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REGENCY CENTERS CORP - Quarter Report: 2023 March (Form 10-Q)

10-Q

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2023

or

 

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)

img38250041_0.jpg 

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

 

Trading Symbol

 

Name of each exchange on which registered

Common Stock, $.01 par value

 

REG

 

The Nasdaq Stock Market LLC

Regency Centers, L.P.

 

 

 

 

 

 

 

Title of each class

 

Trading Symbol

 

Name of each exchange on which registered

None

 

N/A

 

N/A

 

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 No Regency Centers, L.P. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Regency Centers Corporation Yes No Regency Centers, L.P. Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Regency Centers Corporation:

 

Large accelerated filer

Accelerated filer

Emerging growth company

Non-accelerated filer

Smaller reporting company

 

 

Regency Centers, L.P.:

 

Large accelerated filer

Accelerated filer

Emerging growth company

Non-accelerated filer

Smaller reporting company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Regency Centers Corporation Yes No Regency Centers, L.P. Yes No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Regency Centers Corporation Yes No Regency Centers, L.P. Yes No

The number of shares outstanding of Regency Centers Corporation's common stock was 170,978,967 as of May 3, 2023.

 

 


 

EXPLANATORY NOTE

This Quarterly Report on Form 10-Q (this "Report") combines the quarterly reports on Form 10-Q for the quarter ended March 31, 2023, 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 terms "the Company," "Regency Centers," "Regency," "we," "our," and "us" as used in this Report mean 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 March 31, 2023, the Parent Company owned approximately 99.6% of the Units in the Operating Partnership. The remaining limited Units are owned by third party investors. 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 quarterly reports on Form 10-Q 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 key 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 Units 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. Except for $200 million of unsecured private placement debt, the Parent Company does not hold any indebtedness, but guarantees all of the unsecured debt of the Operating Partnership. The Operating Partnership is also the co-issuer and guarantees the $200 million of Parent Company debt. 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.

Shareholders' 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. 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 shareholders' equity in noncontrolling interests in the Parent Company's financial statements.

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 shareholders' 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

 

 

 

 

 

Form 10-Q

Report Page

PART I - FINANCIAL INFORMATION

 

 

Item 1.

Financial Statements (Unaudited)

 

 

Regency Centers Corporation:

 

 

Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022

1

 

Consolidated Statements of Operations for the periods ended March 31, 2023 and 2022

2

 

Consolidated Statements of Comprehensive Income for the periods ended March 31, 2023 and 2022

3

 

Consolidated Statements of Equity for the periods ended March 31, 2023 and 2022

4

 

Consolidated Statements of Cash Flows for the periods ended March 31, 2023 and 2022

5

 

 

Regency Centers, L.P.:

 

 

Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022

7

 

Consolidated Statements of Operations for the periods ended March 31, 2023 and 2022

8

 

Consolidated Statements of Comprehensive Income for the periods ended March 31, 2023 and 2022

9

 

Consolidated Statements of Capital for the periods ended March 31, 2023 and 2022

10

 

Consolidated Statements of Cash Flows for the periods ended March 31, 2023 and 2022

11

 

 

Notes to Consolidated Financial Statements

13

 

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

24

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

43

 

Item 4.

Controls and Procedures

44

 

PART II - OTHER INFORMATION

 

 

Item 1.

Legal Proceedings

44

 

Item 1A.

Risk Factors

44

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

45

 

Item 3.

Defaults Upon Senior Securities

45

 

Item 4.

Mine Safety Disclosures

45

 

Item 5.

Other Information

45

 

Item 6.

Exhibits

45

 

SIGNATURES

47

 

 


 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

REGENCY CENTERS CORPORATION

Consolidated Balance Sheets

March 31, 2023 and December 31, 2022

(in thousands, except share data)

 

 

 

2023

 

 

2022

 

Assets

 

(unaudited)

 

 

 

 

Net real estate investments:

 

 

 

 

 

 

Real estate assets, at cost

 

$

11,886,697

 

 

 

11,858,064

 

Less: accumulated depreciation

 

 

2,484,960

 

 

 

2,415,860

 

Real estate assets, net

 

 

9,401,737

 

 

 

9,442,204

 

Investments in real estate partnerships

 

 

346,390

 

 

 

350,377

 

Net real estate investments

 

 

9,748,127

 

 

 

9,792,581

 

Cash, cash equivalents, and restricted cash, including $2,955 and $2,310 of restricted cash at March 31, 2023 and December 31, 2022, respectively

 

 

68,143

 

 

 

68,776

 

Tenant and other receivables

 

 

181,579

 

 

 

188,863

 

Deferred leasing costs, less accumulated amortization of $118,766 and $117,137 at March 31, 2023 and December 31, 2022, respectively

 

 

68,567

 

 

 

68,945

 

Acquired lease intangible assets, less accumulated amortization of $344,460 and $338,053 at March 31, 2023 and December 31, 2022, respectively

 

 

188,636

 

 

 

197,745

 

Right of use assets, net

 

 

273,702

 

 

 

275,513

 

Other assets

 

 

276,926

 

 

 

267,797

 

Total assets

 

$

10,805,680

 

 

 

10,860,220

 

Liabilities and Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Notes payable

 

$

3,711,784

 

 

 

3,726,754

 

Unsecured credit facility

 

 

30,000

 

 

 

 

Accounts payable and other liabilities

 

 

289,297

 

 

 

317,259

 

Acquired lease intangible liabilities, less accumulated amortization of $199,840 and $193,315 at March 31, 2023 and December 31, 2022, respectively

 

 

346,939

 

 

 

354,204

 

Lease liabilities

 

 

212,582

 

 

 

213,722

 

Tenants' security, escrow deposits and prepaid rent

 

 

75,643

 

 

 

70,242

 

Total liabilities

 

 

4,666,245

 

 

 

4,682,181

 

Commitments and contingencies

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

Common stock; $0.01 par value per share, 220,000,000 shares authorized; 170,958,422 and 171,124,593 shares issued at March 31, 2023 and December 31, 2022, respectively

 

 

1,710

 

 

 

1,711

 

Treasury stock at cost; 483,782 and 465,415 shares held at March 31, 2023 and December 31, 2022, respectively

 

 

(25,699

)

 

 

(24,461

)

Additional paid-in-capital

 

 

7,856,426

 

 

 

7,877,152

 

Accumulated other comprehensive income

 

 

3,927

 

 

 

7,560

 

Distributions in excess of net income

 

 

(1,779,043

)

 

 

(1,764,977

)

Total shareholders' equity

 

 

6,057,321

 

 

 

6,096,985

 

Noncontrolling interests:

 

 

 

 

 

 

Exchangeable operating partnership units, aggregate redemption value of $45,361 and $46,340 at March 31, 2023 and December 31, 2022, respectively

 

 

34,411

 

 

 

34,489

 

Limited partners' interests in consolidated partnerships

 

 

47,703

 

 

 

46,565

 

Total noncontrolling interests

 

 

82,114

 

 

 

81,054

 

Total equity

 

 

6,139,435

 

 

 

6,178,039

 

Total liabilities and equity

 

$

10,805,680

 

 

 

10,860,220

 

 

See accompanying notes to consolidated financial statements.

1


 

REGENCY CENTERS CORPORATION

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

 

 

Three months ended March 31,

 

 

 

2023

 

 

2022

 

Revenues:

 

 

 

 

 

 

Lease income

 

$

308,801

 

 

 

293,645

 

Other property income

 

 

3,138

 

 

 

3,104

 

Management, transaction, and other fees

 

 

6,038

 

 

 

6,684

 

Total revenues

 

 

317,977

 

 

 

303,433

 

Operating expenses:

 

 

 

 

 

 

Depreciation and amortization

 

 

82,707

 

 

 

77,842

 

Property operating expense

 

 

51,022

 

 

 

46,461

 

Real estate taxes

 

 

38,477

 

 

 

36,869

 

General and administrative

 

 

25,280

 

 

 

18,792

 

Other operating (income) expenses

 

 

(497

)

 

 

2,173

 

Total operating expenses

 

 

196,989

 

 

 

182,137

 

Other expense (income):

 

 

 

 

 

 

Interest expense, net

 

 

36,393

 

 

 

36,738

 

Gain on sale of real estate, net of tax

 

 

(250

)

 

 

(101,948

)

Net investment (income) loss

 

 

(1,727

)

 

 

2,494

 

Total other expense (income)

 

 

34,416

 

 

 

(62,716

)

Income from operations before equity in income of investments in real estate partnerships

 

 

86,572

 

 

 

184,012

 

Equity in income of investments in real estate partnerships

 

 

11,916

 

 

 

12,804

 

Net income

 

 

98,488

 

 

 

196,816

 

Noncontrolling interests:

 

 

 

 

 

 

Exchangeable operating partnership units

 

 

(420

)

 

 

(863

)

Limited partners' interests in consolidated partnerships

 

 

(787

)

 

 

(725

)

Income attributable to noncontrolling interests

 

 

(1,207

)

 

 

(1,588

)

Net income attributable to common shareholders

 

$

97,281

 

 

 

195,228

 

 

 

 

 

 

 

 

Income per common share - basic

 

$

0.57

 

 

 

1.14

 

Income per common share - diluted

 

$

0.57

 

 

 

1.14

 

 

See accompanying notes to consolidated financial statements.

2


 

REGENCY CENTERS CORPORATION

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

 

 

 

Three months ended March 31,

 

 

 

2023

 

 

2022

 

Net income

 

$

98,488

 

 

 

196,816

 

Other comprehensive income:

 

 

 

 

 

 

Effective portion of change in fair value of derivative instruments:

 

 

 

 

 

 

Effective portion of change in fair value of derivative instruments

 

 

(2,736

)

 

 

8,968

 

Reclassification adjustment of derivative instruments included in net income

 

 

(1,492

)

 

 

1,010

 

Unrealized gain (loss) on available-for-sale debt securities

 

 

192

 

 

 

(754

)

Other comprehensive (loss) income

 

 

(4,036

)

 

 

9,224

 

Comprehensive income

 

 

94,452

 

 

 

206,040

 

Less: comprehensive income attributable to noncontrolling interests:

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

 

1,207

 

 

 

1,588

 

Other comprehensive (loss) income attributable to noncontrolling interests

 

 

(403

)

 

 

761

 

Comprehensive income attributable to noncontrolling interests

 

 

804

 

 

 

2,349

 

Comprehensive income attributable to the Company

 

$

93,648

 

 

 

203,691

 

 

See accompanying notes to consolidated financial statements.

 

3


 

REGENCY CENTERS CORPORATION

Consolidated Statements of Equity

For the three months ended March 31, 2023 and 2022

(in thousands, except per share data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling Interests

 

 

 

 

 

 

Common
Stock

 

 

Treasury
Stock

 

 

Additional
Paid In
Capital

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Distributions
in Excess of
Net Income

 

 

Total
Shareholders'
Equity

 

 

Exchangeable
Operating
Partnership
Units

 

 

Limited
Partners'
Interest in
Consolidated
Partnerships

 

 

Total
Noncontrolling
Interests

 

 

Total
Equity

 

Balance at December 31, 2021

 

$

1,712

 

 

 

(22,758

)

 

 

7,883,458

 

 

 

(10,227

)

 

 

(1,814,814

)

 

 

6,037,371

 

 

 

35,447

 

 

 

37,114

 

 

 

72,561

 

 

 

6,109,932

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

195,228

 

 

 

195,228

 

 

 

863

 

 

 

725

 

 

 

1,588

 

 

 

196,816

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income before reclassification

 

 

 

 

 

 

 

 

 

 

 

7,537

 

 

 

 

 

 

7,537

 

 

 

37

 

 

 

640

 

 

 

677

 

 

 

8,214

 

Amounts reclassified from accumulated other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

926

 

 

 

 

 

 

926

 

 

 

4

 

 

 

80

 

 

 

84

 

 

 

1,010

 

Deferred compensation plan, net

 

 

 

 

 

(1,073

)

 

 

1,073

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock issued, net of amortization

 

 

2

 

 

 

 

 

 

4,206

 

 

 

 

 

 

 

 

 

4,208

 

 

 

 

 

 

 

 

 

 

 

 

4,208

 

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

 

 

 

 

 

 

 

 

(6,091

)

 

 

 

 

 

 

 

 

(6,091

)

 

 

 

 

 

 

 

 

 

 

 

(6,091

)

Common stock issued under dividend reinvestment plan

 

 

 

 

 

 

 

 

118

 

 

 

 

 

 

 

 

 

118

 

 

 

 

 

 

 

 

 

 

 

 

118

 

Distributions to partners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,070

)

 

 

(1,070

)

 

 

(1,070

)

Cash dividends declared:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock/unit ($0.625 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(106,970

)

 

 

(106,970

)

 

 

(475

)

 

 

 

 

 

(475

)

 

 

(107,445

)

Balance at March 31, 2022

 

$

1,714

 

 

 

(23,831

)

 

 

7,882,764

 

 

 

(1,764

)

 

 

(1,726,556

)

 

 

6,132,327

 

 

 

35,876

 

 

 

37,489

 

 

 

73,365

 

 

 

6,205,692

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2022

 

$

1,711

 

 

 

(24,461

)

 

 

7,877,152

 

 

 

7,560

 

 

 

(1,764,977

)

 

 

6,096,985

 

 

 

34,489

 

 

 

46,565

 

 

 

81,054

 

 

 

6,178,039

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

97,281

 

 

 

97,281

 

 

 

420

 

 

 

787

 

 

 

1,207

 

 

 

98,488

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss before reclassification

 

 

 

 

 

 

 

 

 

 

 

(2,316

)

 

 

 

 

 

(2,316

)

 

 

(11

)

 

 

(217

)

 

 

(228

)

 

 

(2,544

)

Amounts reclassified from accumulated other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(1,317

)

 

 

 

 

 

(1,317

)

 

 

(5

)

 

 

(170

)

 

 

(175

)

 

 

(1,492

)

Deferred compensation plan, net

 

 

 

 

 

(1,238

)

 

 

1,238

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock issued, net of amortization

 

 

2

 

 

 

 

 

 

4,817

 

 

 

 

 

 

 

 

 

4,819

 

 

 

 

 

 

 

 

 

 

 

 

4,819

 

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

 

 

 

 

 

 

 

 

(6,920

)

 

 

 

 

 

 

 

 

(6,920

)

 

 

 

 

 

 

 

 

 

 

 

(6,920

)

Common stock repurchased and retired

 

 

(3

)

 

 

 

 

 

(20,003

)

 

 

 

 

 

 

 

 

(20,006

)

 

 

 

 

 

 

 

 

 

 

 

(20,006

)

Common stock issued under dividend reinvestment plan

 

 

 

 

 

 

 

 

142

 

 

 

 

 

 

 

 

 

142

 

 

 

 

 

 

 

 

 

 

 

 

142

 

Contributions from partners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,777

 

 

 

1,777

 

 

 

1,777

 

Distributions to partners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,039

)

 

 

(1,039

)

 

 

(1,039

)

Cash dividends declared:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock/unit ($0.650 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(111,347

)

 

 

(111,347

)

 

 

(482

)

 

 

 

 

 

(482

)

 

 

(111,829

)

Balance at March 31, 2023

 

$

1,710

 

 

 

(25,699

)

 

 

7,856,426

 

 

 

3,927

 

 

 

(1,779,043

)

 

 

6,057,321

 

 

 

34,411

 

 

 

47,703

 

 

 

82,114

 

 

 

6,139,435

 

See accompanying notes to consolidated financial statements.

4


 

REGENCY CENTERS CORPORATION

Consolidated Statements of Cash Flows

For the three months ended March 31, 2023 and 2022

(in thousands)

(unaudited)

 

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

98,488

 

 

 

196,816

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

82,707

 

 

 

77,842

 

Amortization of deferred loan costs and debt premiums

 

 

1,490

 

 

 

1,379

 

(Accretion) and amortization of above and below market lease intangibles, net

 

 

(5,478

)

 

 

(5,302

)

Stock-based compensation, net of capitalization

 

 

4,810

 

 

 

4,164

 

Equity in income of investments in real estate partnerships

 

 

(11,916

)

 

 

(12,804

)

Gain on sale of real estate, net of tax

 

 

(250

)

 

 

(101,948

)

Distribution of earnings from investments in real estate partnerships

 

 

14,524

 

 

 

16,736

 

Deferred compensation expense (income)

 

 

1,448

 

 

 

(2,256

)

Realized and unrealized (gain) loss on investments

 

 

(1,674

)

 

 

2,533

 

Changes in assets and liabilities:

 

 

 

 

 

 

Tenant and other receivables

 

 

6,710

 

 

 

3,396

 

Deferred leasing costs

 

 

(672

)

 

 

(2,014

)

Other assets

 

 

(12,631

)

 

 

(4,724

)

Accounts payable and other liabilities

 

 

(20,858

)

 

 

(29,387

)

Tenants' security, escrow deposits and prepaid rent

 

 

5,401

 

 

 

(1,539

)

Net cash provided by operating activities

 

 

162,099

 

 

 

142,892

 

Cash flows from investing activities:

 

 

 

 

 

 

Acquisition of operating real estate

 

 

 

 

 

(30,166

)

Real estate development and capital improvements

 

 

(44,569

)

 

 

(53,605

)

Proceeds from sale of real estate and FF&E

 

 

3,603

 

 

 

124,924

 

Investments in real estate partnerships

 

 

(604

)

 

 

(7,173

)

Return of capital from investments in real estate partnerships

 

 

 

 

 

23,892

 

Dividends on investment securities

 

 

187

 

 

 

109

 

Acquisition of investment securities

 

 

(2,171

)

 

 

(5,554

)

Proceeds from sale of investment securities

 

 

4,504

 

 

 

5,927

 

Net cash (used in) provided by investing activities

 

 

(39,050

)

 

 

58,354

 

Cash flows from financing activities:

 

 

 

 

 

 

Repurchase of common shares in conjunction with equity award plans

 

 

(7,066

)

 

 

(6,246

)

Common shares repurchased through share repurchase program

 

 

(20,006

)

 

 

 

Proceeds from sale of treasury stock

 

 

2

 

 

 

63

 

Contributions from (distributions to) limited partners in consolidated partnerships, net

 

 

738

 

 

 

(1,070

)

Distributions to exchangeable operating partnership unit holders

 

 

(482

)

 

 

(475

)

Dividends paid to common shareholders

 

 

(111,085

)

 

 

(106,887

)

Proceeds from unsecured credit facilities

 

 

115,000

 

 

 

40,000

 

Repayment of unsecured credit facilities

 

 

(85,000

)

 

 

(40,000

)

Proceeds from notes payable

 

 

15,500

 

 

 

 

Repayment of notes payable

 

 

(28,306

)

 

 

 

Scheduled principal payments

 

 

(2,836

)

 

 

(2,846

)

Payment of loan costs

 

 

(141

)

 

 

(82

)

Net cash used in financing activities

 

 

(123,682

)

 

 

(117,543

)

Net (decrease) increase in cash and cash equivalents and restricted cash

 

 

(633

)

 

 

83,703

 

Cash and cash equivalents and restricted cash at beginning of the period

 

 

68,776

 

 

 

95,027

 

Cash and cash equivalents and restricted cash at end of the period

 

$

68,143

 

 

 

178,730

 

 

See accompanying notes to consolidated financial statements.

5


 

REGENCY CENTERS CORPORATION

Consolidated Statements of Cash Flows

For the three months ended March 31, 2023 and 2022

(in thousands)

(unaudited)

 

 

 

 

2023

 

 

2022

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Cash paid for interest (net of capitalized interest of $1,250 and $796 in 2023 and 2022, respectively)

 

$

44,107

 

 

 

44,317

 

Cash paid for income taxes, net of refunds

 

$

112

 

 

 

165

 

Supplemental disclosure of non-cash transactions:

 

 

 

 

 

 

Common stock and exchangeable operating partnership dividends declared
but not paid

 

$

111,829

 

 

 

107,445

 

Change in accrued capital expenditures

 

$

10,596

 

 

 

11,603

 

Common stock issued under dividend reinvestment plan

 

$

142

 

 

 

118

 

Stock-based compensation capitalized

 

$

155

 

 

 

199

 

Common stock issued for dividend reinvestment in trust

 

$

303

 

 

 

267

 

Contribution of stock awards into trust

 

$

1,201

 

 

 

1,177

 

Distribution of stock held in trust

 

$

265

 

 

 

329

 

Change in fair value of securities

 

$

243

 

 

 

754

 

 

See accompanying notes to consolidated financial statements.

 

6


 

REGENCY CENTERS, L.P.

Consolidated Balance Sheets

March 31, 2023 and December 31, 2022

(in thousands, except unit data)

 

 

 

2023

 

 

2022

 

Assets

 

(unaudited)

 

 

 

 

Net real estate investments:

 

 

 

 

 

 

Real estate assets, at cost

 

$

11,886,697

 

 

 

11,858,064

 

Less: accumulated depreciation

 

 

2,484,960

 

 

 

2,415,860

 

Real estate assets, net

 

 

9,401,737

 

 

 

9,442,204

 

Investments in real estate partnerships

 

 

346,390

 

 

 

350,377

 

Net real estate investments

 

 

9,748,127

 

 

 

9,792,581

 

Cash, cash equivalents, and restricted cash, including $2,955 and $2,310 of restricted cash at March 31, 2023 and December 31, 2022, respectively

 

 

68,143

 

 

 

68,776

 

Tenant and other receivables

 

 

181,579

 

 

 

188,863

 

Deferred leasing costs, less accumulated amortization of $118,766 and $117,137 at March 31, 2023 and December 31, 2022, respectively

 

 

68,567

 

 

 

68,945

 

Acquired lease intangible assets, less accumulated amortization of $344,460 and $338,053 at March 31, 2023 and December 31, 2022, respectively

 

 

188,636

 

 

 

197,745

 

Right of use assets, net

 

 

273,702

 

 

 

275,513

 

Other assets

 

 

276,926

 

 

 

267,797

 

Total assets

 

$

10,805,680

 

 

 

10,860,220

 

Liabilities and Capital

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Notes payable

 

$

3,711,784

 

 

 

3,726,754

 

Unsecured credit facility

 

 

30,000

 

 

 

 

Accounts payable and other liabilities

 

 

289,297

 

 

 

317,259

 

Acquired lease intangible liabilities, less accumulated amortization of $199,840 and $193,315 at March 31, 2023 and December 31, 2022, respectively

 

 

346,939

 

 

 

354,204

 

Lease liabilities

 

 

212,582

 

 

 

213,722

 

Tenants' security, escrow deposits and prepaid rent

 

 

75,643

 

 

 

70,242

 

Total liabilities

 

 

4,666,245

 

 

 

4,682,181

 

Commitments and contingencies

 

 

 

 

 

 

Capital:

 

 

 

 

 

 

Partners' capital:

 

 

 

 

 

 

General partner; 170,958,422 and 171,124,593 units outstanding at March 31, 2023 and December 31, 2022, respectively

 

 

6,053,394

 

 

 

6,089,425

 

Limited partners; 741,433 units outstanding at March 31, 2023 and December 31, 2022

 

 

34,411

 

 

 

34,489

 

Accumulated other comprehensive income

 

 

3,927

 

 

 

7,560

 

Total partners' capital

 

 

6,091,732

 

 

 

6,131,474

 

Noncontrolling interest: Limited partners' interests in consolidated partnerships

 

 

47,703

 

 

 

46,565

 

Total capital

 

 

6,139,435

 

 

 

6,178,039

 

Total liabilities and capital

 

$

10,805,680

 

 

 

10,860,220

 

 

See accompanying notes to consolidated financial statements.

7


 

REGENCY CENTERS, L.P.

Consolidated Statements of Operations

(in thousands, except per unit data)

(unaudited)

 

 

 

Three months ended March 31,

 

 

 

2023

 

 

2022

 

Revenues:

 

 

 

 

 

 

Lease income

 

$

308,801

 

 

 

293,645

 

Other property income

 

 

3,138

 

 

 

3,104

 

Management, transaction, and other fees

 

 

6,038

 

 

 

6,684

 

Total revenues

 

 

317,977

 

 

 

303,433

 

Operating expenses:

 

 

 

 

 

 

Depreciation and amortization

 

 

82,707

 

 

 

77,842

 

Property operating expense

 

 

51,022

 

 

 

46,461

 

Real estate taxes

 

 

38,477

 

 

 

36,869

 

General and administrative

 

 

25,280

 

 

 

18,792

 

Other operating (income) expenses

 

 

(497

)

 

 

2,173

 

Total operating expenses

 

 

196,989

 

 

 

182,137

 

Other expense (income):

 

 

 

 

 

 

Interest expense, net

 

 

36,393

 

 

 

36,738

 

Gain on sale of real estate, net of tax

 

 

(250

)

 

 

(101,948

)

Net investment (income) loss

 

 

(1,727

)

 

 

2,494

 

Total other expense (income)

 

 

34,416

 

 

 

(62,716

)

Income from operations before equity in income of investments in real estate partnerships

 

 

86,572

 

 

 

184,012

 

Equity in income of investments in real estate partnerships

 

 

11,916

 

 

 

12,804

 

Net income

 

 

98,488

 

 

 

196,816

 

Limited partners' interests in consolidated partnerships

 

 

(787

)

 

 

(725

)

Net income attributable to common unit holders

 

$

97,701

 

 

 

196,091

 

 

 

 

 

 

 

Income per common share - basic

 

$

0.57

 

 

 

1.14

 

Income per common share - diluted

 

$

0.57

 

 

 

1.14

 

 

See accompanying notes to consolidated financial statements.

8


 

REGENCY CENTERS, L.P.

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

 

 

 

Three months ended March 31,

 

 

 

2023

 

 

2022

 

Net income

 

$

98,488

 

 

 

196,816

 

Other comprehensive income:

 

 

 

 

 

 

Effective portion of change in fair value of derivative instruments:

 

 

 

 

 

 

Effective portion of change in fair value of derivative instruments

 

 

(2,736

)

 

 

8,968

 

Reclassification adjustment of derivative instruments included in net income

 

 

(1,492

)

 

 

1,010

 

Unrealized gain (loss) on available-for-sale debt securities

 

 

192

 

 

 

(754

)

Other comprehensive (loss) income

 

 

(4,036

)

 

 

9,224

 

Comprehensive income

 

 

94,452

 

 

 

206,040

 

Less: comprehensive income attributable to noncontrolling interests:

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

 

787

 

 

 

725

 

Other comprehensive (loss) income attributable to noncontrolling interests

 

 

(387

)

 

 

720

 

Comprehensive income attributable to noncontrolling interests

 

 

400

 

 

 

1,445

 

Comprehensive income attributable to the Partnership

 

$

94,052

 

 

 

204,595

 

 

See accompanying notes to consolidated financial statements.

9


 

REGENCY CENTERS, L.P.

Consolidated Statements of Capital

For the three months ended March 31, 2023 and 2022

(in thousands)

(unaudited)

 

 

 

General Partner Preferred
and Common Units

 

 

Limited
Partners

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Total
Partners'
Capital

 

 

Noncontrolling Interests in
Limited Partners' Interest in
Consolidated Partnerships

 

 

Total
Capital

 

Balance at December 31, 2021

 

$

6,047,598

 

 

 

35,447

 

 

 

(10,227

)

 

 

6,072,818

 

 

 

37,114

 

 

 

6,109,932

 

Net income

 

 

195,228

 

 

 

863

 

 

 

 

 

 

196,091

 

 

 

725

 

 

 

196,816

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income before reclassification

 

 

 

 

 

37

 

 

 

7,537

 

 

 

7,574

 

 

 

640

 

 

 

8,214

 

Amounts reclassified from accumulated other comprehensive loss

 

 

 

 

 

4

 

 

 

926

 

 

 

930

 

 

 

80

 

 

 

1,010

 

Distributions to partners

 

 

(106,970

)

 

 

(475

)

 

 

 

 

 

(107,445

)

 

 

(1,070

)

 

 

(108,515

)

Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization

 

 

4,208

 

 

 

 

 

 

 

 

 

4,208

 

 

 

 

 

 

4,208

 

Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances

 

 

(5,973

)

 

 

 

 

 

 

 

 

(5,973

)

 

 

 

 

 

(5,973

)

Balance at March 31, 2022

 

$

6,134,091

 

 

 

35,876

 

 

 

(1,764

)

 

 

6,168,203

 

 

 

37,489

 

 

 

6,205,692

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2022

 

$

6,089,425

 

 

 

34,489

 

 

 

7,560

 

 

 

6,131,474

 

 

 

46,565

 

 

 

6,178,039

 

Net income

 

 

97,281

 

 

 

420

 

 

 

 

 

 

97,701

 

 

 

787

 

 

 

98,488

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss before reclassification

 

 

 

 

 

(11

)

 

 

(2,316

)

 

 

(2,327

)

 

 

(217

)

 

 

(2,544

)

Amounts reclassified from accumulated other comprehensive loss

 

 

 

 

 

(5

)

 

 

(1,317

)

 

 

(1,322

)

 

 

(170

)

 

 

(1,492

)

Contributions from partners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,777

 

 

 

1,777

 

Distributions to partners

 

 

(111,347

)

 

 

(482

)

 

 

 

 

 

(111,829

)

 

 

(1,039

)

 

 

(112,868

)

Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization

 

 

4,819

 

 

 

 

 

 

 

 

 

4,819

 

 

 

 

 

 

4,819

 

Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company

 

 

(20,006

)

 

 

 

 

 

 

 

 

(20,006

)

 

 

 

 

 

(20,006

)

Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances

 

 

(6,778

)

 

 

 

 

 

 

 

 

(6,778

)

 

 

 

 

 

(6,778

)

Balance at March 31, 2023

 

$

6,053,394

 

 

 

34,411

 

 

 

3,927

 

 

 

6,091,732

 

 

 

47,703

 

 

 

6,139,435

 

 

See accompanying notes to consolidated financial statements.

 

10


 

REGENCY CENTERS, L.P.

Consolidated Statements of Cash Flows

For the three months ended March 31, 2023 and 2022

(in thousands)

(unaudited)

 

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

98,488

 

 

 

196,816

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

82,707

 

 

 

77,842

 

Amortization of deferred loan costs and debt premiums

 

 

1,490

 

 

 

1,379

 

(Accretion) and amortization of above and below market lease intangibles, net

 

 

(5,478

)

 

 

(5,302

)

Stock-based compensation, net of capitalization

 

 

4,810

 

 

 

4,164

 

Equity in income of investments in real estate partnerships

 

 

(11,916

)

 

 

(12,804

)

Gain on sale of real estate, net of tax

 

 

(250

)

 

 

(101,948

)

Distribution of earnings from investments in real estate partnerships

 

 

14,524

 

 

 

16,736

 

Deferred compensation expense (income)

 

 

1,448

 

 

 

(2,256

)

Realized and unrealized (gain) loss on investments

 

 

(1,674

)

 

 

2,533

 

Changes in assets and liabilities:

 

 

 

 

 

 

Tenant and other receivables

 

 

6,710

 

 

 

3,396

 

Deferred leasing costs

 

 

(672

)

 

 

(2,014

)

Other assets

 

 

(12,631

)

 

 

(4,724

)

Accounts payable and other liabilities

 

 

(20,858

)

 

 

(29,387

)

Tenants' security, escrow deposits and prepaid rent

 

 

5,401

 

 

 

(1,539

)

Net cash provided by operating activities

 

 

162,099

 

 

 

142,892

 

Cash flows from investing activities:

 

 

 

 

 

 

Acquisition of operating real estate

 

 

 

 

 

(30,166

)

Real estate development and capital improvements

 

 

(44,569

)

 

 

(53,605

)

Proceeds from sale of real estate and FF&E

 

 

3,603

 

 

 

124,924

 

Collection of notes receivable

 

 

 

 

 

 

Investments in real estate partnerships

 

 

(604

)

 

 

(7,173

)

Return of capital from investments in real estate partnerships

 

 

 

 

 

23,892

 

Dividends on investment securities

 

 

187

 

 

 

109

 

Acquisition of investment securities

 

 

(2,171

)

 

 

(5,554

)

Proceeds from sale of investment securities

 

 

4,504

 

 

 

5,927

 

Net cash (used in) provided by investing activities

 

 

(39,050

)

 

 

58,354

 

Cash flows from financing activities:

 

 

 

 

 

 

Repurchase of common shares in conjunction with equity award plans

 

 

(7,066

)

 

 

(6,246

)

Common units repurchased through share repurchase program

 

 

(20,006

)

 

 

 

Proceeds from sale of treasury stock

 

 

2

 

 

 

63

 

Contributions from (distributions to) limited partners in consolidated partnerships, net

 

 

738

 

 

 

(1,070

)

Distributions to partners

 

 

(111,567

)

 

 

(107,362

)

Proceeds from unsecured credit facilities

 

 

115,000

 

 

 

40,000

 

Repayment of unsecured credit facilities

 

 

(85,000

)

 

 

(40,000

)

Proceeds from notes payable

 

 

15,500

 

 

 

 

Repayment of notes payable

 

 

(28,306

)

 

 

 

Scheduled principal payments

 

 

(2,836

)

 

 

(2,846

)

Payment of loan costs

 

 

(141

)

 

 

(82

)

Net cash used in financing activities

 

 

(123,682

)

 

 

(117,543

)

Net (decrease) increase in cash and cash equivalents and restricted cash

 

 

(633

)

 

 

83,703

 

Cash and cash equivalents and restricted cash at beginning of the period

 

 

68,776

 

 

 

95,027

 

Cash and cash equivalents and restricted cash at end of the period

 

$

68,143

 

 

 

178,730

 

 

See accompanying notes to consolidated financial statements.

11


 

REGENCY CENTERS, L.P.

Consolidated Statements of Cash Flows

For the three months ended March 31, 2023 and 2022

(in thousands)

(unaudited)

 

 

 

 

2023

 

 

2022

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Cash paid for interest (net of capitalized interest of $1,250 and $796 in 2023 and 2022, respectively)

 

$

44,107

 

 

 

44,317

 

Cash paid for income taxes, net of refunds

 

$

112

 

 

 

165

 

Supplemental disclosure of non-cash transactions:

 

 

 

 

 

 

Common stock and exchangeable operating partnership dividends declared
but not paid

 

$

111,829

 

 

 

107,445

 

Change in accrued capital expenditures

 

$

10,596

 

 

 

11,603

 

Common stock issued by Parent Company for dividend reinvestment plan

 

$

142

 

 

 

118

 

Stock-based compensation capitalized

 

$

155

 

 

 

199

 

Common stock issued for dividend reinvestment in trust

 

$

303

 

 

 

267

 

Contribution of stock awards into trust

 

$

1,201

 

 

 

1,177

 

Distribution of stock held in trust

 

$

265

 

 

 

329

 

Change in fair value of securities

 

$

243

 

 

 

754

 

 

See accompanying notes to consolidated financial statements.

 

12


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

 

 

1.

Organization and Significant Accounting Policies

General

Regency Centers Corporation (the "Parent Company") began its operations as a REIT in 1993 and is the general partner of Regency Centers, L.P. (the "Operating Partnership"). The Parent Company primarily engages in the ownership, management, leasing, acquisition, development, and redevelopment of shopping centers through the Operating Partnership, and has no other assets other than through its investment in the Operating Partnership, and its only liabilities are $200 million of unsecured private placement notes, which are co-issued and guaranteed by the Operating Partnership. The Parent Company guarantees all of the unsecured debt of the Operating Partnership.

As of March 31, 2023, the Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis owned 308 properties and held partial interests in an additional 96 properties through unconsolidated Investments in real estate partnerships (also referred to as "joint ventures" or "investment partnerships").

The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. These adjustments are considered to be of a normal recurring nature.

Risks and Uncertainties

The success of the Company's tenants in operating their businesses and their corresponding ability to pay rent continue to be significantly influenced by current economic challenges, which impact their cost of doing business, including but not limited to the impact of inflation, the cost and availability of labor, supply chain constraints, increasing energy prices and interest rates, and access to credit. Additionally, macroeconomic and geopolitical risks create challenges that may exacerbate current market conditions in the United States of America ("U.S.", "USA" or "United States"). The policies implemented by the U.S. government to address these issues, including raising interest rates, could result in adverse impacts on the U.S. economy, including a slowing of growth and potentially a recession, thereby impacting consumer spending, tenants' businesses, and/or decreasing future demand for space in shopping centers. The potential impact of current economic challenges on the Company's financial condition, results of operations, and cash flows is subject to change and continues to depend on the extent and duration of these risks and uncertainties.

Consolidation

The Company consolidates properties that are wholly-owned and properties where it owns less than 100%, but has control over the activities most important to the overall success of the partnership. Control is determined using an evaluation based on accounting standards related to the consolidation of Variable Interest Entities ("VIEs") and voting interest entities.

Ownership of the Operating Partnership

The Operating Partnership's capital includes general and limited common Partnership Units. As of March 31, 2023, the Parent Company owned approximately 99.6% of the outstanding common Partnership Units of the Operating Partnership, with the remaining limited common Partnership Units held by third parties ("Exchangeable operating partnership units" or "EOP units"). Each EOP unit is exchangeable for cash or one share of common stock of the Parent Company, at the discretion of the Parent Company, and the unit holder cannot require redemption in cash or other assets (i.e. registered shares of the Parent). The Parent Company has evaluated the conditions as specified under Accounting Standards Codification ("ASC") Topic 480, Distinguishing Liabilities from Equity, as it relates to EOP units outstanding and concluded that the Parent Company has the right to satisfy the redemption requirements of the units by delivering shares of unregistered common stock. Accordingly, the Parent Company classifies EOP units as permanent equity in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity and Comprehensive Income. The Parent Company serves as general partner of the Operating Partnership. The EOP unit holders have limited rights over the Operating Partnership such that they do not have the power to direct the activities of the Operating Partnership. As such, the Operating Partnership is considered a VIE, and the Parent Company, which consolidates it, is the primary beneficiary. The Parent Company's only investment is 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.

 

13


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

 

Real Estate Partnerships

As of March 31, 2023, Regency had a partial ownership interest in 107 properties through partnerships, of which 11 are consolidated. Regency's partners include institutional investors and other real estate developers and/or operators (the "Partners" or "Limited Partners"). Regency has a variable interest in these entities through its equity interests, with Regency the primary beneficiary in certain of these real estate partnerships. As such, Regency consolidates the partnerships into its financial statements for which it is the primary beneficiary and reports the limited partners' interests as noncontrolling interests. For those partnerships which Regency is not the primary beneficiary and does not control, but has significant influence, Regency recognizes its investment in them using the equity method of accounting.

The assets of these partnerships are restricted to the use of the partnerships and cannot be used by general creditors of the Company. Similarly, the obligations of the partnerships can only be settled by the assets of these partnerships or additional contributions by the partners.

The major classes of assets, liabilities, and non-controlling equity interests held by the Company's consolidated VIEs, exclusive of the Operating Partnership, are as follows:

 

(in thousands)

 

March 31, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

Net real estate investments

 

$

106,916

 

 

 

107,725

 

Cash, cash equivalents and restricted cash

 

 

2,487

 

 

 

2,420

 

Liabilities

 

 

 

 

 

 

Notes payable

 

 

3,695

 

 

 

4,188

 

Equity

 

 

 

 

 

 

Limited partners' interests in consolidated partnerships

 

 

24,337

 

 

 

24,364

 

Revenues and Other Receivables

Other property income includes parking fees and other incidental income from the properties and is generally recognized at the point in time that the performance obligation is met. Income within Management, transaction, and other fees on the Consolidated Statements of Operations is primarily from contracts with the Company's real estate partnerships. The primary components of these revenue streams, the timing of satisfying the performance obligations, and amounts are as follows:

 

 

 

 

 

Three months ended March 31,

 

(in thousands)

 

Timing of satisfaction of performance obligations

 

2023

 

 

2022

 

Management, transaction, and other fees:

 

 

 

 

 

 

 

 

Property management services

 

Over time

 

$

3,458

 

 

 

3,618

 

Asset management services

 

Over time

 

 

1,629

 

 

 

1,755

 

Leasing services

 

Point in time

 

 

718

 

 

 

996

 

Other transaction fees

 

Point in time

 

 

233

 

 

 

315

 

Total management, transaction, and other fees

 

 

 

$

6,038

 

 

 

6,684

 

The accounts receivable for management services, which are included within Tenant and other receivables in the accompanying Consolidated Balance Sheets, are $16.8 million and $16.4 million, as of March 31, 2023 and December 31, 2022, respectively.

 

14


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

 

Recent Accounting Pronouncements

The following table provides a brief description of recently adopted accounting pronouncements and impact on our financial statements:

Standard

Description

Date of adoption

Effect on the financial statements or other significant matters

Recently adopted:

ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

 

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related to activities that impact debt, leases, derivatives, and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.

 

The amendments in this update provide exceptions to the guidance in Topic 815 related to changes to the critical terms of a hedging relationship due to reference rate reform, which if criteria are met, provide such changes should not result in the dedesignation and redesignation of the hedging relationship.

 

March 2020 through March 31, 2023

 

The Company has elected to apply the hedge accounting expedients and exceptions related to changes to the reference rate from LIBOR to SOFR in the Company's interest rate swaps, which it completed during the three months ended March 31, 2023. Application of these exceptions preserves the hedge designation of interest rate swaps and the related accounting and presentation consistent with past presentation.

 

 

15


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

 

2.

Real Estate Investments

The Company had no acquisitions of shopping centers or land for development during the three months ended March 31, 2023, as compared to those detailed in the table below for the three months ended March 31, 2022:

 

(in thousands)

 

Three months ended March 31, 2022

 

Date Purchased

 

Property Name

 

City/State

 

Property
Type

 

Regency Ownership

 

Purchase
Price
(1)

 

 

Debt
Assumed,
Net of
Discounts
(1)

 

 

Intangible
Assets
(1)

 

 

Intangible
Liabilities
 (1)

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3/1/2022

 

Glenwood Green

 

Old Bridge, NJ

 

Development

 

70%

 

$

11,000

 

 

 

 

 

 

 

 

 

 

3/31/2022

 

Island Village

 

Bainbridge Island, WA

 

Operating

 

100%

 

 

30,650

 

 

 

 

 

 

2,900

 

 

 

6,839

 

Total consolidated

 

 

 

 

 

 

 

$

41,650

 

 

 

 

 

 

2,900

 

 

 

6,839

 

Unconsolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3/25/2022

 

Naperville Plaza

 

Naperville, IL

 

Operating

 

20%

 

 

52,380

 

 

 

22,074

 

 

 

4,336

 

 

 

814

 

Total unconsolidated

 

 

 

 

 

 

 

$

52,380

 

 

 

22,074

 

 

 

4,336

 

 

 

814

 

Total property acquisitions

 

 

 

 

 

 

 

$

94,030

 

 

 

22,074

 

 

 

7,236

 

 

 

7,653

 

 

(1)
Amounts reflected for purchase price and allocation are reflected at 100%.

 

3.

Property Dispositions

 

The following table provides a summary of consolidated shopping centers and land parcels sold during the periods set forth below:

 

 

 

Three months ended March 31,

 

(in thousands, except number sold data)

 

2023

 

 

2022

 

Net proceeds from sale of real estate investments

 

$

2,923

 

 

 

124,924

 

Gain on sale of real estate, net of tax

 

 

250

 

 

 

101,948

 

Number of operating properties sold

 

 

 

 

 

1

 

Number of land parcels sold

 

 

1

 

 

 

1

 

Percent interest sold

 

100%

 

 

100%

 

 

 

4.

Other Assets

 

The following table represents the components of Other assets in the accompanying Consolidated Balance Sheets as of the dates set forth below:

 

(in thousands)

 

March 31, 2023

 

 

December 31, 2022

 

Goodwill

 

$

167,062

 

 

 

167,062

 

Investments

 

 

53,967

 

 

 

54,581

 

Prepaid and other

 

 

41,363

 

 

 

28,615

 

Furniture, fixtures, and equipment, net ("FF&E")

 

 

5,044

 

 

 

5,808

 

Derivative assets

 

 

4,907

 

 

 

6,575

 

Deferred financing costs, net

 

 

4,583

 

 

 

5,156

 

Total other assets

 

$

276,926

 

 

 

267,797

 

 

 

 

16


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

 

5.

Notes Payable and Unsecured Credit Facilities

The Company's outstanding debt, net of unamortized debt premium (discount) and debt issuance costs, consisted of the following as of the dates set forth below:

 

(in thousands)

 

Weighted
Average
Contractual
Rate

 

Weighted
Average
Effective
Rate

 

March 31, 2023

 

 

December 31, 2022

 

Notes payable:

 

 

 

 

 

 

 

 

 

 

Fixed rate mortgage loans

 

3.9%

 

3.4%

 

$

330,047

 

 

 

342,135

 

Variable rate mortgage loans (1)

 

3.8%

 

3.9%

 

 

132,269

 

 

 

136,246

 

Fixed rate unsecured debt

 

3.8%

 

4.0%

 

 

3,249,468

 

 

 

3,248,373

 

Total notes payable

 

 

 

 

 

 

3,711,784

 

 

 

3,726,754

 

Unsecured credit facilities:

 

 

 

 

 

 

 

 

 

 

$1.25 Billion Line of Credit (the "Line") (2)

 

5.8%

 

6.2%

 

 

30,000

 

 

 

 

Total debt outstanding

 

 

 

 

 

$

3,741,784

 

 

 

3,726,754

 

(1)
Five of these six variable rate loans, representing $130.1 million of debt in the aggregate, have interest rate swaps in place to mitigate interest rate fluctuation risk. Based on these swap agreements, the effective fixed rates of the five loans range from 2.5% to 6.0%.
(2)
Weighted average effective rate for the Line is calculated based on a fully drawn Line balance using the period end variable rate.

Scheduled principal payments and maturities on notes payable and unsecured credit facilities were as follows:

 

(in thousands)

 

March 31, 2023

 

Scheduled Principal Payments and Maturities by Year:

 

Scheduled
Principal
Payments

 

 

Mortgage
Loan
Maturities

 

 

Unsecured
Maturities
(1)

 

 

Total

 

 2023 (2)

 

$

6,765

 

 

 

31,843

 

 

 

 

 

 

38,608

 

 2024

 

 

5,044

 

 

 

90,742

 

 

 

250,000

 

 

 

345,786

 

 2025

 

 

3,942

 

 

 

43,750

 

 

 

280,000

 

 

 

327,692

 

 2026

 

 

4,127

 

 

 

127,096

 

 

 

200,000

 

 

 

331,223

 

 2027

 

 

3,788

 

 

 

137,915

 

 

 

525,000

 

 

 

666,703

 

Beyond 5 Years

 

 

2,873

 

 

 

322

 

 

 

2,050,000

 

 

 

2,053,195

 

Unamortized debt premium/(discount) and issuance costs

 

 

 

 

 

4,109

 

 

 

(25,532

)

 

 

(21,423

)

Total

 

$

26,539

 

 

 

435,777

 

 

 

3,279,468

 

 

 

3,741,784

 

(1)
Includes unsecured public and private debt and unsecured credit facilities.
(2)
Reflects scheduled principal payments and maturities for the remainder of the year.

The Company was in compliance as of March 31, 2023, with all financial and other covenants under its unsecured public and private placement debt and unsecured credit facilities and expects to remain in compliance thereafter.

 

6.

Derivative Financial Instruments

The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors, and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company's operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative transactions or purposes other than mitigation of interest rate risk. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with quality credit ratings. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

The Company's objectives in using interest rate derivatives are to attempt to stabilize interest expense where possible and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. 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.

 

17


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

 

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:

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

Assets (Liabilities) (1)

 

Effective
Date

 

Maturity
Date

 

Notional
Amount

 

 

Bank Pays
Variable Rate of

 

Regency Pays
Fixed Rate of

 

March 31, 2023

 

 

December 31, 2022

 

12/1/16

 

11/1/23

 

 

30,969

 

 

SOFR

 

1.490%

 

 

621

 

 

 

883

 

9/17/19

 

3/17/25

 

 

24,000

 

 

SOFR

 

1.443%

 

 

1,177

 

 

 

1,443

 

12/20/19

 

12/19/26

 

 

24,365

 

 

SOFR

 

1.684%

 

 

1,523

 

 

 

1,939

 

2/24/23

 

12/31/26

 

 

15,479

 

 

SOFR

 

4.229%

 

 

(370

)

 

 

152

 

6/2/17

 

6/2/27

 

 

35,303

 

 

SOFR

 

2.261%

 

 

1,586

 

 

 

2,158

 

 

 

 

 

 

 

 

 

 

 

$

4,537

 

 

 

6,575

 

(1)
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.

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, as of March 31, 2023, does not have any derivatives that are not designated as hedges.

The changes in the fair value of derivatives designated and qualifying as cash flow hedges are recorded in Accumulated other comprehensive income ("AOCI") and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

The following table represents the effect of the derivative financial instruments on the accompanying Consolidated Financial Statements:

 

Location and Amount of Gain (Loss) Recognized in OCI on Derivative

 

 

Location and Amount of Gain (Loss) Reclassified from AOCI into Income

 

 

Total amounts presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded

 

 

 

Three months ended March 31,

 

 

 

 

Three months ended March 31,

 

 

 

 

Three months ended March 31,

 

(in thousands)

 

2023

 

 

2022

 

 

 

 

2023

 

 

2022

 

 

 

 

2023

 

 

2022

 

Interest rate swaps

 

$

(2,736

)

 

 

8,968

 

 

Interest expense

 

$

(1,492

)

 

 

1,010

 

 

Interest expense, net

 

$

36,393

 

 

 

36,738

 

As of March 31, 2023, the Company expects approximately $4.7 million of accumulated comprehensive income on derivative instruments in AOCI, including the Company's share from its Investments in real estate partnerships, to be reclassified into earnings during the next 12 months.

 

7.

Leases

All of the Company's leases are classified as operating leases. The Company's Lease income is comprised of both fixed and variable income. Fixed and in-substance fixed lease income includes stated amounts per the lease contract, which are primarily related to base rent, and in some cases stated amounts for common area maintenance ("CAM"), real estate taxes, and insurance ("Recoverable Costs"). Income for these amounts is recognized on a straight-line basis.

Variable lease income includes the following two main items in the lease contracts:

(i) Recoveries from tenants represents the tenants' contractual obligations to reimburse the Company for their portion of Recoverable Costs incurred. Generally the Company's leases provide for the tenants to reimburse the Company based on the tenants' share of the actual costs incurred in proportion to the tenants' share of leased space in the property.

(ii) Percentage rent represents amounts billable to tenants based on the tenants' actual sales volume in excess of levels specified in the lease contract.

 

18


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

 

The following table provides a disaggregation of lease income recognized as either fixed or variable lease income based on the criteria specified in ASC Topic 842:

 

(in thousands)

 

Three months ended March 31,

 

 

 

2023

 

 

2022

 

Operating lease income

 

 

 

 

 

 

Fixed and in-substance fixed lease income

 

$

219,641

 

 

 

207,502

 

Variable lease income

 

 

80,780

 

 

 

72,026

 

Other lease related income, net:

 

 

 

 

 

 

Above/below market rent and tenant rent inducement amortization, net

 

 

5,865

 

 

 

5,689

 

Uncollectible straight-line rent

 

 

578

 

 

 

2,282

 

Uncollectible amounts billable in lease income

 

 

1,937

 

 

 

6,146

 

Total lease income

 

$

308,801

 

 

 

293,645

 

Lease income for operating leases with fixed payment terms is recognized on a straight-line basis over the expected term of the lease for all leases in which collectibility is considered probable. At lease commencement, the Company generally expects that collectibility of substantially all payments due under the lease is probable due to the Company's credit checks on tenants and other credit worthiness analysis undertaken before entering into a new lease; therefore, income from most operating leases is initially recognized on a straight-line basis. For operating leases in which collectibility of Lease income is not considered probable, Lease income is recognized on a cash basis and all previously recognized straight-line rent receivables are reversed in the period in which the Lease income is determined not to be probable of collection. Should collectibility of Lease income become probable again, through evaluation of qualitative and quantitative measures on a tenant by tenant basis, accrual basis accounting resumes and all commencement-to-date straight-line rent is recognized in that period. In addition to the lease-specific collectibility assessment performed under ASC Topic 842, the Company may also recognize a general reserve, as a reduction to Lease income, for its portfolio of operating lease receivables which are not expected to be fully collectible based on the Company's historical collection experience.

The following table represents the components of Tenant and other receivables, net of amounts considered uncollectible, in the accompanying Consolidated Balance Sheets:

 

(in thousands)

 

March 31, 2023

 

 

December 31, 2022

 

Tenant receivables

 

$

21,546

 

 

 

31,486

 

Straight-line rent receivables

 

 

130,811

 

 

 

128,214

 

Other receivables (1)

 

 

29,222

 

 

 

29,163

 

Total tenant and other receivables

 

$

181,579

 

 

 

188,863

 

(1)
Other receivables include construction receivables, insurance receivables, and amounts due from real estate partnerships for Management, transaction, and other fee income.

 

8.

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 approximate their fair values, except for the following:

 

 

 

March 31, 2023

 

 

December 31, 2022

 

(in thousands)

 

Carrying
Amount

 

 

Fair Value

 

 

Carrying
Amount

 

 

Fair Value

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Notes payable

 

$

3,711,784

 

 

 

3,409,128

 

 

 

3,726,754

 

 

 

3,333,378

 

Unsecured credit facilities

 

$

30,000

 

 

 

30,000

 

 

 

 

 

 

 

The above fair values represent management's estimate of the amounts that would be received from selling those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants as of March 31, 2023, and December 31, 2022, respectively. These fair value measurements maximize the use of observable inputs which are classified within Level 2 of the fair value hierarchy. 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.

 

19


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

 

The Company develops its judgments based on the best information available at the measurement date, including expected cash flows, appropriate 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. 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.

(b) Fair Value Measurements

The following financial instruments are measured at fair value on a recurring basis:

Securities

The Company has investments in marketable securities that are included within Other assets on the accompanying Consolidated Balance Sheets. The fair value of the securities was determined using quoted prices in active markets, which are considered Level 1 inputs of the fair value hierarchy. Changes in the value of securities are recorded within Net investment (income) loss in the accompanying Consolidated Statements of Operations, and include unrealized gains of $1.6 million and unrealized losses of $3.0 million during the three months ended March 31, 2023 and 2022, respectively.

Available-for-Sale Debt Securities

Available-for-sale debt securities consist of investments in certificates of deposit and corporate bonds, and are recorded at fair value using either recent trade prices for the identical debt instrument or comparable instruments by issuers of similar industry sector, issuer rating, and size, to estimate fair value, which are considered Level 2 inputs of the fair value hierarchy. Unrealized gains or losses on these debt securities are recognized through Other comprehensive income.

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 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.

 

20


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

 

The following tables present the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis:

 

 

Fair Value Measurements as of March 31, 2023

 

 

 

 

 

Quoted Prices in Active Markets for Identical Assets

 

 

Significant Other Observable Inputs

 

 

Significant Unobservable Inputs

 

(in thousands)

Balance

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

Securities

$

38,788

 

 

 

38,788

 

 

 

 

 

 

 

Available-for-sale debt securities

 

15,179

 

 

 

 

 

 

15,179

 

 

 

 

Interest rate derivatives

 

4,907

 

 

 

 

 

 

4,907

 

 

 

 

Total

$

58,874

 

 

 

38,788

 

 

 

20,086

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest rate derivatives

$

(370

)

 

 

 

 

 

(370

)

 

 

 

 

 

Fair Value Measurements as of December 31, 2022

 

 

 

 

 

Quoted Prices in Active Markets for Identical Assets

 

 

Significant Other Observable Inputs

 

 

Significant Unobservable Inputs

 

(in thousands)

Balance

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

Securities

$

40,089

 

 

 

40,089

 

 

 

 

 

 

 

Available-for-sale debt securities

 

14,492

 

 

 

 

 

 

14,492

 

 

 

 

Interest rate derivatives

 

6,575

 

 

 

 

 

 

6,575

 

 

 

 

Total

$

61,156

 

 

 

40,089

 

 

 

21,067

 

 

 

 

 

 

9.

Equity and Capital

 

Common Stock of the Parent Company

Dividends Declared

On May 2, 2023, our Board of Directors declared a common stock dividend of $0.65 per share, payable on July 6, 2023, to shareholders of record as of June 14, 2023.

At the Market ("ATM") Program

Under the Parent Company's ATM equity offering program, the Parent Company could have sold up to $350.4 million of common stock available for issuance. No sales occurred during the three months ended March 31, 2023, and the program expired on March 12, 2023.

Share Repurchase Program

The Company has a common share repurchase program under which it may purchase, from time to time, up to a maximum of $250 million of its outstanding common stock through open market purchases, and/or in privately negotiated transactions (referred to as the "Repurchase Program"). The timing and price of share repurchases, if any will be dependent upon market conditions and other factors. The shares repurchased, if not retired, would be treated as treasury shares. The authorization for this repurchase program will expire on February 7, 2025, unless modified or earlier terminated by the Board.

During the three months ended March 31, 2023, the Company executed multiple trades to repurchase 349,519 common shares under the Repurchase Program for a total of $20.0 million at a weighted average price of $57.22 per share. All repurchased shares were retired on the respective settlement dates. At March 31, 2023, $230.0 million remained available under the Repurchase Program.

 

 

21


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

 

Common Units of the Operating Partnership

Common units of the Operating Partnership are issued, or redeemed and retired, for each of the shares of Parent Company common shares issued or repurchased, as described above.

 

10.

Stock-Based Compensation

 

During the three months ended March 31, 2023, the Company granted 282,100 shares of restricted stock with a weighted-average grant-date fair value of $68.87 per share. The Company records stock-based compensation expense within General and administrative expenses in the accompanying Consolidated Statements of Operations, and recognizes forfeitures as they occur.

 

11.

Earnings per Share and Unit

 

Parent Company Earnings per Share

The following summarizes the calculation of basic and diluted earnings per share:

 

 

 

Three months ended March 31,

 

(in thousands, except per share data)

 

2023

 

 

2022

 

Numerator:

 

 

 

 

 

 

Income attributable to common shareholders - basic

 

$

97,281

 

 

 

195,228

 

Income attributable to common shareholders - diluted

 

$

97,281

 

 

 

195,228

 

Denominator:

 

 

 

 

 

 

Weighted average common shares outstanding for basic EPS

 

 

171,212

 

 

 

171,312

 

Weighted average common shares outstanding for diluted EPS (1)

 

 

171,494

 

 

 

171,671

 

Income per common share – basic

 

$

0.57

 

 

 

1.14

 

Income per common share – diluted

 

$

0.57

 

 

 

1.14

 

(1)
Includes the dilutive impact of unvested restricted stock.

Income attributable to noncontrolling interests of the Operating Partnership has been excluded from the numerator and EOP 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 be anti-dilutive. Weighted average EOP units outstanding were 741,433 and 760,046 for the three months ended March 31, 2023 and 2022, respectively.

Operating Partnership Earnings per Unit

The following summarizes the calculation of basic and diluted earnings per unit ("EPU"):

 

 

 

Three months ended March 31,

 

(in thousands, except per share data)

 

2023

 

 

2022

 

Numerator:

 

 

 

 

 

 

Income attributable to common unit holders - basic

 

$

97,701

 

 

 

196,091

 

Income attributable to common unit holders - diluted

 

$

97,701

 

 

 

196,091

 

Denominator:

 

 

 

 

 

 

Weighted average common units outstanding for basic EPU

 

 

171,953

 

 

 

172,072

 

Weighted average common units outstanding for diluted EPU (1)

 

 

172,235

 

 

 

172,431

 

Income per common unit – basic

 

$

0.57

 

 

 

1.14

 

Income per common unit – diluted

 

$

0.57

 

 

 

1.14

 

(1)
Includes the dilutive impact of unvested restricted stock.

 

 

22


REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.

Notes to Unaudited Consolidated Financial Statements

March 31, 2023

 

12.

Commitments and Contingencies

 

Litigation

The Company is involved in litigation on a number of matters, and is subject to other disputes, in each case that arise in the ordinary course of business. While the outcome of any particular lawsuit or dispute cannot be predicted with certainty, in the opinion of management, the Company's currently pending litigation and disputes are not 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.

Environmental

The Company is subject to numerous environmental laws and regulations. With respect to impact on the Company, these pertain primarily to chemicals historically used by certain current and former dry cleaning tenants, the existence of asbestos in older shopping centers, older underground petroleum storage tanks and other historic land uses. 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. The Company can give no assurance that existing environmental studies with respect to its shopping centers have revealed all potential environmental contaminants; that its estimate of liabilities will not change as more information becomes available; that any previous owner, occupant or tenant did not create any material environmental condition not known to the Company; 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; and that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to the Company.

Letters of Credit

The Company has the right to issue letters of credit under the Line up to an aggregate amount not to exceed $50.0 million, which reduces the credit availability under the Line. These letters of credit are primarily issued as collateral on behalf of its captive insurance subsidiary and to facilitate the construction of development projects. As of March 31, 2023 and December 31, 2022, the Company had $9.4 million in letters of credit outstanding.

23


 

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to Regency's future events, developments, or financial or operational performance or results, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as "may," "will," "could," "should," "would," "expect," "estimate," "believe," "intend," "forecast," "project," "plan," "anticipate," "guidance," and other similar language. However, the absence of these or similar words or expressions does not mean a statement is not forward-looking. While we believe these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance these expectations will be attained, and it is possible actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties.

Our operations are subject to a number of risks and uncertainties including, but not limited to, risk factors described in our Securities and Exchange Commission ("SEC") filings, our Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 Form 10-K") under Item 1A. "Risk Factors" and in Part II, Item 1A. "Risk Factors" in this Report. When considering an investment in our securities, you should carefully read and consider these risks, together with all other information in our most recent 2022 Form 10-K, subsequent Quarterly Reports on Form 10-Q and our other filings with and submissions to the SEC. If any of the events described in the risk factors actually occur, our business, financial condition or operating results, as well as the market price of our securities, could be materially adversely affected. Forward-looking statements are only as of the date they are made, and Regency undertakes no duty to update its forward-looking statements, whether as a result of new information, future events, or developments otherwise, except as and to the extent required by law.

Non-GAAP Measures

In addition to the required Generally Accepted Accounting Principles ("GAAP") presentations, we use and report certain non-GAAP measures as we believe these measures improve the understanding of our operational results. We believe these non-GAAP measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP measures to determine how best to provide relevant information to the public, and thus such reported measures could change.

We do not consider non-GAAP measures an alternative to financial measures determined in accordance with GAAP, rather they supplement GAAP measures by providing additional information we believe to be useful to our shareholders. The principal limitation of these non-GAAP measures is that they may exclude significant expense and income items that are required by GAAP to be recognized in our Consolidated Financial Statements. In addition, they reflect the exercise of management's judgment about which expense and income items are excluded or included in determining these non-GAAP measures. In order to compensate for these limitations, reconciliations of the non-GAAP measures we use to their most directly comparable GAAP measures are provided. Non-GAAP measures should not be relied upon in evaluating the financial condition, results of operations, or future prospects of the Company.

 

24


 

Defined Terms

The following terms, as defined, are commonly used by management and the investing public to understand and evaluate our operational results, and are included in this document:

Core Operating Earnings is an additional performance measure we use because the computation of Nareit Funds from Operations includes certain non-comparable items that affect our period-over-period performance. Core Operating Earnings excludes from Nareit FFO: (i) transaction related income or expenses, (ii) gains or losses from the early extinguishment of debt, (iii) certain non-cash components of earnings derived from above and below market rent amortization, straight-line rents, and amortization of mark-to-market debt adjustments, and (iv) other amounts as they occur. We provide reconciliations of both Net Income Attributable to Common Shareholders to Nareit FFO and Nareit FFO to Core Operating Earnings.
Development Completion is a Property in Development that is deemed complete upon the earlier of: (i) 90% of total estimated net development costs have been incurred and percent leased equals or exceeds 95%, or (ii) the property features at least two years of anchor operations. Once deemed complete, the property is termed a Retail Operating Property.
Fixed Charge Coverage Ratio is defined as Operating EBITDAre divided by the sum of the gross interest and scheduled mortgage principal paid to our lenders.
Nareit EBITDAre is a measure of REIT performance, which the National Association of Real Estate Investment Trusts ("Nareit") defines as net income, computed in accordance with GAAP, excluding (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) gains on sales of real estate, (v) impairments of real estate, and (vi) adjustments to reflect the Company's share of unconsolidated partnerships and joint ventures.
Nareit Funds from Operations ("NAREIT FFO") is a commonly used measure of REIT performance, which Nareit defines as net income, computed in accordance with GAAP, excluding gains on sales and impairments of real estate, net of tax, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We compute Nareit FFO for all periods presented in accordance with Nareit's definition.

Companies use different depreciable lives and methods, and real estate values historically fluctuate with market conditions. Since Nareit FFO excludes depreciation and amortization and gains on sale and impairments of real estate, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in percent leased, 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, Nareit 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 a substitute measure of cash flows from operations. We provide a reconciliation of Net Income Attributable to Common Shareholders to Nareit FFO.

Net Operating Income ("NOI") is the sum of base rent, percentage rent, recoveries from tenants, other lease income, and other property income, less operating and maintenance expenses, real estate taxes, ground rent, and uncollectible lease income. NOI excludes straight-line rental income and expense, above and below market rent and ground rent amortization, tenant lease inducement amortization, and other fees. We also provide disclosure of NOI excluding termination fees, which excludes both termination fee income and expenses.
A Non-Same Property is any property, during either calendar year period being compared, that was acquired, sold, a Property in Development, a Development Completion, or a property under, or being positioned for, significant redevelopment that distorts comparability between periods. Non-retail properties and corporate activities, including the captive insurance program, are part of Non-Same Property.

 

25


 

Operating EBITDAre begins with Nareit EBITDAre and excludes certain non-cash components of earnings derived from above and below market rent amortization and straight-line rents. We provide a reconciliation of Net income to Nareit EBITDAre to Operating EBITDAre.
Pro-rata information includes 100% of our consolidated properties plus our economic share (based on our ownership interest) in our unconsolidated real estate investment partnerships.

We provide Pro-rata financial information because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated partnerships, when read in conjunction with our reported results under GAAP. We believe presenting our Pro-rata share of assets, liabilities, operating results, and other metrics, along with certain other non-GAAP measures, makes comparisons of our operating results to those of other REITs more meaningful. The Pro-rata information provided is not, nor is it intended to be, presented in accordance with GAAP. The Pro-rata supplemental details of assets and liabilities and supplemental details of operations reflect our proportionate economic ownership of the assets, liabilities, and operating results of the properties in our portfolio.

The Pro-rata information is prepared on a basis consistent with the comparable consolidated amounts and is intended to more accurately reflect our proportionate economic interest in the assets, liabilities, and operating results of properties in our portfolio. We do not control the unconsolidated investment partnerships, and the Pro-rata presentations of the assets and liabilities, and revenues and expenses do not represent our legal claim to such items. The partners are entitled to profit or loss allocations and distributions of cash flows according to the operating agreements, which generally provide for such allocations according to their invested capital. Our share of invested capital establishes the ownership interests we use to prepare our Pro-rata share.

The presentation of Pro-rata information has limitations which include, but are not limited to, the following:

o
The amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses; and
o
Other companies in our industry may calculate their Pro-rata interest differently, limiting the comparability of Pro-rata information.

Because of these limitations, the Pro-rata financial information should not be considered independently or as a substitute for our financial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP financial statements, using the Pro-rata information as a supplement.

Property In Development includes properties in various stages of ground-up development.
Property In Redevelopment includes Retail Operating Properties under redevelopment or being positioned for redevelopment. Unless otherwise indicated, a Property in Redevelopment is included in the Same Property pool.
Redevelopment Completion is a Property in Redevelopment that is deemed complete upon the earlier of: (i) 90% of total estimated project costs have been incurred and percent leased equals or exceeds 95% for the Company owned GLA related to the project, or (ii) the property features at least two years of anchor operations, if applicable.
Retail Operating Property is any retail property not termed a Property in Development. A retail property is any property where the majority of the income is generated from retail uses.
Same Property is a Retail Operating Property that was owned and operated for the entirety of both calendar year periods being compared. This term excludes Properties in Development, prior year Development Completions, and Non-Same Properties. Properties in Redevelopment are included unless otherwise indicated.

 

26


 

Overview of Our Strategy

Regency Centers Corporation began operations as a publicly-traded REIT in 1993. All of our operating, investing, and financing activities are performed through our Operating Partnership, Regency Centers, L.P. and its wholly-owned subsidiaries, and through our co-investment partnerships. As of March 31, 2023, the Parent Company owns approximately 99.6% of the outstanding common partnership units of the Operating Partnership.

We are a preeminent national owner, operator, and developer of shopping centers located in suburban trade areas with compelling demographics. As of March 31, 2023, we had full or partial ownership interests in 404 retail properties. Our properties are high-quality neighborhood and community shopping centers primarily anchored by market leading grocers and principally located in suburban markets within the country's most desirable metro areas and contain approximately 51.1 million square feet ("SF") of gross leasable area ("GLA"). Our mission is to create thriving environments for retailers and service providers to connect with surrounding neighborhoods and communities. Our vision is to elevate quality of life as an integral thread in the fabric of our communities. Our portfolio includes thriving properties merchandised with highly productive grocers, restaurants, service providers, and best-in-class retailers that connect to their neighborhoods, communities, and customers.

Our values:

We are our people: Our people are our greatest asset, and we believe a talented team from differing backgrounds and experiences make us better.
We do what is right: We act with unwavering standards of honesty and integrity.
We connect with our communities: We promote philanthropic ideas and strive for the betterment of our neighborhoods by giving our time and financial support.
We are responsible: Our duty is to balance purpose and profit, being good stewards of capital and the environment for the benefit of all our stakeholders.
We strive for excellence: When we are passionate about what we do, it is reflected in our performance.
We are better together: When we listen to each other and our customers, we will succeed together.

Our goals are to:

Own and manage a portfolio of high-quality neighborhood and community shopping centers primarily anchored by market leading grocers and principally located in suburban trade areas in the most desirable metro areas in the United States. We expect that this strategy will result in highly desirable and attractive centers with best-in-class retailers. These centers should command higher rental and occupancy rates resulting in excellent prospects to grow NOI;
Maintain an industry leading and disciplined development and redevelopment platform to create exceptional retail centers that deliver favorable returns;
Support our business activities with a conservative capital structure, including a strong balance sheet with sufficient liquidity to meet our capital needs together with a carefully constructed debt maturity profile;
Implement leading environmental, social, and governance ("ESG") practices through our Corporate Responsibility Program;
Engage and retain an exceptional and diverse team that is guided by our strong values, while fostering an environment of innovation and continuous improvement; and
Create shareholder value by increasing earnings and dividends per share such that we generate total returns at or near the top of our shopping center peers.

Risks and Uncertainties

Refer to Item 1, Note 1 to Unaudited Consolidated Financial Statements.

Please also refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2022, including, without limitation, the Risk Factors discussed in Item 1A of Part I thereof, and the Risk Factors described in Part II, Item 1A of this Form 10-Q.

 

27


 

Executing on our Strategy

During the three months ended March 31, 2023, we had Net income attributable to common shareholders of $97.3 million as compared to $195.2 million during the three months ended March 31, 2022, which included gains on sale of real estate of $101.9 million.

During the three months ended March 31, 2023:

Our Pro-rata same property NOI, excluding termination fees, grew 2.5%, as compared to the three months ended March 31, 2022, primarily attributable to improvements in base rent from increases in year over year occupancy rates, contractual rent steps in existing leases, and positive rent spreads on new and renewal leases.
We executed 405 new and renewal leasing transactions representing 1.1 million Pro-rata SF with positive rent spreads of 5.5% during the three months ended March 31, 2023, compared to 459 leasing transactions representing 1.9 million Pro-rata SF with positive rent spreads of 6.5% during the three months ended March 31, 2022. Rent spreads are calculated on all executed leasing transactions for comparable Retail Operating Property spaces, including spaces vacant greater than 12 months.
At March 31, 2023, December 31, 2022, and March 31, 2022 our total property portfolio was 94.9%, 94.8%, and 93.9% leased, respectively. At March 31, 2023, December 31, 2022, and March 31, 2022 our Same Property portfolio was 95.1%, 95.1%, and 94.3% leased, respectively.

We continued our development and redevelopment of high quality shopping centers:

Estimated Pro-rata project costs of our current in process development and redevelopment projects total $302.5 million at March 31, 2023, compared to $300.9 million at December 31, 2022, as further discussed within Liquidity and Capital Resources.
Development and redevelopment projects completed during 2023 represent $1.6 million of estimated net project cost, with an average stabilized yield of 21%.

We maintained liquidity and financial flexibility to cost effectively fund investment opportunities and debt maturities:

We have no unsecured debt maturities until June 2024 and a manageable level of secured mortgage maturities during the next 12 months, including mortgages within our real estate partnerships.
At March 31, 2023, our Pro-rata net debt-to-operating EBITDAre ratio on a trailing 12 month basis was 4.9x compared to 5.0x at December 31, 2022.

Property Portfolio

The following table summarizes general information related to the consolidated properties in our portfolio:

 

(GLA in thousands)

March 31, 2023

 

December 31, 2022

Number of Properties

308

 

308

GLA

38,826

 

38,834

% Leased – Operating and Development

94.8%

 

94.8%

% Leased – Operating

94.9%

 

94.9%

Weighted average annual effective rent per square foot ("PSF"), net of tenant concessions.

$24.13

 

$23.95

The following table summarizes general information related to the unconsolidated properties owned in co-investment partnerships in our portfolio:

 

(GLA in thousands)

March 31, 2023

 

December 31, 2022

Number of Properties

96

 

96

GLA

12,311

 

12,311

% Leased – Operating and Development

95.2%

 

94.8%

% Leased –Operating

95.3%

 

94.8%

Weighted average annual effective rent PSF, net of tenant concessions

$23.32

 

$23.15

 

28


 

The following table summarizes Pro-rata occupancy rates of our combined consolidated and unconsolidated shopping center portfolio:

 

 

March 31, 2023

 

December 31, 2022

Percent Leased – All Properties

94.9%

 

94.8%

Anchor Space (spaces  10,000 SF)

96.8%

 

96.8%

Shop Space (spaces < 10,000 SF)

91.7%

 

91.5%

The following table summarizes leasing activity, including our Pro-rata share of activity within the portfolio of our co-investment partnerships (totals as a weighted average PSF):

 

 

 

Three months ended March 31, 2023

 

 

 

Leasing
Transactions

 

 

SF (in
thousands)

 

 

Base Rent
PSF

 

 

Tenant
Allowance
and Landlord
Work PSF

 

 

Leasing
Commissions
PSF

 

Anchor Space Leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New

 

 

6

 

 

 

67

 

 

$

14.24

 

 

$

41.74

 

 

$

7.69

 

Renewal

 

 

18

 

 

 

399

 

 

 

15.01

 

 

 

0.40

 

 

 

0.19

 

Total Anchor Space Leases

 

 

24

 

 

 

466

 

 

$

14.90

 

 

$

6.37

 

 

$

1.27

 

Shop Space Leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New

 

 

121

 

 

 

217

 

 

$

36.88

 

 

$

33.10

 

 

$

12.21

 

Renewal

 

 

260

 

 

 

447

 

 

 

35.20

 

 

 

0.75

 

 

 

0.54

 

Total Shop Space Leases

 

 

381

 

 

 

664

 

 

$

35.75

 

 

$

11.33

 

 

$

4.36

 

Total Leases

 

 

405

 

 

 

1,130

 

 

$

27.14

 

 

$

9.28

 

 

$

3.08

 

 

 

 

Three months ended March 31, 2022

 

 

 

Leasing
Transactions

 

 

SF (in
thousands)

 

 

Base Rent
PSF

 

 

Tenant
Allowance
and Landlord
Work PSF

 

 

Leasing
Commissions
PSF

 

Anchor Space Leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New

 

 

6

 

 

 

280

 

 

$

9.50

 

 

$

8.76

 

 

$

6.70

 

Renewal

 

 

34

 

 

 

851

 

 

 

16.18

 

 

 

0.54

 

 

 

0.08

 

Total Anchor Space Leases

 

 

40

 

 

 

1,131

 

 

$

14.53

 

 

$

2.57

 

 

$

1.71

 

Shop Space Leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New

 

 

133

 

 

 

243

 

 

$

38.90

 

 

$

39.24

 

 

$

11.51

 

Renewal

 

 

286

 

 

 

537

 

 

 

36.52

 

 

 

2.34

 

 

 

0.73

 

Total Shop Space Leases

 

 

419

 

 

 

780

 

 

$

37.26

 

 

$

13.85

 

 

$

4.09

 

Total Leases

 

 

459

 

 

 

1,911

 

 

$

23.81

 

 

$

7.17

 

 

$

2.68

 

The weighted-average base rent PSF on signed Shop Space leases during 2023 was $35.75 PSF, which is consistent with the $35.67 PSF weighted average annual base rent PSF of all Shop Space leases due to expire during the next 12 months. New and renewal rent spreads, compared to prior rents on these same spaces leased, were positive at 5.5% for the three months ended March 31, 2023, compared to 6.5% for the three months ended March 31, 2022.

 

29


 

The success of our tenants in operating their businesses and their corresponding ability to pay us rent continue to be significantly impacted by current economic challenges, which increase their cost of doing business, including, but not limited to, inflation, labor shortages, supply chain constraints, increasing energy prices, and interest rates. Additionally, macroeconomic and geopolitical risks create challenges that may exacerbate current market conditions in the United States.

These economic conditions could adversely impact our volume of leasing activity, leasing spreads, and financial results generally, as well as adversely affect the business and financial results of our tenants. The aggregate impacts of these current economic challenges may also negatively affect the overall market for retail space, resulting in decreased demand for space in our centers. This, in turn, could result in downward pressure on rents that we are able to charge to new or renewing tenants, such that future new and renewal rent spreads could be adversely impacted as tenants look to manage their total occupancy costs. Further, we may experience higher costs for tenant buildouts, as costs of materials and labor may increase and supply and availability of both may become more limited.

Significant Tenants and Concentrations of Risk

We seek to reduce our operating and leasing risks through geographic diversification of our properties and by avoiding dependence on any single property, market, or tenant. Based on percentage of annualized base rent, the following table summarizes our most significant tenants, of which four of the top five are grocers:

 

 

 

March 31, 2023

Tenant

 

Number of
Stores

 

 

Percentage of
Company-
owned GLA
(1)

 

Percentage of
Annual Base Rent
(1)

Publix

 

 

66

 

 

7.0%

 

3.2%

Kroger Co.

 

 

53

 

 

7.3%

 

3.1%

Albertsons Companies, Inc.

 

 

46

 

 

4.7%

 

3.0%

Amazon/Whole Foods

 

 

36

 

 

2.9%

 

2.7%

TJX Companies, Inc.

 

 

63

 

 

3.6%

 

2.6%

(1)
Includes Regency's Pro-rata share of unconsolidated properties and excludes those owned by anchors.

Bankruptcies and Credit Concerns

Our management team devotes significant time to researching and monitoring consumer preferences and trends, customer shopping behaviors, changes in delivery methods, shifts to e-commerce, and changing demographics in order to anticipate the challenges and opportunities impacting our industry. We seek to mitigate these potential impacts through maintaining a high quality portfolio, diversifying our tenant mix, replacing less successful tenants with stronger operators, anchoring our centers with market leading grocery stores that drive customer traffic, and maintaining a presence in suburban trade areas with compelling demographic populations benefiting from high levels of disposal income. The potential for a recession and the severity and duration of any economic downturn could negatively impact our existing tenants and their ability to continue to meet their lease obligations.

Although base rent is derived from long-term lease contracts, tenants that file bankruptcy generally have the legal right to reject any or all of their leases and close related stores. Any unsecured claim we hold against a bankrupt tenant for unpaid rent might be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. As a result, it is likely that we would recover substantially less than the full value of any unsecured claims we hold. Additionally, we may incur significant expense to adjudicate our claim and significant downtime to re-lease the vacated space. 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. Tenants who are currently in bankruptcy and continue to occupy space in our shopping centers represent an aggregate of 1.1% of our Pro-rata annual base rent, of which 0.5% is related to Bed Bath and Beyond.

 

30


 

Results from Operations

Comparison of the three months ended March 31, 2023 and 2022:

Our revenues changed as summarized in the following table:

 

 

 

Three months ended March 31,

 

 

 

 

(in thousands)

 

2023

 

 

2022

 

 

Change

 

Lease income

 

 

 

 

 

 

 

 

 

Base rent

 

$

212,930

 

 

 

199,252

 

 

 

13,678

 

Recoveries from tenants

 

 

71,226

 

 

 

67,774

 

 

 

3,452

 

Percentage rent

 

 

7,030

 

 

 

4,948

 

 

 

2,082

 

Uncollectible lease income

 

 

1,937

 

 

 

6,146

 

 

 

(4,209

)

Other lease income

 

 

7,216

 

 

 

3,825

 

 

 

3,391

 

Straight-line rent

 

 

2,597

 

 

 

6,011

 

 

 

(3,414

)

Above / below market rent amortization

 

 

5,865

 

 

 

5,689

 

 

 

176

 

Total lease income

 

$

308,801

 

 

 

293,645

 

 

 

15,156

 

Other property income

 

 

3,138

 

 

 

3,104

 

 

 

34

 

Management, transaction, and other fees

 

 

6,038

 

 

 

6,684

 

 

 

(646

)

Total revenues

 

$

317,977

 

 

 

303,433

 

 

 

14,544

 

Total lease income increased $15.2 million driven by the following contractually billable components of rent to the tenants per the lease agreements:

$13.7 million increase from billable Base rent, as follows:
o
$786,000 increase from rent commencing at development properties;
o
$1.9 million increase from acquisitions of operating properties; and
o
$11.1 million net increase from same properties, including a $2.0 million increase related to our acquisition and resulting consolidation of four properties previously held in an unconsolidated partnership during 2022, and a $9.1 million net increase in the remaining same properties due to increases from occupancy, rent steps in existing leases, and positive rental spreads on new and renewal leases as well as redevelopment projects completing and operating; partially offset by
o
$119,000 decrease from the sale of operating properties.
$3.5 million increase from contractual Recoveries from tenants, which represents the tenants' proportionate share of the operating, maintenance, insurance, and real estate tax expenses that we incur to operate our shopping centers. Recoveries from tenants increased, on a net basis, from the following:
o
$585,000 increase from acquisition of operating properties and rents commencing at development properties; and
o
$2.9 million net increase from same properties due to higher operating costs in the current year; partially offset by
o
$35,000 decrease from the sale of operating properties.
$2.1 million increase in Percentage rent due to increases in tenant sales.
$4.2 million decrease from changes in Uncollectible lease income. While we continue to see improvements in our collection rates, our 2023 collections of COVID-19 related reserves have been lower than our 2022 experience resulting in reduced Uncollectible lease income year over year.
$3.4 million increase in Other lease income primarily due to an increase in lease termination fees.
$3.4 million decrease in Straight-line rent due to higher 2022 levels of reinstating straight-line rents from former cash basis tenants upon returning to accrual basis.

Management, transaction, and other fees decreased $646,000 primarily due to decreases in leasing commissions and construction and property management fees resulting from a smaller portfolio of properties within our co-investment partnerships.

 

31


 

Changes in our operating expenses are summarized in the following table:

 

 

 

Three months ended March 31,

 

 

 

 

(in thousands)

 

2023

 

 

2022

 

 

Change

 

Depreciation and amortization

 

$

82,707

 

 

 

77,842

 

 

 

4,865

 

Property operating expense

 

 

51,022

 

 

 

46,461

 

 

 

4,561

 

Real estate taxes

 

 

38,477

 

 

 

36,869

 

 

 

1,608

 

General and administrative

 

 

25,280

 

 

 

18,792

 

 

 

6,488

 

Other operating (income) expenses

 

 

(497

)

 

 

2,173

 

 

 

(2,670

)

Total operating expenses

 

$

196,989

 

 

 

182,137

 

 

 

14,852

 

Depreciation and amortization costs increased $4.9 million, on a net basis, as follows:

$1.5 million increase from acquisitions of operating properties and development properties where tenant spaces became available for occupancy, offset by decreases in corporate asset depreciation and the sale of operating properties; and
$3.4 million increase from same properties, primarily related to redevelopment projects.

Property operating expense increased $4.6 million, on a net basis, as follows:

$263,000 increase from development properties where tenant spaces became available for occupancy;
$1.0 million increase from acquisitions of operating properties; and
$3.4 million increase from same properties primarily attributable to an increase in recoverable common area and tenant related costs; partially offset by
$67,000 decrease from the sale of operating properties.

Real estate taxes increased $1.6 million, on a net basis, as follows:

$102,000 increase from developments where capitalization ceased and spaces became available for occupancy;
$586,000 increase from acquisitions of operating properties; and
$962,000 net increase from same properties including $420,000 increase related to our acquisition and resulting consolidation of four properties previously held in an unconsolidated partnership; partially offset by
$41,000 decrease from the sale of operating properties.

General and administrative costs increased $6.5 million, on a net basis, as follows:

$3.7 million net increase due to changes in the value of participant obligations within the deferred compensation plan, attributable to changes in market values of those investments, reflected within Net investment income;
$1.6 million net increase in compensation costs primarily driven by performance based incentive compensation and annual base salary increases;
$650,000 increase due to lower development overhead capitalization based on the timing and progress of our development and redevelopment projects; and
$566,000 net increase in other corporate overhead costs driven by increases in professional fees and travel related costs.

Other operating (income) expenses had a favorable change of $2.7 million, primarily due to a $1.6 million fee for the cancelation of a land contract related to a development pursuit. The remaining $1.1 million favorable change is driven by higher 2022 expenses for environmental remediation costs at one of our operating properties.

 

32


 

The following table presents the components of Other expense (income):

 

 

 

Three months ended March 31,

 

 

 

 

(in thousands)

 

2023

 

 

2022

 

 

Change

 

Interest expense, net

 

 

 

 

 

 

 

 

 

Interest on notes payable

 

$

36,909

 

 

 

37,087

 

 

 

(178

)

Interest on unsecured credit facilities

 

 

987

 

 

 

480

 

 

 

507

 

Capitalized interest

 

 

(1,250

)

 

 

(795

)

 

 

(455

)

Hedge expense

 

 

109

 

 

 

109

 

 

 

 

Interest income

 

 

(362

)

 

 

(143

)

 

 

(219

)

Interest expense, net

 

$

36,393

 

 

 

36,738

 

 

 

(345

)

Gain on sale of real estate, net of tax

 

 

(250

)

 

 

(101,948

)

 

 

101,698

 

Net investment loss (income)

 

 

(1,727

)

 

 

2,494

 

 

 

(4,221

)

Total other expense (income)

 

$

34,416

 

 

 

(62,716

)

 

 

97,132

 

During the three months ended March 31, 2023, we recognized gains on sale of $250,000 for one land parcel. During the three months ended March 31, 2022, we recognized gains on sale of $101.9 million from one land parcel and one operating property.

Net investment income increased $4.2 million, primarily driven by favorable changes in unrealized gains and losses on investments held in the deferred compensation plan and our captive insurance company. There is an offsetting $3.7 million expense in General and administrative costs related to participant obligations within the deferred compensation plans.

Total equity in income of investments in real estate partnerships changed as follows:

 

 

 

 

 

Three months ended March 31,

 

 

 

 

(in thousands)

 

Regency's
Ownership

 

2023

 

 

2022

 

 

Change

 

GRI - Regency, LLC (GRIR)

 

40.00%

 

$

9,130

 

 

 

9,373

 

 

 

(243

)

New York Common Retirement Fund (NYC) (1)

 

30.00%

 

 

(6

)

 

 

266

 

 

 

(272

)

Columbia Regency Retail Partners, LLC (Columbia I)

 

20.00%

 

 

458

 

 

 

521

 

 

 

(63

)

Columbia Regency Partners II, LLC (Columbia II)

 

20.00%

 

 

528

 

 

 

557

 

 

 

(29

)

Columbia Village District, LLC

 

30.00%

 

 

453

 

 

 

266

 

 

 

187

 

RegCal, LLC (RegCal) (2)

 

25.00%

 

 

118

 

 

 

626

 

 

 

(508

)

Other investments in real estate partnerships

 

35.00% - 50.00%

 

 

1,235

 

 

 

1,195

 

 

 

40

 

Total equity in income of investments in real estate partnerships

 

 

 

$

11,916

 

 

 

12,804

 

 

 

(888

)

(1)
On May 25, 2022, the NYC partnership sold its remaining two properties and distributed sales proceeds to its members. Dissolution will follow final distributions, which are expected in 2023.
(2)
On April 1, 2022, we acquired our partner's 75% share in four properties held in the RegCal partnership for a total purchase price of $88.5 million; therefore results following the date of acquisition are included in consolidated results. A single operating property remains within RegCal, LLC, at March 31, 2023.

The $888,000 decrease in our Equity in income of investments in real estate partnerships was largely attributable to a smaller portfolio of properties within our co-investment partnerships.

The following represents the remaining components that comprise Net income attributable to common shareholders and unit holders:

 

 

 

Three months ended March 31,

 

 

 

 

(in thousands)

 

2023

 

 

2022

 

 

Change

 

Net income

 

$

98,488

 

 

 

196,816

 

 

 

(98,328

)

Income attributable to noncontrolling interests

 

 

(1,207

)

 

 

(1,588

)

 

 

381

 

Net income attributable to common shareholders

 

$

97,281

 

 

 

195,228

 

 

 

(97,947

)

Net income attributable to exchangeable operating partnership units

 

 

(420

)

 

 

(863

)

 

 

443

 

Net income attributable to common unit holders

 

$

97,701

 

 

 

196,091

 

 

 

(98,390

)

 

 

33


 

Supplemental Earnings Information

We use certain non-GAAP measures, in addition to certain performance metrics determined under GAAP, as we believe these measures improve the understanding of the our operating results. We believe these non-GAAP measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We provide Pro-rata financial information because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated partnerships, when read in conjunction with our reported results under GAAP. We believe presenting our Pro-rata share of operating results, along with other non-GAAP measures, may assist in comparing our operating results to other REITs. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP measures to determine how best to provide relevant information to the public, and thus such reported non-GAAP measures could change. See "Non-GAAP Measures" at the beginning of this Management's Discussion and Analysis.

We do not consider non-GAAP measures an alternative to financial measures determined in accordance with GAAP, rather they supplement GAAP measures by providing additional information we believe to be useful to shareholders. The principal limitation of these non-GAAP measures is they may exclude significant expense and income items that are required by GAAP to be recognized in our Consolidated Financial Statements. In addition, they reflect the exercise of management's judgment about which expense and income items are excluded or included in determining these non-GAAP measures. In order to compensate for these limitations, reconciliations of the non-GAAP measures we use to their most directly comparable GAAP are provided, including as set forth below. Non-GAAP financial measures should not be relied upon in evaluating the financial condition, results of operations, or future prospects.

Pro-Rata Same Property NOI:

Pro-rata same property NOI, excluding termination fees/expenses, changed as follows:

 

 

 

Three months ended March 31,

 

 

 

 

(in thousands)

 

2023

 

 

2022

 

 

Change

 

Base rent

 

$

232,919

 

 

 

223,265

 

 

 

9,654

 

Recoveries from tenants

 

 

78,331

 

 

 

76,224

 

 

 

2,107

 

Percentage rent

 

 

7,671

 

 

 

5,515

 

 

 

2,156

 

Termination fees

 

 

4,718

 

 

 

1,948

 

 

 

2,770

 

Uncollectible lease income

 

 

1,860

 

 

 

6,634

 

 

 

(4,774

)

Other lease income

 

 

2,850

 

 

 

2,629

 

 

 

221

 

Other property income

 

 

2,662

 

 

 

2,529

 

 

 

133

 

Total real estate revenue

 

 

331,011

 

 

 

318,744

 

 

 

12,267

 

Operating and maintenance

 

 

51,794

 

 

 

48,832

 

 

 

2,962

 

Real estate taxes

 

 

41,775

 

 

 

41,070

 

 

 

705

 

Ground rent

 

 

3,044

 

 

 

2,913

 

 

 

131

 

Total real estate operating expenses

 

 

96,613

 

 

 

92,815

 

 

 

3,798

 

Pro-rata same property NOI

 

$

234,398

 

 

 

225,929

 

 

 

8,469

 

Less: Termination fees

 

 

4,718

 

 

 

1,948

 

 

 

2,770

 

Pro-rata same property NOI, excluding termination fees

 

$

229,680

 

 

 

223,981

 

 

 

5,699

 

Pro-rata same property NOI growth, excluding termination fees

 

 

 

 

 

 

 

 

2.5

%

Real estate revenue increased $12.3 million, on a net basis, as follows:

Base rent increased $9.7 million during the three months ended March 31, 2023, due to rent steps in existing leases, positive rental spreads on new and renewal leases, and increases in occupancy, as well as redevelopment projects completing and operating.

Recoveries from tenants increased $2.1 million during the three months ended March 31, 2023, due to increases in recoverable expenses.

Percentage rent increased $2.2 million during the three months ended March 31, 2023, due to increases in tenant sales.

 

34


 

Termination fees increased $2.8 million during the three months ended March 31, 2023, driven by two anchor terminations that were recognized in 2023.

Uncollectible lease income decreased $4.8 million during the three months ended March 31, 2023, primarily driven by the 2022 collection of previously reserved amounts, which have continued to be favorable in 2023, but to a lesser degree.

Total real estate operating expense increased $3.8 million, primarily driven by a $3.0 million increase in recoverable costs within Operating and maintenance expense.

Same Property Rollforward:

Our Same Property pool includes the following property count, Pro-rata GLA, and changes therein:

 

 

 

Three months ended March 31,

 

 

 

2023

 

 

2022

 

(GLA in thousands)

 

Property
Count

 

 

GLA

 

 

Property
Count

 

 

GLA

 

Beginning same property count

 

 

389

 

 

 

41,383

 

 

 

393

 

 

 

41,294

 

Acquired properties owned for entirety of comparable periods presented (1)

 

 

5

 

 

 

771

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

1

 

 

 

72

 

Disposed properties

 

 

 

 

 

 

 

 

(1

)

 

 

(88

)

SF adjustments (2)

 

 

 

 

 

(6

)

 

 

 

 

 

(58

)

Change in intended property use

 

 

1

 

 

 

 

 

 

 

 

 

 

Ending same property count

 

 

395

 

 

 

42,148

 

 

 

393

 

 

 

41,220

 

(1)
Includes an adjustment to GLA arising from the acquisition of our partners' share of properties previously held in the RegCal and USAA partnerships, of which our previous ownership share was already included in our Same Property pool.
(2)
SF adjustments arising from remeasurements or redevelopments.

Nareit FFO and Core Operating Earnings:

Our reconciliation of net income attributable to common stock and unit holders to Nareit FFO and to Core Operating Earnings is as follows:

 

 

 

Three months ended March 31,

 

(in thousands, except share information)

 

2023

 

 

2022

 

Reconciliation of Net income to Nareit FFO

 

 

 

 

 

 

Net income attributable to common shareholders

 

$

97,281

 

 

 

195,228

 

Adjustments to reconcile to Nareit FFO: (1)

 

 

 

 

 

 

Depreciation and amortization (excluding FF&E)

 

 

89,035

 

 

 

84,130

 

Gain on sale of real estate, net of tax

 

 

(241

)

 

 

(102,010

)

Exchangeable operating partnership units

 

 

420

 

 

 

863

 

Nareit FFO attributable to common stock and unit holders

 

$

186,495

 

 

 

178,211

 

Reconciliation of Nareit FFO to Core Operating Earnings

 

 

 

 

 

 

Nareit Funds From Operations

 

$

186,495

 

 

 

178,211

 

Adjustments to reconcile to Core Operating Earnings (1):

 

 

 

 

 

 

Certain Non Cash Items

 

 

 

 

 

 

Straight-line rent

 

 

(2,389

)

 

 

(3,478

)

Uncollectible straight-line rent

 

 

(635

)

 

 

(2,383

)

Above/below market rent amortization, net

 

 

(5,665

)

 

 

(5,392

)

Debt premium/discount amortization

 

 

(8

)

 

 

(106

)

Core Operating Earnings

 

$

177,798

 

 

 

166,852

 

(1)
Includes Regency's Pro-rata share of unconsolidated investment partnerships, net of Pro-rata share attributable to noncontrolling interest.

 

35


 

Reconciliation of Same Property NOI to Nearest GAAP Measure:

Our reconciliation of Net income attributable to common shareholders to Same Property NOI, on a Pro-rata basis, is as follows:

 

 

 

Three months ended March 31,

 

(in thousands)

 

2023

 

 

2022

 

Net income attributable to common shareholders

 

$

97,281

 

 

 

195,228

 

Less:

 

 

 

 

 

 

Management, transaction, and other fees

 

 

6,038

 

 

 

6,684

 

Other (1)

 

 

9,502

 

 

 

12,621

 

Plus:

 

 

 

 

 

 

Depreciation and amortization

 

 

82,707

 

 

 

77,842

 

General and administrative

 

 

25,280

 

 

 

18,792

 

Other operating expense

 

 

(497

)

 

 

2,173

 

Other expense (income)

 

 

34,416

 

 

 

(62,716

)

Equity in income of investments in real estate excluded from NOI (2)

 

 

11,785

 

 

 

12,388

 

Net income attributable to noncontrolling interests

 

 

1,207

 

 

 

1,588

 

Pro-rata NOI

 

$

236,639

 

 

 

225,990

 

Less non-same property NOI (3)

 

 

2,241

 

 

 

61

 

Pro-rata same property NOI

 

$

234,398

 

 

 

225,929

 

(1)
Includes straight-line rental income and expense, net of reserves, above and below market rent amortization, other fees, and noncontrolling interest.
(2)
Includes non-NOI income earned and expenses incurred at our unconsolidated real estate partnerships, including those separated out above for our consolidated properties.
(3)
Includes revenues and expenses attributable to non-same property, sold property, development properties, and corporate activities. Also includes adjustments for earnings at the four properties we acquired from our former unconsolidated RegCal partnership in 2022 in order to calculate growth on a comparable basis for the periods presented.

Liquidity and Capital Resources

General

We use cash flows generated from operating, investing, and financing activities to strengthen our balance sheet, finance our development and redevelopment projects, fund our investment activities, and maintain financial flexibility. A significant portion of our cash from operations is distributed to our common shareholders in the form of dividends in order to maintain our status as a REIT.

Except for $200 million of private placement debt, our Parent Company has no capital commitments other than its guarantees of the commitments of our Operating Partnership. All remaining debt is held by our Operating Partnership or by our co-investment partnerships. The Operating Partnership is a co-issuer and a guarantor of the $200 million of outstanding debt of our Parent Company. 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.

We continually assess our available liquidity and our expected cash requirements, including monitoring our tenant rent collections. We have access to and draw on multiple financing sources to fund our operations and our long-term capital needs, including the requirements of our in process and planned developments, redevelopments, other capital expenditures, and the repayment of debt. We expect to meet these needs by using a combination of the following: cash flow from operations after funding our dividend, borrowings from our Line, proceeds from the sale of real estate, mortgage loan and unsecured bank financing, distributions received from our co-investment partnerships, and when the capital markets are favorable, proceeds from the sale of equity securities or the issuance of new unsecured debt. We continually evaluate alternative financing options, and we believe we can obtain new financing on reasonable terms, although likely at higher interest rates than that of our debt currently outstanding, in the current interest rate environment.

We have no unsecured debt maturities in 2023, $250 million of unsecured debt maturing in 2024, and what we believe is a manageable level of secured mortgage maturities during the next 12 months, including those mortgages within our real estate partnerships. Based upon our available cash balance, sources of capital, our current credit ratings, and the number of high quality, unencumbered properties we own, we believe our available capital resources are sufficient to meet our expected capital needs for the next year, and in the longer term, although we can give no assurances.

 

36


 

In addition to our $65.2 million of unrestricted cash, we have the following additional sources of capital available:

 

(in thousands)

March 31, 2023

 

Line of Credit

 

 

Total commitment amount

$

1,250,000

 

Available capacity (1)

$

1,210,619

 

Maturity (2)

March 23, 2025

 

(1)
Net of letters of credit.
(2)
The Company has the option to extend the maturity for two additional six-month periods.

The declaration of dividends is determined quarterly by our Board of Directors. On May 2, 2023, our Board of Directors declared a common stock dividend of $0.65 per share, payable on July 6, 2023, to shareholders of record as of June 14, 2023. While future dividends will be determined at the discretion of our Board of Directors, 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. We have historically generated sufficient cash flow from operations to fund our dividend distributions. During the three months ended March 31, 2023 and 2022, we generated cash flow from operations of $162.1 million and $142.9 million, respectively, and paid $111.6 million and $107.4 million in dividends to our common stock and unit holders, in the same respective periods.

We currently have development and redevelopment projects in various stages of construction, along with a pipeline of potential projects for future development or redevelopment. After funding our common stock dividend payment and refinancing maturing co-investment partnership debt in April 2023, we estimate that we will require cash during the next 12 months of approximately $296.1 million related to leasing commissions, tenant improvements, in-process developments and redevelopments, capital contributions to our co-investment partnerships, and repaying maturing debt. These capital requirements are being impacted by current levels of high inflation resulting in increased costs of construction materials, labor, and services from third party contractors and suppliers. In response, we have implemented mitigation strategies such as entering into fixed cost construction contracts, pre-ordering materials, and other planning efforts. Further, continued challenges from permitting delays, labor shortages, and supply chain disruptions may extend the time to completion of these projects.

If we start new developments or redevelopments, commit to property acquisitions, repay debt prior to maturity, declare future dividends, or repurchase shares of our common stock, our cash requirements will increase. If we refinance maturing debt, our cash requirements will decrease.

We endeavor to maintain a high percentage of unencumbered assets. As of March 31, 2023, 90.2% of our wholly-owned real estate assets were unencumbered. Our low level of encumbered assets allow us to more readily access the secured and unsecured debt markets and to maintain availability on the Line. Our trailing 12 month fixed charge coverage ratio, including our Pro-rata share of our partnerships, was 4.7x for the periods ended March 31, 2023, and December 31, 2022, and our Pro-rata net debt-to-operating EBITDAre ratio on a trailing 12 month basis was 4.9x and 5.0x, respectively, for the same periods.

Our Line and unsecured debt require that we remain in compliance with various covenants, which are described in the Notes to Consolidated Financial Statements included in our 2022 Form 10-K. We were in compliance with all these covenants at March 31, 2023, and expect to remain in compliance.

Summary of Cash Flow Activity

The following table summarizes net cash flows related to operating, investing, and financing activities of the Company:

 

 

 

Three months ended March 31,

 

 

 

 

(in thousands)

 

2023

 

 

2022

 

 

Change

 

Net cash provided by operating activities

 

$

162,099

 

 

 

142,892

 

 

 

19,207

 

Net cash (used in) provided by investing activities

 

 

(39,050

)

 

 

58,354

 

 

 

(97,404

)

Net cash used in financing activities

 

 

(123,682

)

 

 

(117,543

)

 

 

(6,139

)

Net (decrease) increase in cash and cash equivalents and restricted cash

 

$

(633

)

 

 

83,703

 

 

 

(84,336

)

Total cash and cash equivalents and restricted cash

 

$

68,143

 

 

 

178,730

 

 

 

(110,587

)

 

37


 

Net cash provided by operating activities:

Net cash provided by operating activities increased $19.2 million due to:

$21.4 million increase in cash from operations due to timing of receipts and payments, partially offset by
$2.2 million decrease in operating cash flow distributions from Investments in real estate partnerships.

Net cash used in investing activities:

Net cash (used in) provided by investing activities changed by $97.4 million as follows:

 

 

 

Three months ended March 31,

 

 

 

 

(in thousands)

 

2023

 

 

2022

 

 

Change

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Acquisition of operating real estate

 

$

 

 

 

(30,166

)

 

 

30,166

 

Real estate development and capital improvements

 

 

(44,569

)

 

 

(53,605

)

 

 

9,036

 

Proceeds from sale of real estate and FF&E

 

 

3,603

 

 

 

124,924

 

 

 

(121,321

)

Investments in real estate partnerships

 

 

(604

)

 

 

(7,173

)

 

 

6,569

 

Return of capital from investments in real estate partnerships

 

 

 

 

 

23,892

 

 

 

(23,892

)

Dividends on investment securities

 

 

187

 

 

 

109

 

 

 

78

 

Acquisition of investment securities

 

 

(2,171

)

 

 

(5,554

)

 

 

3,383

 

Proceeds from sale of investment securities

 

 

4,504

 

 

 

5,927

 

 

 

(1,423

)

Net cash (used in) provided by investing activities

 

$

(39,050

)

 

 

58,354

 

 

 

(97,404

)

Significant changes in investing activities include:

In 2022, we paid $30.2 million to purchase one operating property and to fund a deposit on another.
We invested $9.0 million less on real estate development, redevelopment, and capital improvements, as further detailed in a table below.
We sold one land parcel in 2023 for proceeds of $3.6 million compared to one operating property and one land parcel in 2022 for proceeds of $124.9 million.
Investments in real estate partnerships:
o
In 2023, we invested $604,000 to fund our share of development and redevelopment activities.
o
In 2022, we invested $7.2 million, including:
$6.1 million to fund our share of acquiring one operating property within an existing co-investment partnership, and
$1.1 million to fund our share of development and redevelopment activities.
Return of capital from our unconsolidated real estate partnerships includes sales or financing proceeds.
o
During the three months ended March 31, 2023 we had no such activity.
o
During the same period in 2022, we received $12.3 million from our share of proceeds from real estate sales and $11.6 million from our share of proceeds from debt refinancing activities.
Acquisition of investment securities and proceeds from sale of investment securities pertain to investment activities held in our captive insurance company and our deferred compensation plan.

 

38


 

We plan to continue developing and redeveloping shopping centers for long-term investment. During 2023, we deployed capital of $44.6 million for the development, redevelopment, and improvement of our real estate properties, comprised of the following:

 

 

 

Three months ended March 31,

 

 

 

 

(in thousands)

 

2023

 

 

2022

 

 

Change

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

Land acquisitions

 

$

 

 

 

11,545

 

 

 

(11,545

)

Building and tenant improvements

 

 

14,998

 

 

 

16,320

 

 

 

(1,322

)

Redevelopment costs

 

 

20,610

 

 

 

17,310

 

 

 

3,300

 

Development costs

 

 

5,847

 

 

 

5,741

 

 

 

106

 

Capitalized interest

 

 

1,224

 

 

 

776

 

 

 

448

 

Capitalized direct compensation

 

 

1,890

 

 

 

1,913

 

 

 

(23

)

Real estate development and capital improvements

 

$

44,569

 

 

 

53,605

 

 

 

(9,036

)

We acquired one land parcel for development in 2022.
Building and tenant improvements decreased $1.3 million in 2023, primarily related to the timing of capital projects.
Redevelopment costs are higher in 2023 due to the timing and magnitude of projects currently in process. We intend to continuously improve our portfolio of shopping centers through redevelopment which can include adjacent land acquisition, existing building expansion, facade renovation, new out-parcel building construction, and redevelopment related tenant improvement costs. The size and magnitude of each redevelopment project varies with each redevelopment plan. The timing and duration of these projects could also result in volatility in NOI. See the tables below for more details about our redevelopment projects.
Development costs remain consistent within our development projects in process. See the tables below for more details about our development projects.
Interest is capitalized on our development and redevelopment projects and is based on cumulative actual costs expended. We cease interest 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 tenant opens for business. If we reduce our development and redevelopment activity, the amount of interest that we capitalize may be lower than historical averages.
We have a staff of employees who directly support our development program, which includes redevelopment of our existing properties. Internal compensation costs directly attributable to these activities are capitalized as part of each project.

 

39


 

The following table summarizes our development projects in-process and completed:

 

(in thousands, except cost PSF)

 

 

 

 

 

 

 

March 31, 2023

 

Property Name

 

Market

 

Ownership

 

Start
Date

 

Estimated
Stabilization
Year
(1)

 

Estimated Net
Development
Costs
(2) (3)

 

 

GLA (3)

 

 

Cost PSF
of GLA
(2) (3)

 

 

% of Costs Incurred

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Developments In-Process

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Glenwood Green

 

Metro NYC

 

70%

 

Q1-22

 

2025

 

 

45,530

 

 

 

247

 

 

 

184

 

 

 

50

%

Eastfield at Baybrook

 

Houston, TX

 

50%

 

Q2-22

 

2025

 

 

10,384

 

 

 

78

 

 

 

133

 

 

 

55

%

Total Developments In-Process

 

 

 

 

 

 

 

$

55,914

 

 

 

325

 

 

 

172

 

 

 

51

%

(1)
Estimated Stabilization Year represents the estimated first full calendar year that the project will reach our expected stabilized yield.
(2)
Includes leasing costs and is net of tenant reimbursements.
(3)
Estimated Net Development Costs and GLA reported based on Regency's ownership interest in the real estate partnership at completion.

The following table summarizes our redevelopment projects in process and completed:

 

(in thousands, except cost PSF)

 

 

 

 

 

 

 

March 31, 2023

 

Property Name

 

Market

 

Ownership

 

Start Date

 

Estimated Stabilization Year (1)

 

Estimated Net
Project Costs
(2) (3)

 

 

GLA (3)

 

 

% of Costs Incurred

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redevelopments In-Process

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Crossing Clarendon

 

Metro DC

 

100%

 

Q4-18

 

2024

 

$

55,838

 

 

 

129

 

 

 

77

%

The Abbot

 

Boston, MA

 

100%

 

Q2-19

 

2024

 

 

58,979

 

 

 

64

 

 

 

89

%

Westbard Square Phase I

 

Bethesda, MD

 

100%

 

Q2-21

 

2025

 

 

37,537

 

 

 

123

 

 

 

54

%

Buckhead Landing

 

Atlanta, GA

 

100%

 

Q2-22

 

2025

 

 

27,709

 

 

 

152

 

 

 

12

%

Town & Country Center

 

Los Angeles, CA

 

35%

 

Q4-22

 

2027

 

 

24,525

 

 

 

51

 

 

 

7

%

Various Redevelopments

 

Various

 

20% - 100%

 

Various

 

Various

 

 

41,993

 

 

 

1,179

 

 

 

54

%

Total Redevelopments In-Process

 

 

 

 

 

 

 

$

246,581

 

 

 

1,698

 

 

 

57

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redevelopments Completed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Various Properties

 

Various

 

100%

 

Various

 

Various

 

$

1,567

 

 

 

390

 

 

 

100

%

Total Redevelopments Completed

 

 

 

 

 

 

 

$

1,567

 

 

 

390

 

 

 

100

%

(1)
Estimated Stabilization Year represents the estimated first full calendar year that the project will reach our expected stabilized yield.
(2)
Includes leasing costs and is net of tenant reimbursements.
(3)
Estimated Net Development Costs and GLA are reported based on Regency's ownership interest in the real estate partnership at completion.

 

40


 

Net cash used in financing activities:

Net cash flows from financing activities changed by $6.1 million during 2023, as follows:

 

 

 

Three months ended March 31,

 

 

 

 

(in thousands)

 

2023

 

 

2022

 

 

Change

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Repurchase of common shares in conjunction with equity award plans

 

$

(7,066

)

 

 

(6,246

)

 

 

(820

)

Common shares repurchased through share repurchase program

 

 

(20,006

)

 

 

 

 

 

(20,006

)

Contributions from (distributions to) limited partners in consolidated partnerships, net

 

 

738

 

 

 

(1,070

)

 

 

1,808

 

Dividend payments and operating partnership distributions

 

 

(111,567

)

 

 

(107,362

)

 

 

(4,205

)

Proceeds from unsecured credit facilities, net

 

 

30,000

 

 

 

 

 

 

30,000

 

Proceeds from debt issuance

 

 

15,500

 

 

 

 

 

 

15,500

 

Debt repayment, including early redemption costs

 

 

(31,142

)

 

 

(2,846

)

 

 

(28,296

)

Payment of loan costs

 

 

(141

)

 

 

(82

)

 

 

(59

)

Proceeds from sale of treasury stock, net

 

 

2

 

 

 

63

 

 

 

(61

)

Net cash used in financing activities

 

$

(123,682

)

 

 

(117,543

)

 

 

(6,139

)

Significant financing activities during the three months ended March 31, 2023 and 2022, include the following:

We repurchased for cash a portion of the common stock granted to employees for stock based compensation to satisfy employee tax withholding requirements, which totaled $7.1 million and $6.2 million during 2023 and 2022, respectively.
We paid $20.0 million to repurchase 349,519 shares of our common stock through our Repurchase Program during 2023.
We received $738,000 net from limited partners, including $1.7 million of contributions from limited partners for their share of debt repayments and development funding, offset by $1.0 million in distributions to limited partners during 2023. During 2022, we paid $1.0 million in distributions to limited partners.
We paid $4.2 million more in dividends as a result of an increase in our dividend rate per share and the number of shares of our common stock outstanding.
We had the following debt related activity during 2023:
o
$30.0 million in net borrowings from our Line to manage working capital needs,
o
$15.5 million in proceeds from a mortgage refinancing,
o
We paid $31.1 million for debt repayments, including:
$2.8 million in principal mortgage payments, and
$28.3 million to repay three mortgage loans at maturity.
We had the following debt related activity during 2022:
o
We paid $2.8 million in principal mortgage payments.

 

41


 

Investments in Real Estate Partnerships

The following table is a summary of the unconsolidated combined assets and liabilities of our co-investment partnerships and our Pro-rata share:

 

 

 

Combined

 

 

Regency's Share (1)

 

(dollars in thousands)

 

March 31, 2023

 

 

December 31, 2022

 

 

March 31, 2023

 

 

December 31, 2022

 

Number of Co-investment Partnerships

 

 

13

 

 

 

13

 

 

 

 

 

 

 

Regency's Ownership

 

20% - 50%

 

 

20% - 50%

 

 

 

 

 

 

 

Number of Properties

 

96

 

 

 

96

 

 

 

 

 

 

 

Assets

 

$

2,600,152

 

 

 

2,608,005

 

 

$

941,695

 

 

 

943,699

 

Liabilities

 

 

1,503,027

 

 

 

1,497,630

 

 

 

533,545

 

 

 

530,915

 

Equity

 

 

1,097,125

 

 

 

1,110,375

 

 

 

408,150

 

 

 

412,784

 

Basis difference

 

 

 

 

 

 

(61,760

)

 

 

(62,407

)

Investments in real estate partnerships

 

 

 

 

 

$

346,390

 

 

 

350,377

 

(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 our Consolidated Financial Statements.

Our equity method investments in real estate partnerships consist of the following:

 

(in thousands)

 

Regency's Ownership

 

March 31, 2023

 

 

December 31, 2022

 

GRI-Regency, LLC (GRIR)

 

40.00%

 

$

152,011

 

 

 

155,302

 

New York Common Retirement Fund (NYC) (1)

 

30.00%

 

 

668

 

 

 

674

 

Columbia Regency Retail Partners, LLC (Columbia I)

 

20.00%

 

 

7,452

 

 

 

7,423

 

Columbia Regency Partners II, LLC (Columbia II)

 

20.00%

 

 

41,408

 

 

 

41,757

 

Columbia Village District, LLC

 

30.00%

 

 

5,809

 

 

 

5,836

 

RegCal, LLC (RegCal) (2)

 

25.00%

 

 

5,757

 

 

 

5,789

 

Individual Investors

 

 

 

 

 

 

 

 

Ballard Blocks

 

49.90%

 

 

62,332

 

 

 

62,624

 

Town & Country Center

 

35.00%

 

 

40,467

 

 

 

40,409

 

Others

 

50.00%

 

 

30,486

 

 

 

30,563

 

Total Investment in real estate partnerships

 

 

 

$

346,390

 

 

 

350,377

 

(1)
On May 25, 2022, the NYC partnership sold the remaining two properties and distributed sales proceeds to the members. Dissolution will follow final distributions, which are expected in 2023.
(2)
During April 2022, we acquired our partner's 75% share in four properties held in the RegCal, LLC partnership for a total purchase price of $88.5 million. Upon acquisition, these four properties were consolidated into Regency's financial statements. A single operating property remains within RegCal, LLC at March 31, 2023.

Notes Payable - Investments in Real Estate Partnerships

Scheduled principal repayments on notes payable held by our investments in real estate partnerships were as follows:

 

(in thousands)

 

March 31, 2023

 

Scheduled Principal Payments and Maturities by Year:

 

Scheduled
Principal
Payments

 

 

Mortgage
Loan
Maturities

 

 

Unsecured
Maturities

 

 

Total

 

 

Regency’s
Pro-Rata
Share

 

2023 (1)

 

$

1,826

 

 

 

125,108

 

(2)

 

 

 

 

126,934

 

 

 

50,662

 

2024

 

 

2,205

 

 

 

33,690

 

 

 

 

 

 

35,895

 

 

 

14,298

 

2025

 

 

3,433

 

 

 

142,937

 

 

 

 

 

 

146,370

 

 

 

45,536

 

2026

 

 

3,807

 

 

 

221,354

 

 

 

23,800

 

 

 

248,961

 

 

 

80,606

 

2027

 

 

3,802

 

 

 

32,800

 

 

 

 

 

 

36,602

 

 

 

12,420

 

Beyond 5 Years

 

 

9,194

 

 

 

809,650

 

 

 

 

 

 

818,844

 

 

 

300,506

 

Net unamortized loan costs, debt premium / (discount)

 

 

 

 

 

(10,487

)

 

 

 

 

 

(10,487

)

 

 

(3,660

)

Total

 

$

24,267

 

 

 

1,355,052

 

 

 

23,800

 

 

 

1,403,119

 

 

 

500,368

 

(1)
Reflects scheduled principal payments and maturities for the remainder of the year.
(2)
Subsequent to March 31, 2023, we refinanced the 2023 maturing mortgages.

At March 31, 2023, our investments in real estate partnerships had notes payable of $1.4 billion maturing through 2034, of which 97.5% had a weighted average fixed interest rate of 3.7%. The remaining notes payable float with SOFR and had a weighted average variable interest rate of 6.6%, based on rates as of March 31, 2023. These fixed and variable rate notes payable are all non-recourse,

42


 

and our Pro-rata share was $500.4 million as of March 31, 2023. As notes payable mature, they are expected to be repaid from proceeds from new borrowings and/or partner capital contributions. Refinancing debt at maturity in the current interest rate environment could result in higher interest expense in future periods if rates remain elevated.

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 is 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 which would be secured by the partner's membership interest.

Management fee income

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:

 

 

 

Three months ended March 31,

 

(in thousands)

 

2023

 

 

2022

 

Asset management, property management, leasing, and other transaction fees

 

$

6,038

 

 

 

6,684

 

 

Recent Accounting Pronouncements

See Note 1 to Unaudited Financial Statements.

Environmental Matters

We are subject to numerous environmental laws and regulations that apply to our shopping centers, which primarily pertain to chemicals historically used by certain current and former dry cleaning and gas station tenants and the existence of asbestos in older shopping centers. We believe that the few tenants who currently operate dry cleaning plants or gas stations do so in accordance with current laws and regulations. Generally, we endeavor to require tenants to remove dry cleaning plants from our shopping centers or convert them to more environmentally friendly systems, in accordance with the terms of our leases. We carry an environmental insurance policy for certain third-party liabilities and remediation costs on shopping centers that currently have no known environmental contamination. We have also secured environmental insurance policies, where appropriate, on a relatively small number of 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 March 31, 2023, we had accrued liabilities of $11.4 million for our Pro-rata share of environmental remediation, including our Investments in real estate partnerships. We believe that the ultimate remediation of currently known environmental matters will not have a material effect on our financial position, cash flows, or results of operations. We can give no assurance that existing environmental studies on our shopping centers have revealed all potential environmental contamination; that our estimate of liabilities will not change as more information becomes available; 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.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We continuously monitor the capital markets and evaluate our ability to issue new debt, to repay maturing debt, or fund our commitments. We continue to believe, in light of our credit ratings, the available capacity under our unsecured credit facility, and the number of high quality, unencumbered properties that we own which could collateralize borrowings, we will be able to successfully issue new secured or unsecured debt to fund maturing debt obligations. It is uncertain the degree to which capital market volatility and rising interest rates will adversely impact the interest rates on any new debt that we may issue. Please also refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2022, including, without limitation, the Risk Factors discussed in Item 1A of Part I thereof, and the Risk Factors described in Part II, Item 1A of this Form 10-Q.

 

43


 

Item 4. Controls and Procedures

Controls and Procedures (Regency Centers Corporation)

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 periods covered by this quarterly report on Form 10-Q 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.

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 first quarter of 2023 which have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Controls and Procedures (Regency Centers, L.P.)

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 periods covered by this quarterly report on Form 10-Q 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.

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 first quarter of 2023 which have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

See Note 12 — Commitments and Contingencies in the Notes for discussion regarding material legal proceedings and contingencies. Except as set forth in such discussion, there have been no material developments in legal proceedings as reported in Item 3. “Legal Proceedings” of our 2022 Form 10-K.

Item 1A. Risk Factors

In addition to the risk factors disclosed in item 1A. of Part I of our Form 10-K for the year ended December 31, 2022, the following additional risk has been identified during 2023:

Unfavorable developments affecting the banking and financial services industry could adversely affect our business, liquidity and financial condition, and overall results of operations.

Actual events, concerns or speculation about disruption or instability in the banking and financial services industry, such as liquidity constraints, the failure of individual institutions, or the inability of individual institutions or the banking and financial service industry generally to meet their contractual obligations, could significantly impair our access to capital, delay access to deposits or other financial assets, or cause actual loss of funds subject to cash management arrangements. Similarly, these events, concerns or speculation could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Additionally, our tenants, critical vendors and business partners also could be adversely affected by these risks as described above, which in turn could result in their committing a breach or default under their contractual agreements with us, their insolvency or bankruptcy, or other adverse effects.

 

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Any decline in available funding or access to our cash and liquidity resources, or non-compliance of banking and financial services counterparties with their contractual commitments to us could, among other risks, have material adverse impacts on our ability to meet our operating expenses and other financial needs, could result in breaches of our financial and/or contractual obligations, and could have material adverse impacts on our business, financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of equity securities during the three months ended March 31, 2023.

The following table represents information with respect to purchases by the Parent Company of its common stock, by month, during the three months ended March 31, 2023:

 

Period

 

Total number of shares purchased

 

 

Average price paid per share

 

 

Total number of shares purchased as part of publicly announced plans or programs (2)

 

 

Maximum number or approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) (2)

 

January 1 through January 31, 2023

 

 

5,897

 

(1)

$

62.50

 

(1)

 

 

 

$

174,607

 

February 1 through February 28, 2023

 

 

100,286

 

(1)

$

66.78

 

(1)

 

 

 

$

250,000

 

March 1 through March 31, 2023

 

 

349,519

 

 

$

57.22

 

 

 

349,519

 

 

$

230,000

 

(1)
Represents shares repurchased to cover payment of withholding taxes in connection with restricted stock vesting by participants under Regency’s Long-Term Omnibus Plan.
(2)
Our Board authorizes a common share repurchase program under which we may purchase, from time to time, up to a maximum of $250 million of our outstanding common stock through open market purchases, and/or in privately negotiated transactions. The timing and price of share repurchases will be dependent upon market conditions and other factors. Any shares repurchased, if not retired, will be treated as treasury shares. Our prior program expired on February 3, 2023 and the Board authorized a new program as of February 8, 2023 which is set to expire February 7, 2025 unless modified or earlier terminated by the Board.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.
 

Item 6. Exhibits

In reviewing any 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. Each agreement contains 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.

 

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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 filings, 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 (Regency Centers Corporation) and 000-24763 (Regency Centers, L.P.).

 

Ex #

Description

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.

 

 

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

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

 

 

101.SCH

Inline XBRL Taxonomy Extension Schema Document

 

 

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

 

 

101.DEF

Inline XBRL Taxonomy Definition Linkbase Document

 

 

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

 

 

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104.

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

 

*

Furnished, not filed.

 

 

46


 

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.

 

May 5, 2023

REGENCY CENTERS CORPORATION

 

By:

/s/ Michael J. Mas

 

 

Michael J. Mas, Executive Vice President and Chief Financial Officer (Principal Financial Officer)

 

 

 

 

By:

/s/ Terah L. Deveraux

 

 

Terah L. Devereaux, Senior Vice President, Chief Accounting Officer (Principal Accounting Officer)

 

May 5, 2023

REGENCY CENTERS, L.P.

 

By:

Regency Centers Corporation, General Partner

 

 

 

 

By:

/s/ Michael J. Mas

 

 

Michael J. Mas, Executive Vice President and Chief Financial Officer (Principal Financial Officer)

 

 

 

 

By:

/s/ Terah L. Deveraux

 

 

Terah L. Devereaux, Senior Vice President, Chief Accounting Officer (Principal Accounting Officer)

 

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