Retail Partners, LP (the Fund) (2)
 
20.00%
 
7,749

 
297

 
7,452

US Regency Retail I, LLC (USAA)
 
20.01%
 
487

 
297

 
190

BRE Throne Holdings, LLC (BRET) (3)
 
—%
 
4,499

 
2,211

 
2,288

Other investments in real estate partnerships
 
50.00%
 
2,146

 
1,807

 
339

Total investments in real estate partnerships
 
 
 
$
31,718

 
23,807

 
7,911

(1) As of December 31, 2012, our ownership interest in MCWR III was 24.95%. The liquidation of MCWR III was complete effective March 20, 2013.
(2) On August 13, 2013, Regency Retail Partners, LP (the "Fund") sold 100% of its interest in its entire portfolio of shopping centers to a third party. The Fund will be dissolved following the final distribution of proceeds.
(3) On October 23, 2013, the Company sold 100% of its interest in the BRET unconsolidated real estate partnership and received a capital distribution of $47.5 million, its share of the undistributed income of the partnership, and a redemption premium. Regency no longer has any interest in the BRET partnership.

The increase in our equity in income in investments in real estate partnerships is principally due to the following:

$3.5 million increase from the GRIR partnership due to various factors, including: increased tenant percentage rent, recovery revenue rates, and settlement proceeds; coupled with lower interest expense as a result of paying off debt in 2012 and the loss on debt extinguishment and provision for impairment in 2012 that did not occur in 2013. These increases are offset by higher depreciation expense from redevelopments.

$6.8 million decrease from the Columbia I partnership primarily due to our $6.9 million pro-rata gain on sale of an operating property that was sold in April 2012,

$7.5 million increase from the Fund due to recognizing $7.4 million pro-rata gain on the sale of all operating properties within the Fund in August 2013, and

$2.3 million increase from our ownership interest retained in BRET, as part of the 15-property portfolio sale completed in July 2012, which we redeemed 100% of our ownership interest for cash in October 2013.


    

62



The following represents the remaining components that comprised net income attributable to the common stockholders and unit holders for the year ended December 31, 2013, as compared to the year ended December 31, 2012, (in thousands):
 
 
2013
 
2012
 
Change
Income from continuing operations before tax
 
$
84,297

 
59,003

 
25,294

Income tax (benefit) expense of taxable REIT subsidiary
 

 
13,224

 
(13,224
)
Discontinued operations
 
 
 
 
 
 
Gain on sale of operating properties, net of tax
 
57,953

 
21,855

 
36,098

Provision for impairment
 

 
54,500

 
(54,500
)
Operating income
 
7,332

 
10,917

 
(3,585
)
(Loss) income from discontinued operations
 
65,285

 
(21,728
)
 
87,013

Gain on sale of real estate, net of tax
 
1,703

 
2,158

 
(455
)
Income attributable to noncontrolling interests
 
(1,481
)
 
(342
)
 
(1,139
)
Preferred stock dividends
 
(21,062
)
 
(32,531
)
 
11,469

Net income (loss) attributable to common stockholders
 
$
128,742

 
(6,664
)
 
135,406

Net income attributable to exchangeable operating partnership units
 
276

 
106

 
170

Net income (loss) attributable to common unit holders
 
$
129,018

 
(6,558
)
 
135,576


The decrease in income tax expense of taxable REIT subsidiary is due to the large expense recognized during 2012 as a full valuation allowance was established on the balance of our deferred tax assets.

Income from discontinued operations of $65.3 million for the year ended December 31, 2013 included $58.0 million in gains, net of taxes, from the sale of twelve properties and the operations of the shopping centers sold. Loss from discontinued operations of $21.7 million for the year ended December 31, 2012 included the operations of the shopping centers sold during 2012 and 2013, and $21.9 million in gains, net of taxes, from the sale of five properties; offset by $54.5 million of impairment losses.

The decrease in preferred stock dividends is attributable to the $9.3 million non-cash charges recognized during 2012 upon redemption of the Series 3, 4 and 5 Preferred Stock.

    

63




Supplemental Earnings Information

We use certain non-GAAP performance measures, in addition to the required GAAP presentations, as we believe these measures are beneficial to us in improving the understanding of our operational results among the investing public. We believe such measures make comparisons of other REITs' operating results to ours more meaningful. We continually evaluate the usefulness, relevance, and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the public, and thus such reported measures could change.

The following are our definitions of Same Property Net Operating Income ("NOI"), Funds from Operations ("FFO"), and Core FFO, which we believe to be beneficial non-GAAP performance measures used in understanding our operational results:

Ÿ
NOI is calculated as total property revenues (minimum rent, percentage rents, and recoveries from tenants and other income) less direct property operating expenses (operating and maintenance and real estate taxes) from the properties owned by us, and excludes corporate-level income (including management, transaction, and other fees), for the entirety of the periods presented. NOI excludes straight-line rental income, net of reserves, above and below market rent amortization, banking charges, and other fees

Pro-Rata information includes 100% of our consolidated properties plus our ownership interest in our unconsolidated real estate investment partnerships.

Same Property information is provided for operating properties that were owned and operated for the entirety of both periods being compared and excludes all Properties in Development and Non-Same Properties. A Non-Same Property is a property acquired during either period being compared, a development completion that is less than 90% funded and 95% leased or features less than two years of anchor operations. Same Property also excludes projects in development, which represent projects owned and intended to be developed, including partially operating properties acquired specifically for redevelopment and excluding land held for future development. See note 1 to the consolidated financial statements for an expanded definition of properties in development.
 
Same Property NOI includes NOI for Same Property, which is a key measure used by management in evaluating the performance of our properties.

FFO is a commonly used measure of REIT performance, which the National Association of Real Estate Investment Trusts ("NAREIT") defines as net income, computed in accordance with GAAP, excluding gains and losses from sales of depreciable property, net of tax, excluding operating real estate impairments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We compute FFO for all periods presented in accordance with NAREIT's definition. Many companies use different depreciable lives and methods, and real estate values historically fluctuate with market conditions. Since FFO excludes depreciation and amortization and gains and losses from depreciable property dispositions, and impairments, it can provide a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition and development activities, and financing costs. This provides a perspective of our financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, FFO is a supplemental non-GAAP financial measure of our operating performance, which does not represent cash generated from operating activities in accordance with GAAP and therefore, should not be considered an alternative for cash flow as a measure of liquidity.

Core FFO is an additional performance measure used by Regency as the computation of FFO includes certain non-cash and non-comparable items that affect the Company's period-over-period performance.  Core FFO excludes from FFO, but is not limited to: (a) transaction related gains, income or expense; (b) impairments on land; (c) gains or losses from the early extinguishment of debt; and (d) other non-core amounts as they occur.  The Company provides a reconciliation of FFO to Core FFO below.


64



Our reconciliation of property revenues and property expenses to Same Property NOI, on a pro-rata basis, for the years ended December 31, 2014 and 2013 is as follows (in thousands):
 
 
2014
 
2013
 
 
Same Property
 
Other (1)
 
Total
 
Same Property
 
Other (1)
 
Total
Income from continuing operations, before tax
 
$
212,088

 
(79,314
)
 
132,774

 
184,819

 
(100,522
)
 
84,297

Less:
 
 
 
 
 
 
 
 
 
 
 
 
Management, transaction, and other fees
 

 
24,095

 
24,095

 

 
25,097

 
25,097

Other (2)
 
6,062

 
3,668

 
9,730

 
6,511

 
1,727

 
8,238

Plus:
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
120,735

 
27,056

 
147,791

 
118,176

 
12,454

 
130,630

General and administrative
 

 
60,242

 
60,242

 

 
61,234

 
61,234

Other operating expense, excluding provision for doubtful accounts
 
614

 
5,690

 
6,304

 
2,586

 
3,702

 
6,288

Other expense (income)
 
28,064

 
54,982

 
83,046

 
35,334

 
76,407

 
111,741

Equity in income (loss) of investments in real estate excluded from NOI (3)
 
60,030

 
(2,236
)
 
57,794

 
64,439

 
(5,033
)
 
59,406

NOI from discontinued operations
 

 

 

 

 
10,866

 
10,866

Pro-rata NOI
 
$
415,469

 
38,657

 
454,126

 
398,843

 
32,284

 
431,127

(1) Includes revenues and expenses attributable to non-same property, sold property, development property, and corporate activities. 
(2) Includes straight-line rental income, net of reserves, above and below market rent amortization, banking charges, and other fees.
(3) Includes non-NOI expenses incurred at our unconsolidated real estate partnerships, including those separated out above for our consolidated properties.

Our same property pool includes the following property count, pro-rata GLA (in thousands), and changes therein during the years ended December 31, 2014 and 2013:
 
2014
 
2013
 
Property Count
GLA
 
Property Count
GLA
Beginning same property count
304

25,109

 
323

25,803

Acquired properties owned for entirety of comparable periods
6

560

 
6

476

Developments that reached completion by beginning of earliest comparable period presented
5

360

 
4

359

Disposed properties
(17
)
(680
)
 
(29
)
(1,683
)
SqFT adjustments (1)

177

 

154

Ending same property count
298

25,526

 
304

25,109

(1) SqFT adjustments arise from remeasurements or redevelopments.

The major components of pro-rata same property NOI growth of 4.2% include the following:
 
 
2014
 
2013
 
Change
Base rent
 
$
433,332

 
420,334

 
12,998

Percentage rent
 
4,813

 
4,862

 
(49
)
Recovery revenue
 
126,929

 
119,454

 
7,475

Other income
 
8,543

 
6,885

 
1,658

Operating expenses
 
158,148

 
152,692

 
5,456

Pro-rata same property NOI
 
$
415,469

 
398,843

 
16,626


Pro-rata same property base rent increased $13.0 million, driven by $5.1 million increase in contractual rent steps and $7.9 million increase in rental rate growth and changes in occupancy.


65



Pro-rata same property recovery revenue increased $7.5 million due to greater recovery rates driven by market rates and occupancy improvements, as well as increases in recoverable costs.

Pro-rata same property operating expenses increased $5.5 million due to increases in real estate tax assessments and increased common area expenses primarily related to snow removal costs associated with the inclement winter weather in 2014.


Our reconciliation of net income available to common shareholders to FFO and Core FFO for the years ended December 31, 2014 and 2013 is as follows (in thousands, except share information):

 
 
2014
 
2013
Reconciliation of Net income to FFO
 
 
 
 
Net income (loss) attributable to common stockholders
$
166,328

 
128,742

Adjustments to reconcile to FFO:
 
 
 
 
Depreciation and amortization (1)
 
184,750

 
173,497

Provision for impairment (2)
 
983

 
6,000

Gain on sale of operating properties, net of tax (2)
 
(64,960
)
 
(67,894
)
Gain on remeasurement of investment in real estate partnership
 
(18,271
)
 

Exchangeable partnership units
 
319

 
276

FFO
$
269,149

 
240,621

Reconciliation of FFO to Core FFO
 
 
 
 
FFO
$
269,149

 
240,621

Adjustments to reconcile to Core FFO:
 
 
 
 
Development and acquisition pursuit costs (2)(3)
 
2,598

 
1,344

Income tax
 
(996
)
 
 
Gain on sale of land (2)
 
(3,731
)
 

Provision for impairment to land (2)
 
699

 

Interest rate swap ineffectiveness (2)
 
30

 
(21
)
Early extinguishment of debt (2)
 
51

 
(325
)
Gain on sale of AmREIT stock, net of costs (3)
 
(5,960
)
 

Dividends from investments
 
(334
)
 

Core FFO
$
261,506

 
241,619

(1) Includes Regency's pro-rata share of unconsolidated co-investment partnerships, net of pro-rata share attributable to noncontrolling interests.
(2) Includes Regency's pro-rata share of unconsolidated co-investment partnerships.
(3) Development and acquisition pursuit costs exclude AmREIT pursuit costs of $1.8 million, which are shown net with the gain on sale of AmREIT stock.



66



Environmental Matters

We are subject to numerous environmental laws and regulations as they apply to our shopping centers pertaining to chemicals used by the dry cleaning industry, the existence of asbestos in older shopping centers, and underground petroleum storage tanks. We believe that the tenants who currently operate dry cleaning plants or gas stations do so in accordance with current laws and regulations. Generally, we use all legal means to cause tenants to remove dry cleaning plants from our shopping centers or convert them to more environmentally friendly systems. Where available, we have applied and been accepted into state-sponsored environmental programs. We have a blanket environmental insurance policy for third-party liabilities and remediation costs on shopping centers that currently have no known environmental contamination. We have also placed environmental insurance, where possible, on specific properties with known contamination, in order to mitigate our environmental risk. We monitor the shopping centers containing environmental issues and in certain cases voluntarily remediate the sites. We also have legal obligations to remediate certain sites and we are in the process of doing so.

As of December 31, 2014 we had accrued liabilities of $10.2 million for our pro-rata share of environmental remediation. We believe that the ultimate disposition of currently known environmental matters will not have a material effect on our financial position, liquidity, or results of operations; however, we can give no assurance that existing environmental studies on our shopping centers have revealed all potential environmental liabilities; that any previous owner, occupant or tenant did not create any material environmental condition not known to us; that the current environmental condition of the shopping centers will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties; or that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to us.

Inflation/Deflation

Inflation has been historically low and has had a minimal impact on the operating performance of our shopping centers; however, inflation may become a greater concern in the future. Substantially all of our long-term leases contain provisions designed to mitigate the adverse impact of inflation. Most of our leases require tenants to pay their pro-rata share of operating expenses, including common-area maintenance, real estate taxes, insurance and utilities, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. In addition, many of our leases are for terms of less than ten years, which permits us to seek increased rents upon re-rental at market rates. However, during deflationary periods or periods of economic weakness, minimum rents and percentage rents will decline as the supply of available retail space exceeds demand and consumer spending declines. Occupancy declines resulting from a weak economic period will also likely result in lower recovery rates of our operating expenses.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Market Risk

We are exposed to two significant components of interest rate risk:

We have an $800.0 million Line commitment and a $165.0 million Term Loan commitment, as further described in Note 9 to the Consolidated Financial Statements. Our Line commitment has a variable interest rate that is based upon an annual rate of LIBOR plus 117.5 basis points and our Term Loan has a variable rate of LIBOR plus 115 basis points and both are subject to a fee on the undrawn balances. LIBOR rates charged on our Line and Term Loan (collectively our "unsecured credit facilities") change monthly. The spread on the unsecured credit facilities is dependent upon maintaining specific credit ratings. If our credit ratings are downgraded, the spread on the unsecured credit facilities would increase, resulting in higher interest costs.

We are also exposed to changes in interest rates when we refinance our existing long-term fixed rate debt. The objective of our interest rate risk management program is to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, we borrow primarily at fixed interest rates and may enter into derivative financial instruments such as interest rate swaps, caps, or treasury locks in order to mitigate our interest rate risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes. Our interest rate swaps are structured solely for the purpose of interest rate protection.

We have $350.0 million and $400.0 million of fixed rate, unsecured debt maturing in August 2015 and June 2017, respectively. In order to mitigate the risk of interest rate volatility, we previously entered into $220.0 million of forward starting interest rate swaps to partially hedge the new debt expected to be issued in 2015 and an additional $220.0 million of forward starting interest rate swaps to partially hedge the new debt expected to be issued in 2017. These interest rate swaps lock in the 10-year treasury rate and swap spread at a weighted average fixed rate of 2.67%

67



and 3.48%, respectively. A current market based credit spread applicable to Regency will be added to the locked in fixed rate at time of issuance that will determine the final bond yield.

We continuously monitor the capital markets and evaluate our ability to issue new debt to repay maturing debt or fund our commitments. Based upon the current capital markets, our current credit ratings, our current capacity under our unsecured credit facilities, and the number of high quality, unencumbered properties that we own which could collateralize borrowings, we expect that we will be able to successfully issue new secured or unsecured debt to fund these debt obligations.

Our interest rate risk is monitored using a variety of techniques. The table below presents the principal cash flows, weighted average interest rates of remaining debt, and the fair value of total debt as of December 31, 2014 (dollars in thousands). The table is presented by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes. Although the average interest rate for variable rate debt is included in the table, those rates represent rates that existed as of December 31, 2014 and are subject to change on a monthly basis. Further, the table below incorporates only those exposures that exist as of December 31, 2014 and does not consider exposures or positions that could arise after that date. Since firm commitments are not presented, the table has limited predictive value. As a result, our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, our hedging strategies at that time, and actual interest rates. 
 
 
2015
 
2016
 
2017
 
2018
 
2019
 
Thereafter
 
Total
 
Fair Value
Fixed rate debt
 
$
432,483

 
47,577

 
521,309

 
61,400

 
109,012

 
739,986

 
1,911,767

 
2,086,000

Average interest rate for all fixed rate debt (1)
 
5.48
%
 
5.47
%
 
5.20
%
 
5.13
%
 
4.75
%
 
4.75
%
 

 

Variable rate LIBOR debt
 
$

 

 
297

 
410

 
75,431

 
28,700

 
104,838

 
105,000

Average interest rate for all variable rate debt (1)
 
1.41
%
 
1.41
%
 
1.40
%
 
1.40
%
 
1.66
%
 
1.66
%
 

 

(1) Average interest rates at the end of each year presented.

68



Item 8.    Consolidated Financial Statements and Supplementary Data

Regency Centers Corporation and Regency Centers, L.P.

Index to Financial Statements

 
 
Regency Centers Corporation:
 
 
 
Regency Centers, L.P.:
 
 
 
 
 
Financial Statement Schedule
 

All other schedules are omitted because of the absence of conditions under which they are required, materiality or because information required therein is shown in the consolidated financial statements or notes thereto.




69




Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Regency Centers Corporation:

We have audited the accompanying consolidated balance sheets of Regency Centers Corporation and subsidiaries (the Company) as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2014. In connection with our audits of the consolidated financial statements, we also have audited financial statement Schedule III. These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Regency Centers Corporation and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
As discussed in Note 1 to the financial statements, the Company has prospectively changed its method of reporting discontinued operations in 2014 due to the adoption of ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Regency Centers Corporation's internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 20, 2015 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.
/s/ KPMG LLP

February 20, 2015
Jacksonville, Florida
Certified Public Accountants

70



Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Regency Centers Corporation:

We have audited Regency Centers Corporation's internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Regency Centers Corporation's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Regency Centers Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Regency Centers Corporation and subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2014, and our report dated February 20, 2015 expressed an unqualified opinion on those consolidated financial statements.
/s/ KPMG LLP

February 20, 2015
Jacksonville, Florida
Certified Public Accountants

71



Report of Independent Registered Public Accounting Firm
The Unit Holders of Regency Centers, L.P. and
the Board of Directors and Stockholders of
Regency Centers Corporation:

We have audited the accompanying consolidated balance sheets of Regency Centers, L.P. and subsidiaries (the Partnership) as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, capital, and cash flows for each of the years in the three-year period ended December 31, 2014. In connection with our audits of the consolidated financial statements, we also have audited financial statement Schedule III. These consolidated financial statements and financial statement schedule are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Regency Centers, L.P. and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
As discussed in Note 1 to the financial statements, the Company has prospectively changed its method of reporting discontinued operations in 2014 due to the adoption of ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Regency Centers, L.P.'s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 20, 2015 expressed an unqualified opinion on the effectiveness of the Partnership's internal control over financial reporting.
/s/ KPMG LLP

February 20, 2015
Jacksonville, Florida
Certified Public Accountants

72




Report of Independent Registered Public Accounting Firm
The Unit Holders of Regency Centers, L.P. and
the Board of Directors and Stockholders of
Regency Centers Corporation:

We have audited Regency Centers, L.P.'s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Regency Centers, L.P.'s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Partnership's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Regency Centers, L.P. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Regency Centers, L.P. and subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, capital, and cash flows for each of the years in the three-year period ended December 31, 2014, and our report dated February 20, 2015 expressed an unqualified opinion on those consolidated financial statements.
/s/ KPMG LLP

February 20, 2015
Jacksonville, Florida
Certified Public Accountants

73




REGENCY CENTERS CORPORATION
Consolidated Balance Sheets
December 31, 2014 and 2013
(in thousands, except share data)
 
 
2014
 
2013
Assets
 
 
 
 
Real estate investments at cost (notes 2 and 3):
 
 
 
 
Land
 
$
1,380,211

 
1,249,779

Buildings and improvements
 
2,790,137

 
2,590,302

Properties in development
 
239,538

 
186,450

 
 
4,409,886

 
4,026,531

Less: accumulated depreciation
 
933,708

 
844,873

 
 
3,476,178

 
3,181,658

Investments in real estate partnerships (note 4)
 
333,167

 
358,849

Net real estate investments
 
3,809,345

 
3,540,507

Cash and cash equivalents
 
113,776

 
80,684

Restricted cash
 
8,013

 
9,520

Accounts receivable, net of allowance for doubtful accounts of $4,523 and $3,922 at December 31, 2014 and 2013, respectively
 
30,999

 
26,319

Straight-line rent receivable, net of reserve of $652 and $547 at December 31, 2014 and 2013, respectively
 
55,768

 
50,612

Notes receivable (note 5)
 
12,132

 
11,960

Deferred costs, less accumulated amortization of $81,822 and $73,231 at December 31, 2014 and 2013, respectively
 
71,502

 
69,963

Acquired lease intangible assets, less accumulated amortization of $36,112 and $25,591 at December 31, 2014 and 2013, respectively (note 6)
 
52,365

 
44,805

Trading securities held in trust, at fair value (note 14)
 
28,134

 
26,681

Other assets
 
15,136

 
52,465

Total assets
 
$
4,197,170

 
3,913,516

Liabilities and Equity
 
 
 
 
Liabilities:
 
 
 
 
Notes payable (note 9)
 
$
1,946,357

 
1,779,697

Unsecured credit facilities (note 9)
 
75,000

 
75,000

Accounts payable and other liabilities
 
181,197

 
147,045

Acquired lease intangible liabilities, less accumulated accretion of $13,993 and $10,102 at December 31, 2014 and 2013, respectively (note 6)
 
32,143

 
26,729

Tenants’ security and escrow deposits and prepaid rent
 
25,991

 
23,911

Total liabilities
 
2,260,688

 
2,052,382

Commitments and contingencies (notes 16 and 17)
 

 

Equity:
 
 
 
 
Stockholders’ equity (notes 12 and 13):
 
 
 
 
Preferred stock, $0.01 par value per share, 30,000,000 shares authorized; 13,000,000 Series 6 and 7 shares issued and outstanding at December 31, 2014 and December 31, 2013, with liquidation preferences of $25 per share
 
325,000

 
325,000

Common stock $0.01 par value per share,150,000,000 shares authorized; 94,108,061 and 92,333,161 shares issued at December 31, 2014 and 2013, respectively
 
941

 
923

Treasury stock at cost, 425,246 and 373,042 shares held at December 31, 2014 and 2013, respectively
 
(19,382
)
 
(16,726
)
Additional paid in capital
 
2,540,153

 
2,426,477

Accumulated other comprehensive loss
 
(57,748
)
 
(17,404
)
Distributions in excess of net income
 
(882,372
)
 
(874,916
)
Total stockholders’ equity
 
1,906,592

 
1,843,354

Noncontrolling interests (note 12):
 
 
 
 
Exchangeable operating partnership units, aggregate redemption value of $9,833 and $7,676 at December 31, 2014 and 2013, respectively
 
(1,914
)
 
(1,426
)
Limited partners’ interests in consolidated partnerships
 
31,804

 
19,206

Total noncontrolling interests
 
29,890

 
17,780

Total equity
 
1,936,482

 
1,861,134

Total liabilities and equity
 
$
4,197,170

 
3,913,516

See accompanying notes to consolidated financial statements.

74



REGENCY CENTERS CORPORATION
Consolidated Statements of Operations
For the years ended December 31, 2014, 2013, and 2012
(in thousands, except per share data)
 
 
2014
 
2013
 
2012
Revenues:
 
 
 
 
 
 
Minimum rent
 
$
390,697

 
353,833

 
340,940

Percentage rent
 
3,488

 
3,583

 
3,323

Recoveries from tenants and other income
 
119,618

 
106,494

 
103,155

Management, transaction, and other fees
 
24,095

 
25,097

 
26,511

Total revenues
 
537,898

 
489,007

 
473,929

Operating expenses:
 
 
 
 
 
 
Depreciation and amortization
 
147,791

 
130,630

 
119,008

Operating and maintenance
 
77,788

 
71,018

 
66,687

General and administrative
 
60,242

 
61,234

 
61,700

Real estate taxes
 
59,031

 
53,726

 
52,911

Other operating expenses
 
8,496

 
8,079

 
7,187

Total operating expenses
 
353,348

 
324,687

 
307,493

Other expense (income):
 
 
 
 
 
 
Interest expense, net of interest income of $1,210, $1,643, and $1,675 in 2014, 2013, and 2012, respectively (note 9)
 
109,491

 
108,966

 
112,129

Provision for impairment
 
1,257

 
6,000

 
20,316

Early extinguishment of debt
 
18

 
32

 
852

Net investment income, including unrealized losses (gains) of $1,058, $(2,231), and $(888) in 2014, 2013, and 2012, respectively (notes 8 and 14)
 
(9,449
)
 
(3,257
)
 
(2,057
)
Gain on remeasurement of investment in real estate partnership
 
(18,271
)
 

 

Total other expense (income)
 
83,046

 
111,741

 
131,240

Income before equity in income of investments in real estate partnerships and income taxes
 
101,504

 
52,579

 
35,196

Equity in income of investments in real estate partnerships (note 4)
 
31,270

 
31,718

 
23,807

Income tax (benefit) expense of taxable REIT subsidiary
 
(996
)
 

 
13,224

Income from continuing operations
 
133,770

 
84,297

 
45,779

Discontinued operations, net (note 3):
 
 
 
 
 
 
Operating income (loss)
 

 
7,332

 
(43,583
)
Gain on sale of operating properties, net of tax
 

 
57,953

 
21,855

Income (loss) from discontinued operations
 

 
65,285

 
(21,728
)
Gain on sale of real estate, net of tax
 
55,077

 
1,703

 
2,158

Net income
 
188,847

 
151,285

 
26,209

Noncontrolling interests:
 
 
 
 
 
 
Preferred units
 

 

 
629

Exchangeable operating partnership units
 
(319
)
 
(276
)
 
(106
)
Limited partners’ interests in consolidated partnerships
 
(1,138
)
 
(1,205
)
 
(865
)
Income attributable to noncontrolling interests
 
(1,457
)
 
(1,481
)
 
(342
)
Net income attributable to the Company
 
187,390

 
149,804

 
25,867

Preferred stock dividends
 
(21,062
)
 
(21,062
)
 
(32,531
)
Net income (loss) attributable to common stockholders

$
166,328

 
128,742

 
(6,664
)
Income (loss) per common share - basic (note 15):
 
 
 
 
 
 
Continuing operations
 
$
1.80

 
0.69

 
0.16

Discontinued operations
 

 
0.71

 
(0.24
)
Net income (loss) attributable to common stockholders
 
$
1.80

 
1.40

 
(0.08
)
Income (loss) per common share - diluted (note 15):
 
 
 
 
 
 
Continuing operations
 
$
1.80

 
0.69

 
0.16

Discontinued operations
 

 
0.71

 
(0.24
)
Net income (loss) attributable to common stockholders
 
$
1.80

 
1.40

 
(0.08
)
See accompanying notes to consolidated financial statements.

75



REGENCY CENTERS CORPORATION
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2014, 2013, and 2012
(in thousands)
 
 
2014
 
2013
 
2012
Net income
 
$
188,847

 
151,285

 
26,209

Other comprehensive income:
 
 
 
 
 
 
Loss on settlement of derivative instruments:
 
 
 
 
 
 
Amortization of loss on settlement of derivative instruments recognized in net income
 
8,747

 
9,466

 
9,466

Effective portion of change in fair value of derivative instruments:
 
 
 
 
 
 
Effective portion of change in fair value of derivative instruments
 
(49,968
)
 
30,985

 
4,220

Less: reclassification adjustment for change in fair value of derivative instruments included in net income
 
606

 
(33
)
 
25

Available for sale securities
 
 
 
 
 
 
Unrealized gain on available-for-sale securities
 
7,765

 

 

Less: realized gains on sale of available-for-sale securities recognized in net income
 
(7,765
)
 

 

Other comprehensive income
 
(40,615
)
 
40,418

 
13,711

Comprehensive income
 
148,232

 
191,703

 
39,920

Less: comprehensive (loss) income attributable to noncontrolling interests:
 
 
 
 
 
 
Net income attributable to noncontrolling interests
 
1,457

 
1,481

 
342

Other comprehensive (loss) income attributable to noncontrolling interests
 
(271
)
 
107

 
(3
)
Comprehensive income attributable to noncontrolling interests
 
1,186

 
1,588

 
339

Comprehensive income attributable to the Company
 
$
147,046

 
190,115

 
39,581

See accompanying notes to consolidated financial statements.

76




REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the years ended December 31, 2014, 2013, and 2012 
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling Interests
 
 
 
 
Preferred
Stock
 
Common
Stock
 
Treasury
Stock
 
Additional
Paid In
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Distributions
in Excess of
Net Income
 
Total
Stockholders’
Equity
 
Preferred Units
 
Exchangeable
Operating
Partnership
Units
 
Limited
Partners’
Interest  in
Consolidated
Partnerships
 
Total
Noncontrolling
Interests
 
Total
Equity
Balance at December 31, 2011
$
275,000

 
899

 
(15,197
)
 
2,281,817

 
(71,429
)
 
(662,735
)
 
1,808,355

 
49,158

 
(963
)
 
13,104

 
61,299

 
1,869,654

Net income
 

 

 

 

 

 
25,867

 
25,867

 
(629
)
 
106

 
865

 
342

 
26,209

Other comprehensive income
 

 

 

 

 
13,714

 

 
13,714

 

 
28

 
(31
)
 
(3
)
 
13,711

Deferred compensation plan, net
 

 

 
273

 
(261
)
 

 

 
12

 

 

 

 

 
12

Amortization of restricted stock issued
 

 

 

 
11,526

 

 

 
11,526

 

 

 

 

 
11,526

Common stock redeemed for taxes withheld for stock based compensation, net
 

 

 

 
(1,474
)
 

 

 
(1,474
)
 

 

 

 

 
(1,474
)
Common stock issued for dividend reinvestment plan
 

 

 

 
988

 

 

 
988

 

 

 

 

 
988

Common stock issued for stock offerings, net of issuance costs
 

 
5

 

 
21,537

 

 

 
21,542

 

 

 

 

 
21,542

Redemption of preferred units
 

 

 

 

 

 

 

 
(48,125
)
 

 

 
(48,125
)
 
(48,125
)
Issuance of preferred stock, net of issuance costs
 
325,000

 

 

 
(11,100
)
 

 

 
313,900

 

 

 

 

 
313,900

Redemption of preferred stock
 
(275,000
)
 

 

 
9,277

 

 
(9,277
)
 
(275,000
)
 

 

 

 

 
(275,000
)
Contributions from partners
 

 

 

 

 

 

 

 

 

 
3,362

 
3,362

 
3,362

Distributions to partners
 

 

 

 

 

 

 

 

 

 
(1,001
)
 
(1,001
)
 
(1,001
)
Cash dividends declared:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock/unit
 

 

 

 

 

 
(23,254
)
 
(23,254
)
 
(404
)
 

 

 
(404
)
 
(23,658
)
Common stock/unit ($1.85 per share)
 

 

 

 

 

 
(165,411
)
 
(165,411
)
 

 
(324
)
 

 
(324
)
 
(165,735
)
Balance at December 31, 2012
$
325,000

 
904

 
(14,924
)
 
2,312,310

 
(57,715
)
 
(834,810
)
 
1,730,765

 

 
(1,153
)
 
16,299

 
15,146

 
1,745,911

Net income
 

 

 

 

 

 
149,804

 
149,804

 

 
276

 
1,205

 
1,481

 
151,285

Other comprehensive income
 

 

 

 

 
40,311

 

 
40,311

 

 
75

 
32

 
107

 
40,418

Deferred compensation plan, net
 

 

 
(1,802
)
 
1,802

 

 

 

 

 

 

 

 

Amortization of restricted stock issued
 

 

 

 
14,141

 

 

 
14,141

 

 

 

 

 
14,141

Common stock redeemed for taxes withheld for stock based compensation, net
 

 

 

 
(2,887
)
 

 

 
(2,887
)
 

 

 

 

 
(2,887
)
Common stock issued for dividend reinvestment plan
 

 

 

 
1,075

 

 

 
1,075

 

 

 

 

 
1,075

Common stock issued for stock offerings, net of issuance costs
 

 
19

 

 
99,734

 

 

 
99,753

 

 

 

 

 
99,753


77



REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the years ended December 31, 2014, 2013, and 2012 
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling Interests
 
 
 
 
Preferred
Stock
 
Common
Stock
 
Treasury
Stock
 
Additional
Paid In
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Distributions
in Excess of
Net Income
 
Total
Stockholders’
Equity
 
Preferred Units
 
Exchangeable
Operating
Partnership
Units
 
Limited
Partners’
Interest  in
Consolidated
Partnerships
 
Total
Noncontrolling
Interests
 
Total
Equity
Common stock issued for partnership units exchanged
 

 

 

 
302

 

 

 
302

 

 
(302
)
 

 
(302
)
 

Contributions from partners
 

 

 

 

 

 

 

 

 

 
5,792

 
5,792

 
5,792

Distributions to partners
 

 

 

 

 

 

 

 

 

 
(4,122
)
 
(4,122
)
 
(4,122
)
Cash dividends declared:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock/unit
 

 

 

 

 

 
(21,062
)
 
(21,062
)
 

 

 

 

 
(21,062
)
Common stock/unit ($1.85 per share)
 

 

 

 

 

 
(168,848
)
 
(168,848
)
 

 
(322
)
 

 
(322
)
 
(169,170
)
Balance at December 31, 2013
$
325,000

 
923

 
(16,726
)
 
2,426,477

 
(17,404
)
 
(874,916
)
 
1,843,354

 

 
(1,426
)
 
19,206

 
17,780

 
1,861,134

Net income
 

 

 

 

 

 
187,390

 
187,390

 

 
319

 
1,138

 
1,457

 
188,847

Other comprehensive income
 

 

 

 

 
(40,344
)
 

 
(40,344
)
 

 
(70
)
 
(201
)
 
(271
)
 
(40,615
)
Deferred compensation plan, net
 

 

 
(2,656
)
 
2,656

 

 

 

 

 

 

 

 

Amortization of restricted stock issued
 

 

 

 
12,161

 

 

 
12,161

 

 

 

 

 
12,161

Common stock redeemed for taxes withheld for stock based compensation, net
 

 

 

 
(3,493
)
 

 

 
(3,493
)
 

 

 

 

 
(3,493
)
Common stock issued for dividend reinvestment plan
 

 

 

 
1,184

 

 

 
1,184

 

 

 

 

 
1,184

Common stock issued for stock offerings, net of issuance costs
 

 
18

 

 
102,435

 

 

 
102,453

 

 

 

 

 
102,453

Redemption of preferred units
 

 

 

 

 

 

 

 

 
(300
)
 

 
(300
)
 
(300
)
Common stock issued for partnership units exchanged







137






137




(137
)



(137
)


Contributions from partners
 

 

 

 

 

 

 

 

 

 
16,204

 
16,204

 
16,204

Distributions to partners
 

 

 

 
(1,404
)
 

 

 
(1,404
)
 

 

 
(4,543
)
 
(4,543
)
 
(5,947
)
Cash dividends declared:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock/unit
 

 

 

 

 

 
(21,062
)
 
(21,062
)
 

 

 

 

 
(21,062
)
Common stock/unit ($1.88 per share)
 

 

 

 

 

 
(173,784
)
 
(173,784
)
 

 
(300
)
 

 
(300
)
 
(174,084
)
Balance at December 31, 2014
$
325,000

 
941

 
(19,382
)
 
2,540,153

 
(57,748
)
 
(882,372
)
 
1,906,592

 

 
(1,914
)
 
31,804

 
29,890

 
1,936,482

See accompanying notes to consolidated financial statements.

78



REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the years ended December 31, 2014, 2013, and 2012
(in thousands)

 
 
2014
 
2013
 
2012
Cash flows from operating activities:
 
 
 
 
 
 
Net income
 
$
188,847

 
151,285

 
26,209

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
Depreciation and amortization
 
147,791

 
134,454

 
127,839

Amortization of deferred loan cost and debt premium
 
10,521

 
12,339

 
12,759

Amortization and (accretion) of above and below market lease intangibles, net
 
(3,101
)
 
(2,488
)
 
(1,043
)
Stock-based compensation, net of capitalization
 
9,662

 
12,191

 
9,806

Equity in income of investments in real estate partnerships (note 4)
 
(31,270
)
 
(31,718
)
 
(23,807
)
Gain on remeasurement of investment in real estate partnership
 
(18,271
)
 

 

Gain on sale of real estate, net of tax
 
(55,077
)
 
(59,656
)
 
(24,013
)
Provision for impairment
 
1,257

 
6,000

 
74,816

Early extinguishment of debt
 
18

 
32

 
852

Deferred income tax expense of taxable REIT subsidiary
 

 

 
13,727

Distribution of earnings from operations of investments in real estate partnerships
 
42,767

 
45,377

 
44,809

Settlement of derivative instruments
 
4,648

 

 

(Gain) on derivative instruments
 
(13
)
 
(19
)
 
(22
)
Deferred compensation expense
 
1,386

 
3,294

 
2,069

Realized and unrealized (gain) loss on investments (note 8 and 14)
 
(9,158
)
 
(3,293
)
 
(2,095
)
Changes in assets and liabilities:
 
 
 
 
 
 
Restricted cash
 
848

 
(62
)
 
(423
)
Accounts receivable
 
(6,225
)
 
(5,042
)
 
6,157

Straight-line rent receivable, net
 
(6,544
)
 
(5,459
)
 
(6,059
)
Deferred leasing costs
 
(8,252
)
 
(10,086
)
 
(12,642
)
Other assets
 
89

 
(1,866
)
 
(1,079
)
Accounts payable and other liabilities
 
6,201

 
(672
)
 
10,994

Tenants’ security and escrow deposits and prepaid rent
 
1,618

 
6,120

 
(1,639
)
Net cash provided by operating activities
 
277,742

 
250,731

 
257,215

Cash flows from investing activities:
 
 
 
 
 
 
Acquisition of operating real estate
 
(112,120
)
 
(107,790
)
 
(156,026
)
Real estate development and capital improvements
 
(238,237
)
 
(213,282
)
 
(164,588
)
Proceeds from sale of real estate investments
 
118,787

 
212,632

 
352,707

Collection (issuance) of notes receivable
 

 
27,354

 
(552
)
Investments in real estate partnerships (note 4)
 
(23,577
)
 
(10,883
)
 
(66,663
)
Distributions received from investments in real estate partnerships
 
37,152

 
87,111

 
38,353

Dividends on investments
 
243

 
194

 
245

Acquisition of securities
 
(23,760
)
 
(19,144
)
 
(17,930
)
Proceeds from sale of securities
 
31,222

 
13,991

 
18,077

Net cash (used in) provided by investing activities
 
(210,290
)
 
(9,817
)
 
3,623


79



REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the years ended December 31, 2014, 2013, and 2012
(in thousands)

 
 
2014
 
2013
 
2012
Cash flows from financing activities:
 
 
 
 
 
 
Net proceeds from common stock issuance
 
102,453

 
99,753

 
21,542

Net proceeds from issuance of preferred stock
 

 

 
313,900

Proceeds from sale of treasury stock
 

 
34

 
338

Acquisition of treasury stock
 

 

 
(4
)
Redemption of preferred stock and partnership units
 
(300
)
 

 
(323,125
)
(Distributions to) contributions from limited partners in consolidated partnerships, net
 
(5,303
)
 
1,514

 
1,375

Distributions to exchangeable operating partnership unit holders
 
(300
)
 
(322
)
 
(324
)
Distributions to preferred unit holders
 

 

 
(404
)
Dividends paid to common stockholders
 
(172,600
)
 
(167,773
)
 
(164,423
)
Dividends paid to preferred stockholders
 
(21,062
)
 
(21,062
)
 
(23,254
)
Repayment of fixed rate unsecured notes
 
(150,000
)
 

 
(192,377
)
Proceeds from issuance of fixed rate unsecured notes, net
 
248,705

 

 

Proceeds from unsecured credit facilities
 
255,000

 
82,000

 
750,000

Repayment of unsecured credit facilities
 
(255,000
)
 
(177,000
)
 
(620,000
)
Proceeds from notes payable
 
12,739

 
36,350

 

Repayment of notes payable
 
(38,717
)
 
(27,960
)
 
(1,332
)
Scheduled principal payments
 
(6,909
)
 
(7,530
)
 
(7,259
)
Payment of loan costs
 
(3,066
)
 
(583
)
 
(4,544
)
Net cash used in financing activities
 
(34,360
)
 
(182,579
)
 
(249,891
)
Net increase in cash and cash equivalents
 
33,092

 
58,335

 
10,947

Cash and cash equivalents at beginning of the year
 
80,684

 
22,349

 
11,402

Cash and cash equivalents at end of the year
 
$
113,776

 
80,684

 
22,349

Supplemental disclosure of cash flow information:
 
 
 
 
 
 
Cash paid for interest (net of capitalized interest of $7,142, $6,078, and $3,686 in 2014, 2013, and 2012, respectively)
 
$
109,425

 
107,312

 
115,879

Cash paid for income taxes
 
$
2,169

 

 

Supplemental disclosure of non-cash transactions:
 
 
 
 
 
 
Common stock issued for partnership units exchanged
 
$
137

 
302

 

Real estate received through distribution in kind
 
$

 
7,576

 

Mortgage loans assumed through distribution in kind
 
$

 
7,500

 

Mortgage loans assumed for the acquisition of real estate
 
$
103,187

 

 
30,467

Initial fair value of non-controlling interest recorded at acquisition
 
$
15,385

 

 

Real estate contributed for investments in real estate partnerships
 
$

 

 
47,500

Real estate received through foreclosure on notes receivable
 
$

 

 
12,585

Acquisition of previously unconsolidated real estate investments
 
$
16,182

 

 

Change in fair value of derivative instruments
 
$
(49,968
)
 
30,952

 
(4,285
)
Common stock issued for dividend reinvestment plan
 
$
1,184

 
1,075

 
988

Stock-based compensation capitalized
 
$
2,707

 
2,188

 
1,979

Contributions from limited partners in consolidated partnerships, net
 
$
1,579

 
156

 
986

Common stock issued for dividend reinvestment in trust
 
$
779

 
660

 
440

Contribution of stock awards into trust
 
$
1,881

 
1,537

 
819

Distribution of stock held in trust
 
$
4

 
201

 
1,191

See accompanying notes to consolidated financial statements.



80



REGENCY CENTERS, L.P.
Consolidated Balance Sheets
December 31, 2014 and 2013
(in thousands, except unit data)
    
 
 
2014
 
2013
Assets
 
 
 
 
Real estate investments at cost (notes 2 and 3):
 
 
 
 
Land
 
$
1,380,211

 
1,249,779

Buildings and improvements
 
2,790,137

 
2,590,302

Properties in development
 
239,538

 
186,450

 
 
4,409,886

 
4,026,531

Less: accumulated depreciation
 
933,708

 
844,873

 
 
3,476,178

 
3,181,658

Investments in real estate partnerships (note 4)
 
333,167

 
358,849

Net real estate investments
 
3,809,345

 
3,540,507

Cash and cash equivalents
 
113,776

 
80,684

Restricted cash
 
8,013

 
9,520

Accounts receivable, net of allowance for doubtful accounts of $4,523 and $3,922 at December 31, 2014 and 2013, respectively
 
30,999

 
26,319

Straight-line rent receivable, net of reserve of $652 and $547 at December 31, 2014 and 2013, respectively
 
55,768

 
50,612

Notes receivable (note 5)
 
12,132

 
11,960

Deferred costs, less accumulated amortization of $81,822 and $73,231 at December 31, 2014 and 2013, respectively
 
71,502

 
69,963

Acquired lease intangible assets, less accumulated amortization of $36,112 and $25,591 at December 31, 2014 and 2013, respectively (note 6)
 
52,365

 
44,805

Trading securities held in trust, at fair value (note 14)
 
28,134

 
26,681

Other assets
 
15,136

 
52,465

Total assets
 
$
4,197,170

 
3,913,516

Liabilities and Capital
 
 
 
 
Liabilities:
 
 
 
 
Notes payable (note 9)
 
$
1,946,357

 
1,779,697

Unsecured credit facilities (note 9)
 
75,000

 
75,000

Accounts payable and other liabilities
 
181,197

 
147,045

Acquired lease intangible liabilities, less accumulated accretion of $13,993 and $10,102 at December 31, 2014 and 2013, respectively (note 6)
 
32,143

 
26,729

Tenants’ security and escrow deposits and prepaid rent
 
25,991

 
23,911

Total liabilities
 
2,260,688

 
2,052,382

Commitments and contingencies (notes 16 and 17)
 

 

Capital:
 
 
 
 
Partners’ capital (notes 11 and 12):
 
 
 
 
Preferred units of general partner, $0.01 par value per unit, 13,000,000 units issued and outstanding at December 31, 2014 and 2013, respectively, liquidation preference of $25 per unit
 
325,000

 
325,000

General partner; 94,108,061 and 92,333,161 units outstanding at December 31, 2014 and 2013, respectively
 
1,639,340

 
1,535,758

Limited partners; 154,170 and 165,796 units outstanding at December 31, 2014 and 2013, respectively
 
(1,914
)
 
(1,426
)
Accumulated other comprehensive loss
 
(57,748
)
 
(17,404
)
Total partners’ capital
 
1,904,678

 
1,841,928

Noncontrolling interests (note 12):
 
 
 
 
Limited partners’ interests in consolidated partnerships
 
31,804

 
19,206

Total noncontrolling interests
 
31,804

 
19,206

Total capital
 
1,936,482

 
1,861,134

Total liabilities and capital
 
$
4,197,170

 
3,913,516

See accompanying notes to consolidated financial statements.

81



REGENCY CENTERS, L.P.
Consolidated Statements of Operations
For the years ended December 31, 2014, 2013, and 2012
(in thousands, except per unit data)
 
 
2014
 
2013
 
2012
Revenues:
 
 
 
 
 
 
Minimum rent
 
$
390,697

 
353,833

 
340,940

Percentage rent
 
3,488

 
3,583

 
3,323

Recoveries from tenants and other income
 
119,618

 
106,494

 
103,155

Management, transaction, and other fees
 
24,095

 
25,097

 
26,511

Total revenues
 
537,898

 
489,007

 
473,929

Operating expenses:
 
 
 
 
 
 
Depreciation and amortization
 
147,791

 
130,630

 
119,008

Operating and maintenance
 
77,788

 
71,018

 
66,687

General and administrative
 
60,242

 
61,234

 
61,700

Real estate taxes
 
59,031

 
53,726

 
52,911

Other operating expenses
 
8,496

 
8,079

 
7,187

Total operating expenses
 
353,348

 
324,687

 
307,493

Other expense (income):
 
 
 
 
 
 
Interest expense, net of interest income of $1,210, $1,643, and $1,675 in 2014, 2013, and 2012, respectively (note 9)
 
109,491

 
108,966

 
112,129

Provision for impairment
 
1,257

 
6,000

 
20,316

Early extinguishment of debt
 
18

 
32

 
852

Net investment income, including unrealized losses (gains) of $1,058, $(2,231), and $(888) in 2014, 2013, and 2012, respectively (notes 8 and 14)
 
(9,449
)
 
(3,257
)
 
(2,057
)
Gain on remeasurement of investment in real estate partnership
 
(18,271
)
 

 

Total other expense (income)
 
83,046

 
111,741

 
131,240

Income before equity in income of investments in real estate partnerships and income taxes
 
101,504

 
52,579

 
35,196

Equity in income of investments in real estate partnerships (note 4)
 
31,270

 
31,718

 
23,807

Income tax (benefit) expense of taxable REIT subsidiary
 
(996
)
 

 
13,224

Income from continuing operations
 
133,770

 
84,297

 
45,779

Discontinued operations, net (note 3):
 
 
 
 
 
 
Operating income (loss)
 

 
7,332

 
(43,583
)
Gain on sale of operating properties, net of tax
 

 
57,953

 
21,855

Income (loss) from discontinued operations
 

 
65,285

 
(21,728
)
Gain on sale of real estate, net of tax
 
55,077

 
1,703

 
2,158

Net income
 
188,847

 
151,285

 
26,209

Limited partners’ interests in consolidated partnerships
 
(1,138
)
 
(1,205
)
 
(865
)
Net income attributable to the Partnership
 
187,709

 
150,080

 
25,344

Preferred unit distributions
 
(21,062
)
 
(21,062
)
 
(31,902
)
Net income (loss) attributable to common unit holders
 
$
166,647

 
129,018

 
(6,558
)
Income (loss) per common unit - basic (note 15):
 
 
 
 
 
 
Continuing operations
 
$
1.80

 
0.69

 
0.16

Discontinued operations
 

 
0.71

 
(0.24
)
Net income (loss) attributable to common unit holders
 
$
1.80

 
1.40

 
(0.08
)
Income (loss) per common unit - diluted (note 15):
 
 
 
 
 
 
Continuing operations
 
$
1.80

 
0.69

 
0.16

Discontinued operations
 

 
0.71

 
(0.24
)
Net income (loss) attributable to common unit holders
 
$
1.80

 
1.40

 
(0.08
)
See accompanying notes to consolidated financial statements.

82



REGENCY CENTERS, L.P.
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2014, 2013, and 2012
(in thousands)
 
 
2014
 
2013
 
2012
Net income
 
$
188,847

 
151,285

 
26,209

Other comprehensive income:
 
 
 
 
 
 
Loss on settlement of derivative instruments:
 
 
 
 
 
 
Unrealized loss on derivative instruments
 

 

 

Amortization of loss on settlement of derivative instruments recognized in net income
 
8,747

 
9,466

 
9,466

Effective portion of change in fair value of derivative instruments:
 
 
 
 
 
 
Effective portion of change in fair value of derivative instruments
 
(49,968
)
 
30,985

 
4,220

Less: reclassification adjustment for change in fair value of derivative instruments included in net income
 
606

 
(33
)
 
25

Available for sale securities
 
 
 
 
 
 
Unrealized gain on available-for-sale securities
 
7,765

 

 

Less: realized gains on sale of available-for-sale securities recognized in net income
 
(7,765
)
 

 

Other comprehensive income
 
(40,615
)
 
40,418

 
13,711

Comprehensive income
 
148,232

 
191,703

 
39,920

Less: comprehensive (loss) income attributable to noncontrolling interests:
 
 
 
 
 
 
Net income attributable to noncontrolling interests
 
1,138

 
1,205

 
865

Other comprehensive (loss) income attributable to noncontrolling interests
 
(201
)
 
32

 
(31
)
Comprehensive income attributable to noncontrolling interests
 
937

 
1,237

 
834

Comprehensive income attributable to the Partnership
 
$
147,295

 
190,466

 
39,086

See accompanying notes to consolidated financial statements.


83




REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the years ended December 31, 2014, 2013, and 2012 
 (in thousands)
 
 
Preferred Units
 
General Partner
Preferred and
Common Units
 
Limited
Partners
 
Accumulated
Other
Comprehensive
Loss
 
Total
Partners’
Capital
 
Noncontrolling
Interests in
Limited Partners’
Interest in
Consolidated
Partnerships
 
Total
Capital
Balance at December 31, 2011
$
49,158

 
1,879,784

 
(963
)
 
(71,429
)
 
1,856,550

 
13,104

 
1,869,654

Net income
 
(629
)
 
25,867

 
106

 

 
25,344

 
865

 
26,209

Other comprehensive income
 

 

 
28

 
13,714

 
13,742

 
(31
)
 
13,711

Deferred compensation plan, net
 

 
12

 

 

 
12

 

 
12

Contributions from partners
 

 

 

 

 

 
3,362

 
3,362

Distributions to partners
 

 
(165,411
)
 
(324
)
 

 
(165,735
)
 
(1,001
)
 
(166,736
)
Redemption of preferred units
 
(48,125
)
 

 

 

 
(48,125
)
 

 
(48,125
)
Preferred unit distributions
 
(404
)
 
(23,254
)
 

 

 
(23,658
)
 

 
(23,658
)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company
 

 
11,526

 

 

 
11,526

 

 
11,526

Preferred units issued as a result of preferred stock issued by Parent Company, net of issuance costs
 

 
313,900

 

 

 
313,900

 

 
313,900

Common units exchanged for common stock of the Parent Company
 

 

 

 

 

 

 

Preferred stock redemptions
 

 
(275,000
)
 

 

 
(275,000
)
 

 
(275,000
)
Common units issued as a result of common stock issued by Parent Company, net of repurchases
 

 
21,056

 

 

 
21,056

 

 
21,056

Balance at December 31, 2012
$

 
1,788,480

 
(1,153
)
 
(57,715
)
 
1,729,612

 
16,299

 
1,745,911

Net income
 

 
149,804

 
276

 

 
150,080

 
1,205

 
151,285

Other comprehensive income
 

 

 
75

 
40,311

 
40,386

 
32

 
40,418

Contributions from partners
 

 

 

 

 

 
5,792

 
5,792

Distributions to partners
 

 
(168,848
)
 
(322
)
 

 
(169,170
)
 
(4,122
)
 
(173,292
)
Redemption of preferred units
 

 

 

 

 

 

 

Preferred unit distributions
 

 
(21,062
)
 

 

 
(21,062
)
 

 
(21,062
)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company
 

 
14,141

 

 

 
14,141

 

 
14,141

Common units exchanged for common stock of the Parent Company
 

 
302

 
(302
)
 

 

 

 

Common units issued as a result of common stock issued by Parent Company, net of repurchases
 

 
97,941

 

 

 
97,941

 

 
97,941

Balance at December 31, 2013
$

 
1,860,758

 
(1,426
)
 
(17,404
)
 
1,841,928

 
19,206

 
1,861,134


84



REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the years ended December 31, 2014, 2013, and 2012 
 (in thousands)
 
 
Preferred Units
 
General Partner
Preferred and
Common Units
 
Limited
Partners
 
Accumulated
Other
Comprehensive
Loss
 
Total
Partners’
Capital
 
Noncontrolling
Interests in
Limited Partners’
Interest in
Consolidated
Partnerships
 
Total
Capital
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 

 
187,390

 
319

 

 
187,709

 
1,138

 
188,847

Other comprehensive income
 

 

 
(70
)
 
(40,344
)
 
(40,414
)
 
(201
)
 
(40,615
)
Contributions from partners
 

 

 

 

 

 
16,204

 
16,204

Distributions to partners
 

 
(175,188
)
 
(300
)
 

 
(175,488
)
 
(4,543
)
 
(180,031
)
Redemption of preferred units
 

 

 
(300
)
 

 
(300
)
 

 
(300
)
Preferred unit distributions
 

 
(21,062
)
 

 

 
(21,062
)
 

 
(21,062
)
Restricted units issued as a result of amortization of restricted stock issued by Parent Company
 

 
12,161

 

 

 
12,161

 

 
12,161

Common units exchanged for common stock of the Parent Company
 

 
137

 
(137
)
 

 

 

 

Common units issued as a result of common stock issued by Parent Company, net of repurchases
 

 
100,144

 

 

 
100,144

 

 
100,144

Balance at December 31, 2014
$

 
1,964,340

 
(1,914
)
 
(57,748
)
 
1,904,678

 
31,804

 
1,936,482

See accompanying notes to consolidated financial statements.

85




REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the years ended December 31, 2014, 2013, and 2012
(in thousands)

 
 
2014
 
2013
 
2012
Cash flows from operating activities:
 
 
 
 
 
 
Net income
 
$
188,847

 
151,285

 
26,209

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
Depreciation and amortization
 
147,791

 
134,454

 
127,839

Amortization of deferred loan cost and debt premium
 
10,521

 
12,339

 
12,759

Amortization and (accretion) of above and below market lease intangibles, net
 
(3,101
)
 
(2,488
)
 
(1,043
)
Stock-based compensation, net of capitalization
 
9,662

 
12,191

 
9,806

Equity in income of investments in real estate partnerships (note 4)
 
(31,270
)
 
(31,718
)
 
(23,807
)
Gain on remeasurement of investment in real estate partnership
 
(18,271
)
 

 

Gain on sale of real estate, net of tax
 
(55,077
)
 
(59,656
)
 
(24,013
)
Provision for impairment
 
1,257

 
6,000

 
74,816

Early extinguishment of debt
 
18

 
32

 
852

Deferred income tax expense of taxable REIT subsidiary
 

 

 
13,727

Distribution of earnings from operations of investments in real estate partnerships
 
42,767

 
45,377

 
44,809

Settlement of derivative instruments
 
4,648

 

 

(Gain) on derivative instruments
 
(13
)
 
(19
)
 
(22
)
Deferred compensation expense
 
1,386

 
3,294

 
2,069

Realized and unrealized (gain) loss on investments (note 8 and 14)
 
(9,158
)
 
(3,293
)
 
(2,095
)
Changes in assets and liabilities:
 
 
 
 
 
 
Restricted cash
 
848

 
(62
)
 
(423
)
Accounts receivable
 
(6,225
)
 
(5,042
)
 
6,157

Straight-line rent receivable, net
 
(6,544
)
 
(5,459
)
 
(6,059
)
Deferred leasing costs
 
(8,252
)
 
(10,086
)
 
(12,642
)
Other assets
 
89

 
(1,866
)
 
(1,079
)
Accounts payable and other liabilities
 
6,201

 
(672
)
 
10,994

Tenants’ security and escrow deposits and prepaid rent
 
1,618

 
6,120

 
(1,639
)
Net cash provided by operating activities
 
277,742

 
250,731

 
257,215

Cash flows from investing activities:
 
 
 
 
 
 
Acquisition of operating real estate
 
(112,120
)
 
(107,790
)
 
(156,026
)
Real estate development and capital improvements
 
(238,237
)
 
(213,282
)
 
(164,588
)
Proceeds from sale of real estate investments
 
118,787

 
212,632

 
352,707

Collection (issuance) of notes receivable
 

 
27,354

 
(552
)
Investments in real estate partnerships (note 4)
 
(23,577
)
 
(10,883
)
 
(66,663
)
Distributions received from investments in real estate partnerships
 
37,152

 
87,111

 
38,353

Dividends on investments
 
243

 
194

 
245

Acquisition of securities
 
(23,760
)
 
(19,144
)
 
(17,930
)
Proceeds from sale of securities
 
31,222

 
13,991

 
18,077

Net cash (used in) provided by investing activities
 
(210,290
)
 
(9,817
)
 
3,623


86



REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the years ended December 31, 2014, 2013, and 2012
(in thousands)

 
 
2014
 
2013
 
2012
Cash flows from financing activities:
 
 
 
 
 
 
Net proceeds from common units issued as a result of common stock issued by Parent Company
 
102,453

 
99,753

 
21,542

Net proceeds from preferred units issued as a result of preferred stock issued by Parent Company
 

 

 
313,900

Proceeds from sale of treasury stock
 

 
34

 
338

Acquisition of treasury stock
 

 

 
(4
)
     Redemption of preferred partnership units
 
(300
)
 

 
(323,125
)
(Distributions to) contributions from limited partners in consolidated partnerships, net
 
(5,303
)
 
1,514

 
1,375

Distributions to partners
 
(172,900
)
 
(168,095
)
 
(164,747
)
Distributions to preferred unit holders
 
(21,062
)
 
(21,062
)
 
(23,658
)
Repayment of fixed rate unsecured notes
 
(150,000
)
 

 
(192,377
)
Proceeds from issuance of fixed rate unsecured notes, net
 
248,705

 

 

Proceeds from unsecured credit facilities
 
255,000

 
82,000

 
750,000

Repayment of unsecured credit facilities
 
(255,000
)
 
(177,000
)
 
(620,000
)
Proceeds from notes payable
 
12,739

 
36,350

 

Repayment of notes payable
 
(38,717
)
 
(27,960
)
 
(1,332
)
Scheduled principal payments
 
(6,909
)
 
(7,530
)
 
(7,259
)
Payment of loan costs
 
(3,066
)
 
(583
)
 
(4,544
)
Net cash used in financing activities
 
(34,360
)
 
(182,579
)
 
(249,891
)
Net increase in cash and cash equivalents
 
33,092

 
58,335

 
10,947

Cash and cash equivalents at beginning of the year
 
80,684

 
22,349

 
11,402

Cash and cash equivalents at end of the year
 
$
113,776

 
80,684

 
22,349

Supplemental disclosure of cash flow information:
 
 
 
 
 
 
Cash paid for interest (net of capitalized interest of $7,142, $6,078, and $3,686 in 2014, 2013, and 2012, respectively)
 
$
109,425

 
107,312

 
115,879

Cash paid for income taxes
 
$
2,169

 

 

Supplemental disclosure of non-cash transactions:
 
 
 
 
 
 
Common stock issued by Parent Company for partnership units exchanged
 
$
137

 
302

 

Real estate received through distribution in kind
 
$

 
7,576

 

Mortgage loans assumed through distribution in kind
 
$

 
7,500

 

Mortgage loans assumed for the acquisition of real estate
 
$
103,187

 

 
30,467

Initial fair value of non-controlling interest recorded at acquisition
 
$
15,385

 

 

Real estate contributed for investments in real estate partnerships
 
$

 

 
47,500

Real estate received through foreclosure on notes receivable
 
$

 

 
12,585

Acquisition of previously unconsolidated real estate investments
 
$
16,182

 

 

Change in fair value of derivative instruments
 
$
(49,968
)
 
30,952

 
(4,285
)
Common stock issued by Parent Company for dividend reinvestment plan
 
$
1,184

 
1,075

 
988

Stock-based compensation capitalized
 
$
2,707

 
2,188

 
1,979

Contributions from limited partners in consolidated partnerships, net
 
$
1,579

 
156

 
986

Common stock issued for dividend reinvestment in trust
 
$
779

 
660

 
440

Contribution of stock awards into trust
 
$
1,881

 
1,537

 
819

Distribution of stock held in trust
 
$
4

 
201

 
1,191

See accompanying notes to consolidated financial statements.



87


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014

1.
Summary of Significant Accounting Policies

(a)    Organization and Principles of Consolidation

General

Regency Centers Corporation (the “Parent Company”) began its operations as a Real Estate Investment Trust (“REIT”) in 1993 and is the general partner of Regency Centers, L.P. (the “Operating Partnership”). The Parent Company engages in the ownership, management, leasing, acquisition, and development of retail shopping centers through the Operating Partnership, and has no other assets or liabilities other than through its investment in the Operating Partnership. As of December 31, 2014, the Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis (the "Company” or “Regency”) directly owned 202 retail shopping centers and held partial interests in an additional 120 retail shopping centers through investments in real estate partnerships (also referred to as "joint ventures" or "co-investment partnerships").

Estimates, Risks, and Uncertainties

The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates in the Company's financial statements relate to the carrying values of its investments in real estate, including its shopping centers, properties in development, and its investments in real estate partnerships, and accounts receivable, net. It is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change significantly if economic conditions were to weaken.

Consolidation

The accompanying consolidated financial statements include the accounts of the Parent Company, the Operating Partnership, its wholly-owned subsidiaries, and consolidated partnerships in which the Company has a controlling interest. Investments in real estate partnerships not controlled by the Company are accounted for under the equity method. All significant inter-company balances and transactions are eliminated in the consolidated financial statements.

Ownership of the Parent Company

The Parent Company has a single class of common stock outstanding and two series of preferred stock outstanding (“Series 6 and 7 Preferred Stock”). The dividends on the Series 6 and 7 Preferred Stock are cumulative and payable in arrears quarterly.

Ownership of the Operating Partnership

The Operating Partnership's capital includes general and limited common Partnership Units. As of December 31, 2014, the Parent Company owned approximately 99.8% or 94,108,061 of the 94,262,231 outstanding common Partnership Units of the Operating Partnership. Net income and distributions of the Operating Partnership are allocable to the general and limited common Partnership Units in accordance with their ownership percentages.

Investments in Real Estate Partnerships

Investments in real estate partnerships not controlled by the Company are accounted for under the equity method. The accounting policies of the real estate partnerships are similar to the Company's accounting policies. Income or loss from these real estate partnerships, which includes all operating results (including impairment losses) and gains on sales of properties within the joint ventures, is allocated to the Company in accordance with the respective partnership agreements. Such allocations of net income or loss are recorded in

88

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




equity in income of investments in real estate partnerships in the accompanying Consolidated Statements of Operations. The net difference in the carrying amount of investments in real estate partnerships and the underlying equity in net assets is either accreted to income and recorded in equity in income of investments in real estate partnerships in the accompanying Consolidated Statements of Operations over the expected useful lives of the properties and other intangible assets, which range in lives from 10 to 40 years, or recognized at liquidation if the joint venture agreement includes a unilateral right to elect to dissolve the real estate partnership and, upon such an election, receive a distribution in-kind, as discussed further below.
Cash distributions of earnings from operations from investments in real estate partnerships are presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows. Cash distributions from the sale of a property or loan proceeds received from the placement of debt on a property included in investments in real estate partnerships are presented in cash flows provided by investing activities in the accompanying Consolidated Statements of Cash Flows.

The Company evaluates the structure and the substance of its investments in the real estate partnerships to determine if they are variable interest entities. The Company has concluded that these partnership investments are not variable interest entities. Further, the joint venture partners in the real estate partnerships have significant ownership rights, including approval over operating budgets and strategic plans, capital spending, sale or financing, and admission of new partners. Upon formation of the joint ventures, the Company, through the Operating Partnership, also became the managing member, responsible for the day-to-day operations of the real estate partnerships. In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, the Company evaluated its investment in each real estate partnership and concluded that the other partners have kick-out rights and/or substantive participating rights and, therefore, the Company has concluded that the equity method of accounting is appropriate for these investments and they do not require consolidation. Under the equity method of accounting, investments in real estate partnerships are initially recorded at cost, subsequently increased for additional contributions and allocations of income, and reduced for distributions received and allocations of loss. These investments are included in the consolidated financial statements as investments in real estate partnerships.

Noncontrolling Interests

The Company consolidates all entities in which it has a controlling ownership interest. A controlling ownership interest is typically attributable to the entity with a majority voting interest. Noncontrolling interest is the portion of equity, in a subsidiary or consolidated entity, not attributable, directly or indirectly to the Company. Such noncontrolling interests are reported on the Consolidated Balance Sheets within equity or capital, but separately from stockholders' equity or partners' capital. On the Consolidated Statements of Operations, all of the revenues and expenses from less-than-wholly-owned consolidated subsidiaries are reported in net income, including both the amounts attributable to the Company and noncontrolling interests. The amounts of consolidated net income attributable to the Company and to the noncontrolling interests are clearly identified on the accompanying Consolidated Statements of Operations.

Noncontrolling Interests of the Parent Company

The consolidated financial statements of the Parent Company include the following ownership interests held by owners other than the preferred and common stockholders of the Parent Company: (i) the limited Partnership Units in the Operating Partnership held by third parties (“Exchangeable operating partnership units”) and (ii) the minority-owned interest held by third parties in consolidated partnerships (“Limited partners' interests in consolidated partnerships”). The Parent Company has included all of these noncontrolling interests in permanent equity, separate from the Parent Company's stockholders' equity, in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity and Comprehensive Income (Loss). The portion of net income or comprehensive income attributable to these noncontrolling interests is included in net income and comprehensive income in the accompanying Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) of the Parent Company.

In accordance with the FASB ASC Topic 480, securities that are redeemable for cash or other assets at the option of the holder, not solely within the control of the issuer, are classified as redeemable noncontrolling interests outside of permanent equity in the Consolidated Balance Sheets. The Parent Company has evaluated the conditions as specified under the FASB ASC Topic 480 as it relates to exchangeable operating partnership units outstanding and concluded that it has the right to satisfy the redemption requirements of the units by

89

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




delivering unregistered common stock. Each outstanding exchangeable operating partnership unit is exchangeable for one share of common stock of the Parent Company, and the unit holder cannot require redemption in cash or other assets. Limited partners' interests in consolidated partnerships are not redeemable by the holders. The Parent Company also evaluated its fiduciary duties to itself, its shareholders, and, as the managing general partner of the Operating Partnership, to the Operating Partnership, and concluded its fiduciary duties are not in conflict with each other or the underlying agreements. Therefore, the Parent Company classifies such units and interests as permanent equity in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity.

Noncontrolling Interests of the Operating Partnership

The Operating Partnership has determined that limited partners' interests in consolidated partnerships are noncontrolling interests. The Operating Partnership has included these noncontrolling interests in permanent capital, separate from partners' capital, in the accompanying Consolidated Balance Sheets and Consolidated Statements of Capital. The portion of net income (loss) or comprehensive income (loss) attributable to these noncontrolling interests is included in net income and comprehensive income in the accompanying Consolidated Statements of Operations and Consolidated Statements Comprehensive Income (Loss) of the Operating Partnership.

(b)    Revenues and Accounts Receivable

Leasing Revenue and Receivables

The Company leases space to tenants under agreements with varying terms. Leases are accounted for as operating leases with minimum rent recognized on a straight-line basis over the term of the lease regardless of when payments are due. The Company estimates the collectibility of the accounts receivable related to base rents, straight-line rents, expense reimbursements, and other revenue taking into consideration the Company's historical write-off experience, tenant credit-worthiness, current economic trends, and remaining lease terms.

The Company recorded the following provisions for doubtful accounts (in thousands):
 
Year ended December 31,
 
2014
 
2013
 
2012
Gross provision for doubtful accounts
$
2,192

 
1,841

 
3,006

Amount included in discontinued operations

 
53

 
58


The following table represents the components of accounts receivable, net of allowance for doubtful accounts, in the accompanying Consolidated Balance Sheets (in thousands):

 
December 31,
 
2014
 
2013
Billed tenant receivables
$
10,583

 
6,550

Accrued CAM, insurance and tax reimbursements
15,369

 
16,280

Other receivables
9,570

 
7,411

Less: allowance for doubtful accounts
(4,523
)
 
(3,922
)
Total accounts receivable, net
$
30,999

 
26,319


Substantially all of the lease agreements with anchor tenants contain provisions that provide for additional rents based on tenants' sales volume ("percentage rent"). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. Substantially all lease agreements contain provisions for reimbursement of the tenants' share of real estate taxes, insurance and common area maintenance (“CAM”) costs. Recovery of real estate taxes, insurance, and CAM costs are recognized as the respective costs are incurred in accordance with the lease agreements.

90

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





As part of the leasing process, the Company may provide the lessee with an allowance for the construction of leasehold improvements. These leasehold improvements are capitalized and recorded as tenant improvements, and depreciated over the shorter of the useful life of the improvements or the remaining lease term. If the allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements, the allowance is considered to be a lease incentive and is recognized over the lease term as a reduction of minimum rent. Factors considered during this evaluation include, among other things, who holds legal title to the improvements as well as other controlling rights provided by the lease agreement and provisions for substantiation of such costs (e.g. unilateral control of the tenant space during the build-out process). Determination of the appropriate accounting for the payment of a tenant allowance is made on a lease-by-lease basis, considering the facts and circumstances of the individual tenant lease. When the Company is the owner of the leasehold improvements, recognition of lease revenue commences when the lessee is given possession of the leased space upon completion of tenant improvements. However, when the leasehold improvements are owned by the tenant, the lease inception date is the date the tenant obtains possession of the leased space for purposes of constructing its leasehold improvements.

Real Estate Sales

Profits from sales of real estate are recognized under the full accrual method by the Company when: (i) a sale is consummated; (ii) the buyer's initial and continuing investment is adequate to demonstrate a commitment to pay for the property; (iii) the Company's receivable, if applicable, is not subject to future subordination; (iv) the Company has transferred to the buyer the usual risks and rewards of ownership; and (v) the Company does not have substantial continuing involvement with the property.

The Company sells shopping centers to joint ventures in exchange for cash equal to the fair value of the ownership interest of its partners. The Company accounts for those sales as “partial sales” and recognizes gains on those partial sales in the period the properties were sold to the extent of the percentage interest sold, and in the case of certain real estate partnerships, applies a more restrictive method of recognizing gains, as discussed further below.

As of December 31, 2014, five of the Company's joint ventures (“DIK-JV”) give each partner the unilateral right to elect to dissolve the real estate partnership and, upon such an election, receive a distribution in-kind (“DIK”) of the assets of the real estate partnership equal to their respective capital account, which could include properties the Company previously sold to the real estate partnership.

Because the contingency associated with the possibility of receiving a particular property back upon liquidation is not satisfied at the property level, but at the aggregate level, no deferred gain is recognized on an individual property sold by the DIK-JV to a third party or received by the Company upon actual dissolution. Instead, the property received upon dissolution is recorded at the carrying value of the Company's investment in the DIK-JV on the date of dissolution. However, the deferred gain is recognized if and when all such properties in the DIK-JV are sold to a third party.

Management Services

The Company is engaged under agreements with its joint venture partners to provide asset management, property management, leasing, investing, and financing services for such joint ventures' shopping centers. The fees are market-based, generally calculated as a percentage of either revenues earned or the estimated values of the properties managed or the proceeds received, and are recognized as services are rendered, when fees due are determinable, and collectibility is reasonably assured. The Company also receives transaction fees, as contractually agreed upon with a joint venture, which include fees such as acquisition fees, disposition fees, “promotes”, or “earnouts”, which are recognized as services are rendered, when fees due are determinable, and collectibility is reasonably assured.



91

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




(c)    Real Estate Investments
 
Capitalization and Depreciation

Maintenance and repairs that do not improve or extend the useful lives of the respective assets are recorded in operating and maintenance expense. The Company does not have a capitalization threshold.

Depreciation is computed using the straight-line method over estimated useful lives of approximately 40 years for buildings and improvements, the shorter of the useful life or the remaining lease term subject to a maximum of 10 years for tenant improvements, and three to seven years for furniture and equipment.

Development Costs

Land, buildings, and improvements are recorded at cost. All specifically identifiable costs related to development activities are capitalized into properties in development on the accompanying Consolidated Balance Sheets. Properties in development are defined as properties that are in the construction or initial lease-up phase. Once a development property is substantially complete and held available for occupancy, costs are no longer capitalized. The capitalized costs include pre-development costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, and allocated direct employee costs incurred during the period of development. Interest costs are capitalized into each development project based upon applying the Company's weighted average borrowing rate to that portion of the actual development costs expended. The Company discontinues interest cost capitalization when the property is no longer being developed or is available for occupancy upon substantial completion of tenant improvements, but in no event would the Company capitalize interest on the project beyond 12 months after substantial completion of the building shell. 

The following table represents the components of properties in development in the accompanying Consolidated Balance Sheets (in thousands): 
 
December 31,
 
2014
 
2013
Construction in process
$
213,526

 
158,002

Land held for future development
24,243

 
24,953

Pre-development costs
1,769

 
3,495

Total properties in development
$
239,538

 
186,450


Construction in process represents developments where the Company (i) has not yet incurred at least 90% of the expected costs to complete and is less than 95% leased, and (ii) percent leased is less than 90% and the project features less than one year of anchor tenant operations, and (iii) the anchor tenant has been open for less than two calendar years, and (iv) less than three years have passed since the start of construction.

Land held for future development represents projects not in construction, but identified and available for future development when the market demand for a new shopping center exists.

Pre-development costs represent the costs the Company incurs prior to land acquisition including contract deposits, as well as legal, engineering, and other external professional fees related to evaluating the feasibility of developing a shopping center. As of December 31, 2014 and 2013, the Company had refundable deposits of approximately $375,000 and $680,000, respectively, included in pre-development costs. If the Company determines that the development of a particular shopping center is no longer probable, any related pre-development costs previously capitalized are immediately expensed. During the years ended December 31, 2014, 2013, and 2012, the Company expensed pre-development costs of approximately $2.3 million, $528,000, and $1.5 million, respectively, in other operating expenses in the accompanying Consolidated Statements of Operations.

92

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




Acquisitions

The Company and the real estate partnerships account for business combinations using the acquisition method by recognizing and measuring the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at their acquisition date fair values. The Company expenses transaction costs associated with business combinations in the period incurred.

The Company's methodology includes estimating an “as-if vacant” fair value of the physical property, which includes land, building, and improvements. In addition, the Company determines the estimated fair value of identifiable intangible assets, considering the following categories: (i) value of in-place leases, and (ii) above and below-market value of in-place leases. 

The value of in-place leases is estimated based on the value associated with the costs avoided in originating leases compared to the acquired in-place leases as well as the value associated with lost rental and recovery revenue during the assumed lease-up period. The value of in-place leases is recorded to amortization expense over the remaining initial term of the respective leases.

Above-market and below-market in-place lease values for acquired properties are recorded based on the present value of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management's estimate of fair market lease rates for comparable in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The value of above-market leases is amortized as a reduction of minimum rent over the remaining terms of the respective leases and the value of below-market leases is accreted to minimum rent over the remaining terms of the respective leases, including below-market renewal options, if applicable. The Company does not assign value to customer relationship intangibles if it has pre-existing business relationships with the major retailers at the acquired property since they do not provide incremental value over the Company's existing relationships.

Held for Sale

The Company classifies an operating property or a property in development as held-for-sale upon satisfaction of the following criteria: (i) management commits to a plan to sell a property (or group of properties), (ii) the property is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such properties, (iii) an active program to locate a buyer and other actions required to complete the plan to sell the property have been initiated, (iv) the sale of the property is probable and transfer of the asset is expected to be completed within one year, (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

The Company generally considers assets to be held for sale when the transaction has been approved by the appropriate level of management and there are no known significant contingencies relating to the sale such that the sale of the property within one year is considered probable. It is not unusual for real estate sales contracts to allow potential buyers a period of time to evaluate the property prior to formal acceptance of the contract. In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance. As a result, properties under contract may not close within the expected time period, or may not close at all. The Company must make a determination as to the point in time that it is probable that a sale will be consummated. Generally this occurs when a sales contract is executed with no contingencies and the prospective buyer has significant funds at risk to ensure performance.

Operating properties held-for-sale are carried at the lower of cost or fair value less costs to sell. The recording of depreciation and amortization expense is suspended during the held-for-sale period. If circumstances arise that previously were considered unlikely and, as a result, the Company decides not to sell a property previously classified as held-for-sale, the property is reclassified as held and used and is measured individually at the lower of its (i) carrying amount before the property was classified as held-for-sale, adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used or (ii) the fair value at the date of the subsequent decision not to sell. The Company evaluated its property portfolio and

93

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




did not identify any properties that would meet the above mentioned criteria for held-for-sale as of December 31, 2014 and 2013.

Discontinued Operations

On January 1, 2014, the Company prospectively adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, and all sales will be recorded in accordance with the ASU. The amendments in the ASU change the requirements for reporting discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization's operations and financial results. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations.

Prior to January 1, 2014, when the Company sold a property or classified a property as held-for-sale and would not have significant continuing involvement in the operation of the property, the operations of the property were eliminated from ongoing operations and classified in discontinued operations. Its operations, including any mortgage interest and gain on sale, were reported in discontinued operations so that the operations were clearly distinguished. Prior periods were also reclassified to reflect the operations of the property as discontinued operations. When the Company sold an operating property to a joint venture or to a third party, and would continue to manage the property, the operations and gain on sale were included in income from continuing operations.

Impairment

We evaluate whether there are any indicators, including property operating performance and general market conditions, that the value of the real estate properties (including any related amortizable intangible assets or liabilities) may not be recoverable. Through the evaluation, we compare the current carrying value of the asset to the estimated undiscounted cash flows that are directly associated with the use and ultimate disposition of the asset. Our estimated cash flows are based on several key assumptions, including rental rates, costs of tenant improvements, leasing commissions, anticipated hold period, and assumptions regarding the residual value upon disposition, including the exit capitalization rate. These key assumptions are subjective in nature and could differ materially from actual results. Changes in our disposition strategy or changes in the marketplace may alter the hold period of an asset or asset group which may result in an impairment loss and such loss could be material to the Company's financial condition or operating performance. To the extent that the carrying value of the asset exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over fair value. If such indicators are not identified, management will not assess the recoverability of a property's carrying value. If a property previously classified as held and used is changed to held-for-sale, the Company estimates fair value, less expected costs to sell, which could cause the Company to determine that the property is impaired.

The fair value of real estate assets is subjective and is determined through comparable sales information and other market data if available, or through use of an income approach such as the direct capitalization method or the traditional discounted cash flow approach. Such cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors, and therefore is subject to management judgment and changes in those factors could impact the determination of fair value. In estimating the fair value of undeveloped land, the Company generally uses market data and comparable sales information.

A loss in value of investments in real estate partnerships under the equity method of accounting, other than a temporary decline, must be recognized in the period in which the loss occurs. If management identifies indicators that the value of the Company's investment in real estate partnerships may be impaired, it evaluates the investment by calculating the fair value of the investment by discounting estimated future cash flows over the expected term of the investment.

94

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





The Company established the following provisions for impairment (in thousands):
 
Year ended December 31,
 
2014
 
2013
 
2012
Consolidated properties:
 
 
 
 
 
Gross provision for impairment
$
1,257

 
6,000

 
74,816

Amount included in discontinued operations

 

 
54,500


Tax Basis

The net tax basis of the Company's real estate assets exceeds the book basis by approximately $129.7 million and $156.8 million at December 31, 2014 and 2013, respectively, primarily due to the property impairments recorded for book purposes and the cost basis of the assets acquired and their carryover basis recorded for tax purposes.

(d)    Cash and Cash Equivalents 

Any instruments which have an original maturity of 90 days or less when purchased are considered cash equivalents. As of December 31, 2014 and 2013, $8.0 million and $9.5 million, respectively, of cash was restricted through escrow agreements and certain mortgage loans.

(e)    Securities

The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt and marketable equity securities not classified as held to maturity or as trading, are classified as available-for-sale, and are carried at fair value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in the Consolidated Statements of Comprehensive Income. The fair value of securities is determined using quoted market prices.

(f)    Deferred Costs 

Deferred costs include leasing costs and loan costs, net of accumulated amortization. Such costs are amortized over the periods through lease expiration or loan maturity, respectively. If the lease is terminated early, or if the loan is repaid prior to maturity, the remaining leasing costs or loan costs are written off. Deferred leasing costs consist of internal and external commissions associated with leasing the Company's shopping centers. The following table represents the components of deferred costs, net of accumulated amortization, in the accompanying Consolidated Balance Sheets (in thousands):
 
December 31,
 
2014
 
2013
Deferred leasing costs, net
$
60,889

 
59,027

Deferred loan costs, net (1)
10,613

 
10,936

Total deferred costs, net
$
71,502

 
69,963

(1) Consist of initial direct and incremental costs associated with financing activities.


(g)    Derivative Financial Instruments

The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or future payment of known and uncertain cash

95

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




amounts, the amount of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash payments principally related to the Company's borrowings.

All derivative instruments, whether designated in hedging relationships or not, are recorded on the accompanying Consolidated Balance Sheets at their fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

The Company uses interest rate swaps to mitigate its interest rate risk on a related financial instrument or forecasted transaction, and the Company designates these interest rate swaps as cash flow hedges. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The gains or losses resulting from changes in fair value of derivatives that qualify as cash flow hedges are recognized in other comprehensive income (“OCI”) while the ineffective portion of the derivative's change in fair value is recognized in the Statements of Operations as interest expense. Upon the settlement of a hedge, gains and losses remaining in OCI are amortized over the underlying term of the hedged transaction.

The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking various hedge transactions.  The Company assesses, both at inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the cash flows and/or forecasted cash flows of the hedged items.

In assessing the valuation of the hedges, the Company uses standard market conventions and techniques such as discounted cash flow analysis, option pricing models, and termination costs at each balance sheet date. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized.

The cash receipts or payments to settle interest rate swaps are presented in cash flows provided by operating activities in the accompanying Consolidated Statements of Cash Flows.

(h)    Income Taxes 

The Parent Company believes it qualifies, and intends to continue to qualify, as a REIT under the Internal Revenue Code (the “Code”). As a REIT, the Parent Company will generally not be subject to federal income tax, provided that distributions to its stockholders are at least equal to REIT taxable income. Regency Realty Group, Inc. (“RRG”), a wholly-owned subsidiary of the Operating Partnership, is a Taxable REIT Subsidiary (“TRS”) as defined in Section 856(l) of the Code. RRG is subject to federal and state income taxes and files separate tax returns. As a pass through entity, the Operating Partnership's taxable income or loss is reported by its partners, of which the Parent Company, as general partner and approximately 99.8% owner, is allocated its pro-rata share of tax attributes.

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which these temporary differences are expected to be recovered or settled.

96

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





Earnings and profits, which determine the taxability of dividends to stockholders, differs from net income reported for financial reporting purposes primarily because of differences in depreciable lives and cost bases of the shopping centers, as well as other timing differences.

Tax positions are initially recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open tax years (2011 and forward for federal and state) based on an assessment of many factors including past experience and interpretations of tax laws applied to the facts of each matter.
  
(i)    Earnings per Share and Unit 

Basic earnings per share of common stock and unit are computed based upon the weighted average number of common shares and units, respectively, outstanding during the period. Diluted earnings per share and unit reflect the conversion of obligations and the assumed exercises of securities including the effects of shares issuable under the Company's share-based payment arrangements, if dilutive. Dividends paid on the Company's share-based compensation awards are not participating securities as they are forfeitable.

(j)    Stock-Based Compensation 

The Company grants stock-based compensation to its employees and directors. The Company recognizes stock-based compensation based on the grant-date fair value of the award and the cost of the stock-based compensation is expensed over the vesting period.

When the Parent Company issues common shares as compensation, it receives a like number of common units from the Operating Partnership. The Company is committed to contributing to the Operating Partnership all proceeds from the exercise of stock options or other share-based awards granted under the Parent Company's Long-Term Omnibus Plan (the “Plan”). Accordingly, the Parent Company's ownership in the Operating Partnership will increase based on the amount of proceeds contributed to the Operating Partnership for the common units it receives. As a result of the issuance of common units to the Parent Company for stock-based compensation, the Operating Partnership accounts for stock-based compensation in the same manner as the Parent Company.

(k)    Segment Reporting 

The Company's business is investing in retail shopping centers through direct ownership or through joint ventures. The Company actively manages its portfolio of retail shopping centers and may from time to time make decisions to sell lower performing properties or developments not meeting its long-term investment objectives. The proceeds from sales are reinvested into higher quality retail shopping centers, through acquisitions or new developments, which management believes will generate sustainable revenue growth and attractive returns. It is management's intent that all retail shopping centers will be owned or developed for investment purposes; however, the Company may decide to sell all or a portion of a development upon completion. The Company's revenues and net income are generated from the operation of its investment portfolio. The Company also earns fees for services provided to manage and lease retail shopping centers owned through joint ventures. 

The Company's portfolio is located throughout the United States. Management does not distinguish or group its operations on a geographical basis for purposes of allocating resources or capital. The Company reviews operating and financial data for each property on an individual basis; therefore, the Company defines an operating segment as its individual properties. The individual properties have been aggregated into one reportable segment based upon their similarities with regard to both the nature and economics of the centers, tenants and operational processes, as well as long-term average financial performance.




97

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




(l)    Business Concentration

No single tenant accounts for 5% or more of revenue and none of the shopping centers are located outside the United States.

(m)    Fair Value of Assets and Liabilities

Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement is determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the Company uses a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from independent sources (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the Company's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The three levels of inputs used to measure fair value are as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Unobservable inputs for the asset or liability, which are typically based on the Company's own assumptions, as there is little, if any, related market activity. 

The Company also remeasures nonfinancial assets and nonfinancial liabilities, initially measured at fair value in a business combination or other new basis event, at fair value in subsequent periods.

(n)    Recent Accounting Pronouncements

On January 1, 2014, the Company prospectively adopted FASB ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, and all sales will be recorded in accordance with the ASU. The amendments in the ASU change the requirements for reporting discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization's operations and financial results. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early adoption is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.




98

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





2.
Real Estate Investments

Acquisitions
The following tables detail the shopping centers acquired or land acquired for development (in thousands):
Year ended December 31, 2014
Date Purchased
 
Property Name
 
City/State
 
Property Type
 
Purchase Price
 
Debt Assumed, Net of Premiums
 
Intangible Assets
 
Intangible Liabilities
1/31/2014
 
Persimmon Place
 
Dublin, CA
 
Development
 
$
14,200

 

 

 

2/14/2014
 
Shops at Mira Vista
 
Austin, TX
 
Operating
 
22,500

 
319

 
2,329

 
291

3/7/2014
 
Fairfield Portfolio (1)
 
Fairfield, CT
 
Operating
 
149,344

 
77,730

 
12,650

 
5,601

6/2/2014
 
Willow Oaks Crossing
 
Concord, NC
 
Development
 
3,342

 

 

 

7/15/2014
 
Clybourn Commons
 
Chicago, IL
 
Operating
 
19,000

 

 
1,686

 
3,298

9/10/2014
 
Belmont Chase
 
Ashburn, VA
 
Development
 
4,300

 

 

 

9/19/2014
 
CityLine Market
 
Dallas, TX
 
Development
 
4,913

 

 

 

10/24/2014
 
East San Marco (2)
 
Jacksonville, FL
 
Development
 
5,223

 

 

 

12/4/2014
 
The Village at La Floresta
 
Brea, CA
 
Development
 
6,750

 

 

 

12/16/2014
 
Indian Springs (3)
 
Houston, TX
 
Operating
 
53,156

 
25,138

 
3,867

 
1,612

Total property acquisitions
 
$
282,728

 
103,187

 
20,532

 
10,802


Year ended December 31, 2013
Date Purchased
 
Property Name
 
City/State
 
Property Type
 
Purchase Price
 
Debt Assumed, Net of Premiums
 
Intangible Assets
 
Intangible Liabilities
1/16/2013
 
Shops on Main
 
Schererville, IN
 
Development
 
$
85

 

 

 

5/16/2013
 
Juanita Tate Marketplace
 
Los Angeles, CA
 
Development
 
1,100

 

 

 

5/30/2013
 
Preston Oaks
 
Dallas, TX
 
Operating
 
27,000

 

 
3,396

 
7,597

7/22/2013
 
Fontainebleau Square
 
Miami, FL
 
Development
 
17,092

 

 

 

10/7/2013
 
Glen Gate
 
Glenview, IL
 
Development
 
14,950

 

 

 

10/16/2013
 
Fellsway Plaza
 
Medford, MA
 
Operating
 
42,500

 

 
5,139

 
963

10/24/2013
 
Shoppes on Riverside
 
Jacksonville, FL
 
Development
 
3,500

 

 

 

12/27/2013
 
Holly Park
 
Raleigh, NC
 
Operating
 
33,900

 

 
3,146

 
1,526

Total property acquisitions
 
$
140,127

 

 
11,681

 
10,086


(1) On March 7, 2014, the Company acquired an 80% controlling interest in the Fairfield Portfolio. As a result of consolidation, the Company recorded the non-controlling interest of approximately $15.4 million at fair value. The portfolio consists of three operating properties located in Fairfield, CT. 

(2) On October 24, 2014, Regency acquired the remaining 50% interest and gained control of this previously unconsolidated investment in real estate partnership that owns land for development. The $5.2 million purchase price includes the consideration paid to purchase the other partners interest as well as Regency's carrying value in the partnership.

(3) On December 16, 2014, Regency acquired the remaining 50% interest and gained control of this previously unconsolidated investment in real estate partnership that owns a single operating property. As the operating property constitutes a business, acquisition of control was accounted for as a step acquisition and the net assets acquired were recognized at fair value. A gain of $18.3 million was recognized upon remeasurement as the difference between the fair value, of $14.1 million, and the carrying value of the Company's previously held equity interest. The fair value was measured based on an income approach, using rental growth rate of 3.0%, a discount rate of 7.0%, and a terminal cap rate of 6.1%.


99

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




In addition, on March 20, 2013, the Company entered into a liquidation agreement with Macquarie Countrywide (US) No. 2, LLC ("CQR") to redeem its 24.95% interest through dissolution of the Macquarie CountryWide-Regency III, LLC (MCWR III) co-investment partnership through a DIK. The assets of the partnership were distributed as 100% ownership interests to CQR and Regency after a selection process, as provided for by the agreement. Regency selected one asset, Hilltop Village, which was recorded at the carrying value of the Company's equity investment in MCWR III, net of deferred gain, on the date of dissolution of $7.6 million, including a $7.5 million mortgage assumed.

The real estate operations acquired are not considered material to Company, individually or in the aggregate.

3.    Property Dispositions
               
Dispositions

The following table provides a summary of shopping centers and land out-parcels disposed of ($ in thousands):

 
Year ended December 31,
 
2014
 
2013
 
2012
 
Proceeds from sale of real estate investments
$
118,787

 
212,632

(1) 
352,707

 
Gain on sale of real estate, net of tax
$
55,077

 
59,656

 
24,013

 
Number of operating properties sold
11
 
12
 
20
(2) 
Number of land out-parcels sold
6
 
10
 
7
 

(1) One of the properties sold during 2013 was financed by the Company issuing a note receivable for the entire purchase price, which was subsequently collected during 2013.

(2) On July 25, 2012, the Company sold a 15-property portfolio for total consideration of $321.0 million. As a result of entering into this agreement, the Company recognized a net impairment loss of $18.1 million. As of December 31, 2012, this asset group did not meet the definition of discontinued operations, in accordance with FASB ASC Topic 205-20, Presentation of Financial Statements - Discontinued Operations, based on its continuing cash flows as further discussed in note 4. The remaining five operating properties sold met the definition of discontinued operations and are included in income from discontinued operations in the Consolidated Statements of Operations.

As a result of adopting ASU No. 2014-08, there were no discontinued operations for the year ended December 31, 2014 as none of the current year sales represented a strategic shift that would qualify as discontinued operations. The following table provides a summary of revenues and expenses from properties included in discontinued operations (in thousands):

 
Year ended December 31,
 
2013
 
2012
Revenues
$
14,924

 
26,413

Operating expenses
7,592

 
15,514

Provision for impairment

 
54,500

Income tax expense (benefit) (1)

 
(18
)
Operating income (loss) from discontinued operations
$
7,332

 
(43,583
)

(1) The operating income and gain on sales of properties included in discontinued operations are reported net of income taxes, if the property is sold by Regency Realty Group, Inc. ("RRG"), a wholly owned subsidiary of the Operating Partnership, which is a Taxable REIT subsidiary as defined by in Section 856(1) of the Internal Revenue Code.


100

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





4.
Investments in Real Estate Partnerships

The Company invests in real estate partnerships, which consist of the following (in thousands): 
 
December 31, 2014
 
Ownership
 
Number of Properties
 
Total Investment
 
Total Assets of the Partnership
 
Net Income of the Partnership
 
The Company's Share of Net Income of the Partnership
GRI - Regency, LLC (GRIR) (1)
40.00%
 
74
 
$
247,175

 
1,829,116

 
33,032

 
13,727

Columbia Regency Retail Partners, LLC (Columbia I) (1)
20.00%
 
10
 
15,916

 
199,427

 
7,173

 
1,431

Columbia Regency Partners II, LLC (Columbia II) (1)
20.00%
 
14
 
9,343

 
300,028

 
1,211

 
233

Cameron Village, LLC (Cameron)
30.00%
 
1
 
12,114

 
100,625

 
3,393

 
1,008

RegCal, LLC (RegCal) (1)
25.00%
 
7
 
13,354

 
149,457

 
4,012

 
966

Regency Retail Partners, LP (the Fund) (2)
20.00%
 
 

 

 
171

 
27

US Regency Retail I, LLC (USAA) (1)
20.01%
 
8
 
806

 
115,660

 
2,872

 
567

Other investments in real estate partnerships
50.00%
 
6
 
34,459

 
113,189

 
27,602

 
13,311

Total investments in real estate partnerships
 
 
120
 
$
333,167

 
2,807,502

 
79,466

 
31,270


(1) This partnership agreement has a unilateral right for election to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company has applied the Restricted Gain Method to determine the amount of gain recognized on property sales to this partnership. During 2014, the Company did not sell any properties to this real estate partnership.

(2) On August 13, 2013, the Fund sold 100% of its interest in its entire portfolio of shopping centers to a third party. The Fund was dissolved following the final distribution of proceeds made in 2014.


101

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




 

 
December 31, 2013
 
Ownership
 
Number of Properties
 
Total Investment
 
Total Assets of the Partnership
 
Net Income of the Partnership
 
The Company's Share of Net Income of the Partnership
GRI - Regency, LLC (GRIR) (1)
40.00%
 
75
 
$
250,118

 
1,870,660

 
31,705

 
12,789

Macquarie CountryWide-Regency III, LLC (MCWR III) (1)(2)
—%
 
 

 

 
213

 
53

Columbia Regency Retail Partners, LLC (Columbia I) (1)
20.00%
 
10
 
16,735

 
204,759

 
8,605

 
1,727

Columbia Regency Partners II, LLC (Columbia II) (1)
20.00%
 
15
 
8,797

 
295,829

 
6,290

 
1,274

Cameron Village, LLC (Cameron)
30.00%
 
1
 
16,678

 
103,805

 
2,198

 
662

RegCal, LLC (RegCal) (1)
25.00%
 
8
 
15,576

 
159,255

 
1,300

 
332

Regency Retail Partners, LP (the Fund) (3)
20.00%
 
 
1,793

 
9,325

 
9,234

 
7,749

US Regency Retail I, LLC (USAA) (1)
20.00%
 
8
 
1,391

 
118,865

 
2,387

 
487

BRE Throne Holdings, LLC (BRET) (4)
—%
 
 

 

 
4,499

 
4,499

Other investments in real estate partnerships
50.00%
 
9
 
47,761

 
177,101

 
4,619

 
2,146

Total investments in real estate partnerships
 
 
126
 
$
358,849

 
2,939,599

 
71,050

 
31,718


(1) This partnership agreement has a unilateral right for election to dissolve the partnership and receive a DIK upon liquidation; therefore, the Company has applied the Restricted Gain Method to determine the amount of gain recognized on property sales to this partnership. During 2013, the Company did not sell any properties to this real estate partnership.

(2) As of December 31, 2012, our ownership interest in MCWR III was 24.95%. The liquidation of MCWR III was complete effective March 20, 2013.

(3) On August 13, 2013, the Fund sold 100% of its interest in its entire portfolio of shopping centers to a third party. The Fund was dissolved following the final distribution of proceeds made in 2014.

(4) On October 23, 2013, the Company sold 100% of its interest in the BRET unconsolidated real estate partnership and received a capital distribution of $47.5 million, plus its share of the undistributed income of the partnership and an early redemption premium. Regency no longer has any interest in the BRET partnership.

In addition to earning its pro-rata share of net income or loss in each of these real estate partnerships, the Company received recurring, market-based fees for asset management, property management, and leasing, as well as fees for investment and financing services, totaling $23.0 million, $24.2 million, and $25.4 million for the years ended December 31, 2014, 2013, and 2012, respectively.
















102

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





The summarized balance sheet information for the investments in real estate partnerships, on a combined basis, is as follows (in thousands): 
 
 
December 31,
 
 
2014
 
2013
 
 
 
 
 
Investments in real estate, net
 
$
2,620,583

 
2,742,591

Acquired lease intangible assets, net
 
50,763

 
52,350

Other assets
 
136,156

 
144,658

Total assets
 
$
2,807,502

 
2,939,599

 
 
 
 
 
Notes payable
 
$
1,462,790

 
1,519,943

Acquired lease intangible liabilities, net
 
28,991

 
31,148

Other liabilities
 
67,093

 
66,829

Capital - Regency
 
442,050

 
468,099

Capital - Third parties
 
806,578

 
853,580

Total liabilities and capital
 
$
2,807,502

 
2,939,599


The following table reconciles the Company's capital in unconsolidated partnerships to the Company's investments in real estate partnerships (in thousands):
 
 
December 31,
 
 
2014
 
2013
Capital - Regency
 
$
442,050

 
468,099

add: Investment in Indian Springs at Woodlands, Ltd. (1)
 

 
4,094

less: Impairment
 
(1,300
)
 
(5,880
)
less: Ownership percentage or Restricted Gain Method deferral
 
(29,380
)
 
(29,261
)
less: Net book equity in excess of purchase price
 
(78,203
)
 
(78,203
)
Investments in real estate partnerships
 
$
333,167

 
358,849


(1) On December 16, 2014, Regency acquired the remaining 50% interest and gained control of this previously unconsolidated investment in real estate partnership that owns a single operating property. As the operating property constitutes a business, acquisition of control was accounted for as a step acquisition and the net assets acquired were recognized at fair value. A gain of $18.3 million was recognized upon remeasurement as the difference between the fair value and carrying value of the Company's previously held equity interest, using an income approach to measure fair value.



















103

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014






The revenues and expenses for the investments in real estate partnerships, on a combined basis, are summarized as follows (in thousands): 
 
 
Year ended December 31,
 
 
2014
 
2013
 
2012
Total revenues
 
$
361,103

 
378,670

 
387,908

Operating expenses:
 
 
 
 
 
 
Depreciation and amortization
 
117,780

 
125,363

 
128,946

Operating and maintenance
 
55,216

 
55,423

 
55,394

General and administrative
 
5,503

 
7,385

 
7,549

Real estate taxes
 
42,380

 
45,451

 
46,395

Other operating expenses
 
2,234

 
1,725

 
3,521

Total operating expenses
 
223,113

 
235,347

 
241,805

Other expense (income):
 
 
 
 
 
 
Interest expense, net
 
84,155

 
95,505

 
104,694

Gain on sale of real estate
 
(28,856
)
 
(15,695
)
 
(40,437
)
Provision for impairment
 
2,123

 

 
3,775

Early extinguishment of debt
 
114

 
(1,780
)
 
967

Preferred return on equity investment
 

 
(4,499
)
 
(2,211
)
Other expense (income)
 
988

 
(1,258
)
 
51

Total other expense (income)
 
58,524

 
72,273

 
66,839

Net income of the Partnership
 
$
79,466

 
71,050

 
79,264

The Company's share of net income of the Partnership
 
$
31,270

 
31,718

 
23,807


104

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





Acquisitions

The following table provides a summary of shopping centers and land parcels acquired through our unconsolidated co-investment partnerships (in thousands):
Year ended December 31, 2014
Date Purchased
 
Property Name
 
City/State
 
Property Type
 
Co-investment Partner
 
Ownership %
 
Purchase Price
 
Debt Assumed, Net of Premiums
 
Intangible Assets
 
Intangible Liabilities
12/30/2014
 
Broadway
 
Seattle, WA
 
Operating
 
Columbia II
 
20.00%
 
$
43,000

 

 
7,604

 
3,487

Total property acquisitions
 
$
43,000

 

 
7,604

 
3,487


Year ended December 31, 2013
Date Purchased
 
Property Name
 
City/State
 
Property Type
 
Co-investment Partner
 
Ownership %
 
Purchase Price
 
Debt Assumed, Net of Premiums
 
Intangible Assets
 
Intangible Liabilities
7/23/2013
 
Shoppes of Burnt Mills
 
Silver Spring, MD
 
Operating
 
Columbia II
 
20.00%
 
$
13,600

 
7,496

 
8,438

 
332

Total property acquisitions
 
$
13,600

 
7,496

 
8,438

 
332


Dispositions

The following table provides a summary of shopping centers and land out-parcels disposed of through our unconsolidated co-investment partnerships during the years ended December 31, 2014, 2013, and 2012 (dollars in thousands):
 
 
2014
 
2013
 
2012
Proceeds from sale of real estate investments
 
$
88,106

 
145,295

 
119,275

Gain on sale of real estate
 
$
28,856

 
15,695

 
40,437

The Company's share of gain on sale of real estate
 
$
13,615

 
3,847

 
8,962

Number of operating properties sold
 
6
 
15
 
7
Number of land out-parcels sold
 
2
 
3
 
1


105

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




Notes Payable

As of December 31, 2014, scheduled principal repayments on notes payable of the investments in real estate partnerships were as follows (in thousands): 
Scheduled Principal Payments by Year:
 
Scheduled
Principal
Payments
 
Mortgage Loan
Maturities
 
Unsecured
Maturities
 
Total
 
Regency’s
Pro-Rata
Share
2015
 
$
19,685

 
59,803

 

 
79,488

 
24,292

2016
 
17,135

 
305,076

 

 
322,211

 
113,155

2017
 
17,517

 
77,385

 
21,460

 
116,362

 
26,214

2018
 
18,696

 
67,021

 

 
85,717

 
27,655

2019
 
17,934

 
65,939

 

 
83,873

 
21,618

Beyond 5 Years
 
34,827

 
741,622

 

 
776,449

 
294,463

Unamortized debt premiums (discounts), net
 

 
(1,310
)
 

 
(1,310
)
 
(617
)
Total notes payable
 
$
125,794

 
1,315,536

 
21,460

 
1,462,790

 
506,780


These loans are all non-recourse and Regency's proportionate share was $506.8 million at December 31, 2014. Maturities will be repaid from proceeds from refinancing and partner capital contributions. The Company is obligated to contribute its pro-rata share to fund maturities if the loans are not refinanced. The Company believes that its partners are financially sound and have sufficient capital or access thereto to fund future capital requirements.  In the event that a co-investment partner was unable to fund its share of the capital requirements of the co-investment partnership, the Company would have the right, but not the obligation, to loan the defaulting partner the amount of its capital call. 

5.
Notes Receivable
The Company had notes receivable of $12.1 million and $12.0 million at December 31, 2014 and 2013, respectively. The loans have fixed interest rates of 7.0% with maturity dates through January 2019 and are secured by real estate held as collateral. 

6.
Acquired Lease Intangibles

The Company had the following acquired lease intangibles, net of accumulated amortization and accretion (in thousands):
 
December 31,
 
2014
 
2013
In-place leases, net
$
40,145

 
33,049

Above-market leases, net
10,549

 
10,074

Above-market ground leases, net
1,671

 
1,682

Acquired lease intangible assets, net
$
52,365

 
44,805

 
 
 
 
Acquired lease intangible liabilities, net
$
32,143

 
26,729



106

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




The following table provides a summary of amortization and net accretion amounts from acquired lease intangibles (dollar amounts in thousands):
 
Year ended December 31,
 
2014
 
2013
 
2012
 
Remaining Weighted Average Amortization/Accretion Period
 
 
 
 
 
 
 
(in years)
In-place lease amortization
$
10,365

 
7,441

 
4,307

 
5.9
Above-market lease amortization (1)
1,795

 
1,246

 
739

 
7.4
Above-market ground lease amortization (3)
23

 
22

 
23

 
82.2
Acquired lease intangible asset amortization
$
12,183

 
8,709

 
5,069

 
 
 
 
 
 
 
 
 
 
Acquired lease intangible liability accretion (2)(3)
$
4,590

 
3,726

 
1,950

 
12.5
(1) Amounts are recorded as a reduction to minimum rent.
(2) Amounts are recorded as an increase to minimum rent.
(3) Above and below market ground lease amortization and accretion are recorded as an offset to other operating expenses.
The estimated aggregate amortization and net accretion amounts from acquired lease intangibles for the next five years are as follows (in thousands):
 Year Ending December 31,
Amortization Expense
 
Net Accretion
2015
$
10,603

 
3,888

2016
8,569

 
3,393

2017
6,589

 
3,088

2018
5,354

 
2,609

2019
4,374

 
2,417

7.    Income Taxes
    
The following table summarizes the tax status of dividends paid on our common shares:
 
Year ended December 31,
 
2014
 
2013
 
2012
Dividend per share
$
1.88

 
1.85

 
1.85

Ordinary income
70%
 
70%
 
71%
Capital gain
16%
 
6%
 
1%
Return of capital
14%
 
—%
 
28%
Qualified dividend income
—%
 
24%
 
—%

RRG is subject to federal and state income taxes and files separate tax returns. Income tax expense consists of the following (in thousands):
 
Year ended December 31,
 
2014
 
2013
 
2012
Income tax expense (benefit):
 
 
 
 
 
Current
$
1,152

(1) 

 
97

Deferred

 

 
13,727

Total income tax expense (benefit)
$
1,152

 

 
13,824

(1) Includes $2.2 million of tax expense presented with Gain on sale of real estate, net of tax on the Consolidated Statements of Operations.


107

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




Income tax expense (benefit) is included in the Consolidated Statements of Operations as either income tax expense (benefit) of taxable REIT subsidiaries, if the related income is from continuing operations, or is presented net of gains on sale of real estate, if the taxable income is from the gain on sale. Income tax expense (benefit) is included in discontinued operations, net of gains on sale of real estate, if the taxable income is from the gain on sale that qualified as discontinued operations, as follows (in thousands):
 
Year ended December 31,
 
2014
 
2013
 
2012
Income tax expense (benefit) from:
 
 
 
 
 
Continuing operations
$
1,152

(1) 

 
13,224

Discontinued operations

 

 
600

Total income tax expense (benefit)
$
1,152

 

 
13,824

(1) Includes $2.2 million of tax expense presented with Gain on sale of real estate, net of tax on the Consolidated Statements of Operations.

Income tax expense (benefit) differed from the amounts computed by applying the U.S. Federal income tax rate of 34% to pretax income of RRG as follows (in thousands):
 
Year ended December 31,
 
2014
 
2013
 
2012
Computed expected tax expense (benefit)
$
5,140

 
1,677

 
(2,099
)
Increase (decrease) in income tax resulting from state taxes
(629
)
 
98

 
(122
)
Valuation allowance
(3,301
)
 
(1,511
)
 
15,635

All other items
(58
)
 
(264
)
 
410

Total income tax expense
1,152

 

 
13,824

Amounts attributable to discontinued operations

 

 
600

Amounts attributable to continuing operations
$
1,152

(1) 

 
13,224

(1) Includes $2.2 million of tax expense presented with Gain on sale of real estate, net of tax on the Consolidated Statements of Operations.

The following table represents the Company's net deferred tax assets recorded in accounts payable and other liabilities in the accompanying Consolidated Balance Sheets (in thousands):
 
December 31,
 
2014
 
2013
Deferred tax assets
 
 
 
Investments in real estate partnerships
$
8,427

 
8,314

Provision for impairment
3,299

 
3,273

Deferred interest expense
2,538

 
4,295

Capitalized costs under Section 263A
1,832

 
2,184

Net operating loss carryforward

 
2,019

Employee benefits
385

 
488

Other
1,370

 
887

Deferred tax assets
17,851

 
21,460

Valuation allowance
(17,302
)
 
(20,603
)
Deferred tax assets, net
549

 
857

Deferred tax liabilities
 
 
 
Straight line rent
549

 
537

Depreciation

 
320

Deferred tax liabilities
549

 
857

Net deferred tax assets
$

 



108

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




During the years ended December 31, 2014 and 2013, the net change in the total valuation allowance was $3.3 million and $1.5 million, respectfully.

The evaluation of the recoverability of the deferred tax assets and the need for a valuation allowance requires the Company to weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be realized. The Company's framework for assessing the recoverability of deferred tax assets includes weighing recent taxable income (loss), projected future taxable income (loss) of the character necessary to realize the deferred tax assets, the carryforward periods for the net operating loss, including the effect of reversing taxable temporary differences, and prudent feasible tax planning strategies that would be implemented, if necessary, to protect against the loss of deferred tax assets. As of December 31, 2014, the projected future taxable income and unpredictable nature of potential property sales with built in losses within the TRS caused the Company to determine that it is still more likely than not that the net deferred tax assets will not be realized. As a result, the deferred tax asset continues to be fully reserved.

The Company accounts for uncertainties in income tax law in accordance with FASB ASC Topic 740, under which tax positions shall initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open tax years based on an assessment of many factors including past experience and interpretations of tax laws applied to the facts of each matter. Federal and state tax returns are open from 2011 and forward for the Company.

8.    Available-for-Sale Securities

During the year ended ended December 31, 2014, the Company acquired shares of AmREIT common stock for a total investment of $14.3 million. Subsequent to AmREIT’s announcement on October 31, 2014 that it had entered into a definitive agreement to be acquired by Edens Investment Trust, Regency liquidated its equity position in AmREIT for total proceeds of $22.1 million, which resulted in realized gains of $7.8 million, determined based on specific identification. In connection with its efforts, the Company incurred $1.8 million of pursuit costs, which are recognized within other operating expenses in the accompanying Consolidated Statements of Operations. The Company did not have any available-for-sale securities during the years ended December 31, 2013 or 2012.

9.    Notes Payable and Unsecured Credit Facilities

The Parent Company does not have any indebtedness, but guarantees all of the unsecured debt and 15.5% of the secured debt of the Operating Partnership. The Company’s debt outstanding as of December 31, 2014 and 2013 consists of the following (in thousands):

 
2014
 
2013
Notes payable:
 
 
 
Fixed rate mortgage loans
$
518,993

 
444,245

Variable rate mortgage loans (1)
29,839

 
37,100

Fixed rate unsecured loans
1,397,525

 
1,298,352

Total notes payable
1,946,357

 
1,779,697

Unsecured credit facilities:
 
 
 
Line

 

Term Loan
75,000

 
75,000

Total unsecured credit facilities
75,000

 
75,000

Total debt outstanding
$
2,021,357

 
1,854,697

(1) Interest rate swaps are in place to fix the interest rates on these variable rate mortgage loans. See note 10.

Notes Payable


109

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




Notes payable consist of mortgage loans secured by properties and unsecured public debt. Mortgage loans may be prepaid, but could be subject to yield maintenance premiums. Mortgage loans are generally due in monthly installments of principal and interest or interest only, whereas, interest on unsecured public debt is payable semi-annually.

The Company is required to comply with certain financial covenants for its unsecured public debt as defined in the indenture agreements such as the following ratios: Consolidated Debt to Consolidated Assets, Consolidated Secured Debt to Consolidated Assets, Consolidated Income for Debt Service to Consolidated Debt Service, and Unencumbered Consolidated Assets to Unsecured Consolidated Debt. As of December 31, 2014, management of the Company believes it is in compliance with all financial covenants for its unsecured public debt.

As of December 31, 2014, the key terms of the Company's fixed rate notes payable are as follows:
 
 
 
 
Fixed Interest Rates
 
 
Maturing Through
 
Minimum
 
Maximum
 
Weighted Average
Secured mortgage loans
 
2032
 
3.30%
 
8.40%
 
5.57%
Unsecured public debt
 
2024
 
3.75%
 
6.00%
 
5.17%

As of December 31, 2014, the Company had one variable rate mortgage loan, which has an interest rate swap in place for the initial principal balance effectively fixing the interest rate through the maturity of the loan (as discussed in note 10), with key terms as follows ($ in thousands):
Balance
 
Maturity
 
Variable Interest Rate
$
29,839

 
10/16/2020
 
1 month LIBOR plus 150 basis points

Unsecured Credit Facilities

The Company has an unsecured line of credit commitment (the "Line") and an unsecured term loan commitment (the "Term Loan") under separate credit agreements, both with Wells Fargo Bank and a syndicate of other banks.

The Company is required to comply with certain financial covenants as defined in the Line and Term Loan credit agreements, such as Minimum Tangible Net Worth, Ratio of Indebtedness to Total Asset Value ("TAV"), Ratio of Unsecured Indebtedness to Unencumbered Asset Value, Ratio of Adjusted Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) to Fixed Charges, Ratio of Secured Indebtedness to TAV, Ratio of Unencumbered Net Operating Income to Unsecured Interest Expense, and other covenants customary with this type of unsecured financing. As of December 31, 2014, management of the Company believes it is in compliance with all financial covenants for the Line and Term Loan.

As of December 31, 2014, the key terms of the Line and Term Loan are as follows (dollars in thousands):
 
Total Capacity
 
Remaining Capacity
 
Maturity
 
Variable Interest Rate (6)
 
Fee
 
Line
$
800,000

(1) 
$
794,096

(2) 
9/4/2016
(3) 
LIBOR plus 117.5 basis points
 
0.225%
(4) 
Term Loan
165,000

(5) 
90,000

 
6/27/2019
 
LIBOR plus 115 basis points
 
0.200%
(7) 
(1) The Company has the ability to increase the Line through an accordion feature to $1.0 billion.
(2) Borrowing capacity is reduced by the balance of outstanding borrowings and commitments under outstanding letters of credit.
(3) Maturity is subject to a one-year extension at the Company's option.
(4) The facility fee is subject to an adjustment based on the higher of the Company's corporate credit ratings from Moody's and S&P.
(5) The Company has the ability to utilize the additional $90.0 million through August 31, 2015.
(6) Interest rate is subject to Regency maintaining its corporate credit and senior unsecured ratings at BBB.
(7) Subject to a fee of 0.20% per annum on the undrawn balance.




110

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014








As of December 31, 2014, scheduled principal payments and maturities on notes payable and unsecured credit facilities were as follows (in thousands): 
Scheduled Principal Payments and Maturities by Year:
Scheduled
Principal
Payments
 
Mortgage Loan
Maturities
 
Unsecured
Maturities (1)
 
Total
2015
$
6,587

 
75,896

 
350,000

 
432,483

2016
6,135

 
41,442

 

 
47,577

2017
5,399

 
116,207

 
400,000

 
521,606

2018
4,452

 
57,358

 

 
61,810

2019
3,443

 
106,000

 
75,000

 
184,443

Beyond 5 Years
22,647

 
96,039

 
650,000

 
768,686

Unamortized debt premiums (discounts), net

 
7,227

 
(2,475
)
 
4,752

Total notes payable
$
48,663

 
500,169

 
1,472,525

 
2,021,357

(1) Includes unsecured public debt and unsecured credit facilities.

10.    Derivative Financial Instruments

The following table summarizes the terms and fair values of the Company's derivative financial instruments, as well as their classification on the Consolidated Balance Sheets (dollars in thousands): 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value at December 31,
 
 
 
 
 
 
 
 
 
 
 
 
Assets (3)
 
Liabilities (3)
Effective Date
 
Maturity Date
 
Mandatory Settlement Date (1)
 
Notional Amount
 
Bank Pays Variable Rate of
 
Regency Pays Fixed Rate of
 
2014
 
2013
 
2014
 
2013
10/1/11
 
9/1/14
 
N/A
 
$
9,000

 
1 Month LIBOR
 
0.760%
 
$

 

 
$

 
(34
)
10/16/13
 
10/16/20
 
N/A
 
28,100

 
1 Month LIBOR
 
2.196%
 

 
82

 
(764
)
 

4/15/14
 
4/15/24
 
10/15/14
(2) 
75,000

 
3 Month LIBOR
 
2.087%
 

 
7,476

 

 

4/15/14
 
4/15/24
 
10/15/14
(2) 
50,000

 
3 Month LIBOR
 
2.088%
 

 
4,978

 

 

4/15/14
 
4/15/24
 
10/15/14
(2) 
35,000

 
3 Month LIBOR
 
2.873%
 

 
1,036

 

 

4/15/14
 
4/15/24
 
10/15/14
(2) 
60,000

 
3 Month LIBOR
 
2.864%
 

 
1,821

 

 

8/1/15
 
8/1/25
 
2/1/16
 
75,000

 
3 Month LIBOR
 
2.479%
 

 
8,516

 
(289
)
 

8/1/15
 
8/1/25
 
2/1/16
 
50,000

 
3 Month LIBOR
 
2.479%
 

 
5,670

 
(193
)
 

8/1/15
 
8/1/25
 
2/1/16
 
50,000

 
3 Month LIBOR
 
2.479%
 

 
5,658

 
(193
)
 

8/1/15
 
8/1/25
 
2/1/16
 
45,000

 
3 Month LIBOR
 
3.412%
 

 

 
(3,964
)
 

6/15/17
 
6/15/27
 
12/15/17
 
20,000

 
3 Month LIBOR
 
3.488%
 

 

 
(1,227
)
 

6/15/17
 
6/15/27
 
12/15/17
 
100,000

 
3 Month LIBOR
 
3.480%
 

 

 
(6,080
)
 

6/15/17
 
6/15/27
 
12/15/17
 
100,000

 
3 Month LIBOR
 
3.480%
 

 

 
(6,084
)
 

     Total derivative financial instruments
 
$

 
35,237

 
(18,794
)
 
(34
)
(1) Represents the earliest date which the counterparty has the right to require cash settlement of the derivative. The Company may settle these swaps at any time before the mandatory settlement date.
(2) The Company issued $250 million of 3.75%, fixed rate ten year unsecured bonds in May 2014. Prior to issuing the bonds, the Company locked in the ten year treasury rate using forward starting interest rate swaps to mitigate the risk of interest rates rising. In connection with the issuance of the new bonds, the Company terminated and settled these swaps, resulting in net cash proceeds of $4.6 million. These proceeds will offset bond interest expense over the life of the bonds, resulting in a lower effective interest rate of 3.59%.
(3) Derivatives in an asset position are included within Other Assets in the accompanying Consolidated Balance Sheets, while those in a liability position are included within Accounts Payable and Other Liabilities.

111

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014






These derivative financial instruments are all interest rate swaps, which are designated and qualify as cash flow hedges. The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges. The Company has master netting agreements, however the Company does not have multiple derivatives subject to a single master netting agreement with the same counterparties. Therefore none are offset in the accompanying Consolidated Balance Sheets.
The Company expects to issue new debt in 2015 and 2017. In order to mitigate the risk of interest rates rising before new borrowings are obtained, the Company previously entered into $220 million of forward starting interest rate swaps to partially hedge the new debt expected to be issued in 2015 and another $220 million of forward starting interest rate swaps to partially hedge the new debt expected to be issued in 2017. These interest rate swaps lock in the 10-year treasury rate and swap spread at a weighted average fixed rate of 2.67% and 3.48%, respectively. A current market based credit spread applicable to Regency will be added to the locked in fixed rate at time of issuance that will determine the final bond yield.

The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive income (loss) ("AOCI") and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings within interest expense.

The following table represents the effect of the derivative financial instruments on the accompanying consolidated financial statements (in thousands):
Derivatives in FASB
ASC Topic 815 Cash
Flow Hedging
Relationships:
Amount of Gain (Loss)
Recognized in Other Comprehensive Loss on
Derivative (Effective
Portion)
 
Location of Gain
(Loss) Reclassified
from AOCI into Income
(Effective Portion)
 
Amount of Gain (Loss)
Reclassified from
AOCI into
Income (Effective
Portion)
 
Location of Gain or
(Loss) Recognized in
Income on  Derivative
(Ineffective Portion and
Amount Excluded from
Effectiveness Testing)
 
Amount of Gain or
(Loss) Recognized in
Income on Derivative
(Ineffective Portion and
Amount Excluded from
Effectiveness Testing)
 
Year ended December 31,
 
 
 
Year ended December 31,
 
 
 
Year ended December 31,
 
2014
 
2013
 
2012
 
 
 
2014
 
2013
 
2012
 
 
 
2014
 
2013
 
2012
Interest rate swaps
$
(49,968
)
 
30,985

 
4,220

 
Interest expense
 
$
(9,353
)
 
(9,433
)
 
(9,491
)
 
Other expenses
 
$

 

 


As of December 31, 2014, the Company expects $8.7 million of net deferred losses on derivative instruments accumulated in other comprehensive income to be reclassified into earnings during the next 12 months, of which $8.0 million is related to previously settled swaps.

11.    Fair Value Measurements

(a) Disclosure of Fair Value of Financial Instruments

All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management's estimation, reasonably approximates their fair values, except for the following (in thousands):     
 
December 31,
 
2014
 
2013
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Financial assets:
 
 
 
 
 
 
 
Notes receivable
$
12,132

 
11,980

 
$
11,960

 
11,600

Financial liabilities:
 
 
 
 
 
 
 
Notes payable
$
1,946,357

 
2,116,000

 
$
1,779,697

 
1,936,400

Unsecured credit facilities
$
75,000

 
75,000

 
$
75,000

 
75,400


The table above reflects carrying amounts in the accompanying Consolidated Balance Sheets under the indicated captions. The above fair values represent the amounts that would be received from selling those assets or that would

112

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




be paid to transfer those liabilities in an orderly transaction between market participants as of December 31, 2014 and 2013. These fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company's own judgments about the assumptions that market participants would use in pricing the asset or liability.

The Company develops its judgments based on the best information available at the measurement date, including expected cash flows, appropriately risk-adjusted discount rates, and available observable and unobservable inputs. Service providers involved in fair value measurements are evaluated for competency and qualifications on an ongoing basis. The Company's valuation policies and procedures are determined by its Finance Group, which reports to the Chief Financial Officer, and the results of material fair value measurements are discussed with the Audit Committee of the Board of Directors on a quarterly basis. As considerable judgment is often necessary to estimate the fair value of these financial instruments, the fair values presented above are not necessarily indicative of amounts that will be realized upon disposition of the financial instruments.

The following methods and assumptions were used to estimate the fair value of these financial instruments:

Notes Receivable

The fair value of the Company's notes receivable is estimated by calculating the present value of future contractual cash flows discounted at interest rates available for notes of the same terms and maturities, adjusted for counter-party specific credit risk. The fair value of notes receivable was determined primarily using Level 3 inputs of the fair value hierarchy, which considered counter-party credit risk and loan to value ratio on the underlying property securing the note receivable.

Notes Payable

The fair value of the Company's notes payable is estimated by discounting future cash flows of each instrument at interest rates that reflect the current market rates available to the Company for debt of the same terms and maturities. Fixed rate loans assumed in connection with real estate acquisitions are recorded in the accompanying consolidated financial statements at fair value at the time the property is acquired. The fair value of the notes payable was determined using Level 2 inputs of the fair value hierarchy.

Unsecured Credit Facilities

The fair value of the Company's unsecured credit facilities is estimated based on the interest rates currently offered to the Company by financial institutions. The fair value of the credit facilities was determined using Level 2 inputs of the fair value hierarchy.

The following interest rates were used by the Company to estimate the fair value of its financial instruments:
 
 
December 31,
 
 
2014
 
2013
 
 
Low
 
High
 
Low
 
High
Notes receivable
 
7.4%
 
7.4%
 
7.8%
 
7.8%
Notes payable
 
0.9%
 
3.4%
 
3.0%
 
3.5%
Unsecured credit facilities
 
1.3%
 
1.3%
 
1.4%
 
1.4%

(b) Fair Value Measurements

The following financial instruments are measured at fair value on a recurring basis:

Trading Securities Held in Trust

The Company has investments in marketable securities that are classified as trading securities held in trust on the accompanying Consolidated Balance Sheets. The fair value of the trading securities held in trust was determined using quoted prices in active markets, considered Level 1 inputs of the fair value hierarchy. Changes in the value

113

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




of trading securities are recorded within net investment (income) loss in the accompanying Consolidated Statements of Operations.




Interest Rate Derivatives

The fair value of the Company's interest rate derivatives is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments on the overall valuation adjustments are not significant to the overall valuation of its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy.

The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis (in thousands):
 
Fair Value Measurements as of December 31, 2014
 
 
 
Quoted Prices in Active Markets for Identical Assets
 
Significant Other Observable Inputs
 
Significant Unobservable Inputs
 
Balance
 
(Level 1)
 
(Level 2)
 
(Level 3)
Assets:
 
 
 
 
 
 
 
Trading securities held in trust
$
28,134

 
28,134

 

 

Interest rate derivatives

 

 

 

Total
$
28,134

 
28,134

 

 

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Interest rate derivatives
$
(18,794
)
 

 
(18,794
)
 


 
Fair Value Measurements as of December 31, 2013
 
 
 
Quoted Prices in Active Markets for Identical Assets
 
Significant Other Observable Inputs
 
Significant Unobservable Inputs
 
Balance
 
(Level 1)
 
(Level 2)
 
(Level 3)
Assets:
 
 
 
 
 
 
 
Trading securities held in trust
$
26,681

 
26,681

 

 

Interest rate derivatives
35,237

 

 
35,237

 

Total
61,918

 
26,681

 
35,237

 

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Interest rate derivatives
$
(34
)
 

 
(34
)
 




114

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





The following tables present assets that were measured at fair value on a nonrecurring basis (in thousands):

 
Fair Value Measurements during the
 
year ended December 31, 2014
 
 
 
Quoted Prices in Active Markets for Identical Assets
 
Significant Other Observable Inputs
 
Significant Unobservable Inputs
 
Total Gains (Losses)
Assets:
Balance
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Long-lived asset held and used
 
 
 
 
 
 
 
 
 
Land
$
397

 

 

 
397

 
(175
)

 
Fair Value Measurements during the
 
year ended December 31, 2013
 
 
 
Quoted Prices in Active Markets for Identical Assets
 
Significant Other Observable Inputs
 
Significant Unobservable Inputs
 
Total Gains (Losses)
Assets:
Balance
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Long-lived asset held and used
 
 
 
 
 
 
 
 
 
Operating and development properties
$
4,686

 

 

 
4,686

 
(6,000
)

Long-lived assets held and used are comprised primarily of real estate. Fair value for the long-lived assets held and used measured using Level 3 inputs was determined through the use of market comparables to estimate anticipated sales value. The income approach estimates an income stream for a property (typically 10 years) and discounts this income plus a reversion (presumed sale) into a present value at a risk adjusted rate. Yield rates and growth assumptions utilized in this approach are derived from property specific information, market transactions, and other financial and industry data. The terminal cap rate and discount rate are significant inputs to this valuation.
During the year ended December 31, 2014, the Company recognized a $175,000 impairment on two parcels of land held at December 31, 2014, with the fair value measured based on the anticipated sales price of the land.

During the year ended December 31, 2013, the Company recognized a $6 million impairment on a single operating property as a result of an unoccupied anchor declaring bankruptcy, and the inability of the Company, at that time, to re-lease the anchor space. The following are the key inputs used in determining the fair value of real estate measured using Level 3 inputs during the year ended December 31, 2013:
 
 
2013
Overall cap rates
 
8.0%
Rental growth rates
 
0.0%
Discount rates
 
9.0%
Terminal cap rates
 
8.5%

Changes in these inputs could result in a change in the valuation of the real estate and a change in the impairment loss recognized during the period.

115

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





12.    Equity and Capital
Preferred Stock of the Parent Company
Terms and conditions of the preferred stock outstanding are summarized as follows: 
 
 
Preferred Stock Outstanding as of December 31, 2014 and 2013
 
 
Date of Issuance
 
Shares Issued and Outstanding
 
Liquidation Preference
 
Distribution Rate
 
Callable By Company
Series 6
 
2/16/2012
 
10,000,000

 
$
250,000,000

 
6.625%
 
2/16/2017
Series 7
 
8/23/2012
 
3,000,000

 
75,000,000

 
6.000%
 
8/23/2017
 
 
 
 
13,000,000

 
$
325,000,000

 
 
 
 
The Series 6 and 7 preferred shares are perpetual, absent a change in control of the Parent Company, are not convertible into common stock of the Parent Company, and are redeemable at par upon the Company’s election beginning 5 years after the issuance date. None of the terms of the preferred stock contain any unconditional obligations that would require the Company to redeem the securities at any time or for any purpose.

Common Stock of the Parent Company

Issuances:

In August 2013, the Parent Company filed a prospectus supplement with respect to a new ATM equity offering program, which ended the prior program established in August 2012. The August 2013 program has similar terms and conditions as the August 2012 program, and authorizes the Parent Company to sell up to $200 million of common stock. As of December 31, 2013, $198.4 million in common stock remained available for issuance under this ATM equity program.

In March 2014, the Parent Company filed a prospectus supplement with the Securities and Exchange Commission with respect to a new ATM equity offering program, ending the prior program established in August 2013. The March 2014 program has similar terms and conditions as the August 2013 program and authorizes the Parent Company to sell up to $200.0 million of common stock at prices determined by the market at the time of sale. As of December 31, 2014, $96.0 million in common stock remained available for issuance under this ATM equity program.

The following shares were issued under the ATM equity program (in thousands, except share data):
 
Year ended December 31,
 
2014
 
2013
Shares issued
1,730

 
1,899

Weighted average price per share
$
60.00

 
53.35

Gross proceeds
$
103,821

 
101,342

Commissions
$
1,369

 
1,521

Issuance costs
$

 
68


In January 2015, the Parent Company entered into a forward sale and an underwritten public offering of 2.875 million shares of its common stock at a price of $67.40 per share which will result in gross proceeds of approximately $193.8 million, before any underwriting discount and offering expenses. The forward sale will settle on one or more dates occurring no later than approximately 12 months after the date of the offering. The Company intends to use any net proceeds that it receives upon settlement of the forward sale agreement to fund development and redevelopment activities, fund potential acquisition opportunities, repay maturing debts, and/or for general corporate purposes.





116

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





Preferred Units of the Operating Partnership

Preferred units for the Parent Company are outstanding in relation to the Parent Company's preferred stock, as discussed above.
 
Common Units of the Operating Partnership

Issuances:

Common units were issued to the Parent Company in relation to the Parent Company's issuance of common stock, as discussed above.

General Partner

The Parent Company, as general partner, owned the following Partnership Units outstanding (in thousands):
 
 
December 31,
 
 
2014
 
2013
Partnership units owned by the general partner
 
94,108

 
92,333

Total partnership units outstanding
 
94,262

 
92,499

Percentage of partnership units owned by the general partner
 
99.8%
 
99.8%

Limited Partners

The Operating Partnership had 154,170 and 165,796 limited Partnership Units outstanding as of December 31, 2014 and 2013, respectively.

Noncontrolling Interests of Limited Partners' Interests in Consolidated Partnerships

Limited partners’ interests in consolidated partnerships not owned by the Company are classified as noncontrolling interests on the accompanying Consolidated Balance Sheets of the Parent Company. Subject to certain conditions and pursuant to the conditions of the agreement, the Company has the right, but not the obligation, to purchase the other member’s interest or sell its own interest in these consolidated partnerships. As of December 31, 2014 and 2013, the noncontrolling interest in these consolidated partnerships was $31.8 million and $19.2 million, respectively.



117

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





Accumulated Other Comprehensive Income (Loss)

The following table presents changes in the balances of each component of AOCI (in thousands):
 
Controlling Interest
 
Noncontrolling Interest
 
Total
 
Cash Flow Hedges
 
Available-For-Sale Securities
 
AOCI
 
Cash Flow Hedges
 
Available-For-Sale Securities
 
AOCI
 
AOCI
Balance as of December 31, 2011
$
(71,429
)
 

 
(71,429
)
 
(583
)
 

 
(583
)
 
(72,012
)
Other comprehensive income before reclassifications
4,254

 

 
4,254

 
(34
)
 

 
(34
)
 
4,220

Amounts reclassified from accumulated other comprehensive income
9,460

 

 
9,460

 
31

 

 
31

 
9,491

Current period other comprehensive income, net
13,714

 

 
13,714

 
(3
)
 

 
(3
)
 
13,711

Balance as of December 31, 2012
$
(57,715
)
 

 
(57,715
)
 
(586
)
 

 
(586
)
 
(58,301
)
Other comprehensive income before reclassifications
30,879

 

 
30,879

 
106

 

 
106

 
30,985

Amounts reclassified from accumulated other comprehensive income
9,432

 

 
9,432

 
1

 

 
1

 
9,433

Current period other comprehensive income, net
40,311

 

 
40,311

 
107

 

 
107

 
40,418

Balance as of December 31, 2013
$
(17,404
)
 

 
(17,404
)
 
(479
)
 

 
(479
)
 
(17,883
)
Other comprehensive income before reclassifications
(49,524
)
 
7,752

 
(41,772
)
 
(444
)
 
13

 
(431
)
 
(42,203
)
Amounts reclassified from accumulated other comprehensive income
9,180

 
(7,752
)
 
1,428

 
173

 
(13
)
 
160

 
1,588

Current period other comprehensive income, net
(40,344
)
 

 
(40,344
)
 
(271
)
 

 
(271
)
 
(40,615
)
Balance as of December 31, 2014
$
(57,748
)
 

 
(57,748
)
 
(750
)
 

 
(750
)
 
(58,498
)

The following represents amounts reclassified out of AOCI into income (in thousands):
AOCI Component
Amount Reclassified from AOCI into Income
 
Affected Line Item Where Net Income is Presented
 
Year ended December 31,
 
 
 
2014
 
2013
 
2012
 
 
Interest rate swaps
$
9,353

 
9,433

 
9,491

 
Interest expense
Realized gains on sale of available-for-sale securities
(7,765
)
 

 

 
Net investment (income) loss

13.    Stock-Based Compensation

The Company recorded stock-based compensation in general and administrative expenses in the accompanying Consolidated Statements of Operations, the components of which are further described below (in thousands): 
 
Year ended December 31,
 
2014
 
2013
 
2012
Restricted stock (1)
$
12,161

 
14,141

 
11,526

Directors' fees paid in common stock (1)
208

 
238

 
259

Capitalized stock-based compensation (2)
(2,707
)
 
(2,188
)
 
(1,979
)
Stock-based compensation, net of capitalization
$
9,662

 
12,191

 
9,806


(1) Includes amortization of the grant date fair value of restricted stock awards over the respective vesting periods.
(2) Includes compensation expense specifically identifiable to development and leasing activities.

118

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





The Company established its stock-based compensation plan (the "Plan") under which the Board of Directors may grant stock options and other stock-based awards to officers, directors, and other key employees. The Plan allows the Company to issue up to 4.1 million shares in the form of the Parent Company's common stock or stock options. As of December 31, 2014, there were 2.8 million shares available for grant under the Plan either through stock options or restricted stock.

Stock Option Awards

Stock options are granted under the Plan with an exercise price equal to the Parent Company's stock's price at the date of grant. All stock options granted have ten-year lives, contain vesting terms of one to five years from the date of grant and some have dividend equivalent rights. The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton closed-form (“Black-Scholes”) option valuation model. The Company believes that the use of the Black-Scholes model meets the fair value measurement objectives of FASB ASC Topic 718 and reflects all substantive characteristics of the instruments being valued.

The following table summarizes stock option activity during the year ended December 31, 2014: 
 
 
Number of Options
 
Weighted Average Exercise Price
 
Weighted Average Remaining Contractual Term (in years)
 
Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2013
 
295,924

 
$
52.46

 
1.1
 
$
(1,822
)
Less: Exercised (1)
 
287,183

 
51.36

 
 
 
 
Less: Forfeited
 

 

 
 
 
 
Less: Expired
 

 

 
 
 
 
Outstanding of of December 31, 2014
 
8,741

 
$
88.45

 
2.1
 
$
(216
)
Vested and expected to vest as of December 31, 2014
 
8,741

 
$
88.45

 
2.1
 
$
(216
)
Exercisable as of December 31, 2014
 
8,741

 
$
88.45

 
2.1
 
$
(216
)

(1) The Company issues new shares to fulfill option exercises from its authorized shares available. The total intrinsic value of options exercised during the years ended December 31, 2014, 2013, and 2012 was approximately $1.3 million, $141,000, and $92,000, respectively.

There were no stock options granted during the years ended December 31, 2014, 2013, or 2012.

Restricted Stock Awards

The Company grants restricted stock under the Plan to its employees as a form of long-term compensation and retention. The terms of each restricted stock grant vary depending upon the participant's responsibilities and position within the Company. The Company's stock grants can be categorized as either time-based awards, performance-based awards, or market-based awards. All awards are valued at fair value, earn dividends throughout the vesting period, and have no voting rights. Fair value is measured using the grant date market price for all time-based or performance-based awards. Market based awards are valued using a Monte Carlo simulation to estimate the fair value based on the probability of satisfying the market conditions and the projected stock price at the time of payout, discounted to the valuation date over a three year performance period.  Assumptions include historic volatility over the previous three year period, risk-free interest rates, and Regency's historic daily return as compared to the market index. Since the award payout includes dividend equivalents and the total shareholder return includes the value of dividends, no dividend yield assumption is required for the valuation. Compensation expense is measured at the grant date and recognized on a straight-line basis over the requisite vesting period for the entire award.








119

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





The following table summarizes non-vested restricted stock activity during the year ended December 31, 2014: 

 
 
Number of Shares
 
Intrinsic Value (in thousands)
 
Weighted Average Grant Price
Non-vested as of December 31, 2013
 
685,697

 
 
 
 
Add: Time-based awards granted (1) (4)
 
143,055

 
 
 
$47.62
Add: Performance-based awards granted (2) (4)
 
12,828

 
 
 
$46.77
Add: Market-based awards granted (3) (4)
 
103,058

 
 
 
$49.14
Less: Vested and Distributed (5)
 
255,962

 
 
 
$48.38
Less: Forfeited
 
12,310

 
 
 
$46.50
Non-vested as of December 31, 2014 (6)
 
676,366

 
$43,139
 
 

(1) Time-based awards vest 25% per year beginning on the first anniversary following the grant date. These grants are subject only to continued employment and are not dependent on future performance measures. Accordingly, if such vesting criteria are not met, compensation cost previously recognized would be reversed.

(2) Performance-based awards are earned subject to future performance measurements. Once the performance criteria are achieved and the actual number of shares earned is determined, shares will vest over a required service period. If such performance criteria are not met, compensation cost previously recognized would be reversed. The Company considers the likelihood of meeting the performance criteria based upon management's estimates from which it determines the amounts recognized as expense on a periodic basis.

(3) Market-based awards are earned dependent upon the Company's total shareholder return in relation to the shareholder return of peer indices over a three-year period (“TSR Grant”). Once the market criteria are met and the actual number of shares earned is determined, 100% of the earned shares vest. The probability of meeting the market criteria is considered when calculating the estimated fair value on the date of grant using a Monte Carlo simulation. These awards are accounted for as awards with market criteria, with compensation cost recognized over the service period, regardless of whether the market criteria are achieved and the awards are ultimately earned and vest. The significant assumptions underlying determination of fair values for market-based awards granted were as follows:
 
 
Year ended December 31,
 
 
2014
 
2013
 
2012
Volatility
 
24.60%
 
27.80%
 
48.80%
Risk free interest rate
 
0.64%
 
0.42%
 
0.32%


(4) The weighted-average grant price for restricted stock granted during the years ended December 31, 2014, 2013, and 2012 was $48.18, $52.80, and $39.44, respectively.

(5) The total intrinsic value of restricted stock vested during the years ended December 31, 2014, 2013, and 2012 was $12.4 million, $11.5 million, and $6.6 million, respectively.

(6) As of December 31, 2014, there was $11.5 million of unrecognized compensation cost related to non-vested restricted stock granted under the Parent Company's Long-Term Omnibus Plan. When recognized, this compensation results in additional paid in capital in the accompanying Consolidated Statements of Equity of the Parent Company and in general partner preferred and common units in the accompanying Consolidated Statements of Capital of the Operating Partnership. This unrecognized compensation cost is expected to be recognized over the next three years. The Company issues new restricted stock from its authorized shares available at the date of grant.

120

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





14.    Saving and Retirement Plans

401(k) Retirement Plan

The Company maintains a 401(k) retirement plan covering substantially all employees, which permits participants to defer up to the maximum allowable amount determined by the IRS of their eligible compensation. This deferred compensation, together with Company matching contributions equal to 100% of employee deferrals up to a maximum of $5,000 of their eligible compensation, is fully vested and funded as of December 31, 2014. Additionally, an annual profit sharing contribution is made, which vests over a three year period. Costs related to the matching portion of the plan were $1.5 million, $1.5 million and $1.4 million for the years ended December 31, 2014, 2013, and 2012, respectively. Costs related to the profit sharing contribution were $1.3 million, $1.2 million, and $1.1 million for the years ended December 31, 2014, 2013, and 2012, respectively.

Non-Qualified Deferred Compensation Plan

The Company maintains a non-qualified deferred compensation plan (“NQDCP”), which allows select employees and directors to defer part or all of their cash bonus, director fees, and restricted stock awards. All contributions into the participants' accounts are fully vested upon contribution to the NQDCP and are deposited in a Rabbi trust.

The assets of the Rabbi trust, exclusive of the shares of the Company's common stock, are classified as trading securities on the accompanying Consolidated Balance Sheets, and accordingly, realized and unrealized gains and losses are recognized within income from deferred compensation plan in the accompanying Consolidated Statements of Operations. The participants' deferred compensation liability, exclusive of the shares of the Company's common stock, is included within accounts payable and other liabilities in the accompanying Consolidated Balance Sheets and was $27.6 million and $26.1 million as of December 31, 2014 and 2013, respectively. Increases or decreases in the deferred compensation liability, exclusive of amounts attributable to participant investments in the shares of the Company's common stock, are recorded as general and administrative expense within the accompanying Consolidated Statements of Operations.

Investments in shares of the Company's common stock are included, at cost, as treasury stock in the accompanying Consolidated Balance Sheets of the Parent Company and as a reduction of general partner capital in the accompanying Consolidated Balance Sheets of the Operating Partnership. The participant's deferred compensation liability attributable to the participants' investments in shares of the Company's common stock are included, at cost, within additional paid in capital in the accompanying Consolidated Balance Sheets of the Parent Company and as a reduction of general partner capital in the accompanying Consolidated Balance Sheets of the Operating Partnership. Changes in participant account balances related to the Regency common stock fund are recorded directly within stockholders' equity.

121

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014





15.    Earnings per Share and Unit
Parent Company Earnings per Share
The following summarizes the calculation of basic and diluted earnings per share (in thousands except per share data): 
 
 
Year ended December 31,
 
 
2014
 
2013
 
2012
Numerator:
 
 
 
 
 
 
Continuing Operations
 
 
 
 
 
 
Income from continuing operations
 
$
133,770

 
84,297

 
45,779

Gain on sale of real estate, net of tax
 
55,077

 
1,703

 
2,158

Less: income attributable to noncontrolling interests
 
1,457

 
1,360

 
385

Income from continuing operations attributable to the Company
 
187,390

 
84,640

 
47,552

Less: preferred stock dividends
 
21,062

 
21,062

 
32,531

Less: dividends paid on unvested restricted stock
 
453

 
448

 
572

Income from continuing operations attributable to common stockholders - basic
 
165,875

 
63,130

 
14,449

Add: dividends paid on Treasury Method restricted stock
 
63

 
45

 
71

Income from continuing operations attributable to common stockholders - diluted
 
165,938

 
63,175

 
14,520

Discontinued Operations
 
 
 
 
 
 
Income (loss) from discontinued operations
 

 
65,285

 
(21,728
)
Less: income from discontinued operations attributable to noncontrolling interests
 

 
121

 
(43
)
Income from discontinued operations attributable to the Company
 

 
65,164

 
(21,685
)
Net Income
 
 
 
 
 
 
Net income attributable to common stockholders - basic
 
165,875

 
128,294

 
(7,236
)
Net income attributable to common stockholders - diluted
 
$
165,938

 
128,339

 
(7,165
)
Denominator:
 
 
 
 
 
 
Weighted average common shares outstanding for basic EPS
 
92,370

 
91,383

 
89,630

Incremental shares to be issued under common stock options
 

 
2

 

Incremental shares to be issued under unvested restricted stock
 
34

 
24

 
39

Weighted average common shares outstanding for diluted EPS
 
92,404

 
91,409

 
89,669

Income per common share – basic
 
 
 
 
 
 
Continuing operations
 
$
1.80

 
0.69

 
0.16

Discontinued operations
 

 
0.71

 
(0.24
)
Net income (loss) attributable to common stockholders
 
$
1.80

 
1.40

 
(0.08
)
Income per common share – diluted
 
 
 
 
 
 
Continuing operations
 
$
1.80

 
0.69

 
0.16

Discontinued operations
 

 
0.71

 
(0.24
)
Net income (loss) attributable to common stockholders
 
$
1.80

 
1.40

 
(0.08
)

Income allocated to noncontrolling interests of the Operating Partnership has been excluded from the numerator and exchangeable Operating Partnership units have been omitted from the denominator for the purpose of computing diluted earnings per share since the effect of including these amounts in the numerator and denominator would have no impact. Weighted average exchangeable Operating Partnership units outstanding for the years ended December 31, 2014, 2013, and 2012 were 157,950, 171,886, and 177,164, respectively.

122

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




Operating Partnership Earnings per Unit
The following summarizes the calculation of basic and diluted earnings per unit (in thousands except per unit data): 
 
 
Year ended December 31,
 
 
2014
 
2013
 
2012
Numerator:
 
 
 
 
 
 
Continuing Operations
 
 
 
 
 
 
Income from continuing operations
 
$
133,770

 
84,297

 
45,779

Gain on sale of real estate, net of tax
 
55,077

 
1,703

 
2,158

Less: income attributable to noncontrolling interests
 
1,138

 
1,084

 
908

Income from continuing operations attributable to the Partnership
 
187,709

 
84,916

 
47,029

Less: preferred unit distributions
 
21,062

 
21,062

 
31,902

Less: dividends paid on unvested restricted units
 
453

 
448

 
572

Income from continuing operations attributable to common unit holders - basic
 
166,194

 
63,406

 
14,555

Add: dividends paid on Treasury Method restricted units
 
63

 
45

 
71

Income from continuing operations attributable to common unit holders - diluted
 
166,257

 
63,451

 
14,626

Discontinued Operations
 
 
 
 
 
 
Income (loss) from discontinued operations
 

 
65,285

 
(21,728
)
Less: income from discontinued operations attributable to noncontrolling interests
 

 
121

 
(43
)
Income from discontinued operations attributable to the Partnership
 

 
65,164

 
(21,685
)
Net Income
 
 
 
 
 
 
Net income attributable to common unit holders - basic
 
166,194

 
128,570

 
(7,130
)
Net income attributable to common unit holders - diluted
 
$
166,257

 
128,615

 
(7,059
)
Denominator:
 
 
 
 
 
 
Weighted average common units outstanding for basic EPU
 
92,528

 
91,555

 
89,808

Incremental units to be issued under common stock options
 

 
2

 

Incremental units to be issued under unvested restricted stock
 
34

 
24

 
39

Weighted average common units outstanding for diluted EPU
 
92,562

 
91,581

 
89,847

Income (loss) per common unit – basic
 
 
 
 
 
 
Continuing operations
 
$
1.80

 
0.69

 
0.16

Discontinued operations
 

 
0.71

 
(0.24
)
Net income (loss) attributable to common unit holders
 
$
1.80

 
1.40

 
(0.08
)
Income (loss) per common unit – diluted
 
 
 
 
 
 
Continuing operations
 
$
1.80

 
0.69

 
0.16

Discontinued operations
 

 
0.71

 
(0.24
)
Net income (loss) attributable to common unit holders

$
1.80

 
1.40

 
(0.08
)


123

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




16.    Operating Leases
    
The Company's properties are leased to tenants under operating leases. Our leases for tenant space under 5,000 square feet generally have terms ranging from three to five years. Leases greater than 10,000 square feet generally have lease terms in excess of five years, mostly comprised of anchor tenants. Many of the anchor leases contain provisions allowing the tenant the option of extending the term of the lease at expiration. Future minimum rents under non-cancelable operating leases as of December 31, 2014, excluding both tenant reimbursements of operating expenses and additional percentage rent based on tenants' sales volume, are as follows (in thousands):
 Year Ending December 31,
 
Future Minimum Rents
2015
 
$
384,955

2016
 
354,968

2017
 
310,255

2018
 
262,123

2019
 
217,686

Thereafter
 
1,077,629

Total
 
$
2,607,616


The shopping centers' tenant base primarily includes national and regional supermarkets, drug stores, discount department stores, and other retailers and, consequently, the credit risk is concentrated in the retail industry. There were no tenants that individually represented more than 5% of the Company's annualized future minimum rents.

The Company has shopping centers that are subject to non-cancelable, long-term ground leases where a third party owns and has leased the underlying land to the Company to construct and/or operate a shopping center. Ground leases expire through the year 2101, and in most cases, provide for renewal options. In addition, the Company has non-cancelable operating leases pertaining to office space from which it conducts its business. Office leases expire through the year 2023, and in most cases, provide for renewal options. Leasehold improvements are capitalized, recorded as tenant improvements, and depreciated over the shorter of the useful life of the improvements or the lease term.

Operating lease expense, including capitalized ground lease payments on properties in development, was $8.9 million, $8.5 million, and $9.1 million for the years ended December 31, 2014, 2013, and 2012, respectively. The following table summarizes the future obligations under non-cancelable operating leases as of December 31, 2014 (in thousands):

 Year Ending December 31,
 
Future Obligations
2015
 
$
8,234

2016
 
7,793

2017
 
6,074

2018
 
5,006

2019
 
4,754

Thereafter
 
194,992

Total
 
$
226,853


17.    Commitments and Contingencies

The Company is involved in litigation on a number of matters and is subject to certain claims, which arise in the normal course of business, none of which, in the opinion of management, is expected to have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity. Legal fees are expensed as incurred.

The Company is also subject to numerous environmental laws and regulations as they apply to real estate pertaining to chemicals used by the dry cleaning industry, the existence of asbestos in older shopping centers, and underground petroleum storage tanks. The Company believes that the ultimate disposition of currently known environmental matters will not have a material effect on its financial position, liquidity, or operations; however, it can give no assurance that existing environmental studies with respect to the shopping centers have revealed all potential

124

REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Consolidated Financial Statements
December 31, 2014




environmental liabilities; that any previous owner, occupant or tenant did not create any material environmental condition not known to it; that the current environmental condition of the shopping centers will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties; or that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to the Company.

The Company has the right to issue letters of credit under the Line up to an amount not to exceed $80.0 million, which reduces the credit availability under the Line. These letters of credit are primarily issued as collateral to facilitate the construction of development projects. As of December 31, 2014 and 2013, the Company had $5.9 million and $19.3 million letters of credit outstanding, respectively. 

18.    Summary of Quarterly Financial Data (Unaudited)

The following table summarizes selected Quarterly Financial Data for the Company on a historical basis for the years ended December 31, 2014 and 2013 and has been derived from the accompanying consolidated financial statements as reclassified for discontinued operations (in thousands except per share and per unit data):

 
 
First Quarter
 
Second Quarter
 
Third Quarter
 
Fourth Quarter
Year ended December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Data:
 
 
 
 
 
 
 
 
Revenue
 
$
133,280

 
134,892

 
133,559

 
136,167

 
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
 
$
19,389

 
25,482

 
47,942

 
73,515

Net income attributable to exchangeable operating partnership units
 
42

 
53

 
90

 
134

Net income attributable to common unit holders
 
$
19,431

 
25,535

 
48,032

 
73,649

 
 
 
 
 
 
 
 
 
Net income attributable to common stock and unit holders per share and unit:
 
 
 
 
 
 
Basic
 
$
0.21

 
0.28

 
0.52

 
0.79

Diluted
 
$
0.21

 
0.28

 
0.52

 
0.79

 
 
 
 
 
 
 
 
 
Year ended December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Data:
 
 
 
 
 
 
 
 
Revenues as originally reported
 
$
126,088

 
125,842

 
122,110

 
126,005

Reclassified to discontinued operations
 
(5,710
)
 
(3,535
)
 
(1,793
)
 

Adjusted Revenues
 
$
120,378

 
122,307

 
120,317

 
126,005

 
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
 
$
15,554

 
31,864

 
34,998

 
46,326

Net income attributable to exchangeable operating partnership units
 
39

 
70

 
73

 
94

Net income attributable to common unit holders
 
$
15,593

 
31,934

 
35,071

 
46,420

 
 
 
 
 
 
 
 
 
Net income attributable to common stock and unit holders per share and unit:
 
 
 
 
 
 
Basic
 
$
0.17

 
0.35

 
0.38

 
0.50

Diluted
 
$
0.17

 
0.35

 
0.38

 
0.50



125



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2014
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Initial Cost
 
 
 
Total Cost
 
 
 
Net Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
4S Commons Town Center
 
$
30,760

 
35,830

 
560

 
30,812

 
36,338

 
67,150

 
16,340

 
50,810

 
62,500

Airport Crossing
 
1,748

 
1,690

 
88

 
1,744

 
1,782

 
3,526

 
746

 
2,780

 

Amerige Heights Town Center
 
10,109

 
11,288

 
358

 
10,109

 
11,647

 
21,756

 
2,840

 
18,916

 
16,580

Anastasia Plaza
 
9,065

 

 
412

 
3,338

 
6,139

 
9,477

 
1,326

 
8,151

 

Ashburn Farm Market Center
 
9,835

 
4,812

 
130

 
9,835

 
4,942

 
14,777

 
3,521

 
11,256

 

Ashford Perimeter
 
2,584

 
9,865

 
631

 
2,584

 
10,496

 
13,080

 
6,020

 
7,060

 

Augusta Center
 
5,142

 
2,720

 
(5,635
)
 
1,366

 
861

 
2,227

 
334

 
1,893

 

Aventura Shopping Center
 
2,751

 
10,459

 
17

 
2,751

 
10,476

 
13,227

 
10,298

 
2,929

 

Balboa Mesa Shopping Center
 
23,074

 
33,838

 
13,215

 
27,715

 
42,869

 
70,584

 
3,378

 
67,206

 

Belleview Square
 
8,132

 
9,756

 
2,324

 
8,323

 
11,889

 
20,212

 
5,506

 
14,706

 

Berkshire Commons
 
2,295

 
9,551

 
1,867

 
2,965

 
10,749

 
13,714

 
6,397

 
7,317

 
7,500

Blackrock
 
22,251

 
20,815

 
(103
)
 
22,251

 
20,711

 
42,962

 
882

 
42,080

 
20,124

Bloomingdale Square
 
3,940

 
14,912

 
2,053

 
3,940

 
16,965

 
20,905

 
7,377

 
13,528

 

Boulevard Center
 
3,659

 
10,787

 
1,125

 
3,659

 
11,912

 
15,571

 
5,475

 
10,096

 

Boynton Lakes Plaza
 
2,628

 
11,236

 
4,452

 
3,606

 
14,710

 
18,316

 
5,144

 
13,172

 

Brentwood Plaza
 
2,788

 
3,473

 
238

 
2,788

 
3,711

 
6,499

 
637

 
5,862

 

Briarcliff La Vista
 
694

 
3,292

 
297

 
694

 
3,589

 
4,283

 
2,305

 
1,978

 

Briarcliff Village
 
4,597

 
24,836

 
1,190

 
4,597

 
26,026

 
30,623

 
14,935

 
15,688

 

Brickwalk
 
25,299

 
41,995

 
237

 
25,299

 
42,232

 
67,531

 
1,240

 
66,291

 
31,823

Bridgeton
 
3,033

 
8,137

 
107

 
3,067

 
8,210

 
11,277

 
1,196

 
10,081

 

Brighten Park
 
3,983

 
18,687

 
1,275

 
3,926

 
20,019

 
23,945

 
10,368

 
13,577

 

Buckhead Court
 
1,417

 
7,432

 
500

 
1,417

 
7,932

 
9,349

 
4,960

 
4,389

 

Buckley Square
 
2,970

 
5,978

 
749

 
2,970

 
6,727

 
9,697

 
3,295

 
6,402

 

Buckwalter Place Shopping Ctr
 
6,563

 
6,590

 
264

 
6,592

 
6,825

 
13,417

 
2,620

 
10,797

 

Caligo Crossing
 
2,459

 
4,897

 
124

 
2,546

 
4,934

 
7,480

 
1,775

 
5,705

 

Cambridge Square
 
774

 
4,347

 
687

 
774

 
5,034

 
5,808

 
2,578

 
3,230

 

Carmel Commons
 
2,466

 
12,548

 
4,412

 
3,422

 
16,004

 
19,426

 
6,896

 
12,530

 

Carriage Gate
 
833

 
4,974

 
2,424

 
1,302

 
6,928

 
8,230

 
4,297

 
3,933

 

Centerplace of Greeley III
 
6,661

 
11,502

 
1,423

 
5,690

 
13,896

 
19,586

 
3,550

 
16,036

 

Chasewood Plaza
 
4,612

 
20,829

 
(400
)
 
4,688

 
20,353

 
25,041

 
12,296

 
12,745

 

Cherry Grove
 
3,533

 
15,862

 
1,949

 
3,533

 
17,810

 
21,343

 
7,625

 
13,718

 


126



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2014
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Initial Cost
 
 
 
Total Cost
 
 
 
Net Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
Clayton Valley Shopping Center
 
24,189

 
35,422

 
2,187

 
24,538

 
37,260

 
61,798

 
16,662

 
45,136

 

Clybourn Commons
 
15,056

 
5,594

 
40

 
15,056

 
5,634

 
20,690

 
161

 
20,529

 

Cochran's Crossing
 
13,154

 
12,315

 
739

 
13,154

 
13,054

 
26,208

 
7,540

 
18,668

 

Corkscrew Village
 
8,407

 
8,004

 
118

 
8,407

 
8,122

 
16,529

 
2,401

 
14,128

 
7,923

Cornerstone Square
 
1,772

 
6,944

 
1,054

 
1,772

 
7,998

 
9,770

 
4,250

 
5,520

 

Corvallis Market Center
 
6,674

 
12,244

 
357

 
6,696

 
12,580

 
19,276

 
3,566

 
15,710

 

Costa Verde Center
 
12,740

 
26,868

 
1,236

 
12,798

 
28,046

 
40,844

 
13,044

 
27,800

 

Courtyard Landcom
 
5,867

 
4

 
3

 
5,867

 
7

 
5,874

 
1

 
5,873

 

Culpeper Colonnade
 
15,944

 
10,601

 
4,772

 
16,258

 
15,184

 
31,442

 
5,853

 
25,589

 

Dardenne Crossing
 
4,194

 
4,005

 
482

 
4,583

 
4,098

 
8,681

 
840

 
7,841

 

Delk Spectrum
 
2,985

 
12,001

 
1,327

 
3,000

 
13,313

 
16,313

 
5,867

 
10,446

 

Diablo Plaza
 
5,300

 
8,181

 
1,079

 
5,300

 
9,260

 
14,560

 
3,922

 
10,638

 

Dunwoody Village
 
3,342

 
15,934

 
3,232

 
3,342

 
19,166

 
22,508

 
10,600

 
11,908

 

East Pointe
 
1,730

 
7,189

 
1,726

 
1,771

 
8,874

 
10,645

 
3,917

 
6,728

 

East Washington Place
 
15,993

 
40,151

 
677

 
15,509

 
41,311

 
56,820

 
2,987

 
53,833

 

El Camino Shopping Center
 
7,600

 
11,538

 
1,258

 
7,600

 
12,796

 
20,396

 
4,983

 
15,413

 

El Cerrito Plaza
 
11,025

 
27,371

 
679

 
11,025

 
28,050

 
39,075

 
6,192

 
32,883

 
38,694

El Norte Parkway Plaza
 
2,834

 
7,370

 
3,243

 
3,263

 
10,185

 
13,448

 
3,693

 
9,755

 

Encina Grande
 
5,040

 
11,572

 
(25
)
 
5,040

 
11,547

 
16,587

 
6,343

 
10,244

 

Fairfax Shopping Center
 
15,239

 
11,367

 
(5,548
)
 
13,175

 
7,882

 
21,057

 
1,766

 
19,291

 

Fairfield
 
6,731

 
29,420

 
128

 
6,731

 
29,548

 
36,279

 
809

 
35,470

 
20,250

Falcon
 
1,340

 
4,168

 
157

 
1,350

 
4,315

 
5,665

 
1,401

 
4,264

 

Fellsway Plaza
 
30,712

 
7,327

 
2,347

 
32,736

 
7,650

 
40,386

 
861

 
39,525

 
29,839

Fenton Marketplace
 
2,298

 
8,510

 
(8,326
)
 
512

 
1,971

 
2,483

 
281

 
2,202

 

Fleming Island
 
3,077

 
11,587

 
2,686

 
3,111

 
14,239

 
17,350

 
5,371

 
11,979

 

French Valley Village Center
 
11,924

 
16,856

 
33

 
11,822

 
16,992

 
28,814

 
8,210

 
20,604

 

Friars Mission Center
 
6,660

 
28,021

 
970

 
6,660

 
28,991

 
35,651

 
11,642

 
24,009

 
141

Gardens Square
 
2,136

 
8,273

 
399

 
2,136

 
8,672

 
10,808

 
3,973

 
6,835

 

Gateway 101
 
24,971

 
9,113

 
24

 
24,971

 
9,137

 
34,108

 
2,684

 
31,424

 

Gateway Shopping Center
 
52,665

 
7,134

 
1,883

 
52,671

 
9,011

 
61,682

 
9,648

 
52,034

 

Gelson's Westlake Market Plaza
 
3,157

 
11,153

 
372

 
3,157

 
11,525

 
14,682

 
4,506

 
10,176

 


127



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2014
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Initial Cost
 
 
 
Total Cost
 
 
 
Net Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
Glen Gate
 
13,241

 
11,968

 
2,717

 
13,241

 
14,685

 
27,926

 
71

 
27,855

 

Glen Oak Plaza
 
4,103

 
12,951

 
327

 
4,103

 
13,278

 
17,381

 
2,036

 
15,345

 

Glenwood Village
 
1,194

 
5,381

 
220

 
1,194

 
5,601

 
6,795

 
3,505

 
3,290

 

Golden Hills Plaza
 
12,699

 
18,482

 
3,375

 
12,693

 
21,863

 
34,556

 
4,765

 
29,791

 

Grand Ridge Plaza
 
24,208

 
61,033

 
2,643

 
24,843

 
63,041

 
87,884

 
4,525

 
83,359

 
11,309

Hancock
 
8,232

 
28,260

 
1,148

 
8,232

 
29,408

 
37,640

 
13,091

 
24,549

 

Harpeth Village Fieldstone
 
2,284

 
9,443

 
166

 
2,284

 
9,609

 
11,893

 
4,129

 
7,764

 

Harris Crossing
 
7,199

 
3,677

 
8

 
7,162

 
3,722

 
10,884

 
1,454

 
9,430

 

Heritage Land
 
12,390

 

 
(453
)
 
11,937

 

 
11,937

 

 
11,937

 

Heritage Plaza
 

 
26,097

 
13,366

 
278

 
39,185

 
39,463

 
13,048

 
26,415

 

Hershey
 
7

 
808

 
6

 
7

 
815

 
822

 
293

 
529

 

Hibernia Pavilion
 
4,929

 
5,065

 
(1
)
 
4,929

 
5,064

 
9,993

 
1,800

 
8,193

 

Hibernia Plaza
 
267

 
230

 
(8
)
 
267

 
222

 
489

 
51

 
438

 

Hickory Creek Plaza
 
5,629

 
4,564

 
275

 
5,629

 
4,839

 
10,468

 
2,552

 
7,916

 

Hillcrest Village
 
1,600

 
1,909

 
51

 
1,600

 
1,960

 
3,560

 
795

 
2,765

 

Hilltop Village
 
2,995

 
4,581

 
907

 
3,089

 
5,394

 
8,483

 
619

 
7,864

 
7,500

Hinsdale
 
5,734

 
16,709

 
1,812

 
5,734

 
18,521

 
24,255

 
8,198

 
16,057

 

Holly Park
 
8,975

 
23,799

 
(181
)
 
8,828

 
23,765

 
32,593

 
962

 
31,631

 

Howell Mill Village
 
5,157

 
14,279

 
1,983

 
5,157

 
16,261

 
21,418

 
3,358

 
18,060

 

Hyde Park
 
9,809

 
39,905

 
2,032

 
9,809

 
41,937

 
51,746

 
19,836

 
31,910

 

Indian Springs
 
24,974

 
25,903

 

 
24,958

 
25,919

 
50,877

 
81

 
50,796

 

Indio Towne Center
 
17,946

 
31,985

 
28

 
17,317

 
32,642

 
49,959

 
9,611

 
40,348

 

Inglewood Plaza
 
1,300

 
2,159

 
226

 
1,300

 
2,385

 
3,685

 
1,029

 
2,656

 

Jefferson Square
 
5,167

 
6,445

 
(7,340
)
 
1,775

 
2,497

 
4,272

 
254

 
4,018

 

Juanita Tate Marketplace
 
3,886

 
11,315

 
3,263

 
4,563

 
13,903

 
18,466

 
425

 
18,041

 

Keller Town Center
 
2,294

 
12,841

 
298

 
2,404

 
13,030

 
15,434

 
5,255

 
10,179

 

Kent Place
 
4,855

 
3,544

 
793

 
5,228

 
3,964

 
9,192

 
299

 
8,893

 
8,250

Kirkwood Commons
 
6,772

 
16,224

 
478

 
6,802

 
16,672

 
23,474

 
2,211

 
21,263

 
11,038

Kroger New Albany Center
 
3,844

 
6,599

 
593

 
3,844

 
7,192

 
11,036

 
4,530

 
6,506

 

Kulpsville
 
5,518

 
3,756

 
152

 
5,600

 
3,826

 
9,426

 
1,246

 
8,180

 

Lake Pine Plaza
 
2,008

 
7,632

 
448

 
2,029

 
8,058

 
10,087

 
3,431

 
6,656

 


128



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2014
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Initial Cost
 
 
 
Total Cost
 
 
 
Net Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
Lebanon/Legacy Center
 
3,913

 
7,874

 
90

 
3,913

 
7,964

 
11,877

 
4,597

 
7,280

 

Littleton Square
 
2,030

 
8,859

 
(4,950
)
 
1,949

 
3,990

 
5,939

 
1,299

 
4,640

 

Lloyd King
 
1,779

 
10,060

 
1,070

 
1,779

 
11,130

 
12,909

 
4,747

 
8,162

 

Loehmanns Plaza California
 
5,420

 
9,450

 
696

 
5,420

 
10,146

 
15,566

 
4,462

 
11,104

 

Lower Nazareth Commons
 
15,992

 
12,964

 
3,248

 
16,343

 
15,861

 
32,204

 
5,257

 
26,947

 

Market at Colonnade Center
 
6,455

 
9,839

 
(18
)
 
6,160

 
10,115

 
16,275

 
1,812

 
14,463

 

Market at Preston Forest
 
4,400

 
11,445

 
995

 
4,400

 
12,440

 
16,840

 
5,241

 
11,599

 

Market at Round Rock
 
2,000

 
9,676

 
5,699

 
2,000

 
15,375

 
17,375

 
6,172

 
11,203

 

Marketplace Shopping Center
 
1,287

 
5,509

 
5,036

 
1,330

 
10,502

 
11,832

 
4,362

 
7,470

 

Marketplace at Briargate
 
1,706

 
4,885

 
48

 
1,727

 
4,912

 
6,639

 
1,884

 
4,755

 

Millhopper Shopping Center
 
1,073

 
5,358

 
4,890

 
1,796

 
9,524

 
11,320

 
5,742

 
5,578

 

Mockingbird Commons
 
3,000

 
10,728

 
665

 
3,000

 
11,393

 
14,393

 
5,043

 
9,350

 
10,300

Monument Jackson Creek
 
2,999

 
6,765

 
660

 
2,999

 
7,425

 
10,424

 
4,634

 
5,790

 

Morningside Plaza
 
4,300

 
13,951

 
547

 
4,300

 
14,498

 
18,798

 
6,251

 
12,547

 

Murryhill Marketplace
 
2,670

 
18,401

 
1,729

 
2,670

 
20,130

 
22,800

 
8,360

 
14,440

 

Naples Walk
 
18,173

 
13,554

 
387

 
18,173

 
13,941

 
32,114

 
3,914

 
28,200

 
15,022

Newberry Square
 
2,412

 
10,150

 
238

 
2,412

 
10,388

 
12,800

 
6,942

 
5,858

 

Newland Center
 
12,500

 
10,697

 
684

 
12,500

 
11,381

 
23,881

 
5,387

 
18,494

 

Nocatee Town Center
 
10,124

 
8,691

 
(1,505
)
 
8,386

 
8,924

 
17,310

 
2,256

 
15,054

 

North Hills
 
4,900

 
19,774

 
1,056

 
4,900

 
20,830

 
25,730

 
8,765

 
16,965

 

Northgate Marketplace
 
5,668

 
13,727

 
1,104

 
6,232

 
14,267

 
20,499

 
1,861

 
18,638

 

Northgate Plaza (Maxtown Road)
 
1,769

 
6,652

 
196

 
1,769

 
6,849

 
8,618

 
3,218

 
5,400

 

Northgate Square
 
5,011

 
8,692

 
389

 
5,011

 
9,081

 
14,092

 
2,538

 
11,554

 

Northlake Village
 
2,662

 
11,284

 
1,202

 
2,686

 
12,462

 
15,148

 
4,932

 
10,216

 

Oak Shade Town Center
 
6,591

 
28,966

 
391

 
6,591

 
29,357

 
35,948

 
3,573

 
32,375

 
9,692

Oakbrook Plaza
 
4,000

 
6,668

 
306

 
4,000

 
6,974

 
10,974

 
3,023

 
7,951

 

Oakleaf Commons
 
3,503

 
11,671

 
288

 
3,510

 
11,952

 
15,462

 
3,804

 
11,658

 

Ocala Corners
 
1,816

 
10,515

 
206

 
1,816

 
10,721

 
12,537

 
1,679

 
10,858

 
5,025

Old St Augustine Plaza
 
2,368

 
11,405

 
201

 
2,368

 
11,606

 
13,974

 
5,649

 
8,325

 

Paces Ferry Plaza
 
2,812

 
12,639

 
334

 
2,812

 
12,974

 
15,786

 
7,562

 
8,224

 

Panther Creek
 
14,414

 
14,748

 
2,872

 
15,212

 
16,822

 
32,034

 
9,370

 
22,664

 


129



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2014
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Initial Cost
 
 
 
Total Cost
 
 
 
Net Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
Peartree Village
 
5,197

 
19,746

 
796

 
5,197

 
20,542

 
25,739

 
9,761

 
15,978

 
7,465

Pike Creek
 
5,153

 
20,652

 
1,583

 
5,251

 
22,137

 
27,388

 
9,772

 
17,616

 

Pima Crossing
 
5,800

 
28,143

 
1,197

 
5,800

 
29,340

 
35,140

 
12,957

 
22,183

 

Pine Lake Village
 
6,300

 
10,991

 
717

 
6,300

 
11,708

 
18,008

 
5,058

 
12,950

 

Pine Tree Plaza
 
668

 
6,220

 
364

 
668

 
6,584

 
7,252

 
2,849

 
4,403

 

Plaza Hermosa
 
4,200

 
10,109

 
2,434

 
4,202

 
12,541

 
16,743

 
4,331

 
12,412

 
13,800

Powell Street Plaza
 
8,248

 
30,716

 
1,821

 
8,248

 
32,537

 
40,785

 
11,408

 
29,377

 

Powers Ferry Square
 
3,687

 
17,965

 
6,118

 
5,289

 
22,481

 
27,770

 
11,597

 
16,173

 

Powers Ferry Village
 
1,191

 
4,672

 
438

 
1,191

 
5,110

 
6,301

 
2,971

 
3,330

 

Prairie City Crossing
 
4,164

 
13,032

 
393

 
4,164

 
13,425

 
17,589

 
4,782

 
12,807

 

Prestonbrook
 
7,069

 
8,622

 
232

 
7,069

 
8,854

 
15,923

 
5,712

 
10,211

 
6,800

Preston Oaks
 
763

 
30,438

 
129

 
763

 
30,567

 
31,330

 
1,504

 
29,826

 

Red Bank
 
10,336

 
9,505

 
(115
)
 
10,110

 
9,616

 
19,726

 
1,635

 
18,091

 

Regency Commons
 
3,917

 
3,616

 
210

 
3,917

 
3,826

 
7,743

 
1,790

 
5,953

 

Regency Solar (Saugus)
 

 

 
758

 
6

 
752

 
758

 
59

 
699

 

Regency Square
 
4,770

 
25,191

 
4,391

 
5,060

 
29,292

 
34,352

 
19,735

 
14,617

 

Rona Plaza
 
1,500

 
4,917

 
217

 
1,500

 
5,134

 
6,634

 
2,476

 
4,158

 

Russell Ridge
 
2,234

 
6,903

 
920

 
2,234

 
7,823

 
10,057

 
3,912

 
6,145

 

Sammamish-Highlands
 
9,300

 
8,075

 
7,777

 
9,592

 
15,560

 
25,152

 
4,412

 
20,740

 

San Leandro Plaza
 
1,300

 
8,226

 
472

 
1,300

 
8,698

 
9,998

 
3,519

 
6,479

 

Sandy Springs
 
6,889

 
28,056

 
1,195

 
6,889

 
29,251

 
36,140

 
2,176

 
33,964

 
16,079

Saugus
 
19,201

 
17,984

 
(1,120
)
 
18,805

 
17,260

 
36,065

 
5,552

 
30,513

 

Seminole Shoppes
 
8,593

 
7,523

 
94

 
8,629

 
7,581

 
16,210

 
1,561

 
14,649

 
9,958

Sequoia Station
 
9,100

 
18,356

 
1,394

 
9,100

 
19,750

 
28,850

 
7,949

 
20,901

 
21,100

Sherwood II
 
2,731

 
6,360

 
492

 
2,731

 
6,852

 
9,583

 
2,183

 
7,400

 

Shoppes @ 104
 
11,193

 

 
574

 
6,652

 
5,115

 
11,767

 
1,256

 
10,511

 

Shoppes at Fairhope Village
 
6,920

 
11,198

 
276

 
6,920

 
11,473

 
18,393

 
3,019

 
15,374

 

Shoppes of Grande Oak
 
5,091

 
5,985

 
218

 
5,091

 
6,203

 
11,294

 
3,944

 
7,350

 

Shops at Arizona
 
3,063

 
3,243

 
153

 
3,063

 
3,396

 
6,459

 
1,794

 
4,665

 

Shops at County Center
 
9,957

 
11,269

 
740

 
10,209

 
11,757

 
21,966

 
5,455

 
16,511

 

Shops at Erwin Mill
 
236

 
131

 
15,087

 
9,171

 
6,283

 
15,454

 
378

 
15,076

 
10,000


130



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2014
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Initial Cost
 
 
 
Total Cost
 
 
 
Net Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
Shops at Johns Creek
 
1,863

 
2,014

 
(349
)
 
1,501

 
2,028

 
3,529

 
938

 
2,591

 

Shops at Mira Vista
 
11,691

 
9,026

 
6

 
11,691

 
9,032

 
20,723

 
345

 
20,378

 
257

Shops at Quail Creek
 
1,487

 
7,717

 
438

 
1,499

 
8,143

 
9,642

 
2,061

 
7,581

 

Shops on Main
 
15,211

 
23,030

 
1,203

 
15,211

 
25,589

 
40,800

 
1,548

 
39,252

 

Signature Plaza
 
2,396

 
3,898

 
(13
)
 
2,396

 
3,885

 
6,281

 
2,025

 
4,256

 

South Bay Village
 
11,714

 
15,580

 
1,385

 
11,776

 
16,903

 
28,679

 
1,567

 
27,112

 

South Lowry Square
 
3,434

 
10,445

 
789

 
3,434

 
11,234

 
14,668

 
4,781

 
9,887

 

Southcenter
 
1,300

 
12,750

 
848

 
1,300

 
13,598

 
14,898

 
5,559

 
9,339

 

Southpark at Cinco Ranch
 
18,395

 
11,306

 
702

 
18,685

 
11,718

 
30,403

 
1,325

 
29,078

 

SouthPoint Crossing
 
4,412

 
12,235

 
657

 
4,412

 
12,892

 
17,304

 
5,034

 
12,270

 

Starke
 
71

 
1,683

 
4

 
71

 
1,686

 
1,757

 
599

 
1,158

 

State Street Crossing
 
1,283

 
1,970

 
107

 
1,283

 
2,077

 
3,360

 
473

 
2,887

 

Sterling Ridge
 
12,846

 
12,162

 
490

 
12,846

 
12,652

 
25,498

 
7,431

 
18,067

 
13,900

Stonewall
 
27,511

 
22,123

 
6,886

 
28,429

 
28,091

 
56,520

 
10,146

 
46,374

 

Strawflower Village
 
4,060

 
8,084

 
394

 
4,060

 
8,478

 
12,538

 
3,767

 
8,771

 

Stroh Ranch
 
4,280

 
8,189

 
503

 
4,280

 
8,692

 
12,972

 
5,246

 
7,726

 

Suncoast Crossing
 
4,057

 
5,545

 
10,253

 
9,030

 
10,825

 
19,855

 
3,575

 
16,280

 

Tanasbourne Market
 
3,269

 
10,861

 
(296
)
 
3,269

 
10,565

 
13,834

 
3,142

 
10,692

 

Tassajara Crossing
 
8,560

 
15,464

 
781

 
8,560

 
16,245

 
24,805

 
6,747

 
18,058

 
19,800

Tech Ridge Center
 
12,945

 
37,169

 
375

 
12,945

 
37,544

 
50,489

 
5,244

 
45,245

 
9,644

The Hub Hillcrest Market
 
18,773

 
61,906

 
2,789

 
19,355

 
64,114

 
83,469

 
3,744

 
79,725

 

Town Square
 
883

 
8,132

 
356

 
883

 
8,488

 
9,371

 
4,050

 
5,321

 

Twin City Plaza
 
17,245

 
44,225

 
1,379

 
17,263

 
45,586

 
62,849

 
11,606

 
51,243

 
39,745

Twin Peaks
 
5,200

 
25,827

 
695

 
5,200

 
26,522

 
31,722

 
10,823

 
20,899

 

Valencia Crossroads
 
17,921

 
17,659

 
559

 
17,921

 
18,219

 
36,140

 
12,972

 
23,168

 

Village at Lee Airpark
 
11,099

 
12,955

 
2,292

 
11,352

 
15,320

 
26,672

 
4,126

 
22,546

 

Village Center
 
3,885

 
14,131

 
6,847

 
4,829

 
20,159

 
24,988

 
6,463

 
18,525

 

Walker Center
 
3,840

 
7,232

 
3,170

 
3,878

 
10,364

 
14,242

 
4,081

 
10,161

 

Welleby Plaza
 
1,496

 
7,787

 
806

 
1,496

 
8,593

 
10,089

 
5,802

 
4,287

 

Wellington Town Square
 
2,041

 
12,131

 
307

 
2,041

 
12,438

 
14,479

 
5,627

 
8,852

 
12,800

West Park Plaza
 
5,840

 
5,759

 
1,170

 
5,840

 
6,929

 
12,769

 
2,969

 
9,800

 


131



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation
December 31, 2014
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Initial Cost
 
 
 
Total Cost
 
 
 
Net Cost
 
 
Shopping Centers (1)
 
 Land
 
 Building & Improvements
 
 Cost Capitalized
 Subsequent to
 Acquisition (2)
 
 Land
 
 Building & Improvements
 
 Total
 
 Accumulated Depreciation
 
 Net of Accumulated Depreciation
 
 Mortgages
Westchase
 
5,302

 
8,273

 
244

 
5,302

 
8,517

 
13,819

 
2,294

 
11,525

 
7,242

Westchester Commons
 
3,366

 
11,751

 
9,452

 
4,655

 
20,815

 
25,470

 
3,911

 
21,559

 

Westchester Plaza
 
1,857

 
7,572

 
269

 
1,857

 
7,841

 
9,698

 
4,421

 
5,277

 

Westlake Plaza and Center
 
7,043

 
27,195

 
1,491

 
7,043

 
28,687

 
35,730

 
12,432

 
23,298

 

Westwood Village
 
19,933

 
25,301

 
(1,196
)
 
19,553

 
24,485

 
44,038

 
8,586

 
35,452

 

Willow Festival
 
1,954

 
56,501

 
436

 
1,954

 
56,937

 
58,891

 
7,373

 
51,518

 
39,505

Windmiller Plaza Phase I
 
2,638

 
13,241

 
158

 
2,638

 
13,399

 
16,037

 
6,161

 
9,876

 

Woodcroft Shopping Center
 
1,419

 
6,284

 
523

 
1,421

 
6,805

 
8,226

 
3,463

 
4,763

 

Woodman Van Nuy
 
5,500

 
7,195

 
197

 
5,500

 
7,392

 
12,892

 
3,127

 
9,765

 

Woodmen and Rangewood
 
7,621

 
11,018

 
477

 
7,617

 
11,493

 
19,110

 
9,125

 
9,985

 

Woodside Central
 
3,500

 
9,288

 
548

 
3,500

 
9,836

 
13,336

 
4,008

 
9,328

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Corporate Assets
 

 

 
1,547

 

 
1,547

 
1,547

 
1,085

 
462

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Properties in Development
 

 

 
239,538

 
24,243

 
215,295

 
239,538

 
472

 
239,066

 

 
 
$
1,370,286

 
2,572,774

 
463,537

 
1,404,454

 
3,005,432

 
4,409,886

 
933,708

 
3,476,178

 
541,605


(1) See Item 2, Properties for geographic location and year each operating property was acquired.
(2) The negative balance for costs capitalized subsequent to acquisition could include out-parcels sold, provision for loss recorded and development transfers subsequent to the initial costs.
See accompanying report of independent registered public accounting firm.

132



REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Schedule III - Consolidated Real Estate and Accumulated Depreciation, continued
December 31, 2014
(in thousands)

Depreciation and amortization of the Company's investment in buildings and improvements reflected in the statements of operations is calculated over the estimated useful lives of the assets, which are up to 40 years. The aggregate cost for federal income tax purposes was approximately $4.6 billion at December 31, 2014.

The changes in total real estate assets for the years ended December 31, 2014, 2013, and 2012 are as follows (in thousands):

 
 
2014
 
2013
 
2012
Beginning balance
 
$
4,026,531

 
3,909,912

 
4,101,912

Acquired properties
 
274,091

 
143,992

 
220,340

Developments and improvements
 
191,250

 
180,374

 
141,807

Sale of properties
 
(81,811
)
 
(200,393
)
 
(491,438
)
Provision for impairment
 
(175
)
 
(7,354
)
 
(62,709
)
Ending balance
 
$
4,409,886

 
4,026,531

 
3,909,912



The changes in accumulated depreciation for the years ended December 31, 2014, 2013, and 2012 are as follows (in thousands):

 
 
2014
 
2013
 
2012
Beginning balance
 
$
844,873

 
782,749

 
791,619

Depreciation expense
 
108,692

 
99,883

 
104,087

Sale of properties
 
(19,857
)
 
(36,405
)
 
(104,748
)
Provision for impairment
 

 
(1,354
)
 
(8,209
)
Ending balance
 
$
933,708

 
844,873

 
782,749


See accompanying report of independent registered public accounting firm.

133




Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.

Item 9A. Controls and Procedures

Controls and Procedures (Regency Centers Corporation)
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of the Parent Company's management, including its chief executive officer and chief financial officer, the Parent Company conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on this evaluation, the Parent Company's chief executive officer and chief financial officer concluded that its disclosure controls and procedures were effective as of the end of the period covered by this annual report on Form 10-K to ensure information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Parent Company in the reports it files or submits is accumulated and communicated to management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management's Report on Internal Control over Financial Reporting
The Parent Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of its management, including its chief executive officer and chief financial officer, the Parent Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation under the framework in Internal Control - Integrated Framework (2013), the Parent Company's management concluded that its internal control over financial reporting was effective as of December 31, 2014.
KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this annual report on Form 10-K and, as part of their audit, has issued a report, included herein, on the effectiveness of the Parent Company's internal control over financial reporting.
The Parent Company's system of internal control over financial reporting was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with accounting principles generally accepted in the United States. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Controls
There have been no changes in the Parent Company's internal controls over financial reporting identified in connection with this evaluation that occurred during the fourth quarter of 2014 and that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.

Controls and Procedures (Regency Centers, L.P.)
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of the Operating Partnership's management, including the chief executive officer and chief financial officer of its general partner, the Operating Partnership conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act. Based on this evaluation, the chief executive officer and chief financial officer of its general partner concluded that its disclosure controls and procedures were effective as of the end of the period covered by this annual report on Form 10-K to ensure information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Operating Partnership in the reports it files or submits is accumulated and communicated to management, including the chief executive officer and chief financial officer of its general partner, as appropriate, to allow timely decisions regarding required disclosure.

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Management's Report on Internal Control over Financial Reporting
The Operating Partnership's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of its management, including the chief executive officer and chief financial officer of its general partner, the Operating Partnership conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation under the framework in Internal Control - Integrated Framework (2013), the Operating Partnership's management concluded that its internal control over financial reporting was effective as of December 31, 2014.
KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this annual report on Form 10-K and, as part of their audit, has issued a report, included herein, on the effectiveness of the Operating Partnership's internal control over financial reporting.
The Operating Partnership's system of internal control over financial reporting was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with accounting principles generally accepted in the United States. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Controls
There have been no changes in the Operating Partnership's internal controls over financial reporting identified in connection with this evaluation that occurred during the fourth quarter of 2014 and that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.

Item 9B. Other Information
Not applicable


PART III
Item 10. Directors, Executive Officers, and Corporate Governance

Information concerning our directors is incorporated herein by reference to our definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to the 2015 Annual Meeting of Stockholders.
 
Information regarding executive officers is included in Part I of this Form 10-K as permitted by General Instruction G(3).
 
Audit Committee, Independence, Financial Experts. Incorporated herein by reference to our definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10‑K with respect to the 2015 Annual Meeting of Stockholders.
 
Compliance with Section 16(a) of the Exchange Act.   Information concerning filings under Section 16(a) of the Exchange Act by our directors or executive officers is incorporated herein by reference to our definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to the 2015 Annual Meeting of Stockholders.
 
Code of Ethics. We have adopted a code of ethics applicable to our Board of Directors, principal executive officers, principal financial officer, principal accounting officer and persons performing similar functions. The text of this code of ethics may be found on our web site at www.regencycenters.com. We intend to post notice of any waiver from, or amendment to, any provision of our code of ethics on our web site.



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Item 11. Executive Compensation

Incorporated herein by reference to our definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to the 2015 Annual Meeting of Stockholders.


Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Equity Compensation Plan Information
 
 
(a)
 
(b)
 
(c)
Plan Category
 
Number of securities to be issued upon exercise of outstanding options, warrants and rights (1)
 



Weighted-average exercise price of outstanding options, warrants and rights(2)
 
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column a) (3)
Equity compensation plans
approved by security holders
 
8,740

 
$
88.45

 
2,114,499

Equity compensation plans not approved by security holders
 
N/A
 
N/A
 
N/A
Total
 
8,740

 
$
88.45

 
2,114,499

(1) This column does not include 676,366 shares that may be issued pursuant to unvested restricted stock and performance share awards.

(2) The weighted average exercise price excludes stock rights awards, which we sometimes refer to as unvested restricted stock.

(3) The Regency Centers Corporation 2011 Omnibus Incentive Plan, (“Omnibus Plan”), as approved by stockholders at our 2011 annual meeting, provides that an aggregate maximum of 4.1 million shares of our common stock are reserved for issuance under the Omnibus Plan.

Information about security ownership is incorporated herein by reference to our definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to the 2015 Annual Meeting of Stockholders.

Item 13.     Certain Relationships and Related Transactions, and Director Independence

Incorporated herein by reference to our definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to the 2015 Annual Meeting of Stockholders.

Item 14.     Principal Accountant Fees and Services
    
Incorporated herein by reference to our definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to the 2015 Annual Meeting of Stockholders.    

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)    Financial Statements and Financial Statement Schedules:
Regency Centers Corporation and Regency Centers, L.P. 2014 financial statements and financial statement schedule, together with the reports of KPMG LLP are listed on the index immediately preceding the financial statements in Item 8, Consolidated Financial Statements and Supplemental Data.
(b)    Exhibits:
In reviewing the agreements included as exhibits to this report, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company, its subsidiaries or other parties to the agreements. The Agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. We acknowledge that, notwithstanding the inclusion of the foregoing cautionary statements, we are responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this report not misleading. Additional information about the Company may be found elsewhere in this report and the Company's other public files, which are available without charge through the SEC's website at http://www.sec.gov.
Unless otherwise indicated below, the Commission file number to the exhibit is No. 001-12298.
1. Underwriting Agreement

(a)
Equity Distribution Agreement (the “Wells Agreement”) among the Company, Regency Centers, L.P. and Wells Fargo Securities, LLC dated August 10, 2012 (incorporated by reference to Exhibit 1.1 to the Company's report on Form 8-K filed on August 10, 2012).

(i)
Amendment No. 1 to Equity Distribution Agreement (the "Wells Amendment") among the Company, Regency Centers, L.P. and Wells Fargo Securities, LLC dated August 6, 2013 (incorporated by reference to Exhibit 1.2 to the Company's report on Form 8-K filed on August 6, 2013).

(ii)
Amendment No. 2 to Equity Distribution Agreement (the "Wells Amendment") among the Company, Regency Centers, L.P. and Wells Fargo Securities, LLC dated March 4, 2014 (incorporated by reference to Exhibit 1.1 to the Company's report on Form 8-K filed on March 4, 2014).

The Equity Distribution Agreements listed below are substantially identical in all material respects to the Wells Agreement, as amended by the Wells Amendment, except for the identities of the parties, and have not been filed as exhibits to the Company's 1934 Act reports pursuant to Instruction 2 to Item 601 of Regulation S-K:

(ii)
Equity Distribution Agreement among the Company, Regency Centers, L.P. and Merrill Lynch, Pierce, Fenner & Smith Incorporated dated August 10, 2012, as amended by Amendment No. 1 to Equity Distribution Agreement among the Company, Regency Centers, L.P. and Merrill Lynch, Pierce, Fenner & Smith Incorporated dated August 6, 2013; and


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(iii)
Equity Distribution Agreement among the Company, Regency Centers, L.P. and J.P. Morgan Securities LLC dated August 10, 2012, as amended by Amendment No. 1 to Equity Distribution Agreement among the Company, Regency Centers, L.P. and J.P. Morgan Securities LLC dated August 6, 2013.

(b)
Equity Distribution Agreement (the “Jefferies Agreement”) among the Company, Regency Centers, L.P. and Jefferies LLC dated August 6, 2013 (incorporated by reference to Exhibit 1.1 to the Company's report on Form 8-K filed on August 6, 2013).
    
The Equity Distribution Agreement listed below is substantially identical in all material respects to the Jefferies Agreement except for the identities of the parties, and has not been filed as an exhibit to the Company's 1934 Act reports pursuant to Instruction 2 to Item 601 of Regulation S-K:

(i)
Equity Distribution Agreement among the Company, Regency Centers, L.P. and RBC Capital Markets, LLC dated August 6, 2013.

(c)
Underwriting Agreement dated as of January 14, 2015 among Regency Centers Corporation, the Forward Counterparty named therein, the Forward Seller named therein and Wells Fargo Securities, LLC, as Underwriter and as representatives of other underwriters listed therein (incorporated by reference to Exhibit 1.1 to the Company’s report on Form 8-K filed January 16, 2015).

3.    Articles of Incorporation and Bylaws
(a)
Restated Articles of Incorporation of Regency Centers Corporation (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K filed on June 5, 2013).
(b)
Amended and Restated Bylaws of Regency Centers Corporation (incorporated by reference to Exhibit 3.2(b) to the Company's Form 8-K filed on November 7, 2008).
(c)
Fourth Amended and Restated Certificate of Limited Partnership of Regency Centers, L.P. (incorporated by reference to Exhibit 3(a) to Regency Centers, L.P.'s Form 10-K filed on March 17, 2009).
(d)
Fifth Amended and Restated Agreement of Limited Partnership of Regency Centers, L.P., (incorporated by reference to Exhibit 3(d) to the Company's Form 10-K filed on February 19, 2014).
4.    Instruments Defining Rights of Security Holders
(a)
See Exhibits 3(a) and 3(b) for provisions of the Articles of Incorporation and Bylaws of the Company defining the rights of security holders. See Exhibits 3(c) and 3(d) for provisions of the Partnership Agreement of Regency Centers, L.P. defining rights of security holders.
(b)
Indenture dated December 5, 2001 between Regency Centers, L.P., the guarantors named therein and First Union National Bank, as trustee (incorporated by reference to Exhibit 4.4 to Regency Centers, L.P.'s Form 8-K filed on December 10, 2001).
(i)
First Supplemental Indenture dated as of June 5, 2007 among Regency Centers, L.P., the Company as guarantor and U.S. Bank National Association, as successor to Wachovia Bank, National Association (formerly known as First Union National Bank), as trustee (incorporated by reference to Exhibit 4.1 to Regency Centers, L.P.'s Form 8-K filed on June 5, 2007).
(c)
Indenture dated July 18, 2005 between Regency Centers, L.P., the guarantors named therein and Wachovia Bank, National Bank, as trustee (incorporated by reference to Exhibit 4.1 to Regency Centers, L.P's registration statement on Form S-4 filed on August 5, 2005, No. 333-127274).
10.    Material Contracts (~ indicates management contract or compensatory plan)
~(a)
Regency Centers Corporation Long Term Omnibus Plan (incorporated by reference to Exhibit 10.9 to the Company's Form 10-Q filed on May 8, 2008).

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~(i)
Form of Stock Rights Award Agreement pursuant to the Company's Long Term Omnibus Plan (incorporated by reference to Exhibit 10(b) to the Company's Form 10-K filed on March 10, 2006).
~(ii)
Form of 409A Amendment to Stock Rights Award Agreement (incorporated by reference to Exhibit 10(b)(i) to the Company's Form 10-K filed on March on 17, 2009).
~(iii)
Form of Nonqualified Stock Option Agreement pursuant to the Company's Long Term Omnibus Plan (incorporated by reference to Exhibit 10(c) to the Company's Form 10-K filed on March 10, 2006).
~(iv)
Form of 409A Amendment to Stock Option Agreement (incorporated by reference to Exhibit 10(c)(i) to the Company's Form 10-K filed on March 17, 2009).
~(v)
Amended and Restated Deferred Compensation Plan dated May 6, 2003 (incorporated by reference to Exhibit 10(k) to the Company's Form 10-K filed on March 12, 2004).
~(vi)
Regency Centers Corporation 2005 Deferred Compensation Plan (incorporated by reference to Exhibit 10(s) to the Company's Form 8-K filed on December 21, 2004).
~(vii)
First Amendment to Regency Centers Corporation 2005 Deferred Compensation Plan dated December 2005 (incorporated by reference to Exhibit 10(q)(i) to the Company's Form 10-K filed on March 10, 2006).
~(viii)
Second Amendment to the Regency Centers Corporation Amended and Restated Deferred Compensation Plan (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on June 13, 2011).
~(ix)
Third Amendment to the Regency Centers Corporation 2005 Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on June 13, 2011).
~(b)
Regency Centers Corporation 2011 Omnibus Plan (incorporated by reference to Annex A to the Company's 2011 Annual Meeting Proxy Statement filed on March 24, 2011).
~(c)
Form of Director/Officer Indemnification Agreement (filed as an Exhibit to Pre-effective Amendment No. 2 to the Company's registration statement on Form S-11 filed on October 5, 1993 (33-67258), and incorporated by reference).
~(d)
Form of Amended and Restated Severance and Change of Control Agreement dated as of January 1, 2014 by and between the Company and Martin E. Stein, Jr. (incorporated by reference to Exhibit 10.1 of the Company's Form 8-K filed on December 24, 2013).
~(e)
Form of Amended and Restated Severance and Change of Control Agreement dated as of January 1, 2014 by and between the Company and Brian M. Smith (incorporated by reference to Exhibit 10.2 of the Company's Form 8-K filed on December 24, 2013).
~(f)
Form of Amended and Restated Severance and Change of Control Agreement dated as of January 1, 2014 by and between the Company and Lisa Palmer (incorporated by reference to Exhibit 10.3 of the Company's Form 8-K filed on December 24, 2013).
~(g)
Form of Amended and Restated Severance and Change of Control Agreement dated as of January 1, 2014 by and between the Company and Dan M. Chandler, III (incorporated by reference to Exhibit 10.4 of the Company's Form 8-K filed on December 24, 2013).
~(h)
Form of Amended and Restated Severance and Change of Control Agreement dated as of January 1, 2014 by and between the Company and John S. Delatour (incorporated by reference to Exhibit 10.5 of the Company's Form 8-K filed on December 24, 2013).

139



~(i)
Form of Amended and Restated Severance and Change of Control Agreement dated as of January 1, 2014 by and between the Company and James D. Thompson (incorporated by reference to Exhibit 10.6 of the Company's Form 8-K filed on December 24, 2013).
(j)
Third Amended and Restated Credit Agreement dated as of September 7, 2011 by and among Regency Centers, , L.P., the Company, each of the financial institutions party thereto, and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on November 8, 2011).
(i)
First Amendment to Third Amended and Restated Credit Agreement dated September 13, 2012 (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on November 9, 2012).
(ii)
Second Amendment to Third Amended and Restated Credit Agreement dated June 27, 2014 (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on August 8, 2014).
(k)
Term Loan Agreement dated as of November 17, 2011 by and among Regency Centers, L.P., the Company, each of the financial institutions party thereto and Wells Fargo Securities, LLC (incorporated by reference to Exhibit 10.1 to the Company's Form 10-K filed on February 29, 2012).
(i)
First Amendment to Term Loan Agreement dated as of June 19, 2012 (incorporated by reference to Exhibit 10(h)(i) to the Company's Form 10-K filed on March 1, 2013).
(ii)
Second Amendment to Term Loan Agreement dated as of December 19, 2012 (incorporated by reference to Exhibit 10(h)(ii) to the Company's Form 10-K filed on March 1, 2013).
(iii)
Third Amendment to Term Loan Agreement dated as of June 27, 2014 (incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q filed on August 8, 2014).
(l)
Second Amended and Restated Limited Liability Company Agreement of Macquarie CountryWide-Regency II, LLC dated as of July 31, 2009 by and among Global Retail Investors, LLC, Regency Centers, L.P. and Macquarie CountryWide (US) No. 2 LLC (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on November 6, 2009).
(i)
Amendment No. 1 to Second Amended and Restate Limited Liability Company Agreement of GRI-Regency, LLC (formerly Macquarie CountryWide-Regency II, LLC) (incorporated by reference to Exhibit 10.(h)(i) to the Company’s Form 10-K filed March 1, 2011).
(m)
Forward Sale Agreement dated as of January 14, 2015 among Regency Centers Corporation and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Company’s report on Form 8-K filed January 16, 2015).
(n)
Forward Sale Agreement dated as of January 15, 2015 among Regency Centers Corporation and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.2 to the Company’s report on Form 8-K filed on January 16, 2015).
12.    Computation of ratios
12.1    Computation of Ratio of Earnings to Fixed Charges and Ratio of Combined Fixed Charges and Preference Dividends to Earnings
21.    Subsidiaries of Regency Centers Corporation
23.    Consents of Independent Accountants
23.1    Consent of KPMG LLP for Regency Centers Corporation.
23.2    Consent of KPMG LLP for Regency Centers, L.P.

140



31.    Rule 13a-14(a)/15d-14(a) Certifications.
31.1    Rule 13a-14 Certification of Chief Executive Officer for Regency Centers Corporation.
31.2    Rule 13a-14 Certification of Chief Financial Officer for Regency Centers Corporation.
31.3    Rule 13a-14 Certification of Chief Executive Officer for Regency Centers, L.P.
31.4    Rule 13a-14 Certification of Chief Financial Officer for Regency Centers, L.P.
32.    Section 1350 Certifications.
The certifications in this exhibit 32 are being furnished solely to accompany this report pursuant to 18 U.S.C. § 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any of the Company's filings, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
32.1
18 U.S.C. § 1350 Certification of Chief Executive Officer for Regency Centers Corporation.
32.2
18 U.S.C. § 1350 Certification of Chief Financial Officer for Regency Centers Corporation.
32.3    18 U.S.C. § 1350 Certification of Chief Executive Officer for Regency Centers, L.P.
32.4    18 U.S.C. § 1350 Certification of Chief Financial Officer for Regency Centers, L.P.
101.    Interactive Data Files
101.INS+    XBRL Instance Document
101.SCH+    XBRL Taxonomy Extension Schema Document
101.CAL+    XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF+    XBRL Taxonomy Definition Linkbase Document
101.LAB+    XBRL Taxonomy Extension Label Linkbase Document
101.PRE+    XBRL Taxonomy Extension Presentation Linkbase Document
__________________________
+    Submitted electronically with this Annual Report

141




SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
February 20, 2015
REGENCY CENTERS CORPORATION
 
By:

/s/ Martin E. Stein, Jr.
Martin E. Stein. Jr., Chairman of the Board and Chief Executive Officer



February 20, 2015
REGENCY CENTERS, L.P.
 
By:
Regency Centers Corporation, General Partner
 
By:

/s/ Martin E. Stein, Jr.
Martin E. Stein. Jr., Chairman of the Board and Chief Executive Officer


142





Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
February 20, 2015
 

/s/ Martin E. Stein, Jr.
Martin E. Stein. Jr., Chairman of the Board and Chief Executive Officer
February 20, 2015
 

/s/ Brian M. Smith
Brian M. Smith, President, Chief Operating Officer and Director
February 20, 2015
 

/s/ Lisa Palmer
Lisa Palmer, Executive Vice President and Chief Financial Officer (Principal Financial Officer)
February 20, 2015
 

/s/ J. Christian Leavitt
J. Christian Leavitt, Senior Vice President and Treasurer (Principal Accounting Officer)
February 20, 2015
 

/s/ Raymond L. Bank
Raymond L. Bank, Director
February 20, 2015
 

/s/ Bryce Blair
Bryce Blair, Director
February 20, 2015
 

/s/ C. Ronald Blankenship
C. Ronald Blankenship, Director
February 20, 2015
 

/s/ A.R. Carpenter
A.R. Carpenter, Director
February 20, 2015
 

/s/ J. Dix Druce
J. Dix Druce, Director
February 20, 2015
 

/s/ Mary Lou Fiala
Mary Lou Fiala, Director
February 20, 2015
 

/s/ David P. O'Connor
David P. O'Connor, Director
February 20, 2015
 

/s/ Douglas S. Luke
Douglas S. Luke, Director
February 20, 2015
 

/s/ John C. Schweitzer
John C. Schweitzer, Director
February 20, 2015
 

/s/ Thomas G. Wattles
Thomas G. Wattles, Director


143