Regency Centers LP
12/04/2025 | Press release | Distributed by Public on 12/04/2025 05:03
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
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 risk factors, including, without limitation, risk factors relating to:
•
the current economic and geopolitical environments
•
pandemics or other health crises
•
operating retail-based shopping centers
•
real estate investments
•
the environment affecting our properties
•
corporate matters
•
our partnerships and joint ventures
•
funding strategies and capital structure
•
information management and technology
•
taxes and the Parent Company's qualification as a REIT
•
the Company's stock price.
As more specifically described in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K") 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 2024 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 or otherwise, except as and to the extent required by law.
Non-GAAP Financial Measures
In addition to the required Generally Accepted Accounting Principles ("GAAP") presentations, we use and report certain non-GAAP financial measures as we believe these measures improve the understanding of our operational results. We believe these non-GAAP financial 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 financial 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 financial 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 financial 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 financial 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 financial measures. In order to compensate for these limitations, reconciliations of the non-GAAP financial measures we use to their most directly comparable GAAP measures are provided. Non-GAAP financial measures should not be relied upon in evaluating the financial condition, results of operations, or future prospects of the Company.
Our non-GAAP financial measures include the following:
•
Adjusted Funds From Operations ("AFFO") is an additional performance measure we use that reflects cash available to fund the Company's business needs and distribution to shareholders. AFFO is calculated by adjusting Core Operating Earnings ("COE") for (i) capital expenditures necessary to maintain and lease our portfolio of properties, (ii) debt cost and derivative adjustments and (iii) stock-based compensation.
•
Core Operating Earnings is an additional performance measure we use because the computation of Nareit Funds from Operations ("Nareit FFO") 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 straight-line rents, above and below market rent amortization, and debt and derivative mark-to-market amortization, and (iv) other amounts as they occur.
•
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 real estate investment 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.
•
Net Operating Income ("NOI")is the sum of base rent, percentage rent, termination fee income, tenant recoveries, other lease income, and other property income, less operating and maintenance expenses, real estate taxes, ground rent, termination expense, 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.
Management believes that NOI is a useful measure for investors because it provides insight into the core operations and performance of our properties, independent of the capital structure, financing activities, and non-operating factors. By focusing on property-level performance, NOI allows investors to compare the performance of our real estate assets across periods and with those of other REIT peers in the industry, facilitating a clearer understanding of trends in occupancy, rental income, and operating expense management. In addition to its relevance for investors, management uses NOI as a key performance metric in making operational and strategic decisions. NOI is used to evaluate income generated from shopping centers (i.e., return on assets) and to guide decisions on capital investments. These decisions may include acquisitions, redevelopments, and investments in capital improvements.
•
Pro-ratainformation 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 real estate investment 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 financial 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 real estate 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.
•
Pro-rata Same Property NOIis a key non-GAAP financial measure commonly used by REITs to evaluate operating performance. It is calculated on a proportionate ownership basis for properties held during the comparable reporting periods, excluding revenue and expenses related to non-same properties during the periods.
Management believes this measure provides investors with a useful and consistent comparison of the Company's operating performance and trends. Management uses Pro-rata Same Property NOI as a supplemental measure to assess property-level performance, excluding the effects of corporate-level expenses, financing costs, and non-operating activities. This measure allows investors to evaluate trends in revenue and expense growth for properties that have been consistently operated during the periods.
Other 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:
•
Anchor Space is a space equal to or greater than 10,000 SF.
•
Development Completionis 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.
•
A Non-Same Propertyis 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.
•
Property In Developmentincludes 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 Completionis 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 Propertyis 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 Propertyis 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.
•
Shop Spaceis a space under 10,000 SF.
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 real estate partnerships. As of September 30, 2025, the Parent Company owned approximately 97.9% of the outstanding Common Units and 100% of the Preferred Units of the Operating Partnership.
We are a preeminent national owner, operator, and developer of neighborhood and community shopping centers predominantly located in suburban trade areas with compelling demographics. As of September 30, 2025, we had full or partial ownership interests in 485 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 58.6 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 with their neighborhoods, communities, and customers.
Our values:
•
We are our people: Our people are our greatest asset, and we believe that our highly skilled and talented team makes 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 anchored primarily by market leading grocers and principally located in suburban trade areas in the most desirable metro areas in the United States. We believe 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;
•
Create shareholder value by increasing earnings and dividends per share that generate total returns at or near the top of our shopping center peers;
•
Maintain an industry leading, 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; and
•
Implement resiliency and governance practices through our Corporate Responsibility program to support and enhance our business goals and objectives.
Executing on our Strategy
During the nine months ended September 30, 2025, we had Net income attributable to common shareholders of $314.7 million as compared to $303.7 million during the nine months ended September 30, 2024.
During the nine months ended September 30, 2025:
•
Our Pro-rata same property NOI, excluding termination fees, grew 5.5%, as compared to the nine months ended September 30, 2024, 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 comparable new and renewal leases.
•
We executed 1,418 new and renewal leasing transactions representing 5.3 million Pro-rata SF with positive rent spreads of 10.4% during the nine months ended September 30, 2025, compared to 1,503 leasing transactions representing 6.3 million Pro-rata SF with positive rent spreads of 9.0% during the nine months ended September 30, 2024. Rent spreads are calculated on all executed leasing transactions for comparable Retail Operating Property spaces, including spaces vacant greater than 12 months.
•
At September 30, 2025, December 31, 2024, and September 30, 2024, our total property portfolio was 96.0%, 96.3%, and 95.6% leased, respectively. At September 30, 2025, December 31, 2024, and September 30, 2024 our same property portfolio was 96.4%, 96.7%, and 96.0% 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 totaled $668.1 million at September 30, 2025, compared to $497.3 million at December 31, 2024.
•
Development and redevelopment projects completed during the nine months ended September 30, 2025 represented $48.4 million of estimated net project costs, with an average stabilized yield of 14.3%. A stabilized yield for development and redevelopment projects represents the incremental NOI (estimated stabilized NOI less NOI prior to project commencement) divided by the total project costs.
We maintained liquidity and the financial flexibility to cost effectively fund investment opportunities and debt maturities:
•
In February 2025, we received a credit rating upgrade to A- with a stable outlook from S&P Global Ratings.
•
On May 13, 2025, the Company issued $400 million of senior unsecured notes due 2032, at a par value of 99.279% and a coupon of 5.0% (the "2025 Notes").
•
In July 2025, in connection with the acquisition of five operating properties, the Operating Partnership issued 2,773,087 Common Units and assumed $150 million of secured mortgage debt with a weighted average interest rate of 4.2% and an average remaining term of approximately 12 years.
•
The Company settled forward sales agreements entered into during 2024 under its ATM program as follows:
o
In August 2025, the Company issued 673,172 shares of common stock and received $49.2 million of net proceeds.
o
Subsequent to quarter end, in October 2025, the Company issued an additional 666,205 shares of common stock and received $49.1 million of net proceeds. Upon completion of these settlements, the Company had fully settled all forward sales agreements entered into during 2024.
•
Subsequent to quarter end, on October 1, 2025, the Company received a property distribution from its Regency-GRI real estate partnership. The distribution involved 11 of the 66 properties within the partnership and the Company received five of these properties, which had an aggregate fair value of approximately $113 million, and assumed an existing fixed rate mortgage loan on one property of $10 million maturing January 2026 with an interest rate of 3.95%. The remaining six properties were distributed to the other partner.
•
We have $646.3 million of loans maturing during the next 12 months, of which, $250 million was repaid upon maturity on November 3, 2025, and Regency's pro-rata share of maturities within our unconsolidated real estate partnerships which we intend to refinance or pay-off as they mature.
•
At September 30, 2025, we had $1.46 billion available on the Line, which expires on March 23, 2028 unless we exercise the available options to extend the expiration for either or both of two additional consecutive six-month periods, in which case the term will be extended in accordance with any such option exercise.
Economic Conditions
Refer to the Estimated Risks and Uncertainties section in Note 1 - Organization and Significant Accounting Policies, as these risks and uncertainties could have a material impact on future results of operations and trends.
Property Portfolio
The following table summarizes general information related to the consolidated properties in our portfolio:
|
(GLA in thousands) |
September 30, 2025 |
December 31, 2024 |
|||||
|
Number of Properties |
384 |
379 |
|||||
|
GLA |
45,493 |
43,876 |
|||||
|
% Leased - Operating and Development |
96.1 |
% |
96.2 |
% |
|||
|
% Leased - Operating |
96.5 |
% |
96.5 |
% |
|||
|
Weighted average annual effective rent per square foot ("PSF"), net of tenant concessions. |
$26.46 |
$25.56 |
|||||
The following table summarizes general information related to the unconsolidated properties owned in real estate investment partnerships in our portfolio:
|
(GLA in thousands) |
September 30, 2025 |
December 31, 2024 |
|||||
|
Number of Properties |
101 |
103 |
|||||
|
GLA |
13,122 |
13,439 |
|||||
|
% Leased - Operating and Development |
96.9 |
% |
96.8 |
% |
|||
|
% Leased -Operating |
96.9 |
% |
96.8 |
% |
|||
|
Weighted average annual effective rent PSF, net of tenant concessions |
$25.33 |
$24.51 |
|||||
The following table summarizes Pro-rata occupancy rates of our combined consolidated and unconsolidated shopping center portfolio:
|
September 30, 2025 |
December 31, 2024 |
||||||
|
Percent Leased - All Properties |
96.1 |
% |
96.3 |
% |
|||
|
Anchor Space (spaces ≥10,000 SF) |
98.0 |
% |
98.4 |
% |
|||
|
Shop Space (spaces < 10,000 SF) |
93.0 |
% |
93.0 |
% |
|||
The following table summarizes leasing activity, including our Pro-rata share of activity within the portfolio of our real estate partnerships (totals as a weighted average PSF):
|
Nine months ended September 30, 2025 |
||||||||||||||||||||
|
Leasing |
SF (in |
Base Rent |
Tenant |
Leasing |
||||||||||||||||
|
Anchor Space Leases |
||||||||||||||||||||
|
New |
20 |
519 |
$ |
19.16 |
$ |
34.28 |
$ |
3.97 |
||||||||||||
|
Renewal |
78 |
2,388 |
14.93 |
0.80 |
0.39 |
|||||||||||||||
|
Total Anchor Space Leases |
98 |
2,907 |
$ |
15.68 |
$ |
6.78 |
$ |
1.03 |
||||||||||||
|
Shop Space Leases |
||||||||||||||||||||
|
New |
415 |
759 |
$ |
42.27 |
$ |
48.56 |
$ |
16.71 |
||||||||||||
|
Renewal |
905 |
1,676 |
41.00 |
1.46 |
1.30 |
|||||||||||||||
|
Total Shop Space Leases |
1,320 |
2,435 |
$ |
41.39 |
$ |
16.14 |
$ |
6.10 |
||||||||||||
|
Total Leases |
1,418 |
5,342 |
$ |
27.40 |
$ |
11.05 |
$ |
3.34 |
||||||||||||
|
Nine months ended September 30, 2024 |
||||||||||||||||||||
|
Leasing |
SF (in |
Base Rent |
Tenant |
Leasing |
||||||||||||||||
|
Anchor Space Leases |
||||||||||||||||||||
|
New |
29 |
723 |
$ |
19.73 |
$ |
53.17 |
$ |
6.28 |
||||||||||||
|
Renewal |
104 |
2,871 |
18.03 |
0.34 |
0.10 |
|||||||||||||||
|
Total Anchor Space Leases |
133 |
3,594 |
$ |
18.37 |
$ |
10.97 |
$ |
1.34 |
||||||||||||
|
Shop Space Leases |
||||||||||||||||||||
|
New |
439 |
890 |
$ |
39.50 |
$ |
42.61 |
$ |
13.99 |
||||||||||||
|
Renewal |
931 |
1,819 |
37.57 |
2.34 |
0.61 |
|||||||||||||||
|
Total Shop Space Leases |
1,370 |
2,709 |
$ |
38.21 |
$ |
15.57 |
$ |
5.00 |
||||||||||||
|
Total Leases |
1,503 |
6,303 |
$ |
26.89 |
$ |
12.95 |
$ |
2.92 |
||||||||||||
The weighted-average base rent PSF on signed Shop Space leases for the nine months ended September 30, 2025 is $41.39 PSF, which is higher than the weighted average annual base rent PSF of all Shop Space leases due to expire during the next 12 months of $36.91 PSF. New and renewal rent spreads, compared to prior rents on these same spaces leased, were positive at 10.4% for the nine months ended September 30, 2025, compared to 9.0% for the nine months ended September 30, 2024.
Diversification and Concentration of Tenant Risk
We seek to reduce our risk by limiting dependence on any single 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:
|
September 30, 2025 |
||||||||
|
Tenant |
Number of |
Percentage of |
Percentage of |
|||||
|
Publix |
68 |
5.9% |
2.9% |
|||||
|
Albertsons Companies, Inc. |
53 |
4.2% |
2.8% |
|||||
|
TJX Companies, Inc. |
76 |
3.7% |
2.7% |
|||||
|
Amazon/Whole Foods |
39 |
2.6% |
2.5% |
|||||
|
Kroger Co. |
52 |
5.8% |
2.5% |
|||||
(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 potentially adverse impacts through maintaining a high quality portfolio, diversifying our geographic and tenant mix, replacing less successful tenants with stronger operators, anchoring our centers with market leading grocery stores that drive customer traffic, and investing in suburban trade areas with compelling demographic populations benefiting from high levels of disposal income.
We recognize that current economic conditions including, but not limited to, the potential impacts of tariffs and trade deals, inflation, cost and availability of labor, including potential labor shortages related to deportations or threat of deportations, increasing energy prices and interest rates, supply chain disruptions, access to and cost of credit, and new tax and regulatory changes have introduced additional macroeconomic uncertainty. These economic conditions could place further financial strain on retailers by raising costs and compressing margins. 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 for 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, in a tenant bankruptcy situation 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 for bankruptcy and rejects its leases, we could experience a significant reduction in our revenues. At September 30, 2025, the tenants who are currently in bankruptcy and which continue to occupy space in our shopping centers represent an aggregate of 0.2% of our Pro-rata annual base rent.
Results of Operations
Comparison of the three months ended September 30, 2025 and 2024:
Changes in revenues are summarized in the following table:
|
Three months ended September 30, |
||||||||||||
|
(in thousands) |
2025 |
2024 |
Change |
|||||||||
|
Lease income |
||||||||||||
|
Base rent |
$ |
265,289 |
246,531 |
18,758 |
||||||||
|
Recoveries from tenants |
92,406 |
84,795 |
7,611 |
|||||||||
|
Percentage rent |
1,950 |
2,155 |
(205 |
) |
||||||||
|
Uncollectible lease income |
53 |
(342 |
) |
395 |
||||||||
|
Other lease income |
5,536 |
5,029 |
507 |
|||||||||
|
Straight-line rent |
6,743 |
5,163 |
1,580 |
|||||||||
|
Above/below market rent amortization, net |
5,784 |
5,726 |
58 |
|||||||||
|
Total lease income |
$ |
377,761 |
349,057 |
28,704 |
||||||||
|
Other property income |
3,089 |
4,444 |
(1,355 |
) |
||||||||
|
Management, transaction, and other fees |
6,720 |
6,765 |
(45 |
) |
||||||||
|
Total revenues |
$ |
387,570 |
360,266 |
27,304 |
||||||||
Total lease income increased by $28.7 million primarily due to the following:
•
$18.8 million increase from billable Base rent, mainly from the following:
o
$12.2 million net increase from same properties, including:
▪
$6.8 million net increase due to increases from occupancy, contractual rent steps in existing leases, and positive rental spreads on new and renewal leases;
▪
$4.3 million increase due to redevelopment projects becoming operational; and
▪
$1.1 million increase related to our acquisitions of the remaining ownership interests in and resulting consolidation of operating properties previously held in unconsolidated real estate partnerships;
o
$5.9 million increase from acquisitions of operating properties in 2025 as compared to 2024 activity; and
o
$1.2 million increase from rent commencements at completed development properties; partially offset by
o
$0.5 million decrease due to dispositions of operating properties.
•
$7.6 million increase from contractual Recoveries from tenants which represents their proportionate share of the operating, maintenance, insurance, and real estate tax expenses that we incur to operate our shopping centers. Recoveries from tenants increased, mainly from the following:
o
$5.8 million increase primarily due to higher reimbursable operating costs and higher recovery rates due to increased occupancy in the current quarter; and
o
$1.8 million increase driven by the acquisitions of operating properties in 2025 as compared to 2024, and rent commencements at development properties.
•
$1.6 million increase in Straight-line rent mainly due to timing and degree of contractual rent steps and new lease commencements.
Other property income decreased by $1.4 million primarily due to the business interruption insurance proceeds received in the comparative prior period.
There were no significant changes in Management, transaction, and other fees.
Changes in our operating expenses are summarized in the following table:
|
Three months ended September 30, |
||||||||||||
|
(in thousands) |
2025 |
2024 |
Change |
|||||||||
|
Depreciation and amortization |
$ |
102,799 |
100,955 |
1,844 |
||||||||
|
Property operating expense |
65,471 |
60,477 |
4,994 |
|||||||||
|
Real estate taxes |
47,080 |
45,729 |
1,351 |
|||||||||
|
General and administrative |
27,060 |
25,073 |
1,987 |
|||||||||
|
Other operating expenses |
1,770 |
3,654 |
(1,884 |
) |
||||||||
|
Total operating expenses |
$ |
244,180 |
235,888 |
8,292 |
||||||||
Depreciation and amortization costs increased by $1.8 million, mainly due to the following:
•
$5.2 million increase from acquisitions of operating properties and development properties becoming available for occupancy, partially offset by
•
$3.4 million decrease from same properties mainly driven by acquired lease intangibles becoming fully amortized.
Property operating expense increased by $5.0 million, mainly due to higher recoverable common area maintenance, management fees and utility costs at same properties.
Real estate taxes increased by $1.4 million, mainly due to the acquisitions of operating properties in 2025 as compared to 2024 and increases in real estate tax assessments across the same property portfolio.
General and administrative costs increased by $2.0 million, mainly due to the following:
•
$1.3 million increase due to changes in the fair value of participant obligations within the deferred compensation plan, attributable to changes in fair values of those investments recognized in Net investment income; and
•
$0.7 million increase primarily attributable to higher technology costs and professional fees.
Other operating expenses decreased by $1.9 million, mainly due to the phase-out of transition costs incurred in 2024 related to the acquisition of Urstadt Biddle Properties ("UBP").
Changes in other expense, net are summarized in the following table:
|
Three months ended September 30, |
||||||||||||
|
(in thousands) |
2025 |
2024 |
Change |
|||||||||
|
Interest expense, net |
||||||||||||
|
Interest on notes payable |
$ |
55,064 |
46,365 |
8,699 |
||||||||
|
Interest on unsecured credit facilities |
1,022 |
3,640 |
(2,618 |
) |
||||||||
|
Capitalized interest |
(2,768 |
) |
(1,636 |
) |
(1,132 |
) |
||||||
|
Hedge expense |
226 |
245 |
(19 |
) |
||||||||
|
Interest income |
(2,221 |
) |
(1,592 |
) |
(629 |
) |
||||||
|
Interest expense, net |
$ |
51,323 |
47,022 |
4,301 |
||||||||
|
Provision for impairment of real estate, net of tax |
3,374 |
- |
3,374 |
|||||||||
|
Gain on sale of real estate, net of tax |
(6,198 |
) |
(11,360 |
) |
5,162 |
|||||||
|
Net investment income |
(2,602 |
) |
(1,372 |
) |
(1,230 |
) |
||||||
|
Total other expense, net |
$ |
45,897 |
34,290 |
11,607 |
||||||||
Interest expense, net, increased by $4.3 million primarily due to the following:
•
$8.7 million increase in Interest on notes payable primarily due to new net public debt issuances in 2025 and 2024; partially offset by
•
$2.6 million decrease in Interest on unsecured credit facilities primarily due to carrying a lower weighted average outstanding balance under our Line in 2025 as compared to 2024; and
•
$1.1 million change in Capitalized interest based on the timing and progress of our development and redevelopment projects.
Provision for impairment of real estate, net of tax of $3.4 million was recognized in the three months ended September 30, 2025 related to dispositions of three operating properties.
During the three months ended September 30, 2025, we recognized gains on sale of real estate, net of tax of $6.2 million mainly from sales of an operating property and an outparcel. During the three months ended September 30, 2024, we recognized gains on sale of $11.4 million mainly from the sale of one operating property.
Net investment income increased by $1.2 million primarily driven by market volatility during the current period, including a $1.3 million increase in fair values on investments held in the non-qualified deferred compensation plan partially offset by a $0.1 million decrease in returns related to other corporate investments.
Equity in income of investments in real estate partnerships increased by $1.6 million mainly due to a sale of one outparcel at a property held in an unconsolidated real estate partnership.
The following represents the remaining components that comprise Net income attributable to common shareholders and unit holders:
|
Three months ended September 30, |
||||||||||||
|
(in thousands) |
2025 |
2024 |
Change |
|||||||||
|
Net income |
$ |
112,617 |
103,576 |
9,041 |
||||||||
|
Income attributable to noncontrolling interests |
(3,244 |
) |
(2,107 |
) |
(1,137 |
) |
||||||
|
Net income attributable to the Company |
109,373 |
101,469 |
7,904 |
|||||||||
|
Preferred stock dividends |
(3,413 |
) |
(3,413 |
) |
- |
|||||||
|
Net income attributable to common shareholders |
$ |
105,960 |
$ |
98,056 |
$ |
7,904 |
||||||
|
Net income attributable to exchangeable operating partnership units |
(1,664 |
) |
(593 |
) |
(1,071 |
) |
||||||
|
Net income attributable to common unit holders |
$ |
107,624 |
98,649 |
8,975 |
||||||||
Income attributable to noncontrolling interests increased by $1.1 million, mainly due to issuance of 2.8 million exchangeable operating partnership units to unrelated third-party sellers for acquisition of five properties in July 2025.
There were no significant changes in Preferred stock dividends.
Net income attributable to exchangeable operating partnership units increased by $1.1 million, mainly due to the same acquisition of five properties discussed above.
Results of Operations
Comparison of the nine months ended September 30, 2025 and 2024:
Changes in revenues are summarized in the following table:
|
Nine months ended September 30, |
||||||||||||
|
(in thousands) |
2025 |
2024 |
Change |
|||||||||
|
Lease income |
||||||||||||
|
Base rent |
$ |
778,216 |
736,142 |
42,074 |
||||||||
|
Recoveries from tenants |
275,392 |
254,623 |
20,769 |
|||||||||
|
Percentage rent |
11,558 |
11,958 |
(400 |
) |
||||||||
|
Uncollectible lease income |
(1,906 |
) |
(3,433 |
) |
1,527 |
|||||||
|
Other lease income |
18,283 |
16,851 |
1,432 |
|||||||||
|
Straight-line rent |
18,137 |
14,877 |
3,260 |
|||||||||
|
Above / below market rent amortization, net |
18,265 |
18,990 |
(725 |
) |
||||||||
|
Total lease income |
$ |
1,117,945 |
1,050,008 |
67,937 |
||||||||
|
Other property income |
10,609 |
11,464 |
(855 |
) |
||||||||
|
Management, transaction, and other fees |
20,776 |
19,896 |
880 |
|||||||||
|
Total revenues |
$ |
1,149,330 |
1,081,368 |
67,962 |
||||||||
Lease income increased by $67.9 million primarily due to the following:
•
$42.1 million increase in Base rent, mainly driven by the following:
o
$32.7 million increase resulting from same properties, including:
▪
$20.4 million increase due to increases from occupancy, contractual rent steps in existing leases, and positive rental spreads on new and renewal leases;
▪
$9.8 million increase due to redevelopment projects that commenced operations; and
▪
$2.5 million increase related to our acquisitions of the remaining ownership interests in and resulting consolidation of properties previously held in unconsolidated real estate partnerships;
o
$8.8 million increase from acquisitions of operating properties in 2025 as compared to 2024 activity; and
o
$3.0 million increase from rent commencements at completed development properties; partially offset by
o
$2.4 million decrease due to dispositions of operating properties.
•
$20.8 million increase from contractual Recoveries from tenants which represents their proportionate share of the operating, maintenance, insurance, and real estate tax expenses that we incur to operate our shopping centers. Recoveries from tenants increased, mainly from the following:
o
$17.5 million increase primarily due to higher operating costs and higher recovery rates due to increased occupancy in the current year; and
o
$3.7 million increase driven by the acquisition of operating properties in 2025 as compared to 2024, and lease commencements at development properties; partially offset by
o
$0.4 million decrease due to disposition of operating properties.
•
$1.5 million decrease in Uncollectible lease income primarily driven by higher collection rates in the current period.
•
$1.4 million increase in Other lease income mainly due to increase in lease termination fee income.
•
$3.3 million increase in Straight-line rent mainly due to timing and degree of contractual rent steps and new lease commencements.
There were no significant changes in Other property income, and Management, transaction, and other fees.
Changes in our operating expenses are summarized in the following table:
|
Nine months ended September 30, |
||||||||||||
|
(in thousands) |
2025 |
2024 |
Change |
|||||||||
|
Depreciation and amortization |
$ |
299,108 |
299,508 |
(400 |
) |
|||||||
|
Property operating expense |
194,689 |
183,242 |
11,447 |
|||||||||
|
Real estate taxes |
140,940 |
135,514 |
5,426 |
|||||||||
|
General and administrative |
74,140 |
75,443 |
(1,303 |
) |
||||||||
|
Other operating expenses |
5,402 |
9,363 |
(3,961 |
) |
||||||||
|
Total operating expenses |
$ |
714,279 |
703,070 |
11,209 |
||||||||
Property operating expense increased by $11.4 million, mainly due to the following:
•
$8.4 million increase from same properties primarily due to higher recoverable common area maintenance, management and utility expenses;
•
$2.6 million increase in acquisitions of operating properties and development properties;
•
$0.8 million increase attributable to property damage losses; partially offset by
•
$0.5 million decrease due to disposition of operating properties.
Real estate taxes increased by $5.4 million, mainly due to the acquisition of operating properties in 2025 as compared to 2024 and increases in real estate tax assessments across the same property portfolio.
General and administrative costs decreased by $1.3 million mainly due to the following:
•
$4.8 million decrease due to higher overhead capitalization resulting from increased development and redevelopment activity;
•
$1.7 million decrease due to changes in the fair value of participant obligations within the deferred compensation plan, which were attributable to changes in the fair values of those investments recognized in Net investment income; partially offset by
•
$3.8 million increase in compensation costs primarily driven by performance-based incentive compensation; and
•
$1.4 million increase primarily attributable to higher costs in business promotion, charitable contributions, professional fees and other general and administrative expenses.
Other operating expenses decreased by $4.0 million, mainly due to the $7.1 million of transition costs incurred in 2024 related to the UBP acquisition, partially offset by $3.1 million increase in environmental reserve costs and development pursuit costs.
Changes in Other expense, net are summarized in the following table:
|
Nine months ended September 30, |
||||||||||||
|
(in thousands) |
2025 |
2024 |
Change |
|||||||||
|
Interest expense, net |
||||||||||||
|
Interest on notes payable |
$ |
154,475 |
138,830 |
15,645 |
||||||||
|
Interest on unsecured credit facilities |
6,671 |
6,783 |
(112 |
) |
||||||||
|
Capitalized interest |
(7,302 |
) |
(4,813 |
) |
(2,489 |
) |
||||||
|
Hedge expense |
677 |
503 |
174 |
|||||||||
|
Interest income |
(4,913 |
) |
(8,235 |
) |
3,322 |
|||||||
|
Interest expense, net |
$ |
149,608 |
133,068 |
16,540 |
||||||||
|
Provision for impairment of real estate, net of tax |
4,636 |
- |
4,636 |
|||||||||
|
Gain on sale of real estate, net of tax |
(6,005 |
) |
(33,844 |
) |
27,839 |
|||||||
|
Loss on early extinguishment of debt |
- |
180 |
(180 |
) |
||||||||
|
Net investment income |
(2,629 |
) |
(4,506 |
) |
1,877 |
|||||||
|
Total other expense, net |
$ |
145,610 |
94,898 |
50,712 |
||||||||
Interest expense, net increased by $16.5 million primarily due to the following:
•
$15.6 million increase in Interest on notes payable is primarily due to new net public debt issuances in 2025 and 2024;
•
$3.3 million decrease in Interest income primarily due to maintaining higher levels of excess cash in short term investments in the comparative prior period; partially offset by
•
$2.5 million change in Capitalized interest is based on the timing and progress of our development and redevelopment projects.
Provision for impairment of real estate, net of tax of $4.6 million was recognized during the nine months ended September 30, 2025 related to the sale of five operating properties.
During the nine months ended September 30, 2025, we recognized gains on sale of real estate, net of tax of $6.0 million primarily from the sale of an operating property and an outparcel. During the nine months ended September 30, 2024, we recognized gains on sale of real estate, net of tax of $33.8 million primarily from the sale of four operating properties and recognition of two sales-type leases.
There were no significant changes in Loss on early extinguishments of debt.
Net investment income decreased by $1.9 million primarily driven by market volatility during the current period, including a $1.7 million decrease in returns on investments held in the non-qualified deferred compensation plan and a $0.2 million decrease in returns related to other corporate investments.
Equity in income of investments in real estate partnerships increased by $5.6 million mainly due to increases in operating income driven from increased occupancy and positive rental spreads on new and renewal leases, and a sale of one outparcel at a property held in unconsolidated real estate partnerships.
The following represents the remaining components that comprise Net income attributable to common shareholders and unit holders:
|
Nine months ended September 30, |
||||||||||||
|
(in thousands) |
2025 |
2024 |
Change |
|||||||||
|
Net income |
$ |
332,819 |
321,163 |
11,656 |
||||||||
|
Income attributable to noncontrolling interests |
(7,838 |
) |
(7,252 |
) |
(586 |
) |
||||||
|
Net income attributable to the Company |
324,981 |
313,911 |
11,070 |
|||||||||
|
Preferred stock dividends |
(10,239 |
) |
(10,239 |
) |
- |
|||||||
|
Net income attributable to common shareholders |
$ |
314,742 |
$ |
303,672 |
$ |
11,070 |
||||||
|
Net income attributable to exchangeable operating partnership units |
(2,892 |
) |
(1,836 |
) |
(1,056 |
) |
||||||
|
Net income attributable to common unit holders |
$ |
317,634 |
305,508 |
12,126 |
||||||||
Income attributable to noncontrolling interests increased by $0.6 million, primarily due to $1.1 million increase associated with the issuance of 2.8 million exchangeable operating partnership units to unrelated third-party sellers in connection with the acquisition of five properties in July 2025, partially offset by a $0.5 million decrease in net income from other consolidated real estate partnerships.
There were no significant changes in Preferred stock dividends.
Net income attributable to exchangeable operating partnership units increased by $1.1 million, mainly due to issuance of 2.8 million exchangeable operating partnership units to unrelated third-party sellers for acquisition of five properties in July 2025.
Supplemental Earnings Information on Non-GAAP Financial Measures
We use certain non-GAAP financial measures, in addition to certain performance metrics determined under GAAP, as we believe these measures improve the understanding of the operating results. We believe these non-GAAP financial 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 real estate 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 financial 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 financial measures to determine how best to provide relevant information to the public, and thus such reported non-GAAP financial measures could change. See "Non-GAAP Financial Measures" at the beginning of this Management's Discussion and Analysis.
We do not consider non-GAAP financial measures as 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 financial 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 financial measures. In order to compensate for these limitations, reconciliations of the non-GAAP financial measures we use to their most directly comparable GAAP measures 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 (Non-GAAP Financial Measures):
|
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||||||||||
|
(in thousands) |
2025 |
2024 |
Change |
2025 |
2024 |
Change |
||||||||||||||||||
|
Base rent |
$ |
284,146 |
271,887 |
12,259 |
$ |
845,666 |
811,610 |
34,056 |
||||||||||||||||
|
Recoveries from tenants |
99,089 |
93,047 |
6,042 |
298,854 |
280,255 |
18,599 |
||||||||||||||||||
|
Percentage rent |
2,213 |
2,424 |
(211 |
) |
13,117 |
13,400 |
(283 |
) |
||||||||||||||||
|
Termination fees |
777 |
749 |
28 |
5,146 |
4,160 |
986 |
||||||||||||||||||
|
Uncollectible lease income |
159 |
(466 |
) |
625 |
(1,822 |
) |
(3,880 |
) |
2,058 |
|||||||||||||||
|
Other lease income |
4,991 |
4,803 |
188 |
14,504 |
14,195 |
309 |
||||||||||||||||||
|
Other property income |
2,446 |
4,032 |
(1,586 |
) |
9,058 |
8,930 |
128 |
|||||||||||||||||
|
Total real estate revenue |
393,821 |
376,476 |
17,345 |
1,184,523 |
1,128,670 |
55,853 |
||||||||||||||||||
|
Operating and maintenance |
64,932 |
61,062 |
3,870 |
195,313 |
186,868 |
8,445 |
||||||||||||||||||
|
Termination expense |
- |
- |
- |
- |
5 |
(5 |
) |
|||||||||||||||||
|
Real estate taxes |
50,540 |
49,880 |
660 |
151,576 |
147,426 |
4,150 |
||||||||||||||||||
|
Ground rent |
4,112 |
3,783 |
329 |
11,375 |
11,671 |
(296 |
) |
|||||||||||||||||
|
Total real estate operating expenses |
119,584 |
114,725 |
4,859 |
358,264 |
345,970 |
12,294 |
||||||||||||||||||
|
Pro-rata same property NOI |
$ |
274,237 |
261,751 |
12,486 |
$ |
826,259 |
782,700 |
43,559 |
||||||||||||||||
|
Less: Termination fees |
777 |
749 |
28 |
5,146 |
4,155 |
991 |
||||||||||||||||||
|
Pro-rata same property NOI, excluding termination fees |
$ |
273,460 |
261,002 |
12,458 |
$ |
821,113 |
778,545 |
42,568 |
||||||||||||||||
|
Pro-rata same property NOI growth, excluding termination fees |
4.8 |
% |
5.5 |
% |
||||||||||||||||||||
Pro-rata same property NOI, excluding termination fees/expenses, changed from the following major components:
Total real estate revenue increased by $17.3 million and $55.9 million, on a net basis, during the three and nine months ended September 30, 2025, respectively, as follows:
•
Base rent increased by $12.3 million and $34.1 million during the three and nine months ended September 30, 2025, respectively, due to contractual 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 by $6.0 million and $18.6 million during the three and nine months ended September 30, 2025, respectively, due to higher recoverable expenses and increased occupancy.
•
Uncollectible lease income decreased by $2.1 million during the nine months ended September 30, 2025, primarily driven by higher collection rates in the current period resulting in reduced levels of uncollectible lease income.
•
Other property income decreased by $1.6 million during the three months ended September 30, 2025, due to an increase in business interruption insurance proceeds received in the comparative prior period.
Total real estate operating expenses increased by $4.9 million and $12.3 million, on a net basis, during the three and nine months ended September 30, 2025, respectively, as follows:
•
Operating and maintenance increased by $3.9 million and $8.4 million during the three and nine months ended September 30, 2025, primarily due to increases in common area maintenance, management fees, utility costs and other tenant-recoverable costs.
•
Real estate taxes increased by $4.2 million during the nine months ended September 30, 2025, due to an increase in real estate assessments across the portfolio.
Reconciliation of Pro-rata Same Property NOI to Net Income Attributable to Common Shareholders:
|
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
|
(in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Net income attributable to common shareholders |
$ |
105,960 |
98,056 |
$ |
314,742 |
303,672 |
||||||||||
|
Less: |
||||||||||||||||
|
Management, transaction, and other fees |
(6,720 |
) |
(6,765 |
) |
(20,776 |
) |
(19,896 |
) |
||||||||
|
Other (1) |
(13,654 |
) |
(12,115 |
) |
(40,193 |
) |
(37,428 |
) |
||||||||
|
Plus: |
||||||||||||||||
|
Depreciation and amortization |
102,799 |
100,955 |
299,108 |
299,508 |
||||||||||||
|
General and administrative |
27,060 |
25,073 |
74,140 |
75,443 |
||||||||||||
|
Other operating expense |
1,770 |
3,654 |
5,402 |
9,363 |
||||||||||||
|
Other expense, net |
45,897 |
34,290 |
145,610 |
94,898 |
||||||||||||
|
Equity in income of investments in real estate excluded from NOI (2) |
12,099 |
12,492 |
40,229 |
39,439 |
||||||||||||
|
Net income attributable to noncontrolling interests |
3,244 |
2,107 |
7,838 |
7,252 |
||||||||||||
|
Preferred stock dividends and issuance costs |
3,413 |
3,413 |
10,239 |
10,239 |
||||||||||||
|
NOI |
$ |
281,868 |
261,160 |
$ |
836,339 |
782,490 |
||||||||||
|
Less non-same property NOI |
(7,631 |
) |
591 |
(10,080 |
) |
210 |
||||||||||
|
Pro-rata same property NOI |
$ |
274,237 |
261,751 |
$ |
826,259 |
782,700 |
||||||||||
|
Less: Termination fees |
(777 |
) |
(749 |
) |
(5,146 |
) |
(4,155 |
) |
||||||||
|
Pro-rata same property NOI excluding termination fees. |
$ |
273,460 |
261,002 |
$ |
821,113 |
778,545 |
||||||||||
(1)
Includes straight-line rental income and expense, net of reserves, above and below market rent amortization, other fees, and noncontrolling interests.
(2)
Includes non-NOI income earned and expenses incurred at our unconsolidated real estate partnerships, including those separated out above for our consolidated properties.
Nareit FFO, Core Operating Earnings and AFFO (Non-GAAP Financial Measures):
Our reconciliation of net income attributable to common shareholders to Nareit FFO, to Core Operating Earnings, and to AFFO is as follows:
|
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
|
(in thousands, except share information) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Reconciliation of Net income attributable to common shareholders to Nareit FFO |
||||||||||||||||
|
Net income attributable to common shareholders |
$ |
105,960 |
98,056 |
$ |
314,742 |
303,672 |
||||||||||
|
Adjustments to reconcile to Nareit FFO: (1) |
||||||||||||||||
|
Depreciation and amortization (excluding FF&E) |
109,933 |
107,801 |
321,296 |
319,765 |
||||||||||||
|
Provision for impairment of real estate |
3,374 |
- |
4,636 |
- |
||||||||||||
|
Gain on sale of real estate, net of tax |
(7,432 |
) |
(11,365 |
) |
(7,187 |
) |
(33,853 |
) |
||||||||
|
Exchangeable operating partnership units |
1,664 |
593 |
2,892 |
1,836 |
||||||||||||
|
Nareit FFO attributable to common stock and unit holders |
$ |
213,499 |
195,085 |
$ |
636,379 |
591,420 |
||||||||||
|
Reconciliation of Nareit FFO to Core Operating Earnings |
||||||||||||||||
|
Nareit FFO |
$ |
213,499 |
195,085 |
$ |
636,379 |
591,420 |
||||||||||
|
Adjustments to reconcile to Core Operating Earnings: (1) |
||||||||||||||||
|
Not Comparable Items |
||||||||||||||||
|
Merger transition costs |
- |
2,375 |
- |
7,069 |
||||||||||||
|
Loss on early extinguishment of debt |
- |
- |
- |
180 |
||||||||||||
|
Certain Non-Cash Items |
||||||||||||||||
|
Straight-line rent |
(6,773 |
) |
(5,886 |
) |
(20,070 |
) |
(16,907 |
) |
||||||||
|
Uncollectible straight-line rent |
(509 |
) |
(134 |
) |
611 |
1,899 |
||||||||||
|
Above/below market rent amortization, net |
(5,423 |
) |
(5,370 |
) |
(17,260 |
) |
(17,910 |
) |
||||||||
|
Debt and derivative mark-to-market amortization |
1,816 |
1,693 |
4,618 |
4,333 |
||||||||||||
|
Core Operating Earnings |
$ |
202,610 |
187,763 |
$ |
604,278 |
570,084 |
||||||||||
(1)
Includes Regency's Pro-rata share of unconsolidated investment partnerships, net of Pro-rata share attributable to noncontrolling interests.
|
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
|
(in thousands, except share information) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Reconciliation of Core Operating Earnings to AFFO: |
||||||||||||||||
|
Core Operating Earnings |
$ |
202,610 |
187,763 |
$ |
604,278 |
570,084 |
||||||||||
|
Adjustments to reconcile to AFFO (1): |
||||||||||||||||
|
Operating capital expenditures |
(33,832 |
) |
(36,430 |
) |
(90,109 |
) |
(91,168 |
) |
||||||||
|
Debt cost and derivative adjustments |
2,423 |
2,107 |
6,849 |
6,269 |
||||||||||||
|
Stock-based compensation |
5,321 |
4,776 |
16,219 |
14,078 |
||||||||||||
|
AFFO |
$ |
176,522 |
158,216 |
$ |
537,237 |
499,263 |
||||||||||
(1)
Includes Regency's Pro-rata share of unconsolidated investment partnerships, net of Pro-rata share attributable to noncontrolling interests.
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 flows 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, its subsidiaries, or by our real estate 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 flows from operations after funding our common stock and preferred stock dividends, borrowings from our Line, proceeds from sale of real estate, mortgage loan and unsecured bank financing, distributions received from our real estate partnerships, and when the capital markets are favorable, proceeds from 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, due to the current interest rate environment.
We are actively monitoring market conditions and evaluating strategies to mitigate interest rate risk. These strategies may include the use of interest rate swaps, caps, or forward-starting hedges to lock in rates on future debt issuances or refinancings. We are also prioritizing refinancing of maturing debt with long-duration fixed-rate debt where appropriate, to minimize future exposure to rate volatility.
On May 13, 2025, the Company issued $400 million of senior unsecured notes due 2032, at a par value of 99.279% and a coupon of 5.0%. The intended use of the net proceeds includes (i) to reduce the outstanding balance on the Line, (ii) for the repayment of $250 million of 3.90% unsecured public debt due November 1, 2025, upon it's maturity and (iii) for general corporate purposes, which may include the future repayment of other outstanding debt. Pending the maturity of the November 2025 unsecured public debt, we also temporarily invested a portion of the proceeds in commercial time deposits.
As of September 30, 2025, we had $646.3 million of debt maturing within the next 12 months, including $450 million of maturing unsecured public and private placement debt, of which $250 million was paid off at maturity on November 3, 2025, as well as Regency's pro-rata share of maturities within our unconsolidated real estate partnerships, which we intend to refinance or pay off as they mature. We currently expect to address these maturing obligations through a combination of refinancing, available liquidity under our Line, and proceeds from potential property sales. We continually monitor capital markets and proactively manage our debt maturity profile to maintain a strong balance sheet and financial flexibility.
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, although, in the longer term, we can provide no assurances.
In addition to our $200.7 million of unrestricted cash, we have the following additional sources of capital available:
|
(in thousands) |
September 30, 2025 |
||
|
ATM program |
|||
|
Original offering amount |
$ |
500,000 |
|
|
Available capacity |
$ |
400,000 |
|
|
Line of credit |
|||
|
Total commitment amount |
$ |
1,500,000 |
|
|
Available capacity (1) |
$ |
1,457,440 |
|
|
Maturity (2) |
March 23, 2028 |
||
(1)
Net of letters of credit issued against our Line.
(2)
The Company has the option to extend the maturity for two additional six-month periods.
The declaration of dividends is determined quarterly by, and in the discretion of, our Board of Directors.
On August 5, 2025, the Board:
•
Declared a quarterly cash dividend on the Company's common stock of $0.705 per share. The dividend was paid on October 2, 2025, to shareholders of record as of September 11, 2025.
•
Declared a quarterly cash dividend on the Company's Series A preferred stock of $0.390625 per share. The dividend was paid on October 31, 2025, to shareholders of record of the Series A preferred stock as of October 16, 2025.
•
Declared a quarterly cash dividend on the Company's Series B preferred stock of $0.367200 per share. The dividend was paid on October 31, 2025, to shareholders of record of the Series B preferred stock as of October 16, 2025.
Subsequent to the period ended September 30, 2025, on October 27, 2025, our Board of Directors:
•
Declared a quarterly cash dividend on the Company's common stock of $0.755 per share, representing an increase of $0.05 per share, or 7.1%, from the prior quarterly dividend. The dividend is payable on January 6, 2026, to shareholders of record as of December 15, 2025.
•
Declared a dividend on the Series A Preferred Stock, which will be paid at a rate of $0.390625 per share on January 30, 2026. The dividend will be payable to holders of record of the Series A Preferred Stock as of the close of business on January 16, 2026.
•
Declared a dividend on the Series B Preferred Stock, which will be paid at a rate of $0.367200 per share on January 30, 2026. The dividend will be payable to holders of record of the Series B Preferred Stock as of the close of business on January 16, 2026.
While future dividends on shares of our common stock 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 flows from operations to fund our dividend distributions. During the nine months ended September 30, 2025 and 2024, we generated cash flows from operations of $623.7 million and $598.8 million, respectively, and paid $395.8 million and $381.5 million in dividends to our common stock, preferred stock and unit holders.
We currently have development and redevelopment projects in various stages of planning, design and construction, along with a pipeline of potential projects for future development or redevelopment. After funding our common and preferred stock and units dividend payment in October 2025, we estimate that we will require capital during the next 12 months of approximately $1,085.5 million related to leasing commissions, tenant improvements, in-process developments and redevelopments, capital contributions to our real estate partnerships, and repaying maturing debt. These capital requirements may be impacted by tariffs and inflation, as well as potential shortages of labor employed by contractors, resulting in increased costs of construction materials, labor, and services from third-party contractors and suppliers. We continue to implement mitigation strategies including, but not limited to, entering into fixed cost construction contracts, pre-ordering materials, and other planning efforts. Further, continued challenges from permitting delays and labor and material shortages 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 September 30, 2025, 86.9% of our consolidated real estate assets were unencumbered. Our low level of encumbered assets allows us to more readily access the secured and unsecured debt markets and to maintain borrowing capacity on the Line.
Our Line and unsecured debt require that we remain in compliance with various customary financial covenants, which are described in the Consolidated Financial Statements included in our 2024 Form 10-K. We were in compliance with these covenants at September 30, 2025, 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:
|
Nine months ended September 30, |
|||||||||||
|
(in thousands) |
2025 |
2024 |
Change |
||||||||
|
Net cash provided by operating activities |
$ |
623,744 |
598,813 |
24,931 |
|||||||
|
Net cash used in investing activities |
(404,711 |
) |
(209,071 |
) |
(195,640 |
) |
|||||
|
Net cash used in financing activities |
(75,322 |
) |
(366,265 |
) |
290,943 |
||||||
|
Net change in cash, cash equivalents, and restricted cash |
$ |
143,711 |
23,477 |
120,234 |
|||||||
|
Total cash, cash equivalents, and restricted cash |
$ |
205,595 |
114,831 |
90,764 |
|||||||
Net cash provided by operating activities:
Net cash provided by operating activities increased $24.9 million due to:
•
$27.2 million increase in cash from operations due to the timing of receipts and payments, partially offset by
•
$2.3 million decrease in operating cash flow distributions from Investments in real estate partnerships.
Net cash used in investing activities:
Net cash used in investing activities changed by $195.6 million as follows:
|
Nine months ended September 30, |
|||||||||||
|
(in thousands) |
2025 |
2024 |
Change |
||||||||
|
Cash flows from investing activities: |
|||||||||||
|
Acquisition of operating real estate, net of cash acquired of $4,273 and $14,143 in 2025 and 2024, respectively |
$ |
(103,502 |
) |
(45,205 |
) |
(58,297 |
) |
||||
|
Real estate development and capital improvements |
(307,282 |
) |
(235,284 |
) |
(71,998 |
) |
|||||
|
Proceeds from sale of real estate |
51,084 |
103,626 |
(52,542 |
) |
|||||||
|
Proceeds from property insurance casualty claims |
- |
5,257 |
(5,257 |
) |
|||||||
|
Issuance of notes receivable |
(176 |
) |
(32,651 |
) |
32,475 |
||||||
|
Collection of notes receivable |
479 |
3,052 |
(2,573 |
) |
|||||||
|
Investments in real estate partnerships |
(12,399 |
) |
(25,771 |
) |
13,372 |
||||||
|
Return of capital from investments in real estate partnerships |
12,162 |
12,859 |
(697 |
) |
|||||||
|
Dividends on investment securities |
1,232 |
296 |
936 |
||||||||
|
Purchase of investment securities |
(99,770 |
) |
(99,035 |
) |
(735 |
) |
|||||
|
Proceeds from sale of investment securities |
53,461 |
103,785 |
(50,324 |
) |
|||||||
|
Net cash used in investing activities |
$ |
(404,711 |
) |
(209,071 |
) |
(195,640 |
) |
||||
Significant changes in investing activities include:
•
We paid $103.5 million in 2025 to purchase nine operating properties and one operating outparcel. Three of the operating properties were previously held in unconsolidated real estate investment partnerships in which we held ownership interests ranging from 50.0%-66.7%. We paid $45.2 million in 2024 to purchase one operating property.
•
During 2025, we invested $72.0 million more on real estate development and capital improvements than the comparable prior year period, as further detailed in a table below.
•
We sold six operating properties and one land parcel in 2025 for net proceeds of $51.1 million compared to four operating properties in 2024 for net proceeds of $103.6 million.
•
We received additional property insurance claim proceeds of $5.3 million in 2024 primarily attributable to a single property that was impacted by a weather event in 2019.
•
During 2024, in connection with a secured lending transaction entered into by the Company, we issued a note receivable in the amount of $29.8 million at an interest rate of 6.9% maturing in January 2027, secured by a grocery-anchored shopping center. In addition, we issued $2.9 million of short-term notes receivable to real estate partners in 2024.
•
We collected $3.0 million in short-term note receivables from real estate partners in 2024.
•
Investments in real estate partnerships:
o
In 2025, we invested $12.4 million, including $5.1 million to fund our share of debt repayments, $3.2 million to fund our share of an acquisition of an operating property, and $4.1 million to fund our share of development and redevelopment activities.
o
In 2024, we invested $25.8 million, to fund our share of development and redevelopment activities, including investing in two new ground up development projects.
•
Return of capital from our unconsolidated investments in real estate partnerships includes sales or financing proceeds.
o
During 2025, we received $12.2 million from our share of proceeds from outparcel sales and debt financing activities.
o
During 2024, we received $12.9 million from our share of proceeds from debt financing activities and for the partial sale of ownership interest in a real estate partnership.
•
Purchase 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, as well as:
o
During 2025, we invested approximately $90 million of proceeds received from the 2025 Notes in commercial time deposits with staggered maturity dates ranging from 4 to 5 months, of which $40 million were subsequently settled at maturity during the third quarter of 2025.
o
During 2024, we invested approximately $90 million in commercial deposits from the proceeds received from the January 2024 public offering of senior unsecured notes. These commercial deposits were subsequently settled at maturity during the second quarter of 2024.
We plan to continue developing and redeveloping shopping centers for long-term investment. During the nine months ended September 30, 2025, we deployed capital of $307.3 million for the development, redevelopment, and capital improvement of our real estate properties, comprised of the following:
|
Nine months ended September 30, |
|||||||||||
|
(in thousands) |
2025 |
2024 |
Change |
||||||||
|
Capital expenditures: |
|||||||||||
|
Land acquisitions - Development |
9,534 |
13,882 |
(4,348 |
) |
|||||||
|
Land acquisitions - Redevelopment |
3,607 |
- |
3,607 |
||||||||
|
Building and tenant improvements |
77,313 |
76,002 |
1,311 |
||||||||
|
Redevelopment costs |
89,797 |
85,287 |
4,510 |
||||||||
|
Development costs |
104,587 |
45,370 |
59,217 |
||||||||
|
Capitalized interest |
7,655 |
4,709 |
2,946 |
||||||||
|
Capitalized direct compensation |
14,789 |
10,034 |
4,755 |
||||||||
|
Real estate development and capital improvements |
$ |
307,282 |
235,284 |
71,998 |
|||||||
•
We acquired two land parcels for development, and one for redevelopment in 2025, compared to three land parcel for development, and two outparcels in 2024.
•
Building and tenant improvements increased $1.3 million in 2025, primarily related to the timing and volume of capital projects.
•
Redevelopment costs are higher than prior year. We intend to continuously improve our portfolio of shopping centers through redevelopment which can include adjacent land acquisitions, existing building expansions, facade renovations, new out-parcel building constructions, and redevelopments 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 are higher in 2025 due to the progress towards completion of 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 incurred. 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 dedicated 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.
The following table summarizes our development projects in-process and completed:
|
(in thousands, except cost PSF) |
September 30, 2025 |
|||||||||||||||||||||||
|
Property Name |
Market |
Ownership (1) |
Start |
Estimated |
Estimated / Actual Net |
% of Costs Incurred |
GLA (1) |
Cost PSF |
||||||||||||||||
|
Developments In-Process |
||||||||||||||||||||||||
|
Sienna Grande Shops |
Houston, TX |
75% |
Q2-2023 |
2028 |
9,391 |
88 |
% |
23 |
408 |
|||||||||||||||
|
The Shops at SunVet |
Long Island, NY |
100% |
Q2-2023 |
2027 |
92,863 |
86 |
% |
170 |
546 |
|||||||||||||||
|
The Shops at Stone Bridge |
Cheshire, CT |
100% |
Q1-2024 |
2026 |
68,045 |
83 |
% |
156 |
436 |
|||||||||||||||
|
Jordan Ranch Market |
Houston, TX |
50% |
Q3-2024 |
2027 |
23,006 |
56 |
% |
81 |
284 |
|||||||||||||||
|
Oakley Shops at Laurel Fields |
Bay Area, CA |
100% |
Q3-2024 |
2027 |
35,814 |
76 |
% |
78 |
459 |
|||||||||||||||
|
The Village at Seven Pines |
Jacksonville, FL |
100% |
Q3-2025 |
2028 |
112,302 |
13 |
% |
239 |
470 |
|||||||||||||||
|
Ellis Village Center (South) |
Bay Area, CA |
100% |
Q3-2025 |
2028 |
29,660 |
4 |
% |
49 |
605 |
|||||||||||||||
|
Total Developments In-Process |
$ |
371,081 |
54 |
% |
796 |
466 |
||||||||||||||||||
|
Developments Completed |
||||||||||||||||||||||||
|
Baybrook East - Phase 1B (4) |
Houston, TX |
50% |
Q2-2022 |
2026 |
9,500 |
95 |
% |
83 |
114 |
|||||||||||||||
|
Total Developments Completed |
$ |
9,500 |
95 |
% |
83 |
114 |
||||||||||||||||||
(1)
Estimated net development costs and GLA are reported based on Regency's ownership interest in the real estate partnership at completion.
(2)
Estimated Stabilization Year represents the estimated first full calendar year that the project will reach our expected stabilized yield.
(3)
Includes leasing costs and is net of tenant reimbursements.
(4)
The values are reflected at Regency's pro-rata share of 50.0% as the project was completed prior to the purchase of its partner's remaining 50.0% ownership interest.
The following table summarizes our redevelopment projects in process and completed:
|
(in thousands, except cost PSF) |
September 30, 2025 |
|||||||||||||||
|
Property Name |
Market |
Ownership (1) |
Start Date |
Estimated Stabilization Year (2) |
Estimated Net |
% of Costs Incurred |
||||||||||
|
Redevelopments In-Process |
||||||||||||||||
|
Bloom on Third |
Los Angeles, CA |
35% |
Q4-2022 |
2027 |
$ |
24,525 |
69 |
% |
||||||||
|
Serramonte Center - Phase 3 |
San Francisco, CA |
100% |
Q2-2023 |
2026 |
36,989 |
46 |
% |
|||||||||
|
Avenida Biscayne |
Miami, FL |
100% |
Q4-2023 |
2026 |
22,122 |
77 |
% |
|||||||||
|
Cambridge Square |
Atlanta, GA |
100% |
Q4-2023 |
2026 |
13,027 |
92 |
% |
|||||||||
|
Anastasia Plaza |
Jacksonville, FL |
100% |
Q3-2024 |
2026 |
15,607 |
64 |
% |
|||||||||
|
West Chester Plaza |
Cincinnati, OH |
100% |
Q4-2024 |
2028 |
15,442 |
34 |
% |
|||||||||
|
Willows Shopping Center |
Bay Area, CA |
100% |
Q4-2024 |
2027 |
16,807 |
25 |
% |
|||||||||
|
The Crossing Clarendon |
Metro DC |
100% |
Q2-2025 |
2027 |
13,679 |
14 |
% |
|||||||||
|
East Meadow Plaza - Phase 1 |
Long Island, NY |
100% |
Q3-2024 |
2026 |
11,736 |
63 |
% |
|||||||||
|
East Meadow Plaza - Phase 2A |
Long Island, NY |
100% |
Q3-2025 |
2027 |
15,969 |
12 |
% |
|||||||||
|
Various Redevelopments |
Various |
Various |
Various |
Various |
111,089 |
42 |
% |
|||||||||
|
Total Redevelopments In-Process |
$ |
296,992 |
48 |
% |
||||||||||||
|
Redevelopments Completed |
||||||||||||||||
|
Circle Marina Shops & Marketplace |
Los Angeles, CA |
100% |
Q2-2022 |
2026 |
$ |
15,486 |
94 |
% |
||||||||
|
Various Properties |
Various |
Various |
Various |
Various |
23,381 |
96 |
% |
|||||||||
|
Total Redevelopments Completed |
$ |
38,867 |
95 |
% |
||||||||||||
(1)
Estimated net development costs are reported based on Regency's ownership interest in the real estate partnership at completion.
(2)
Estimated Stabilization Year represents the estimated first full calendar year that the project will reach our expected stabilized yield.
(3)
Includes leasing costs and is net of tenant reimbursements.
Net cash used in financing activities:
Net cash flows provided by financing activities increased by $290.9 million during 2025, as follows:
|
Nine months ended September 30, |
|||||||||||
|
(in thousands) |
2025 |
2024 |
Change |
||||||||
|
Cash flows from financing activities: |
|||||||||||
|
Net proceeds from common stock issuances |
$ |
49,162 |
- |
49,162 |
|||||||
|
Tax withholding on stock-based compensation |
(6,783 |
) |
(8,776 |
) |
1,993 |
||||||
|
Common shares repurchased through share repurchase program |
- |
(200,066 |
) |
200,066 |
|||||||
|
Repurchase of exchangeable operating partnership units |
(2,046 |
) |
- |
(2,046 |
) |
||||||
|
Proceeds from sale of treasury stock |
462 |
210 |
252 |
||||||||
|
Contributions from noncontrolling interests |
10,699 |
6,533 |
4,166 |
||||||||
|
Distributions to and redemptions of noncontrolling interests |
(37,175 |
) |
(9,435 |
) |
(27,740 |
) |
|||||
|
Distributions to exchangeable operating partnership unit holders |
(2,299 |
) |
(2,215 |
) |
(84 |
) |
|||||
|
Dividends paid to common shareholders |
(383,267 |
) |
(368,999 |
) |
(14,268 |
) |
|||||
|
Dividends paid to preferred shareholders |
(10,239 |
) |
(10,239 |
) |
- |
||||||
|
Repayment of fixed rate unsecured notes |
- |
(250,000 |
) |
250,000 |
|||||||
|
Proceeds from issuance of fixed rate unsecured notes, net of debt discount |
397,116 |
722,860 |
(325,744 |
) |
|||||||
|
Proceeds from unsecured credit facilities |
510,000 |
527,419 |
(17,419 |
) |
|||||||
|
Repayment of unsecured credit facilities |
(545,000 |
) |
(649,419 |
) |
104,419 |
||||||
|
Proceeds from notes payable |
10,000 |
12,000 |
(2,000 |
) |
|||||||
|
Repayment of notes payable |
(54,130 |
) |
(110,862 |
) |
56,732 |
||||||
|
Scheduled principal payments |
(7,983 |
) |
(8,716 |
) |
733 |
||||||
|
Payment of financing costs |
(3,839 |
) |
(16,560 |
) |
12,721 |
||||||
|
Net cash used in financing activities |
$ |
(75,322 |
) |
(366,265 |
) |
290,943 |
|||||
Significant financing activities during the nine months ended September 30, 2025 and 2024, include the following:
•
During 2025, we received $49.2 million in net proceeds upon settling forward sales agreements under our ATM program.
•
The taxes withheld in conjunction with vesting of equity award plans to satisfy employee tax withholding requirements totaled $6.8 million and $8.8 million during 2025 and 2024, respectively.
•
During 2024, we paid $200.0 million to repurchase 3,306,709 shares of our common stock under our Repurchase Program.
•
During 2025, we paid $2.0 million for the redemption of exchangeable operating partnership units.
•
During 2025, we received $10.7 million in contributions for the limited partners' share of development funding compared to $6.5 million in 2024.
•
During 2025, we distributed $37.2 million to limited partners, including proceeds to redeem the non-controlling interest in two real estate partnerships. During 2024, we distributed $9.4 million to limited partners, including proceeds to partially redeem a non-controlling interest in one real estate partnership.
•
We paid $14.4 million more in dividends and exchangeable operating partnership unit distributions in 2025 as a result of a higher dividend rate and an increase in the total number of shares and units outstanding
•
We had the following debt related activity during 2025:
o
We received $397.1 million in proceeds from issuing unsecured public debt,
o
We repaid a net $35.0 million on our Line,
o
We received $10.0 million in proceeds from a mortgage refinancing,
o
We paid $62.1 million for debt repayments, including:
▪
$54.1 million for repaying five mortgage loans at maturity, and
▪
$8.0 million in principal mortgage payments
o
We paid $3.8 million in loan costs relating to the unsecured public debt offering.
•
We had the following debt related activity during 2024:
o
We repaid $250.0 million in unsecured public debt,
o
We received $734.9 million in proceeds including:
▪
$722.9 million from issuing unsecured public debt and
▪
$12.0 million from a mortgage refinancing,
o
We repaid a net $122.0 million on our Line,
o
We paid $119.6 million for debt repayments, including:
▪
$110.9 million for repaying three mortgage loans at maturity, and
▪
$8.7 million in principal mortgage payments.
o
We paid $16.6 million in loan costs relating to the recast of the Line as well as the unsecured public debt offering.
Investments in Real Estate Partnerships
The following table is a summary of the unconsolidated combined assets and liabilities of our real estate partnerships and our Pro-rata share:
|
Combined |
Regency's Share(1) |
|||||||||||||||
|
(dollars in thousands) |
September 30, 2025 |
December 31, 2024 |
September 30, 2025 |
December 31, 2024 |
||||||||||||
|
Number of real estate partnerships |
16 |
19 |
||||||||||||||
|
Regency's ownership |
12% - 83% |
12% - 83% |
||||||||||||||
|
Number of properties |
101 |
103 |
||||||||||||||
|
Assets |
$ |
2,800,459 |
2,843,157 |
$ |
1,031,624 |
1,061,072 |
||||||||||
|
Liabilities |
1,700,302 |
1,676,507 |
618,169 |
616,718 |
||||||||||||
|
Equity |
1,100,157 |
1,166,650 |
413,455 |
444,354 |
||||||||||||
|
Basis difference |
(45,618 |
) |
(45,310 |
) |
||||||||||||
|
Investments in real estate partnerships |
$ |
367,837 |
399,044 |
|||||||||||||
(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 our 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 |
September 30, 2025 |
December 31, 2024 |
|||||||
|
GRI - Regency, LLC (GRIR)(1) |
40% |
$ |
134,279 |
136,972 |
||||||
|
Columbia Regency Partners II, LLC (Columbia II) |
20% |
60,745 |
63,024 |
|||||||
|
Columbia Village District, LLC |
30% |
6,334 |
6,434 |
|||||||
|
Individual Investors |
||||||||||
|
Ballard Blocks |
50% |
58,362 |
59,596 |
|||||||
|
Bloom on Third |
35% |
46,277 |
44,715 |
|||||||
|
Others (2)(3) |
12% - 83% |
61,840 |
88,303 |
|||||||
|
Total Investment in real estate partnerships |
$ |
367,837 |
$ |
399,044 |
||||||
(1)
Subsequent to the period ended September 30, 2025, the partners completed a partial distribution-in-kind ("DIK") transaction involving a total of eleven operating properties. The Company received five of these properties, which had an aggregate fair value of approximately $113 million, and assumed existing debt of approximately $10 million. The remaining six properties were distributed to the other partner.
(2)
Effective January 1, 2025, we acquired our partner's 33.3% share in a single property partnership for a total purchase price of $10.3 million. Following this acquisition, the Company now owns 100% of this property, and the property has been consolidated into the Company's financial statements.
(3)
Effective August 1, 2025, we acquired our partners' 50% shares in two single property partnerships for a combined purchase price of $23.7 million. Following this acquisition, the Company now owns 100% of these properties, and the properties have been consolidated into the Company's financial statements.
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) |
September 30, 2025 |
|||||||||||||||||||
|
Scheduled Principal Payments and Maturities by Year: |
Scheduled |
Mortgage |
Unsecured |
Total |
Regency's |
|||||||||||||||
|
2025 (1) |
$ |
1,946 |
68,734 |
- |
70,680 |
28,127 |
||||||||||||||
|
2026 |
7,131 |
293,335 |
20,000 |
320,466 |
116,223 |
|||||||||||||||
|
2027 |
7,303 |
32,800 |
- |
40,103 |
13,417 |
|||||||||||||||
|
2028 |
4,097 |
231,235 |
- |
235,332 |
81,592 |
|||||||||||||||
|
2029 |
2,855 |
104,434 |
- |
107,289 |
37,157 |
|||||||||||||||
|
Beyond 5 Years |
4,508 |
812,163 |
- |
816,671 |
300,410 |
|||||||||||||||
|
Net unamortized loan costs, debt premium / (discount) |
- |
(7,476 |
) |
- |
(7,476 |
) |
(2,658 |
) |
||||||||||||
|
Total |
$ |
27,840 |
1,535,225 |
20,000 |
1,583,065 |
574,268 |
||||||||||||||
(1)
Reflects scheduled principal payments and maturities for the remainder of the year.
At September 30, 2025, our investments in real estate partnerships had notes payable of $1.6 billion maturing through 2034, of which 93.8% had a weighted average fixed interest rate of 4.0%. The remaining notes payable float with SOFR and had a weighted average variable interest rate of 6.7%, based on rates as of September 30, 2025. These fixed and variable rate notes payable are all non-recourse, and our Pro-rata share was $574.3 million as of September 30, 2025. As notes payable mature, they will 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 are obligated to contribute our Pro-rata share to fund maturities if the loans are not refinanced, and we have the capacity to do so from existing cash balances, availability on our Line, and operating cash flows. 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 real estate investment partner is unable to fund its share of the capital requirements of the real estate 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 share of net income or loss in each of these real estate partnerships, we recognized fees as follows:
|
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
|
(in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Management, transaction, and other fees |
$ |
6,640 |
6,765 |
$ |
20,471 |
19,896 |
||||||||||
Critical Accounting Estimates
There have been no material changes in our Critical Accounting Estimates from the information provided in the "Critical Accounting Estimates" section of "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K.
Regency Centers LP published this content on December 04, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on December 04, 2025 at 11:03 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]