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 June 30,March 31, 20222023
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) |
| 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"large accelerated filer,” “accelerated" "accelerated filer,” “smaller" "smaller reporting company,”" and “emerging"emerging growth company”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’sCorporation's common stock was 171,116,018170,978,967 as of August 4, 2022.May 3, 2023.
EXPLANATORY NOTE
This reportQuarterly Report on Form 10-Q (this "Report") combines the quarterly reports on Form 10-Q for the quarter ended June 30, 2022,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;subsidiaries and references to "Regency Centers, L.P." or the "Operating Partnership" mean Regency Centers, L.P. and its controlled subsidiaries. The termterms "the Company",Company," "Regency Centers" or "Regency" meansCenters," "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 trustReal 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 June 30, 2022,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’sPartnership'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:
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’sCompany'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’sCompany's business. These sources include the Operating Partnership's operations, its direct or indirect incurrence of indebtedness, and the issuance of partnership units.
Stockholders'Shareholders' equity, partners' capital, and noncontrolling interests are the main areas of difference between the consolidated financial statementsConsolidated 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' unitsUnits in the Operating Partnership owned by third parties are accounted for in partners' capital in the Operating Partnership's financial statements and outside of stockholders'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 reportReport 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 reportReport refers to actions or holdings as being actions or holdings of the Company.
As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have assets other than its investment in the Operating Partnership. Therefore, while stockholders'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
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
REGENCY CENTERS CORPORATION
Consolidated Balance Sheets
June 30, 2022March 31, 2023 and December 31, 20212022
(in thousands, except share data)
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||
Assets |
| (unaudited) |
|
|
|
|
| (unaudited) |
|
|
|
| ||||
Net real estate investments: |
|
|
|
|
|
| ||||||||||
Real estate assets, at cost |
| $ | 11,762,300 |
|
|
| 11,495,581 |
|
| $ | 11,886,697 |
|
|
| 11,858,064 |
|
Less: accumulated depreciation |
|
| 2,301,183 |
|
|
| 2,174,963 |
|
|
| 2,484,960 |
|
|
| 2,415,860 |
|
Real estate assets, net |
|
| 9,461,117 |
|
|
| 9,320,618 |
|
|
| 9,401,737 |
|
|
| 9,442,204 |
|
Investments in real estate partnerships |
|
| 330,887 |
|
|
| 372,591 |
|
|
| 346,390 |
|
|
| 350,377 |
|
Properties held for sale |
|
| 2,354 |
|
|
| 25,574 |
| ||||||||
Cash, cash equivalents, and restricted cash, including $3,128 and $1,930 of restricted cash at June 30, 2022 and December 31, 2021, respectively |
|
| 121,190 |
|
|
| 95,027 |
| ||||||||
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 |
|
| 159,643 |
|
|
| 153,091 |
|
|
| 181,579 |
|
|
| 188,863 |
|
Deferred leasing costs, less accumulated amortization of $120,650 and $117,878 at June 30, 2022 and December 31, 2021, respectively |
|
| 65,607 |
|
|
| 65,741 |
| ||||||||
Acquired lease intangible assets, less accumulated amortization of $325,131 and $312,186 at June 30, 2022 and December 31, 2021, respectively |
|
| 214,264 |
|
|
| 212,707 |
| ||||||||
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 |
|
| 278,153 |
|
|
| 280,783 |
|
|
| 273,702 |
|
|
| 275,513 |
|
Other assets |
|
| 268,600 |
|
|
| 266,431 |
|
|
| 276,926 |
|
|
| 267,797 |
|
Total assets |
| $ | 10,901,815 |
|
|
| 10,792,563 |
|
| $ | 10,805,680 |
|
|
| 10,860,220 |
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Notes payable |
| $ | 3,737,380 |
|
|
| 3,718,944 |
|
| $ | 3,711,784 |
|
|
| 3,726,754 |
|
Unsecured credit facility |
|
| 30,000 |
|
|
| — |
| ||||||||
Accounts payable and other liabilities |
|
| 322,409 |
|
|
| 322,271 |
|
|
| 289,297 |
|
|
| 317,259 |
|
Acquired lease intangible liabilities, less accumulated amortization of $180,082 and $172,293 at June 30, 2022 and December 31, 2021, respectively |
|
| 357,581 |
|
|
| 363,276 |
| ||||||||
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 |
|
| 214,800 |
|
|
| 215,788 |
|
|
| 212,582 |
|
|
| 213,722 |
|
Tenants' security, escrow deposits and prepaid rent |
|
| 63,510 |
|
|
| 62,352 |
|
|
| 75,643 |
|
|
| 70,242 |
|
Total liabilities |
|
| 4,695,680 |
|
|
| 4,682,631 |
|
|
| 4,666,245 |
|
|
| 4,682,181 |
|
Commitments and contingencies |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Equity: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Stockholders' equity: |
|
|
|
|
|
| ||||||||||
Common stock, $0.01 par value per share, 220,000,000 shares authorized; 171,173,103 and 171,213,008 shares issued at June 30, 2022 and December 31, 2021, respectively |
|
| 1,711 |
|
|
| 1,712 |
| ||||||||
Treasury stock at cost, 456,225 and 427,901 shares held at June 30, 2022 and December 31, 2021, respectively |
|
| (23,882 | ) |
|
| (22,758 | ) | ||||||||
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 |
|
| 7,874,461 |
|
|
| 7,883,458 |
|
|
| 7,856,426 |
|
|
| 7,877,152 |
|
Accumulated other comprehensive income (loss) |
|
| 2,388 |
|
|
| (10,227 | ) | ||||||||
Accumulated other comprehensive income |
|
| 3,927 |
|
|
| 7,560 |
| ||||||||
Distributions in excess of net income |
|
| (1,729,645 | ) |
|
| (1,814,814 | ) |
|
| (1,779,043 | ) |
|
| (1,764,977 | ) |
Total stockholders' equity |
|
| 6,125,033 |
|
|
| 6,037,371 |
| ||||||||
Total shareholders' equity |
|
| 6,057,321 |
|
|
| 6,096,985 |
| ||||||||
Noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Exchangeable operating partnership units, aggregate redemption value of $43,974 and $56,844 at June 30, 2022 and December 31, 2021, respectively |
|
| 34,611 |
|
|
| 35,447 |
| ||||||||
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 |
|
| 46,491 |
|
|
| 37,114 |
|
|
| 47,703 |
|
|
| 46,565 |
|
Total noncontrolling interests |
|
| 81,102 |
|
|
| 72,561 |
|
|
| 82,114 |
|
|
| 81,054 |
|
Total equity |
|
| 6,206,135 |
|
|
| 6,109,932 |
|
|
| 6,139,435 |
|
|
| 6,178,039 |
|
Total liabilities and equity |
| $ | 10,901,815 |
|
|
| 10,792,563 |
|
| $ | 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 June 30, |
|
| Six months ended June 30, |
|
| Three months ended March 31, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Lease income |
| $ | 292,864 |
|
|
| 276,730 |
|
| $ | 586,509 |
|
|
| 543,087 |
|
| $ | 308,801 |
|
|
| 293,645 |
|
Other property income |
|
| 2,720 |
|
|
| 3,074 |
|
|
| 5,824 |
|
|
| 5,027 |
|
|
| 3,138 |
|
|
| 3,104 |
|
Management, transaction, and other fees |
|
| 6,499 |
|
|
| 7,355 |
|
|
| 13,183 |
|
|
| 13,748 |
|
|
| 6,038 |
|
|
| 6,684 |
|
Total revenues |
|
| 302,083 |
|
|
| 287,159 |
|
|
| 605,516 |
|
|
| 561,862 |
|
|
| 317,977 |
|
|
| 303,433 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Depreciation and amortization |
|
| 79,350 |
|
|
| 74,217 |
|
|
| 157,192 |
|
|
| 151,476 |
|
|
| 82,707 |
|
|
| 77,842 |
|
Operating and maintenance |
|
| 47,750 |
|
|
| 46,566 |
|
|
| 94,211 |
|
|
| 92,148 |
| ||||||||
Property operating expense |
|
| 51,022 |
|
|
| 46,461 |
| ||||||||||||||||
Real estate taxes |
|
| 38,477 |
|
|
| 36,869 |
| ||||||||||||||||
General and administrative |
|
| 17,645 |
|
|
| 19,187 |
|
|
| 36,437 |
|
|
| 40,474 |
|
|
| 25,280 |
|
|
| 18,792 |
|
Real estate taxes |
|
| 36,700 |
|
|
| 35,447 |
|
|
| 73,569 |
|
|
| 71,613 |
| ||||||||
Other operating expenses |
|
| 617 |
|
|
| 1,177 |
|
|
| 2,790 |
|
|
| 1,875 |
| ||||||||
Other operating (income) expenses |
|
| (497 | ) |
|
| 2,173 |
| ||||||||||||||||
Total operating expenses |
|
| 182,062 |
|
|
| 176,594 |
|
|
| 364,199 |
|
|
| 357,586 |
|
|
| 196,989 |
|
|
| 182,137 |
|
Other expense (income): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Interest expense, net |
|
| 36,699 |
|
|
| 35,812 |
|
|
| 73,437 |
|
|
| 72,748 |
|
|
| 36,393 |
|
|
| 36,738 |
|
Provision for impairment of real estate |
|
| — |
|
|
| 135 |
|
|
| — |
|
|
| 135 |
| ||||||||
Gain on sale of real estate, net of tax |
|
| (4,291 | ) |
|
| (19,781 | ) |
|
| (106,239 | ) |
|
| (31,479 | ) |
|
| (250 | ) |
|
| (101,948 | ) |
Net investment loss (income) |
|
| 5,468 |
|
|
| (1,998 | ) |
|
| 7,962 |
|
|
| (3,484 | ) | ||||||||
Net investment (income) loss |
|
| (1,727 | ) |
|
| 2,494 |
| ||||||||||||||||
Total other expense (income) |
|
| 37,876 |
|
|
| 14,168 |
|
|
| (24,840 | ) |
|
| 37,920 |
|
|
| 34,416 |
|
|
| (62,716 | ) |
Income from operations before equity in income of investments in real estate partnerships |
|
| 82,145 |
|
|
| 96,397 |
|
|
| 266,157 |
|
|
| 166,356 |
|
|
| 86,572 |
|
|
| 184,012 |
|
Equity in income of investments in real estate partnerships |
|
| 23,842 |
|
|
| 435 |
|
|
| 36,646 |
|
|
| 12,101 |
|
|
| 11,916 |
|
|
| 12,804 |
|
Net income |
|
| 105,987 |
|
|
| 96,832 |
|
|
| 302,803 |
|
|
| 178,457 |
|
|
| 98,488 |
|
|
| 196,816 |
|
Noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Exchangeable operating partnership units |
|
| (452 | ) |
|
| (432 | ) |
|
| (1,315 | ) |
|
| (796 | ) |
|
| (420 | ) |
|
| (863 | ) |
Limited partners' interests in consolidated partnerships |
|
| (739 | ) |
|
| (910 | ) |
|
| (1,464 | ) |
|
| (1,515 | ) |
|
| (787 | ) |
|
| (725 | ) |
Income attributable to noncontrolling interests |
|
| (1,191 | ) |
|
| (1,342 | ) |
|
| (2,779 | ) |
|
| (2,311 | ) |
|
| (1,207 | ) |
|
| (1,588 | ) |
Net income attributable to common stockholders |
| $ | 104,796 |
|
|
| 95,490 |
|
| $ | 300,024 |
|
|
| 176,146 |
| ||||||||
Net income attributable to common shareholders |
| $ | 97,281 |
|
|
| 195,228 |
| ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income per common share - basic |
| $ | 0.61 |
|
|
| 0.56 |
|
| $ | 1.75 |
|
|
| 1.04 |
|
| $ | 0.57 |
|
|
| 1.14 |
|
Income per common share - diluted |
| $ | 0.61 |
|
|
| 0.56 |
|
| $ | 1.74 |
|
|
| 1.04 |
|
| $ | 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 June 30, |
|
| Six months ended June 30, |
|
| Three months ended March 31, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||||
Net income |
| $ | 105,987 |
|
|
| 96,832 |
|
| $ | 302,803 |
|
|
| 178,457 |
|
| $ | 98,488 |
|
|
| 196,816 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Other comprehensive income: |
|
|
|
|
|
| ||||||||||||||||||
Effective portion of change in fair value of derivative instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Effective portion of change in fair value of derivative instruments |
|
| 4,436 |
|
|
| (2,302 | ) |
|
| 13,404 |
|
|
| 3,508 |
|
|
| (2,736 | ) |
|
| 8,968 |
|
Reclassification adjustment of derivative instruments included in net income |
|
| 481 |
|
|
| 1,034 |
|
|
| 1,491 |
|
|
| 2,069 |
|
|
| (1,492 | ) |
|
| 1,010 |
|
Unrealized (loss) gain on available-for-sale debt securities |
|
| (223 | ) |
|
| 71 |
|
|
| (977 | ) |
|
| (214 | ) | ||||||||
Other comprehensive income (loss) |
|
| 4,694 |
|
|
| (1,197 | ) |
|
| 13,918 |
|
|
| 5,363 |
| ||||||||
Unrealized gain (loss) on available-for-sale debt securities |
|
| 192 |
|
|
| (754 | ) | ||||||||||||||||
Other comprehensive (loss) income |
|
| (4,036 | ) |
|
| 9,224 |
| ||||||||||||||||
Comprehensive income |
|
| 110,681 |
|
|
| 95,635 |
|
|
| 316,721 |
|
|
| 183,820 |
|
|
| 94,452 |
|
|
| 206,040 |
|
Less: comprehensive income attributable to noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net income attributable to noncontrolling interests |
|
| 1,191 |
|
|
| 1,342 |
|
|
| 2,779 |
|
|
| 2,311 |
|
|
| 1,207 |
|
|
| 1,588 |
|
Other comprehensive income (loss) attributable to noncontrolling interests |
|
| 542 |
|
|
| (51 | ) |
|
| 1,303 |
|
|
| 396 |
| ||||||||
Other comprehensive (loss) income attributable to noncontrolling interests |
|
| (403 | ) |
|
| 761 |
| ||||||||||||||||
Comprehensive income attributable to noncontrolling interests |
|
| 1,733 |
|
|
| 1,291 |
|
|
| 4,082 |
|
|
| 2,707 |
|
|
| 804 |
|
|
| 2,349 |
|
Comprehensive income attributable to the Company |
| $ | 108,948 |
|
|
| 94,344 |
|
| $ | 312,639 |
|
|
| 181,113 |
|
| $ | 93,648 |
|
|
| 203,691 |
|
See accompanying notes to consolidated financial statements.
3
REGENCY CENTERS CORPORATION
Consolidated Statements of Equity
For the three months ended June 30,March 31, 2023 and 2022 and 2021
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noncontrolling Interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noncontrolling Interests |
|
|
|
| ||||||||||||||||||||||||||||||||||||||
|
| Common |
|
| Treasury |
|
| Additional |
|
| Accumulated |
|
| Distributions |
|
| Total |
|
| Exchangeable |
|
| Limited |
|
| Total |
|
| Total |
|
| Common |
|
| Treasury |
|
| Additional |
|
| Accumulated |
|
| Distributions |
|
| Total |
|
| Exchangeable |
|
| Limited |
|
| Total |
|
| Total |
| ||||||||||||||||||||
Balance at March 31, 2021 |
| $ | 1,698 |
|
|
| (24,775 | ) |
|
| 7,791,416 |
|
|
| (12,512 | ) |
|
| (1,786,196 | ) |
|
| 5,969,631 |
|
|
| 35,667 |
|
|
| 37,746 |
|
|
| 73,413 |
|
|
| 6,043,044 |
| ||||||||||||||||||||||||||||||||||||||||
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 95,490 |
|
|
| 95,490 |
|
|
| 432 |
|
|
| 910 |
|
|
| 1,342 |
|
|
| 96,832 |
| ||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss before reclassification |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (2,093 | ) |
|
| — |
|
|
| (2,093 | ) |
|
| (10 | ) |
|
| (128 | ) |
|
| (138 | ) |
|
| (2,231 | ) | ||||||||||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 947 |
|
|
| — |
|
|
| 947 |
|
|
| 4 |
|
|
| 83 |
|
|
| 87 |
|
|
| 1,034 |
| ||||||||||||||||||||||||||||||||||||||||
Deferred compensation plan, net |
|
| — |
|
|
| (1,112 | ) |
|
| 1,112 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||||||||
Restricted stock issued, net of amortization |
|
| 1 |
|
|
| — |
|
|
| 3,563 |
|
|
| — |
|
|
| — |
|
|
| 3,564 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3,564 |
| ||||||||||||||||||||||||||||||||||||||||
Common stock issued for stock based compensation, net |
|
| — |
|
|
| — |
|
|
| 117 |
|
|
| — |
|
|
| — |
|
|
| 117 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 117 |
| ||||||||||||||||||||||||||||||||||||||||
Common stock issued under dividend reinvestment plan |
|
| — |
|
|
| — |
|
|
| 392 |
|
|
| — |
|
|
| — |
|
|
| 392 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 392 |
| ||||||||||||||||||||||||||||||||||||||||
Issuance of exchangeable operating partnership units |
|
| — |
|
|
| — |
|
|
| 99 |
|
|
| — |
|
|
| — |
|
|
| 99 |
|
|
| (99 | ) |
|
| — |
|
|
| (99 | ) |
|
| — |
| ||||||||||||||||||||||||||||||||||||||||
Distributions to partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,204 | ) |
|
| (1,204 | ) |
|
| (1,204 | ) | ||||||||||||||||||||||||||||||||||||||||
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock/unit ($0.595 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (101,067 | ) |
|
| (101,067 | ) |
|
| (450 | ) |
|
| — |
|
|
| (450 | ) |
|
| (101,517 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 |
| $ | 1,699 |
|
|
| (25,887 | ) |
|
| 7,796,699 |
|
|
| (13,658 | ) |
|
| (1,791,773 | ) |
|
| 5,967,080 |
|
|
| 35,544 |
|
|
| 37,407 |
|
|
| 72,951 |
|
|
| 6,040,031 |
| ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||
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, 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 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 104,796 |
|
|
| 104,796 |
|
|
| 452 |
|
|
| 739 |
|
|
| 1,191 |
|
|
| 105,987 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 195,228 |
|
|
| 195,228 |
|
|
| 863 |
|
|
| 725 |
|
|
| 1,588 |
|
|
| 196,816 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3,743 |
|
|
| — |
|
|
| 3,743 |
|
|
| 17 |
|
|
| 453 |
|
|
| 470 |
|
|
| 4,213 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 7,537 |
|
|
| — |
|
|
| 7,537 |
|
|
| 37 |
|
|
| 640 |
|
|
| 677 |
|
|
| 8,214 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 409 |
|
|
| — |
|
|
| 409 |
|
|
| 3 |
|
|
| 69 |
|
|
| 72 |
|
|
| 481 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 926 |
|
|
| — |
|
|
| 926 |
|
|
| 4 |
|
|
| 80 |
|
|
| 84 |
|
|
| 1,010 |
|
Deferred compensation plan, net |
|
| — |
|
|
| (51 | ) |
|
| 51 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,073 | ) |
|
| 1,073 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Restricted stock issued, net of amortization |
|
| — |
|
|
| — |
|
|
| 4,366 |
|
|
| — |
|
|
| — |
|
|
| 4,366 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,366 |
|
|
| 2 |
|
|
| — |
|
|
| 4,206 |
|
|
| — |
|
|
| — |
|
|
| 4,208 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,208 |
|
Common stock repurchased for taxes withheld for stock based compensation, net |
|
| — |
|
|
| — |
|
|
| 3 |
|
|
| — |
|
|
| — |
|
|
| 3 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3 |
|
|
| — |
|
|
| — |
|
|
| (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 |
|
| (13 | ) |
|
| — |
|
|
| (75,406 | ) |
|
| — |
|
|
| — |
|
|
| (75,419 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (75,419 | ) |
|
| (3 | ) |
|
| — |
|
|
| (20,003 | ) |
|
| — |
|
|
| — |
|
|
| (20,006 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (20,006 | ) |
Common stock issued under dividend reinvestment plan |
|
| — |
|
|
| — |
|
|
| 134 |
|
|
| — |
|
|
| — |
|
|
| 134 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 134 |
|
|
| — |
|
|
| — |
|
|
| 142 |
|
|
| — |
|
|
| — |
|
|
| 142 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 142 |
|
Common stock issued for partnership units exchanged |
|
| — |
|
|
| — |
|
|
| 1,275 |
|
|
| — |
|
|
| — |
|
|
| 1,275 |
|
|
| (1,275 | ) |
|
| — |
|
|
| (1,275 | ) |
|
| — |
| ||||||||||||||||||||||||||||||||||||||||
Common stock issued, net of issuance costs |
|
| 10 |
|
|
| — |
|
|
| 61,274 |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
| ||||||||||||||||||||||||||||||||||||||||
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,446 |
|
|
| 10,446 |
|
|
| 10,446 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,777 |
|
|
| 1,777 |
|
|
| 1,777 |
|
Distributions to partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (2,705 | ) |
|
| (2,705 | ) |
|
| (2,705 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,039 | ) |
|
| (1,039 | ) |
|
| (1,039 | ) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Common stock/unit ($0.625 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (107,885 | ) |
|
| (107,885 | ) |
|
| (462 | ) |
|
| — |
|
|
| (462 | ) |
|
| (108,347 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 |
| $ | 1,711 |
|
|
| (23,882 | ) |
|
| 7,874,461 |
|
|
| 2,388 |
|
|
| (1,729,645 | ) |
|
| 6,125,033 |
|
|
| 34,611 |
|
|
| 46,491 |
|
|
| 81,102 |
|
|
| 6,206,135 |
| ||||||||||||||||||||||||||||||||||||||||
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 Equity
For the six months ended June 30, 2022 and 2021
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noncontrolling Interests |
|
|
|
| ||||||||||||||||
|
| Common |
|
| Treasury |
|
| Additional |
|
| Accumulated |
|
| Distributions |
|
| Total |
|
| Exchangeable |
|
| Limited |
|
| Total |
|
| Total |
| ||||||||||
Balance at December 31, 2020 |
| $ | 1,697 |
|
|
| (24,436 | ) |
|
| 7,792,082 |
|
|
| (18,625 | ) |
|
| (1,765,806 | ) |
|
| 5,984,912 |
|
|
| 35,727 |
|
|
| 37,508 |
|
|
| 73,235 |
|
|
| 6,058,147 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 176,146 |
|
|
| 176,146 |
|
|
| 796 |
|
|
| 1,515 |
|
|
| 2,311 |
|
|
| 178,457 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3,069 |
|
|
| — |
|
|
| 3,069 |
|
|
| 15 |
|
|
| 210 |
|
|
| 225 |
|
|
| 3,294 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,898 |
|
|
| — |
|
|
| 1,898 |
|
|
| 8 |
|
|
| 163 |
|
|
| 171 |
|
|
| 2,069 |
|
Deferred compensation plan, net |
|
| — |
|
|
| (1,451 | ) |
|
| 1,451 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Restricted stock issued, net of amortization |
|
| 2 |
|
|
| — |
|
|
| 6,041 |
|
|
| — |
|
|
| — |
|
|
| 6,043 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 6,043 |
|
Common stock repurchased for taxes withheld for stock based compensation, net |
|
| — |
|
|
| — |
|
|
| (3,742 | ) |
|
| — |
|
|
| — |
|
|
| (3,742 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,742 | ) |
Common stock issued under dividend reinvestment plan |
|
| — |
|
|
| — |
|
|
| 768 |
|
|
| — |
|
|
| — |
|
|
| 768 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 768 |
|
Common stock issued for partnership units exchanged |
|
| — |
|
|
| — |
|
|
| 99 |
|
|
| — |
|
|
| — |
|
|
| 99 |
|
|
| (99 | ) |
|
| — |
|
|
| (99 | ) |
|
| — |
|
Distributions to partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,989 | ) |
|
| (1,989 | ) |
|
| (1,989 | ) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Common stock/unit ($1.190 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (202,113 | ) |
|
| (202,113 | ) |
|
| (903 | ) |
|
| — |
|
|
| (903 | ) |
|
| (203,016 | ) |
Balance at June 30, 2021 |
| $ | 1,699 |
|
|
| (25,887 | ) |
|
| 7,796,699 |
|
|
| (13,658 | ) |
|
| (1,791,773 | ) |
|
| 5,967,080 |
|
|
| 35,544 |
|
|
| 37,407 |
|
|
| 72,951 |
|
|
| 6,040,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
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 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 300,024 |
|
|
| 300,024 |
|
|
| 1,315 |
|
|
| 1,464 |
|
|
| 2,779 |
|
|
| 302,803 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 11,280 |
|
|
| — |
|
|
| 11,280 |
|
|
| 54 |
|
|
| 1,093 |
|
|
| 1,147 |
|
|
| 12,427 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,335 |
|
|
| — |
|
|
| 1,335 |
|
|
| 7 |
|
|
| 149 |
|
|
| 156 |
|
|
| 1,491 |
|
Deferred compensation plan, net |
|
| — |
|
|
| (1,124 | ) |
|
| 1,124 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Restricted stock issued, net of amortization |
|
| 2 |
|
|
| — |
|
|
| 8,572 |
|
|
| — |
|
|
| — |
|
|
| 8,574 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 8,574 |
|
Common stock repurchased for taxes withheld for stock based compensation, net |
|
| — |
|
|
| — |
|
|
| (6,088 | ) |
|
| — |
|
|
| — |
|
|
| (6,088 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (6,088 | ) |
Common stock repurchased and retired |
|
| (13 | ) |
|
| — |
|
|
| (75,406 | ) |
|
| — |
|
|
| — |
|
|
| (75,419 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (75,419 | ) |
Common stock issued under dividend reinvestment plan |
|
| — |
|
|
| — |
|
|
| 252 |
|
|
| — |
|
|
| — |
|
|
| 252 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 252 |
|
Common stock issued for partnership units exchanged |
|
| — |
|
|
| — |
|
|
| 1,275 |
|
|
| — |
|
|
| — |
|
|
| 1,275 |
|
|
| (1,275 | ) |
|
| — |
|
|
| (1,275 | ) |
|
| — |
|
Common stock issued, net of issuance costs |
|
| 10 |
|
|
| — |
|
|
| 61,274 |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,446 |
|
|
| 10,446 |
|
|
| 10,446 |
|
Distributions to partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,775 | ) |
|
| (3,775 | ) |
|
| (3,775 | ) |
Cash dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Common stock/unit ($1.250 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (214,855 | ) |
|
| (214,855 | ) |
|
| (937 | ) |
|
| — |
|
|
| (937 | ) |
|
| (215,792 | ) |
Balance at June 30, 2022 |
| $ | 1,711 |
|
|
| (23,882 | ) |
|
| 7,874,461 |
|
|
| 2,388 |
|
|
| (1,729,645 | ) |
|
| 6,125,033 |
|
|
| 34,611 |
|
|
| 46,491 |
|
|
| 81,102 |
|
|
| 6,206,135 |
|
See accompanying notes to consolidated financial statements.
5
REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the sixthree months ended June 30,March 31, 2023 and 2022 and 2021
(in thousands)
(unaudited)
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 302,803 |
|
|
| 178,457 |
|
| $ | 98,488 |
|
|
| 196,816 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
|
| 157,192 |
|
|
| 151,476 |
|
|
| 82,707 |
|
|
| 77,842 |
|
Amortization of deferred loan costs and debt premiums |
|
| 2,821 |
|
|
| 3,479 |
|
|
| 1,490 |
|
|
| 1,379 |
|
(Accretion) and amortization of above and below market lease intangibles, net |
|
| (10,528 | ) |
|
| (11,174 | ) |
|
| (5,478 | ) |
|
| (5,302 | ) |
Stock-based compensation, net of capitalization |
|
| 8,501 |
|
|
| 5,894 |
|
|
| 4,810 |
|
|
| 4,164 |
|
Equity in income of investments in real estate partnerships |
|
| (36,646 | ) |
|
| (12,101 | ) |
|
| (11,916 | ) |
|
| (12,804 | ) |
Gain on sale of real estate, net of tax |
|
| (106,239 | ) |
|
| (31,479 | ) |
|
| (250 | ) |
|
| (101,948 | ) |
Provision for impairment of real estate, net of tax |
|
| — |
|
|
| 135 |
| ||||||||
Distribution of earnings from investments in real estate partnerships |
|
| 29,207 |
|
|
| 36,545 |
|
|
| 14,524 |
|
|
| 16,736 |
|
Settlement of derivative instruments |
|
| — |
|
|
| (2,472 | ) | ||||||||
Deferred compensation expense |
|
| (7,007 | ) |
|
| 2,856 |
| ||||||||
Realized and unrealized loss (gain) on investments |
|
| 8,033 |
|
|
| (3,606 | ) | ||||||||
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 |
|
| (8,252 | ) |
|
| 12,711 |
|
|
| 6,710 |
|
|
| 3,396 |
|
Deferred leasing costs |
|
| (4,263 | ) |
|
| (4,884 | ) |
|
| (672 | ) |
|
| (2,014 | ) |
Other assets |
|
| (8,353 | ) |
|
| (8,490 | ) |
|
| (12,631 | ) |
|
| (4,724 | ) |
Accounts payable and other liabilities |
|
| (172 | ) |
|
| 7,168 |
|
|
| (20,858 | ) |
|
| (29,387 | ) |
Tenants' security, escrow deposits and prepaid rent |
|
| 660 |
|
|
| 772 |
|
|
| 5,401 |
|
|
| (1,539 | ) |
Net cash provided by operating activities |
|
| 327,757 |
|
|
| 325,287 |
|
|
| 162,099 |
|
|
| 142,892 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Acquisition of operating real estate, net of cash acquired of $3,061 in 2022 |
|
| (139,775 | ) |
|
| 500 |
| ||||||||
Acquisition of operating real estate |
|
| — |
|
|
| (30,166 | ) | ||||||||
Real estate development and capital improvements |
|
| (99,470 | ) |
|
| (72,735 | ) |
|
| (44,569 | ) |
|
| (53,605 | ) |
Proceeds from sale of real estate |
|
| 136,421 |
|
|
| 107,577 |
| ||||||||
Issuance of notes receivable |
|
| — |
|
|
| (20 | ) | ||||||||
Proceeds from sale of real estate and FF&E |
|
| 3,603 |
|
|
| 124,924 |
| ||||||||
Investments in real estate partnerships |
|
| (11,549 | ) |
|
| (21,382 | ) |
|
| (604 | ) |
|
| (7,173 | ) |
Return of capital from investments in real estate partnerships |
|
| 48,473 |
|
|
| 58,699 |
|
|
| — |
|
|
| 23,892 |
|
Dividends on investment securities |
|
| 214 |
|
|
| 67 |
|
|
| 187 |
|
|
| 109 |
|
Acquisition of investment securities |
|
| (8,313 | ) |
|
| (14,065 | ) |
|
| (2,171 | ) |
|
| (5,554 | ) |
Proceeds from sale of investment securities |
|
| 8,737 |
|
|
| 14,393 |
|
|
| 4,504 |
|
|
| 5,927 |
|
Net cash (used in) provided by investing activities |
|
| (65,262 | ) |
|
| 73,034 |
|
|
| (39,050 | ) |
|
| 58,354 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net proceeds from common stock issuance |
|
| 61,284 |
|
|
| — |
| ||||||||
Repurchase of common shares in conjunction with equity award plans |
|
| (6,388 | ) |
|
| (4,017 | ) |
|
| (7,066 | ) |
|
| (6,246 | ) |
Common shares repurchased through share repurchase program |
|
| (71,898 | ) |
|
| — |
|
|
| (20,006 | ) |
|
| — |
|
Proceeds from sale of treasury stock |
|
| 64 |
|
|
| 96 |
|
|
| 2 |
|
|
| 63 |
|
Contributions from (distributions to) limited partners in consolidated partnerships, net |
|
| 1,234 |
|
|
| (1,989 | ) |
|
| 738 |
|
|
| (1,070 | ) |
Distributions to exchangeable operating partnership unit holders |
|
| (950 | ) |
|
| (907 | ) |
|
| (482 | ) |
|
| (475 | ) |
Dividends paid to common stockholders |
|
| (213,868 | ) |
|
| (201,233 | ) | ||||||||
Dividends paid to common shareholders |
|
| (111,085 | ) |
|
| (106,887 | ) | ||||||||
Proceeds from unsecured credit facilities |
|
| 75,000 |
|
|
| — |
|
|
| 115,000 |
|
|
| 40,000 |
|
Repayment of unsecured credit facilities |
|
| (75,000 | ) |
|
| (265,000 | ) |
|
| (85,000 | ) |
|
| (40,000 | ) |
Proceeds from notes payable |
|
| 15,500 |
|
|
| — |
| ||||||||
Repayment of notes payable |
|
| — |
|
|
| (3,962 | ) |
|
| (28,306 | ) |
|
| — |
|
Scheduled principal payments |
|
| (5,728 | ) |
|
| (5,678 | ) |
|
| (2,836 | ) |
|
| (2,846 | ) |
Payment of loan costs |
|
| (82 | ) |
|
| (7,468 | ) |
|
| (141 | ) |
|
| (82 | ) |
Net cash used in financing activities |
|
| (236,332 | ) |
|
| (490,158 | ) |
|
| (123,682 | ) |
|
| (117,543 | ) |
Net increase (decrease) in cash and cash equivalents and restricted cash |
|
| 26,163 |
|
|
| (91,837 | ) | ||||||||
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 |
|
| 95,027 |
|
|
| 378,450 |
|
|
| 68,776 |
|
|
| 95,027 |
|
Cash and cash equivalents and restricted cash at end of the period |
| $ | 121,190 |
|
|
| 286,613 |
|
| $ | 68,143 |
|
|
| 178,730 |
|
See accompanying notes to consolidated financial statements.
65
REGENCY CENTERS CORPORATION
Consolidated Statements of Cash Flows
For the sixthree months ended June 30,March 31, 2023 and 2022 and 2021
(in thousands)
(unaudited)
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash paid for interest (net of capitalized interest of $1,815 and $1,865 in 2022 and 2021, respectively) |
| $ | 70,876 |
|
|
| 70,112 |
| ||||||||
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 |
| $ | 370 |
|
|
| 314 |
|
| $ | 112 |
|
|
| 165 |
|
Supplemental disclosure of non-cash transactions: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Common stock and exchangeable operating partnership dividends declared |
| $ | 108,215 |
|
|
| 101,520 |
|
| $ | 111,829 |
|
|
| 107,445 |
|
Acquisition of real estate previously held within investments in real estate partnerships |
| $ | 17,179 |
|
|
| — |
| ||||||||
Mortgage loans assumed by Company with the acquisition of real estate |
| $ | 22,779 |
|
|
| — |
| ||||||||
Common stock issued for partnership units exchanged |
| $ | 1,275 |
|
|
| 99 |
| ||||||||
Accrued common stock repurchase in Accounts payable and other liabilities |
| $ | 3,521 |
|
|
| — |
| ||||||||
Change in accrued capital expenditures |
| $ | 5,050 |
|
|
| 6,947 |
|
| $ | 10,596 |
|
|
| 11,603 |
|
Common stock issued under dividend reinvestment plan |
| $ | 252 |
|
|
| 768 |
|
| $ | 142 |
|
|
| 118 |
|
Stock-based compensation capitalized |
| $ | 373 |
|
|
| 424 |
|
| $ | 155 |
|
|
| 199 |
|
Contributions from limited partners in consolidated partnerships |
| $ | 5,436 |
|
|
| — |
| ||||||||
Common stock issued for dividend reinvestment in trust |
| $ | 555 |
|
|
| 552 |
|
| $ | 303 |
|
|
| 267 |
|
Contribution of stock awards into trust |
| $ | 2,022 |
|
|
| 1,416 |
|
| $ | 1,201 |
|
|
| 1,177 |
|
Distribution of stock held in trust |
| $ | 566 |
|
|
| 415 |
|
| $ | 265 |
|
|
| 329 |
|
Change in fair value of securities |
| $ | 1,236 |
|
|
| 272 |
|
| $ | 243 |
|
|
| 754 |
|
See accompanying notes to consolidated financial statements.
76
REGENCY CENTERS, L.P.
Consolidated Balance Sheets
June 30, 2022March 31, 2023 and December 31, 20212022
(in thousands, except unit data)
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||
Assets |
| (unaudited) |
|
|
|
| (unaudited) |
|
|
| ||||||
Net real estate investments: |
|
|
|
|
| |||||||||||
Real estate assets, at cost |
| $ | 11,762,300 |
|
|
| 11,495,581 |
|
| $ | 11,886,697 |
|
|
| 11,858,064 |
|
Less: accumulated depreciation |
|
| 2,301,183 |
|
|
| 2,174,963 |
|
|
| 2,484,960 |
|
|
| 2,415,860 |
|
Real estate assets, net |
|
| 9,461,117 |
|
|
| 9,320,618 |
|
|
| 9,401,737 |
|
|
| 9,442,204 |
|
Investments in real estate partnerships |
|
| 330,887 |
|
|
| 372,591 |
|
|
| 346,390 |
|
|
| 350,377 |
|
Properties held for sale |
|
| 2,354 |
|
|
| 25,574 |
| ||||||||
Cash, cash equivalents, and restricted cash, including $3,128 and $1,930 of restricted cash at June 30, 2022 and December 31, 2021, respectively |
|
| 121,190 |
|
|
| 95,027 |
| ||||||||
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 |
|
| 159,643 |
|
|
| 153,091 |
|
|
| 181,579 |
|
|
| 188,863 |
|
Deferred leasing costs, less accumulated amortization of $120,650 and $117,878 at June 30, 2022 and December 31, 2021, respectively |
|
| 65,607 |
|
|
| 65,741 |
| ||||||||
Acquired lease intangible assets, less accumulated amortization of $325,131 and $312,186 at June 30, 2022 and December 31, 2021, respectively |
|
| 214,264 |
|
|
| 212,707 |
| ||||||||
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 |
|
| 278,153 |
|
|
| 280,783 |
|
|
| 273,702 |
|
|
| 275,513 |
|
Other assets |
|
| 268,600 |
|
|
| 266,431 |
|
|
| 276,926 |
|
|
| 267,797 |
|
Total assets |
| $ | 10,901,815 |
|
|
| 10,792,563 |
|
| $ | 10,805,680 |
|
|
| 10,860,220 |
|
Liabilities and Capital |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Notes payable |
| $ | 3,737,380 |
|
|
| 3,718,944 |
|
| $ | 3,711,784 |
|
|
| 3,726,754 |
|
Unsecured credit facility |
|
| 30,000 |
|
|
| — |
| ||||||||
Accounts payable and other liabilities |
|
| 322,409 |
|
|
| 322,271 |
|
|
| 289,297 |
|
|
| 317,259 |
|
Acquired lease intangible liabilities, less accumulated amortization of $180,082 and $172,293 at June 30, 2022 and December 31, 2021, respectively |
|
| 357,581 |
|
|
| 363,276 |
| ||||||||
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 |
|
| 214,800 |
|
|
| 215,788 |
|
|
| 212,582 |
|
|
| 213,722 |
|
Tenants' security, escrow deposits and prepaid rent |
|
| 63,510 |
|
|
| 62,352 |
|
|
| 75,643 |
|
|
| 70,242 |
|
Total liabilities |
|
| 4,695,680 |
|
|
| 4,682,631 |
|
|
| 4,666,245 |
|
|
| 4,682,181 |
|
Commitments and contingencies |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Capital: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Partners' capital: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
General partner; 171,173,103 and 171,213,008 units outstanding at June 30, 2022 and December 31, 2021, respectively |
|
| 6,122,645 |
|
|
| 6,047,598 |
| ||||||||
Limited partners; 741,433 and 760,046 units outstanding at June 30, 2022 and December 31, 2021, respectively |
|
| 34,611 |
|
|
| 35,447 |
| ||||||||
Accumulated other comprehensive income (loss) |
|
| 2,388 |
|
|
| (10,227 | ) | ||||||||
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 |
|
| 6,159,644 |
|
|
| 6,072,818 |
|
|
| 6,091,732 |
|
|
| 6,131,474 |
|
Noncontrolling interest: Limited partners' interests in consolidated partnerships |
|
| 46,491 |
|
|
| 37,114 |
|
|
| 47,703 |
|
|
| 46,565 |
|
Total capital |
|
| 6,206,135 |
|
|
| 6,109,932 |
|
|
| 6,139,435 |
|
|
| 6,178,039 |
|
Total liabilities and capital |
| $ | 10,901,815 |
|
|
| 10,792,563 |
|
| $ | 10,805,680 |
|
|
| 10,860,220 |
|
See accompanying notes to consolidated financial statements.
87
REGENCY CENTERS, L.P.
Consolidated Statements of Operations
(in thousands, except per unit data)
(unaudited)
|
| Three months ended June 30, |
|
| Six months ended June 30, |
|
| Three months ended March 31, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Lease income |
| $ | 292,864 |
|
|
| 276,730 |
|
| $ | 586,509 |
|
|
| 543,087 |
|
| $ | 308,801 |
|
|
| 293,645 |
|
Other property income |
|
| 2,720 |
|
|
| 3,074 |
|
|
| 5,824 |
|
|
| 5,027 |
|
|
| 3,138 |
|
|
| 3,104 |
|
Management, transaction, and other fees |
|
| 6,499 |
|
|
| 7,355 |
|
|
| 13,183 |
|
|
| 13,748 |
|
|
| 6,038 |
|
|
| 6,684 |
|
Total revenues |
|
| 302,083 |
|
|
| 287,159 |
|
|
| 605,516 |
|
|
| 561,862 |
|
|
| 317,977 |
|
|
| 303,433 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Depreciation and amortization |
|
| 79,350 |
|
|
| 74,217 |
|
|
| 157,192 |
|
|
| 151,476 |
|
|
| 82,707 |
|
|
| 77,842 |
|
Operating and maintenance |
|
| 47,750 |
|
|
| 46,566 |
|
|
| 94,211 |
|
|
| 92,148 |
| ||||||||
Property operating expense |
|
| 51,022 |
|
|
| 46,461 |
| ||||||||||||||||
Real estate taxes |
|
| 38,477 |
|
|
| 36,869 |
| ||||||||||||||||
General and administrative |
|
| 17,645 |
|
|
| 19,187 |
|
|
| 36,437 |
|
|
| 40,474 |
|
|
| 25,280 |
|
|
| 18,792 |
|
Real estate taxes |
|
| 36,700 |
|
|
| 35,447 |
|
|
| 73,569 |
|
|
| 71,613 |
| ||||||||
Other operating expenses |
|
| 617 |
|
|
| 1,177 |
|
|
| 2,790 |
|
|
| 1,875 |
| ||||||||
Other operating (income) expenses |
|
| (497 | ) |
|
| 2,173 |
| ||||||||||||||||
Total operating expenses |
|
| 182,062 |
|
|
| 176,594 |
|
|
| 364,199 |
|
|
| 357,586 |
|
|
| 196,989 |
|
|
| 182,137 |
|
Other expense (income): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest expense, net |
|
| 36,699 |
|
|
| 35,812 |
|
|
| 73,437 |
|
|
| 72,748 |
|
|
| 36,393 |
|
|
| 36,738 |
|
Provision for impairment of real estate |
|
| — |
|
|
| 135 |
|
|
| — |
|
|
| 135 |
| ||||||||
Gain on sale of real estate, net of tax |
|
| (4,291 | ) |
|
| (19,781 | ) |
|
| (106,239 | ) |
|
| (31,479 | ) |
|
| (250 | ) |
|
| (101,948 | ) |
Net investment loss (income) |
|
| 5,468 |
|
|
| (1,998 | ) |
|
| 7,962 |
|
|
| (3,484 | ) | ||||||||
Net investment (income) loss |
|
| (1,727 | ) |
|
| 2,494 |
| ||||||||||||||||
Total other expense (income) |
|
| 37,876 |
|
|
| 14,168 |
|
|
| (24,840 | ) |
|
| 37,920 |
|
|
| 34,416 |
|
|
| (62,716 | ) |
Income from operations before equity in income of investments in real estate partnerships |
|
| 82,145 |
|
|
| 96,397 |
|
|
| 266,157 |
|
|
| 166,356 |
|
|
| 86,572 |
|
|
| 184,012 |
|
Equity in income of investments in real estate partnerships |
|
| 23,842 |
|
|
| 435 |
|
|
| 36,646 |
|
|
| 12,101 |
|
|
| 11,916 |
|
|
| 12,804 |
|
Net income |
|
| 105,987 |
|
|
| 96,832 |
|
|
| 302,803 |
|
|
| 178,457 |
|
|
| 98,488 |
|
|
| 196,816 |
|
Limited partners' interests in consolidated partnerships |
|
| (739 | ) |
|
| (910 | ) |
|
| (1,464 | ) |
|
| (1,515 | ) |
|
| (787 | ) |
|
| (725 | ) |
Net income attributable to common unit holders |
| $ | 105,248 |
|
|
| 95,922 |
|
| $ | 301,339 |
|
|
| 176,942 |
|
| $ | 97,701 |
|
|
| 196,091 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income per common share - basic |
| $ | 0.61 |
|
|
| 0.56 |
|
| $ | 1.75 |
|
|
| 1.04 |
|
| $ | 0.57 |
|
|
| 1.14 |
|
Income per common share - diluted |
| $ | 0.61 |
|
|
| 0.56 |
|
| $ | 1.74 |
|
|
| 1.04 |
|
| $ | 0.57 |
|
|
| 1.14 |
|
See accompanying notes to consolidated financial statements.
98
REGENCY CENTERS, L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
|
| Three months ended June 30, |
|
| Six months ended June 30, |
|
| Three months ended March 31, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||||
Net income |
| $ | 105,987 |
|
|
| 96,832 |
|
| $ | 302,803 |
|
|
| 178,457 |
|
| $ | 98,488 |
|
|
| 196,816 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Other comprehensive income: |
|
|
|
|
| |||||||||||||||||||
Effective portion of change in fair value of derivative instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective portion of change in fair value of derivative instruments |
|
| 4,436 |
|
|
| (2,302 | ) |
|
| 13,404 |
|
|
| 3,508 |
|
|
| (2,736 | ) |
|
| 8,968 |
|
Reclassification adjustment of derivative instruments included in net income |
|
| 481 |
|
|
| 1,034 |
|
|
| 1,491 |
|
|
| 2,069 |
|
|
| (1,492 | ) |
|
| 1,010 |
|
Unrealized (loss) gain on available-for-sale debt securities |
|
| (223 | ) |
|
| 71 |
|
|
| (977 | ) |
|
| (214 | ) | ||||||||
Other comprehensive income (loss) |
|
| 4,694 |
|
|
| (1,197 | ) |
|
| 13,918 |
|
|
| 5,363 |
| ||||||||
Unrealized gain (loss) on available-for-sale debt securities |
|
| 192 |
|
|
| (754 | ) | ||||||||||||||||
Other comprehensive (loss) income |
|
| (4,036 | ) |
|
| 9,224 |
| ||||||||||||||||
Comprehensive income |
|
| 110,681 |
|
|
| 95,635 |
|
|
| 316,721 |
|
|
| 183,820 |
|
|
| 94,452 |
|
|
| 206,040 |
|
Less: comprehensive income attributable to noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net income attributable to noncontrolling interests |
|
| 739 |
|
|
| 910 |
|
|
| 1,464 |
|
|
| 1,515 |
|
|
| 787 |
|
|
| 725 |
|
Other comprehensive income (loss) attributable to noncontrolling interests |
|
| 522 |
|
|
| (45 | ) |
|
| 1,242 |
|
|
| 373 |
| ||||||||
Other comprehensive (loss) income attributable to noncontrolling interests |
|
| (387 | ) |
|
| 720 |
| ||||||||||||||||
Comprehensive income attributable to noncontrolling interests |
|
| 1,261 |
|
|
| 865 |
|
|
| 2,706 |
|
|
| 1,888 |
|
|
| 400 |
|
|
| 1,445 |
|
Comprehensive income attributable to the Partnership |
| $ | 109,420 |
|
|
| 94,770 |
|
| $ | 314,015 |
|
|
| 181,932 |
|
| $ | 94,052 |
|
|
| 204,595 |
|
See accompanying notes to consolidated financial statements.
109
REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the three months ended June 30,March 31, 2023 and 2022 and 2021
(in thousands)
(unaudited)
|
| General Partner Preferred |
|
| Limited |
|
| Accumulated |
|
| Total |
|
| Noncontrolling Interests in |
|
| Total |
|
| General Partner Preferred |
|
| Limited |
|
| Accumulated |
|
| Total |
|
| Noncontrolling Interests in |
|
| Total |
| ||||||||||||
Balance at March 31, 2021 |
| $ | 5,982,143 |
|
|
| 35,667 |
|
|
| (12,512 | ) |
|
| 6,005,298 |
|
|
| 37,746 |
|
|
| 6,043,044 |
| ||||||||||||||||||||||||
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 |
|
| 95,490 |
|
|
| 432 |
|
|
| — |
|
|
| 95,922 |
|
|
| 910 |
|
|
| 96,832 |
|
|
| 97,281 |
|
|
| 420 |
|
|
| — |
|
|
| 97,701 |
|
|
| 787 |
|
|
| 98,488 |
|
Other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Other comprehensive loss before reclassification |
|
| — |
|
|
| (10 | ) |
|
| (2,093 | ) |
|
| (2,103 | ) |
|
| (128 | ) |
|
| (2,231 | ) |
|
| — |
|
|
| (11 | ) |
|
| (2,316 | ) |
|
| (2,327 | ) |
|
| (217 | ) |
|
| (2,544 | ) |
Amounts reclassified from accumulated other comprehensive loss |
|
| — |
|
|
| 4 |
|
|
| 947 |
|
|
| 951 |
|
|
| 83 |
|
|
| 1,034 |
| ||||||||||||||||||||||||
Distributions to partners |
|
| (101,067 | ) |
|
| (450 | ) |
|
| — |
|
|
| (101,517 | ) |
|
| (1,204 | ) |
|
| (102,721 | ) | ||||||||||||||||||||||||
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization |
|
| 3,564 |
|
|
| — |
|
|
| — |
|
|
| 3,564 |
|
|
| — |
|
|
| 3,564 |
| ||||||||||||||||||||||||
Common units issued as a result of common stock issued by Parent Company, net of issuance costs |
|
| 509 |
|
|
| — |
|
|
| — |
|
|
| 509 |
|
|
| — |
|
|
| 509 |
| ||||||||||||||||||||||||
Common units exchanged for common stock of Parent Company |
|
| 99 |
|
|
| (99 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||
Balance at June 30, 2021 |
| $ | 5,980,738 |
|
|
| 35,544 |
|
|
| (13,658 | ) |
|
| 6,002,624 |
|
|
| 37,407 |
|
|
| 6,040,031 |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Balance at March 31, 2022 |
| $ | 6,134,091 |
|
|
| 35,876 |
|
|
| (1,764 | ) |
|
| 6,168,203 |
|
|
| 37,489 |
|
|
| 6,205,692 |
| ||||||||||||||||||||||||
Net income |
|
| 104,796 |
|
|
| 452 |
|
|
| — |
|
|
| 105,248 |
|
|
| 739 |
|
|
| 105,987 |
| ||||||||||||||||||||||||
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| 17 |
|
|
| 3,743 |
|
|
| 3,760 |
|
|
| 453 |
|
|
| 4,213 |
| ||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss |
|
| — |
|
|
| 3 |
|
|
| 409 |
|
|
| 412 |
|
|
| 69 |
|
|
| 481 |
|
|
| — |
|
|
| (5 | ) |
|
| (1,317 | ) |
|
| (1,322 | ) |
|
| (170 | ) |
|
| (1,492 | ) |
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,446 |
|
|
| 10,446 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,777 |
|
|
| 1,777 |
|
Distributions to partners |
|
| (107,885 | ) |
|
| (462 | ) |
|
| — |
|
|
| (108,347 | ) |
|
| (2,705 | ) |
|
| (111,052 | ) |
|
| (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 |
|
| 4,366 |
|
|
| — |
|
|
| — |
|
|
| 4,366 |
|
|
| — |
|
|
| 4,366 |
|
|
| 4,819 |
|
|
| — |
|
|
| — |
|
|
| 4,819 |
|
|
| — |
|
|
| 4,819 |
|
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company |
|
| (75,419 | ) |
|
| — |
|
|
| — |
|
|
| (75,419 | ) |
|
| — |
|
|
| (75,419 | ) |
|
| (20,006 | ) |
|
| — |
|
|
| — |
|
|
| (20,006 | ) |
|
| — |
|
|
| (20,006 | ) |
Common units issued as a result of common stock issued by Parent Company, net of redemptions |
|
| 61,284 |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
|
| — |
|
|
| 61,284 |
| ||||||||||||||||||||||||
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances |
|
| 137 |
|
|
| — |
|
|
| — |
|
|
| 137 |
|
|
| — |
|
|
| 137 |
|
|
| (6,778 | ) |
|
| — |
|
|
| — |
|
|
| (6,778 | ) |
|
| — |
|
|
| (6,778 | ) |
Common unit exchanged for common stock of Parent Company |
|
| 1,275 |
|
|
| (1,275 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||
Balance at June 30, 2022 |
| $ | 6,122,645 |
|
|
| 34,611 |
|
|
| 2,388 |
|
|
| 6,159,644 |
|
|
| 46,491 |
|
|
| 6,206,135 |
| ||||||||||||||||||||||||
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.
1110
REGENCY CENTERS, L.P.
Consolidated Statements of Capital
For the six months ended June 30, 2022 and 2021
(in thousands)
(unaudited)
|
| General Partner Preferred |
|
| Limited |
|
| Accumulated |
|
| Total |
|
| Noncontrolling Interests in |
|
| Total |
| ||||||
Balance at December 31, 2020 |
| $ | 6,003,537 |
|
|
| 35,727 |
|
|
| (18,625 | ) |
|
| 6,020,639 |
|
|
| 37,508 |
|
|
| 6,058,147 |
|
Net income |
|
| 176,146 |
|
|
| 796 |
|
|
| — |
|
|
| 176,942 |
|
|
| 1,515 |
|
|
| 178,457 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| 15 |
|
|
| 3,069 |
|
|
| 3,084 |
|
|
| 210 |
|
|
| 3,294 |
|
Amounts reclassified from accumulated other comprehensive loss |
|
| — |
|
|
| 8 |
|
|
| 1,898 |
|
|
| 1,906 |
|
|
| 163 |
|
|
| 2,069 |
|
Distributions to partners |
|
| (202,113 | ) |
|
| (903 | ) |
|
| — |
|
|
| (203,016 | ) |
|
| (1,989 | ) |
|
| (205,005 | ) |
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization |
|
| 6,043 |
|
|
| — |
|
|
| — |
|
|
| 6,043 |
|
|
| — |
|
|
| 6,043 |
|
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances |
|
| (2,974 | ) |
|
| — |
|
|
| — |
|
|
| (2,974 | ) |
|
| — |
|
|
| (2,974 | ) |
Common units exchanged for common stock of Parent Company |
|
| 99 |
|
|
| (99 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Balance at June 30, 2021 |
| $ | 5,980,738 |
|
|
| 35,544 |
|
|
| (13,658 | ) |
|
| 6,002,624 |
|
|
| 37,407 |
|
|
| 6,040,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance at December 31, 2021 |
| $ | 6,047,598 |
|
|
| 35,447 |
|
|
| (10,227 | ) |
|
| 6,072,818 |
|
|
| 37,114 |
|
|
| 6,109,932 |
|
Net income |
|
| 300,024 |
|
|
| 1,315 |
|
|
| — |
|
|
| 301,339 |
|
|
| 1,464 |
|
|
| 302,803 |
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other comprehensive income before reclassification |
|
| — |
|
|
| 54 |
|
|
| 11,280 |
|
|
| 11,334 |
|
|
| 1,093 |
|
|
| 12,427 |
|
Amounts reclassified from accumulated other comprehensive income |
|
| — |
|
|
| 7 |
|
|
| 1,335 |
|
|
| 1,342 |
|
|
| 149 |
|
|
| 1,491 |
|
Contributions from partners |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,446 |
|
|
| 10,446 |
|
Distributions to partners |
|
| (214,855 | ) |
|
| (937 | ) |
|
| — |
|
|
| (215,792 | ) |
|
| (3,775 | ) |
|
| (219,567 | ) |
Restricted units issued as a result of restricted stock issued by Parent Company, net of amortization |
|
| 8,574 |
|
|
| — |
|
|
| — |
|
|
| 8,574 |
|
|
| — |
|
|
| 8,574 |
|
Common units repurchased and retired as a result of common stock repurchased and retired by Parent Company |
|
| (75,419 | ) |
|
| — |
|
|
| — |
|
|
| (75,419 | ) |
|
| — |
|
|
| (75,419 | ) |
Common units issued as a result of common stock issued by Parent Company, net of issuance costs |
|
| 61,284 |
|
|
| — |
|
|
| — |
|
|
| 61,284 |
|
|
| — |
|
|
| 61,284 |
|
Common units repurchased as a result of common stock repurchased by Parent Company, net of issuances |
|
| (5,836 | ) |
|
| — |
|
|
| — |
|
|
| (5,836 | ) |
|
| — |
|
|
| (5,836 | ) |
Common unit exchanged for common stock of Parent Company |
|
| 1,275 |
|
|
| (1,275 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Balance at June 30, 2022 |
| $ | 6,122,645 |
|
|
| 34,611 |
|
|
| 2,388 |
|
|
| 6,159,644 |
|
|
| 46,491 |
|
|
| 6,206,135 |
|
See accompanying notes to consolidated financial statements.
12
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the sixthree months ended June 30,March 31, 2023 and 2022 and 2021
(in thousands)
(unaudited)
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 302,803 |
|
|
| 178,457 |
|
| $ | 98,488 |
|
|
| 196,816 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
|
| 157,192 |
|
|
| 151,476 |
|
|
| 82,707 |
|
|
| 77,842 |
|
Amortization of deferred loan costs and debt premiums |
|
| 2,821 |
|
|
| 3,479 |
|
|
| 1,490 |
|
|
| 1,379 |
|
(Accretion) and amortization of above and below market lease intangibles, net |
|
| (10,528 | ) |
|
| (11,174 | ) |
|
| (5,478 | ) |
|
| (5,302 | ) |
Stock-based compensation, net of capitalization |
|
| 8,501 |
|
|
| 5,894 |
|
|
| 4,810 |
|
|
| 4,164 |
|
Equity in income of investments in real estate partnerships |
|
| (36,646 | ) |
|
| (12,101 | ) |
|
| (11,916 | ) |
|
| (12,804 | ) |
Gain on sale of real estate, net of tax |
|
| (106,239 | ) |
|
| (31,479 | ) |
|
| (250 | ) |
|
| (101,948 | ) |
Provision for impairment of real estate, net of tax |
|
| — |
|
|
| 135 |
| ||||||||
Distribution of earnings from investments in real estate partnerships |
|
| 29,207 |
|
|
| 36,545 |
|
|
| 14,524 |
|
|
| 16,736 |
|
Settlement of derivative instruments |
|
| — |
|
|
| (2,472 | ) | ||||||||
Deferred compensation expense |
|
| (7,007 | ) |
|
| 2,856 |
| ||||||||
Realized and unrealized loss (gain) on investments |
|
| 8,033 |
|
|
| (3,606 | ) | ||||||||
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 |
|
| (8,252 | ) |
|
| 12,711 |
|
|
| 6,710 |
|
|
| 3,396 |
|
Deferred leasing costs |
|
| (4,263 | ) |
|
| (4,884 | ) |
|
| (672 | ) |
|
| (2,014 | ) |
Other assets |
|
| (8,353 | ) |
|
| (8,490 | ) |
|
| (12,631 | ) |
|
| (4,724 | ) |
Accounts payable and other liabilities |
|
| (172 | ) |
|
| 7,168 |
|
|
| (20,858 | ) |
|
| (29,387 | ) |
Tenants' security, escrow deposits and prepaid rent |
|
| 660 |
|
|
| 772 |
|
|
| 5,401 |
|
|
| (1,539 | ) |
Net cash provided by operating activities |
|
| 327,757 |
|
|
| 325,287 |
|
|
| 162,099 |
|
|
| 142,892 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Acquisition of operating real estate, net of cash acquired of $3,061 in 2022 |
|
| (139,775 | ) |
|
| 500 |
| ||||||||
Acquisition of operating real estate |
|
| — |
|
|
| (30,166 | ) | ||||||||
Real estate development and capital improvements |
|
| (99,470 | ) |
|
| (72,735 | ) |
|
| (44,569 | ) |
|
| (53,605 | ) |
Proceeds from sale of real estate |
|
| 136,421 |
|
|
| 107,577 |
| ||||||||
Issuance of notes receivable |
|
| — |
|
|
| (20 | ) | ||||||||
Proceeds from sale of real estate and FF&E |
|
| 3,603 |
|
|
| 124,924 |
| ||||||||
Collection of notes receivable |
|
| — |
|
|
| — |
| ||||||||
Investments in real estate partnerships |
|
| (11,549 | ) |
|
| (21,382 | ) |
|
| (604 | ) |
|
| (7,173 | ) |
Return of capital from investments in real estate partnerships |
|
| 48,473 |
|
|
| 58,699 |
|
|
| — |
|
|
| 23,892 |
|
Dividends on investment securities |
|
| 214 |
|
|
| 67 |
|
|
| 187 |
|
|
| 109 |
|
Acquisition of investment securities |
|
| (8,313 | ) |
|
| (14,065 | ) |
|
| (2,171 | ) |
|
| (5,554 | ) |
Proceeds from sale of investment securities |
|
| 8,737 |
|
|
| 14,393 |
|
|
| 4,504 |
|
|
| 5,927 |
|
Net cash (used in) provided by investing activities |
|
| (65,262 | ) |
|
| 73,034 |
|
|
| (39,050 | ) |
|
| 58,354 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net proceeds from common stock issuance |
|
| 61,284 |
|
|
| — |
| ||||||||
Repurchase of common shares in conjunction with equity award plans |
|
| (6,388 | ) |
|
| (4,017 | ) |
|
| (7,066 | ) |
|
| (6,246 | ) |
Common units repurchased through share repurchase program |
|
| (71,898 | ) |
|
| — |
|
|
| (20,006 | ) |
|
| — |
|
Proceeds from sale of treasury stock |
|
| 64 |
|
|
| 96 |
|
|
| 2 |
|
|
| 63 |
|
Contributions from (distributions to) limited partners in consolidated partnerships, net |
|
| 1,234 |
|
|
| (1,989 | ) |
|
| 738 |
|
|
| (1,070 | ) |
Distributions to partners |
|
| (214,818 | ) |
|
| (202,140 | ) |
|
| (111,567 | ) |
|
| (107,362 | ) |
Proceeds from unsecured credit facilities |
|
| 75,000 |
|
|
| — |
|
|
| 115,000 |
|
|
| 40,000 |
|
Repayment of unsecured credit facilities |
|
| (75,000 | ) |
|
| (265,000 | ) |
|
| (85,000 | ) |
|
| (40,000 | ) |
Proceeds from notes payable |
|
| 15,500 |
|
|
| — |
| ||||||||
Repayment of notes payable |
|
| — |
|
|
| (3,962 | ) |
|
| (28,306 | ) |
|
| — |
|
Scheduled principal payments |
|
| (5,728 | ) |
|
| (5,678 | ) |
|
| (2,836 | ) |
|
| (2,846 | ) |
Payment of loan costs |
|
| (82 | ) |
|
| (7,468 | ) |
|
| (141 | ) |
|
| (82 | ) |
Net cash used in financing activities |
|
| (236,332 | ) |
|
| (490,158 | ) |
|
| (123,682 | ) |
|
| (117,543 | ) |
Net increase (decrease) in cash and cash equivalents and restricted cash |
|
| 26,163 |
|
|
| (91,837 | ) | ||||||||
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 |
|
| 95,027 |
|
|
| 378,450 |
|
|
| 68,776 |
|
|
| 95,027 |
|
Cash and cash equivalents and restricted cash at end of the period |
| $ | 121,190 |
|
|
| 286,613 |
|
| $ | 68,143 |
|
|
| 178,730 |
|
See accompanying notes to consolidated financial statements.
1311
REGENCY CENTERS, L.P.
Consolidated Statements of Cash Flows
For the sixthree months ended June 30,March 31, 2023 and 2022 and 2021
(in thousands)
(unaudited)
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash paid for interest (net of capitalized interest of $1,815 and $1,865 in 2022 and 2021, respectively) |
| $ | 70,876 |
|
|
| 70,112 |
| ||||||||
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 |
| $ | 370 |
|
|
| 314 |
|
| $ | 112 |
|
|
| 165 |
|
Supplemental disclosure of non-cash transactions: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Common stock and exchangeable operating partnership dividends declared |
| $ | 108,215 |
|
|
| 101,520 |
|
| $ | 111,829 |
|
|
| 107,445 |
|
Acquisition of real estate previously held within investments in real estate partnerships |
| $ | 17,179 |
|
|
| — |
| ||||||||
Mortgage loans assumed by Company with the acquisition of real estate |
| $ | 22,779 |
|
|
| — |
| ||||||||
Common stock issued by Parent Company for partnership units exchanged |
| $ | 1,275 |
|
|
| 99 |
| ||||||||
Accrued common stock repurchase in Accounts payable and other liabilities |
| $ | 3,521 |
|
|
| — |
| ||||||||
Change in accrued capital expenditures |
| $ | 5,050 |
|
|
| 6,947 |
|
| $ | 10,596 |
|
|
| 11,603 |
|
Common stock issued by Parent Company for dividend reinvestment plan |
| $ | 252 |
|
|
| 768 |
|
| $ | 142 |
|
|
| 118 |
|
Stock-based compensation capitalized |
| $ | 373 |
|
|
| 424 |
|
| $ | 155 |
|
|
| 199 |
|
Contributions from limited partners in consolidated partnerships |
| $ | 5,436 |
|
|
| — |
| ||||||||
Common stock issued for dividend reinvestment in trust |
| $ | 555 |
|
|
| 552 |
|
| $ | 303 |
|
|
| 267 |
|
Contribution of stock awards into trust |
| $ | 2,022 |
|
|
| 1,416 |
|
| $ | 1,201 |
|
|
| 1,177 |
|
Distribution of stock held in trust |
| $ | 566 |
|
|
| 415 |
|
| $ | 265 |
|
|
| 329 |
|
Change in fair value of securities |
| $ | 1,236 |
|
|
| 272 |
|
| $ | 243 |
|
|
| 754 |
|
See accompanying notes to consolidated financial statements.
1412
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2022March 31, 2023
1. | Organization and Significant Accounting Policies |
General
Regency Centers Corporation (the "Parent Company") began its operations as a Real Estate Investment Trust ("REIT")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, and 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 June 30, 2022,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 manycurrent economic challenges, which impact their cost of doing business, including but not limited to the impact of inflation, the cost and availability of labor, shortages, and supply chain constraints, on their cost of doing business.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.States of America ("U.S.", "USA" or "United States"). The policies utilizedimplemented 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’sCompany'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 which it 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 June 30, 2022,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.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 exchangeable operating partnershipEOP units outstanding and concluded that itthe 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.
1513
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2022March 31, 2023
Real Estate Partnerships
As of June 30, 2022,March 31, 2023, Regency had a partial ownership interest in 108107 properties through partnerships, of which 1211 are consolidated into the Company's financial statements.consolidated. Regency's partners include institutional investors and other real estate developers and/or operators (the "Partners" or "limited partners""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’partners' interests as Noncontrollingnoncontrolling 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) |
| June 30, 2022 |
|
| December 31, 2021 |
|
| March 31, 2023 |
|
| December 31, 2022 |
| ||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net real estate investments |
| $ | 112,260 |
|
|
| 379,075 |
|
| $ | 106,916 |
|
|
| 107,725 |
|
Cash, cash equivalents and restricted cash |
|
| 2,486 |
|
|
| 5,202 |
|
|
| 2,487 |
|
|
| 2,420 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Notes payable |
|
| 4,924 |
|
|
| 5,000 |
|
|
| 3,695 |
|
|
| 4,188 |
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Limited partners' interests in consolidated partnerships |
|
| 27,534 |
|
|
| 27,950 |
|
|
| 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. All income from contracts with the Company's real estate partnerships is includedIncome within Management, transaction, and other fees on the Consolidated Statements of Operations.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 June 30, |
|
| Six months ended June 30, |
|
|
|
| Three months ended March 31, |
| |||||||||||||||
(in thousands) |
| Timing of satisfaction of performance obligations |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| Timing of satisfaction of performance obligations |
| 2023 |
|
| 2022 |
| ||||||
Management, transaction and other fees: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Management, transaction, and other fees: |
|
|
|
|
|
|
|
| ||||||||||||||||||||
Property management services |
| Over time |
|
| 3,310 |
|
|
| 3,753 |
|
| $ | 6,928 |
|
|
| 7,524 |
|
| Over time |
| $ | 3,458 |
|
|
| 3,618 |
|
Asset management services |
| Over time |
|
| 1,669 |
|
|
| 1,719 |
|
|
| 3,425 |
|
|
| 3,434 |
|
| Over time |
|
| 1,629 |
|
|
| 1,755 |
|
Leasing services |
| Point in time |
|
| 1,171 |
|
|
| 1,336 |
|
|
| 2,167 |
|
|
| 2,187 |
|
| Point in time |
|
| 718 |
|
|
| 996 |
|
Other transaction fees |
| Point in time |
|
| 349 |
|
|
| 547 |
|
|
| 663 |
|
|
| 603 |
|
| Point in time |
|
| 233 |
|
|
| 315 |
|
Total management, transaction, and other fees |
|
|
| $ | 6,499 |
|
|
| 7,355 |
|
| $ | 13,183 |
|
|
| 13,748 |
|
|
|
| $ | 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 $15.316.8 million and $13.216.4 million, as of June 30, 2022March 31, 2023 and December 31, 2021,2022, respectively.
1614
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2022March 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 | 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 |
| The | |||
1715
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2022March 31, 2023
2. | Real Estate Investments |
The following table details theCompany had no acquisitions of shopping centers acquired or land acquired for development during the sixthree months ended June 30, 2022. There were no such purchases duringMarch 31, 2023, as compared to those detailed in the sixtable below for the three months ended June 30, 2021.March 31, 2022:
(in thousands) | (in thousands) |
| Six months ended June 30, 2022 |
| (in thousands) |
| Three months ended March 31, 2022 |
| ||||||||||||||||||||||||||||||||||||||||
Date Purchased |
| Property Name |
| City/State |
| Property Type |
| Ownership |
| Purchase |
|
| Debt |
|
| Intangible |
|
| Intangible |
|
| Property Name |
| City/State |
| Property |
| Regency Ownership |
| Purchase |
|
| Debt |
|
| Intangible |
|
| Intangible |
| ||||||||
Consolidated | Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
3/1/2022 |
| Glenwood Green |
| Old Bridge, NJ |
| Development |
| 70% |
|
| 11,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
| 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 |
|
| Island Village |
| Bainbridge Island, WA |
| Operating |
| 100% |
|
| 30,650 |
|
|
| — |
|
|
| 2,900 |
|
|
| 6,839 |
|
4/1/2022 |
| Apple Valley (2) |
| Apple Valley, MN |
| Operating |
| 100% |
|
| 34,070 |
|
|
| — |
|
|
| 4,773 |
|
|
| 490 |
| ||||||||||||||||||||||||
4/1/2022 |
| Cedar Commons (2) |
| Minneapolis, MN |
| Operating |
| 100% |
|
| 29,330 |
|
|
| — |
|
|
| 4,369 |
|
|
| 58 |
| ||||||||||||||||||||||||
4/1/2022 |
| Corral Hollow (2) |
| Tracy, CA |
| Operating |
| 100% |
|
| 40,600 |
|
|
| — |
|
|
| 3,410 |
|
|
| 74 |
| ||||||||||||||||||||||||
4/1/2022 |
| Shops at the Columbia (2) |
| Washington, DC |
| Operating |
| 100% |
|
| 14,000 |
|
|
| — |
|
|
| 889 |
|
|
| 181 |
| ||||||||||||||||||||||||
5/6/2022 |
| Baederwood Shoppes |
| Jenkintown, PA |
| Operating |
| 80% |
|
| 51,603 |
|
|
| 22,779 |
|
|
| 5,796 |
|
|
| 1,062 |
| ||||||||||||||||||||||||
Total consolidated | Total consolidated |
|
|
|
|
|
|
| $ | 41,650 |
|
|
| — |
|
|
| 2,900 |
|
|
| 6,839 |
| |||||||||||||||||||||||||
Unconsolidated | Unconsolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unconsolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
3/25/2022 |
| Naperville Plaza |
| Naperville, IL |
| Operating |
| 20% |
|
| 52,380 |
|
|
| 22,074 |
|
|
| 4,336 |
|
|
| 814 |
|
| Naperville Plaza |
| Naperville, IL |
| Operating |
| 20% |
|
| 52,380 |
|
|
| 22,074 |
|
|
| 4,336 |
|
|
| 814 |
|
6/24/2022 |
| Baybrook East 1B |
| Houston, TX |
| Development |
| 50% |
|
| 5,540 |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||
Total unconsolidated | Total unconsolidated |
|
|
|
|
|
|
| $ | 52,380 |
|
|
| 22,074 |
|
|
| 4,336 |
|
|
| 814 |
| |||||||||||||||||||||||||
Total property acquisitions | Total property acquisitions |
|
|
|
|
| $ | 269,173 |
|
|
| 44,853 |
|
|
| 26,473 |
|
|
| 9,518 |
| Total property acquisitions |
|
|
|
|
| $ | 94,030 |
|
|
| 22,074 |
|
|
| 7,236 |
|
|
| 7,653 |
|
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 June 30, |
|
| Six months ended June 30, |
| Three months ended March 31, |
| |||||||||||||||||
(in thousands, except number sold data) |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| 2023 |
|
| 2022 |
| ||||||||
Net proceeds from sale of real estate investments |
| $ | 11,497 |
|
|
| 53,718 |
|
| $ | 136,421 |
|
|
| 107,577 |
|
|
| $ | 2,923 |
|
|
| 124,924 |
|
Gain on sale of real estate, net of tax |
|
| 4,291 |
|
|
| 19,781 |
|
|
| 106,239 |
|
|
| 31,479 |
|
|
|
| 250 |
|
|
| 101,948 |
|
Provision for impairment of real estate sold |
|
| — |
|
|
| 135 |
|
|
| — |
|
|
| 135 |
|
| ||||||||
Number of operating properties sold |
|
| — |
|
|
| 2 |
|
|
| 1 |
|
|
| 6 |
|
|
|
| — |
|
|
| 1 |
|
Number of land parcels and development project interests sold |
|
| 2 |
|
|
| — |
|
|
| 3 |
|
|
| 1 |
|
| ||||||||
Number of land parcels sold |
|
| 1 |
|
|
| 1 |
| |||||||||||||||||
Percent interest sold |
| 100% |
|
| 100% |
|
| 100% |
| 100% |
|
| 100% |
| 100% |
|
At June 30, 2022, the Company also had 1 land parcel classified within Properties held for sale on the Consolidated Balance Sheets.
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) |
| June 30, 2022 |
|
| December 31, 2021 |
|
| March 31, 2023 |
|
| December 31, 2022 |
| ||||
Goodwill, net |
| $ | 167,095 |
|
|
| 167,095 |
| ||||||||
Goodwill |
| $ | 167,062 |
|
|
| 167,062 |
| ||||||||
Investments |
|
| 55,185 |
|
|
| 65,112 |
|
|
| 53,967 |
|
|
| 54,581 |
|
Prepaid and other |
|
| 29,967 |
|
|
| 21,332 |
|
|
| 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 |
|
| 6,302 |
|
|
| 7,448 |
|
|
| 4,583 |
|
|
| 5,156 |
|
Furniture, fixtures, and equipment, net |
|
| 6,101 |
|
|
| 5,444 |
| ||||||||
Derivative assets |
|
| 3,950 |
|
|
| — |
| ||||||||
Total other assets |
| $ | 268,600 |
|
|
| 266,431 |
|
| $ | 276,926 |
|
|
| 267,797 |
|
1816
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2022March 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 |
| Weighted |
| June 30, 2022 |
|
| December 31, 2021 |
|
| Weighted |
| Weighted |
| March 31, 2023 |
|
| December 31, 2022 |
| ||||
Notes payable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fixed rate mortgage loans |
| 4.0% |
| 3.5% |
| $ | 353,635 |
|
|
| 359,414 |
|
| 3.9% |
| 3.4% |
| $ | 330,047 |
|
|
| 342,135 |
|
Variable rate mortgage loans (1) |
| 3.3% |
| 3.6% |
|
| 137,563 |
|
|
| 115,539 |
|
| 3.8% |
| 3.9% |
|
| 132,269 |
|
|
| 136,246 |
|
Fixed rate unsecured debt |
| 3.8% |
| 4.0% |
|
| 3,246,182 |
|
|
| 3,243,991 |
|
| 3.8% |
| 4.0% |
|
| 3,249,468 |
|
|
| 3,248,373 |
|
Total notes payable |
|
|
|
|
|
| 3,737,380 |
|
|
| 3,718,944 |
|
|
|
|
|
|
| 3,711,784 |
|
|
| 3,726,754 |
|
Unsecured credit facilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Line of Credit (the "Line") (2) |
| 2.0% |
| 2.3% |
|
| — |
|
|
| — |
| ||||||||||||
$1.25 Billion Line of Credit (the "Line") (2) |
| 5.8% |
| 6.2% |
|
| 30,000 |
|
|
| — |
| ||||||||||||
Total debt outstanding |
|
|
|
|
| $ | 3,737,380 |
|
|
| 3,718,944 |
|
|
|
|
|
| $ | 3,741,784 |
|
|
| 3,726,754 |
|
Scheduled principal payments and maturities on notes payable and unsecured credit facilities were as follows:
(in thousands) |
| June 30, 2022 |
|
| March 31, 2023 |
| ||||||||||||||||||||||||||
Scheduled Principal Payments and Maturities by Year: |
| Scheduled |
|
| Mortgage |
|
| Unsecured |
|
| Total |
|
| Scheduled |
|
| Mortgage |
|
| Unsecured |
|
| Total |
| ||||||||
2022 (2) |
| $ | 5,660 |
|
|
| 5,848 |
|
|
| — |
|
|
| 11,508 |
| ||||||||||||||||
2023 |
|
| 9,695 |
|
|
| 59,376 |
|
|
| — |
|
|
| 69,071 |
| ||||||||||||||||
2023 (2) |
| $ | 6,765 |
|
|
| 31,843 |
|
|
| — |
|
|
| 38,608 |
| ||||||||||||||||
2024 |
|
| 4,849 |
|
|
| 90,742 |
|
|
| 250,000 |
|
|
| 345,591 |
|
|
| 5,044 |
|
|
| 90,742 |
|
|
| 250,000 |
|
|
| 345,786 |
|
2025 |
|
| 3,732 |
|
|
| 45,000 |
|
|
| 250,000 |
|
|
| 298,732 |
|
|
| 3,942 |
|
|
| 43,750 |
|
|
| 280,000 |
|
|
| 327,692 |
|
2026 |
|
| 3,922 |
|
|
| 112,365 |
|
|
| 200,000 |
|
|
| 316,287 |
|
|
| 4,127 |
|
|
| 127,096 |
|
|
| 200,000 |
|
|
| 331,223 |
|
2027 |
|
| 3,788 |
|
|
| 137,915 |
|
|
| 525,000 |
|
|
| 666,703 |
| ||||||||||||||||
Beyond 5 Years |
|
| 6,661 |
|
|
| 138,234 |
|
|
| 2,575,000 |
|
|
| 2,719,895 |
|
|
| 2,873 |
|
|
| 322 |
|
|
| 2,050,000 |
|
|
| 2,053,195 |
|
Unamortized debt premium/(discount) and issuance costs |
|
| — |
|
|
| 5,114 |
|
|
| (28,818 | ) |
|
| (23,704 | ) |
|
| — |
|
|
| 4,109 |
|
|
| (25,532 | ) |
|
| (21,423 | ) |
Total |
| $ | 34,519 |
|
|
| 456,679 |
|
|
| 3,246,182 |
|
|
| 3,737,380 |
|
| $ | 26,539 |
|
|
| 435,777 |
|
|
| 3,279,468 |
|
|
| 3,741,784 |
|
The Company was in compliance as of June 30, 2022,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 mitigatemanage its exposure to interest rate movements. To accomplish these objectives,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.
1917
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2022March 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 |
|
|
|
|
|
|
|
|
|
|
| Fair Value |
| ||||||||||||
(in thousands) |
|
|
|
|
|
|
|
|
|
| Assets (Liabilities) (1) |
|
|
|
|
|
|
|
|
|
|
| Assets (Liabilities) (1) |
| ||||||||||||
Effective |
| Maturity |
| Notional |
|
| Receive |
| Pay |
| June 30, 2022 |
|
| December 31, 2021 |
|
| Maturity |
| Notional |
|
| Bank Pays |
| Regency Pays |
| March 31, 2023 |
|
| December 31, 2022 |
| ||||||
4/7/16 |
| 4/1/23 |
| $ | 18,835 |
|
| 1 Month LIBOR |
| 1.303% |
| $ | 236 |
|
|
| (175 | ) | ||||||||||||||||||
12/1/16 |
| 11/1/23 |
|
| 31,450 |
|
| 1 Month LIBOR |
| 1.490% |
|
| 686 |
|
|
| (412 | ) |
| 11/1/23 |
|
| 30,969 |
|
| SOFR |
| 1.490% |
|
| 621 |
|
|
| 883 |
|
9/17/19 |
| 3/17/25 |
|
| 24,000 |
|
| 1 Month LIBOR |
| 1.542% |
|
| 910 |
|
|
| (364 | ) |
| 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 |
|
| 35,733 |
|
| 1 Month LIBOR with Floor |
| 2.366% |
|
| 956 |
|
|
| (1,907 | ) |
| 6/2/27 |
|
| 35,303 |
|
| SOFR |
| 2.261% |
|
| 1,586 |
|
|
| 2,158 |
|
12/20/19 (2) |
| 12/19/26 |
|
| 24,365 |
|
| 1 Month LIBOR |
| 1.750% |
|
| 1,162 |
|
|
| — |
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| $ | 3,950 |
|
|
| (2,858 | ) |
|
|
|
|
|
|
|
|
| $ | 4,537 |
|
|
| 6,575 |
|
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 June 30, 2022,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 isare recorded in Accumulated Other Comprehensive Income (Loss)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:Consolidated Financial Statements:
Location and Amount of Gain (Loss) Recognized in OCI on Derivative | 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 |
| 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 June 30, |
|
|
|
| Three months ended June 30, |
|
|
|
| Three months ended June 30, |
|
| Three months ended March 31, |
|
|
| Three months ended March 31, |
|
|
| Three months ended March 31, |
| ||||||||||||||||||||||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
|
|
| 2022 |
|
| 2021 |
|
|
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
|
|
|
| 2023 |
|
| 2022 |
|
|
|
| 2023 |
|
| 2022 |
| ||||||||||||
Interest rate swaps |
| $ | 4,436 |
|
|
| (2,302 | ) |
| Interest expense |
| $ | 481 |
|
|
| 1,034 |
|
| Interest expense, net |
| $ | 36,699 |
|
|
| 35,812 |
|
| $ | (2,736 | ) |
|
| 8,968 |
|
| Interest expense |
| $ | (1,492 | ) |
|
| 1,010 |
|
| Interest expense, net |
| $ | 36,393 |
|
|
| 36,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
|
| Six months ended June 30, |
|
|
| Six months ended June 30, |
|
|
| Six months ended June 30, |
| |||||||||||||||||||||||||||||||||||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
|
|
| 2022 |
|
| 2021 |
|
|
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||||||||||||||||||
Interest rate swaps |
| $ | 13,404 |
|
|
| 3,508 |
|
| Interest expense |
| $ | 1,491 |
|
|
| 2,069 |
|
| Interest expense, net |
| $ | 73,437 |
|
|
| 72,748 |
|
As of June 30, 2022,March 31, 2023, the Company expects approximately $2.14.7 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.
2018
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2022March 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 June 30, |
|
| Six months ended June 30, |
|
| Three months ended March 31, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||||
Operating lease income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Fixed and in-substance fixed lease income |
| $ | 211,838 |
|
|
| 197,234 |
|
| $ | 419,340 |
|
|
| 393,288 |
|
| $ | 219,641 |
|
|
| 207,502 |
|
Variable lease income |
|
| 67,890 |
|
|
| 68,661 |
|
|
| 139,916 |
|
|
| 132,728 |
|
|
| 80,780 |
|
|
| 72,026 |
|
Other lease related income, net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Above/below market rent and tenant rent inducement amortization, net |
|
| 5,613 |
|
|
| 6,007 |
|
|
| 11,302 |
|
|
| 12,003 |
|
|
| 5,865 |
|
|
| 5,689 |
|
Uncollectible straight-line rent |
|
| 2,623 |
|
|
| (1,792 | ) |
|
| 4,905 |
|
|
| (3,827 | ) |
|
| 578 |
|
|
| 2,282 |
|
Uncollectible amounts billable in lease income |
|
| 4,900 |
|
|
| 6,620 |
|
|
| 11,046 |
|
|
| 8,895 |
|
|
| 1,937 |
|
|
| 6,146 |
|
Total lease income |
| $ | 292,864 |
|
|
| 276,730 |
|
| $ | 586,509 |
|
|
| 543,087 |
|
| $ | 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 no longernot 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) |
| June 30, 2022 |
|
| December 31, 2021 |
|
| March 31, 2023 |
|
| December 31, 2022 |
| ||||
Tenant receivables |
| $ | 21,135 |
|
| $ | 27,354 |
|
| $ | 21,546 |
|
|
| 31,486 |
|
Straight-line rent receivables |
|
| 115,427 |
|
|
| 103,942 |
|
|
| 130,811 |
|
|
| 128,214 |
|
Other receivables (1) |
|
| 23,081 |
|
|
| 21,795 |
|
|
| 29,222 |
|
|
| 29,163 |
|
Total tenant and other receivables |
| $ | 159,643 |
|
| $ | 153,091 |
|
| $ | 181,579 |
|
|
| 188,863 |
|
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:
|
| June 30, 2022 |
|
| December 31, 2021 |
|
| March 31, 2023 |
|
| December 31, 2022 |
| ||||||||||||||||||||
(in thousands) |
| Carrying |
|
| Fair Value |
|
| Carrying |
|
| Fair Value |
|
| Carrying |
|
| Fair Value |
|
| Carrying |
|
| Fair Value |
| ||||||||
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Notes payable |
| $ | 3,737,380 |
|
|
| 3,525,203 |
|
|
| 3,718,944 |
|
|
| 4,103,533 |
|
| $ | 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 June 30, 2022,March 31, 2023, and December 31, 2021,2022, 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.
2119
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2022March 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 (income) in the accompanying Consolidated Statements of Operations, and include unrealized lossesgains of $5.51.6 million and unrealized gainslosses of $1.43.0 million during the three months ended June 30,March 31, 2023 and 2022, and 2021, respectively, and unrealized losses of $8.5 million and unrealized gains of $1.8 million during the six months ended June 30, 2022 and 2021, respectively, on equity securities.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 otherOther 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.
2220
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2022March 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 June 30, 2022 |
| Fair Value Measurements as of March 31, 2023 |
| ||||||||||||||||||||||||||
|
|
|
| Quoted Prices in Active Markets for Identical Assets |
|
| Significant Other Observable Inputs |
|
| Significant Unobservable Inputs |
|
|
|
| Quoted Prices in Active Markets for Identical Assets |
|
| Significant Other Observable Inputs |
|
| Significant Unobservable Inputs |
| ||||||||
(in thousands) | Balance |
|
| (Level 1) |
|
| (Level 2) |
|
| (Level 3) |
| Balance |
|
| (Level 1) |
|
| (Level 2) |
|
| (Level 3) |
| ||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Securities | $ | 40,746 |
|
|
| 40,746 |
|
|
| — |
|
|
| — |
| $ | 38,788 |
|
|
| 38,788 |
|
|
| — |
|
|
| — |
|
Available-for-sale debt securities |
| 14,439 |
|
|
| — |
|
|
| 14,439 |
|
|
| — |
|
| 15,179 |
|
|
| — |
|
|
| 15,179 |
|
|
| — |
|
Interest rate derivatives |
| 3,950 |
|
|
| — |
|
|
| 3,950 |
|
|
| — |
|
| 4,907 |
|
|
| — |
|
|
| 4,907 |
|
|
| — |
|
Total | $ | 59,135 |
|
|
| 40,746 |
|
|
| 18,389 |
|
|
| — |
| $ | 58,874 |
|
|
| 38,788 |
|
|
| 20,086 |
|
|
| — |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Interest rate derivatives | $ | (370 | ) |
|
| — |
|
|
| (370 | ) |
|
| — |
|
| Fair Value Measurements as of December 31, 2021 |
| |||||||||||||
|
|
|
| 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 | $ | 49,513 |
|
|
| 49,513 |
|
|
| — |
|
|
| — |
|
Available-for-sale debt securities |
| 15,599 |
|
|
| — |
|
|
| 15,599 |
|
|
| — |
|
Interest rate derivatives |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total | $ | 65,112 |
|
|
| 49,513 |
|
|
| 15,599 |
|
|
| — |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
| ||||
Interest rate derivatives | $ | (2,858 | ) |
|
| — |
|
|
| (2,858 | ) |
|
| — |
|
The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a nonrecurring basis:
| Fair Value Measurements as of December 31, 2021 |
| Fair Value Measurements as of December 31, 2022 |
| ||||||||||||||||||||||||||||||
|
|
|
| Quoted Prices in Active Markets for Identical Assets |
|
| Significant Other Observable Inputs |
|
| Significant Unobservable Inputs |
|
| Total Gains |
|
|
|
| Quoted Prices in Active Markets for Identical Assets |
|
| Significant Other Observable Inputs |
|
| Significant Unobservable Inputs |
| |||||||||
(in thousands) | Balance |
|
| (Level 1) |
|
| (Level 2) |
|
| (Level 3) |
|
| (Losses) |
| Balance |
|
| (Level 1) |
|
| (Level 2) |
|
| (Level 3) |
| |||||||||
Operating properties | $ | 140,500 |
|
|
| — |
|
|
| — |
|
|
| 140,500 |
|
|
| (84,277 | ) | |||||||||||||||
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 |
|
|
| — |
|
During the year ended December 31, 2021, the Company revalued two shopping centers to estimated fair value due to a change in expected hold period using a discounted cash flow model with a discount rate of 7.2% and a terminal capitalization rate of 5.25%.
9. | Equity and Capital |
Common Stock of the Parent Company
Dividends Declared
On AugustMay 2, 20222023, our Board of Directors declared a common stock dividend of $0.6250.65 per share, payable on October 4, 2022July 6, 2023, to shareholders of record as of September 15, 2022June 14, 2023.
At the Market ("ATM") Program
Under the Parent Company's ATM equity offering program, the Parent Company may sellcould have sold up to $500 million of common stock at prices determined by the market at the time of sale.
23
REGENCY CENTERS CORPORATION AND REGENCY CENTERS, L.P.
Notes to Unaudited Consolidated Financial Statements
June 30, 2022
During 2021, the Company entered into forward sale agreements under its ATM program to issue shares of its common stock at a weighted average offering price of $64.59 before any underwriting discount and offering expenses. In April 2022, the Company settled 984,618 shares subject to forward sales agreements and received proceeds of approximately $61.3 million, after approximately $3.3 million in underwriting discounts and offering expenses. The proceeds were used to fund acquisitions. All shares are now settled under the forward sales agreements.
As of June 30, 2022, $350.4 million of common stock remained available for issuance under this ATM equity program.issuance. No sales occurred during the three months ended March 31, 2023, and the program expired on March 12, 2023.
Share Repurchase Program
On February 3, 2021, the Company's Board authorizedThe Company has a common share repurchase program under which the Companyit 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 "Authorized Repurchase"Repurchase Program"). AnyThe timing and price of share repurchases, if any will be dependent upon market conditions and other factors. The shares purchased,repurchased, if not retired, willwould be treated as treasury shares. Under the currentThe authorization the Authorized Repurchase Program is set tofor this repurchase program will expire on February 3, 20237, 2025, but may beunless modified or earlier terminated at any time at the discretion ofby the Board. The timing and actual number of shares purchased under the Authorized Repurchase Program depend upon marketplace conditions, liquidity needs, and other factors. NaN shares had been repurchased under the Authorized Repurchase Program prior to or during the three months ended March 31, 2022.
During the three months ended June 30, 2022,March 31, 2023, the Company executed multiple trades to repurchase 1,294,201349,519 common shares under the Authorized Repurchase Program for a total of $75.420.0 million at a weighted average price of $58.2557.22 per share. Due to the trade plus two business day settlement requirements, the June 30, 2022 trades representing 59,784 of these common shares repurchased for $3.5 million, did not settle until July 5, 2022 and remained in the Company's outstanding shares as of June 30, 2022. 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 partnershipOperating Partnership are issued, or redeemed and retired, for each of the shares of Parent Company common stockshares issued or repurchased, and retired, as described above. During the six months ended June 30, 2022, 18,613 Partnership Units were converted to Parent Company common stock.
10. | Stock-Based Compensation |
During the sixthree months ended June 30, 2022,March 31, 2023, the Company granted 272,003282,100 shares of restricted stock with a weighted-average grant-date fair value of $72.8868.87 per share. The Company records stock-based compensation expense within General and administrative expenses in the accompanying Consolidated Statements of Operations, and recordsrecognizes 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 June 30, |
|
| Six months ended June 30, |
| ||||||||||
(in thousands, except per share data) |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Income attributable to common stockholders - basic |
| $ | 104,796 |
|
|
| 95,490 |
|
| $ | 300,024 |
|
|
| 176,146 |
|
Income attributable to common stockholders - diluted |
| $ | 104,796 |
|
|
| 95,490 |
|
| $ | 300,024 |
|
|
| 176,146 |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares outstanding for basic EPS |
|
| 172,064 |
|
|
| 169,854 |
|
|
| 171,692 |
|
|
| 169,812 |
|
Weighted average common shares outstanding for diluted EPS |
|
| 172,424 |
|
|
| 170,172 |
|
|
| 172,036 |
|
|
| 170,065 |
|
Income per common share – basic |
| $ | 0.61 |
|
|
| 0.56 |
|
| $ | 1.75 |
|
|
| 1.04 |
|
Income per common share – diluted |
| $ | 0.61 |
|
|
| 0.56 |
|
| $ | 1.74 |
|
|
| 1.04 |
|
24
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
Notes to Unaudited Consolidated Financial Statements
June 30, 2022
Income allocatedattributable to noncontrolling interests of the Operating Partnership has been excluded from the numerator and exchangeable Operating PartnershipEOP 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 exchangeable Operating PartnershipEOP units outstanding were 741,433 and 762,793760,046 for the three months ended June 30,March 31, 2023 and 2022, and 2021, respectively, and were 755,393 and 763,907 for the six months ended June 30, 2022 and 2021, respectively.
Operating Partnership Earnings per Unit
The following summarizes the calculation of basic and diluted earnings per unit:unit ("EPU"):
|
| Three months ended June 30, |
|
| Six months ended June 30, |
|
| Three months ended March 31, |
| |||||||||||||||
(in thousands, except per share data) |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income attributable to common unit holders - basic |
| $ | 105,248 |
|
|
| 95,922 |
|
| $ | 301,339 |
|
|
| 176,942 |
|
| $ | 97,701 |
|
|
| 196,091 |
|
Income attributable to common unit holders - diluted |
| $ | 105,248 |
|
|
| 95,922 |
|
| $ | 301,339 |
|
|
| 176,942 |
|
| $ | 97,701 |
|
|
| 196,091 |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Weighted average common units outstanding for basic EPU |
|
| 172,805 |
|
|
| 170,617 |
|
|
| 172,448 |
|
|
| 170,576 |
|
|
| 171,953 |
|
|
| 172,072 |
|
Weighted average common units outstanding for diluted EPU |
|
| 173,165 |
|
|
| 170,935 |
|
|
| 172,791 |
|
|
| 170,828 |
|
|
| 172,235 |
|
|
| 172,431 |
|
Income per common unit – basic |
| $ | 0.61 |
|
|
| 0.56 |
|
| $ | 1.75 |
|
|
| 1.04 |
|
| $ | 0.57 |
|
|
| 1.14 |
|
Income per common unit – diluted |
| $ | 0.61 |
|
|
| 0.56 |
|
| $ | 1.74 |
|
|
| 1.04 |
|
| $ | 0.57 |
|
|
| 1.14 |
|
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 pertainingregulations. 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 use.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. As of June 30, 2022 and December 31, 2021, the Company had $9.4 million in letters of credit outstanding. These letters of credit are primarily issued as collateral on behalf of its captive insurance programsubsidiary 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.
2523
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 SEC filings.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 Annual Report on2022 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 performance 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 performance 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 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.Consolidated Financial Statements. In addition, they reflect the exercise of management’smanagement'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.
24
Defined Terms
The following terms, as defined, are commonly used by management and the investing public to understand and evaluate our operational results:results, and are included in this document:
26
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 StockholdersShareholders to Nareit FFO.
25
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 other REITs'our operating results to oursthose 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:
27
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.
26
Overview of Our Strategy
Regency Centers Corporation began its operations as a publicly-traded REIT in 1993,1993. All of our operating, investing, and asfinancing activities are performed through our Operating Partnership, Regency Centers, L.P. and its wholly-owned subsidiaries, and through our co-investment partnerships. As of June 30, 2022,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"). 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 June 30, 2022, the Parent Company owns approximately 99.6% of the outstanding common partnership units of the Operating Partnership.
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:
Our goals are to:
28
Risks and Uncertainties
The success of our tenants in operating their businesses and their ability to pay rent continue to be significantly influenced by many challenges, including the impact of inflation, labor shortages, and supply chain constraints. Additionally, macroeconomic and geopolitical risks create challenges that may exacerbate current market conditions in the United States. The policies utilized 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 our tenants' businesses and/or decreasing future demand for space in our shopping centers. 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, 2021, for additional discussion of the impact of the COVID-19 pandemic on the Company’s business2022, including, without limitation, refer to the Risk Factors discussed in Item 1A of Part I thereof.thereof, and the Risk Factors described in Part II, Item 1A of this Form 10-Q.
27
Executing on our Strategy
During the sixthree months ended June 30, 2022,March 31, 2023, we had Net income attributable to common stockholdersshareholders of $300.0$97.3 million as compared to $195.2 million during the three months ended March 31, 2022, which includesincluded gains on sale of real estate of $106.2 million, as compared to $176.1 million during the six months ended June 30, 2021.$101.9 million.
During the sixthree months ended June 30, 2022:March 31, 2023:
We continued our development and redevelopment of high quality shopping centers:
29
We maintain a conservative balance sheet in order to providemaintained liquidity and financial flexibility to cost effectively fund investment opportunities and debt maturities:
Property Portfolio
The following table summarizes general information related to the Consolidated Propertiesconsolidated properties in our portfolio:
(GLA in thousands) | June 30, 2022 |
| December 31, 2021 | March 31, 2023 |
| December 31, 2022 |
Number of Properties | 308 |
| 302 | 308 |
| 308 |
GLA | 38,639 |
| 37,864 | 38,826 |
| 38,834 |
% Leased – Operating and Development | 94.3% |
| 94.0% | 94.8% |
| 94.8% |
% Leased – Operating | 94.6% |
| 94.1% | 94.9% |
| 94.9% |
Weighted average annual effective rent per square foot ("PSF"), net of tenant concessions. | $23.52 |
| $23.17 | $24.13 |
| $23.95 |
The following table summarizes general information related to the Unconsolidated Propertiesunconsolidated properties owned in co-investment partnerships in our portfolio:
(GLA in thousands) | June 30, 2022 |
| December 31, 2021 | March 31, 2023 |
| December 31, 2022 |
Number of Properties | 96 |
| 103 | 96 |
| 96 |
GLA | 12,463 |
| 13,300 | 12,311 |
| 12,311 |
% Leased – Operating and Development | 93.3% |
| 93.9% | 95.2% |
| 94.8% |
% Leased –Operating | 93.4% |
| 93.9% | 95.3% |
| 94.8% |
Weighted average annual effective rent PSF, net of tenant concessions | $22.85 |
| $22.37 | $23.32 |
| $23.15 |
For the purpose of the following disclosures of occupancy and leasing activity, "anchor space" is considered space greater than or equal to 10,000 SF and "shop space" is less than 10,000 SF.
28
The following table summarizes Pro-rata occupancy rates of our combined Consolidatedconsolidated and Unconsolidatedunconsolidated shopping center portfolio:
| June 30, 2022 |
| December 31, 2021 |
% Leased – All Properties | 94.2% |
| 94.1% |
Anchor space | 96.5% |
| 97.0% |
Shop space | 90.3% |
| 89.2% |
30
| 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:partnerships (totals as a weighted average PSF):
|
| Six months ended June 30, 2022 |
|
| Three months ended March 31, 2023 |
| ||||||||||||||||||||||||||||||||||
|
| Leasing |
|
| SF (in |
|
| Base Rent |
|
| Tenant |
|
| Leasing |
|
| Leasing |
|
| SF (in |
|
| Base Rent |
|
| Tenant |
|
| Leasing |
| ||||||||||
Anchor Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Anchor Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
New |
|
| 11 |
|
|
| 372 |
|
| $ | 12.94 |
|
| $ | 10.42 |
|
| $ | 5.65 |
|
|
| 6 |
|
|
| 67 |
|
| $ | 14.24 |
|
| $ | 41.74 |
|
| $ | 7.69 |
|
Renewal |
|
| 49 |
|
|
| 1,227 |
|
|
| 18.85 |
|
|
| 1.50 |
|
|
| 0.11 |
|
|
| 18 |
|
|
| 399 |
|
|
| 15.01 |
|
|
| 0.40 |
|
|
| 0.19 |
|
Total Anchor Leases |
|
| 60 |
|
|
| 1,599 |
|
| $ | 17.47 |
|
| $ | 3.57 |
|
| $ | 1.40 |
| ||||||||||||||||||||
Shop Space |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Anchor Space Leases |
|
| 24 |
|
|
| 466 |
|
| $ | 14.90 |
|
| $ | 6.37 |
|
| $ | 1.27 |
| ||||||||||||||||||||
Shop Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
New |
|
| 278 |
|
|
| 510 |
|
| $ | 38.71 |
|
| $ | 37.70 |
|
| $ | 11.61 |
|
|
| 121 |
|
|
| 217 |
|
| $ | 36.88 |
|
| $ | 33.10 |
|
| $ | 12.21 |
|
Renewal |
|
| 596 |
|
|
| 1,103 |
|
|
| 36.52 |
|
|
| 1.75 |
|
|
| 0.82 |
|
|
| 260 |
|
|
| 447 |
|
|
| 35.20 |
|
|
| 0.75 |
|
|
| 0.54 |
|
Total Shop Space Leases |
|
| 874 |
|
|
| 1,613 |
|
| $ | 37.21 |
|
| $ | 13.12 |
|
| $ | 4.24 |
|
|
| 381 |
|
|
| 664 |
|
| $ | 35.75 |
|
| $ | 11.33 |
|
| $ | 4.36 |
|
Total Leases |
|
| 934 |
|
|
| 3,212 |
|
| $ | 27.39 |
|
| $ | 8.37 |
|
| $ | 2.83 |
|
|
| 405 |
|
|
| 1,130 |
|
| $ | 27.14 |
|
| $ | 9.28 |
|
| $ | 3.08 |
|
|
| Six months ended June 30, 2021 |
|
| Three months ended March 31, 2022 |
| ||||||||||||||||||||||||||||||||||
|
| Leasing |
|
| SF (in |
|
| Base Rent |
|
| Tenant |
|
| Leasing |
|
| Leasing |
|
| SF (in |
|
| Base Rent |
|
| Tenant |
|
| Leasing |
| ||||||||||
Anchor Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Anchor Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
New |
|
| 13 |
|
|
| 188 |
|
| $ | 14.61 |
|
| $ | 40.97 |
|
| $ | 6.03 |
|
|
| 6 |
|
|
| 280 |
|
| $ | 9.50 |
|
| $ | 8.76 |
|
| $ | 6.70 |
|
Renewal |
|
| 55 |
|
|
| 1,214 |
|
|
| 14.23 |
|
|
| 0.22 |
|
|
| 0.21 |
|
|
| 34 |
|
|
| 851 |
|
|
| 16.18 |
|
|
| 0.54 |
|
|
| 0.08 |
|
Total Anchor Leases |
|
| 68 |
|
|
| 1,402 |
|
| $ | 14.28 |
|
| $ | 5.69 |
|
| $ | 0.99 |
| ||||||||||||||||||||
Shop Space |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
Total Anchor Space Leases |
|
| 40 |
|
|
| 1,131 |
|
| $ | 14.53 |
|
| $ | 2.57 |
|
| $ | 1.71 |
| ||||||||||||||||||||
Shop Space Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
New |
|
| 272 |
|
|
| 447 |
|
| $ | 32.78 |
|
| $ | 24.87 |
|
| $ | 9.62 |
|
|
| 133 |
|
|
| 243 |
|
| $ | 38.90 |
|
| $ | 39.24 |
|
| $ | 11.51 |
|
Renewal |
|
| 646 |
|
|
| 1,180 |
|
|
| 33.28 |
|
|
| 1.89 |
|
|
| 0.56 |
|
|
| 286 |
|
|
| 537 |
|
|
| 36.52 |
|
|
| 2.34 |
|
|
| 0.73 |
|
Total Shop Space Leases |
|
| 918 |
|
|
| 1,627 |
|
| $ | 33.14 |
|
| $ | 8.20 |
|
| $ | 3.05 |
|
|
| 419 |
|
|
| 780 |
|
| $ | 37.26 |
|
| $ | 13.85 |
|
| $ | 4.09 |
|
Total Leases |
|
| 986 |
|
|
| 3,029 |
|
| $ | 24.41 |
|
| $ | 7.04 |
|
| $ | 2.10 |
|
|
| 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 ("ABR") per square foot on signed shop space leases during 2022 was $37.21 PSF which is higher than the ABR rent per square foot of all shop spaceShop Space leases due to expire during the next 12 months of $33.50 PSF.months. New and renewal rent spreads, on a trailing twelve month basis were positive at 8.3% as compared to prior rents on thosethese same spaces; however,spaces leased, were positive at 5.5% for the United States economy, as well as specific geographic marketsthree 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 we operate, could face a challenging economic environment should pressures such as highincrease their cost of doing business, including, but not limited to, inflation, labor shortages, and supply chain constraints, persist long term.increasing energy prices, and interest rates. Additionally, macroeconomic and geopolitical risks create challenges that may exacerbate current market conditions in the United States.
In addition, measures intended to contain or reduce inflation, such as increasing interest rates,These economic conditions could also adversely impact our volume of leasing activity, leasing spreads, and financial results generally, andas well as adversely affect the business and financial results of our tenants. The aggregate impacts of these current economic challenges including a slowing of growth and potentially a recession, could have an adverse effect on our tenants and may also negatively affect the overall market for retail space, includingresulting in decreased demand for space in our centers. This, in turn, could result in pricingdownward pressure on rents that we are able to charge to new or renewing tenants, such that future new and renewal rent spreads could be negatively impacted.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 are increasingmay increase and supply and availability of both have tightened.may become more limited.
31
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, with ABR greater than 2%, of which four of the top five are grocers:
|
| June 30, 2022 |
| March 31, 2023 | ||||||||||||
Tenant |
| Number of |
|
| Percentage of |
| Percentage of |
| Number of |
|
| Percentage of |
| Percentage of | ||
Publix |
|
| 67 |
|
| 7.1% |
| 3.3% |
|
| 66 |
|
| 7.0% |
| 3.2% |
Kroger Co. |
|
| 53 |
|
| 7.3% |
| 3.2% |
|
| 53 |
|
| 7.3% |
| 3.1% |
Albertsons Companies, Inc. |
|
| 46 |
|
| 4.7% |
| 3.0% |
|
| 46 |
|
| 4.7% |
| 3.0% |
Amazon/Whole Foods |
|
| 36 |
|
| 2.9% |
| 2.7% |
|
| 36 |
|
| 2.9% |
| 2.7% |
TJX Companies, Inc. |
|
| 63 |
|
| 3.6% |
| 2.6% |
|
| 63 |
|
| 3.6% |
| 2.6% |
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 diversification,mix, replacing weakerless 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 set forth inderived from long-term lease contracts, tenants whothat 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 cancelsrejects 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.
3230
Results from Operations
Comparison of the three months ended June 30, 2022March 31, 2023 and 2021:2022:
Our revenues changed as summarized in the following table:
|
| Three months ended June 30, |
|
|
|
|
| Three months ended March 31, |
|
|
|
| ||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| Change |
|
| 2023 |
|
| 2022 |
|
| Change |
| ||||||
Lease income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Base rent |
| $ | 204,353 |
|
|
| 189,689 |
|
|
| 14,664 |
|
| $ | 212,930 |
|
|
| 199,252 |
|
|
| 13,678 |
|
Recoveries from tenants |
|
| 68,464 |
|
|
| 68,248 |
|
|
| 216 |
|
|
| 71,226 |
|
|
| 67,774 |
|
|
| 3,452 |
|
Percentage rent |
|
| 751 |
|
|
| 749 |
|
|
| 2 |
|
|
| 7,030 |
|
|
| 4,948 |
|
|
| 2,082 |
|
Uncollectible lease income |
|
| 4,900 |
|
|
| 6,620 |
|
|
| (1,720 | ) |
|
| 1,937 |
|
|
| 6,146 |
|
|
| (4,209 | ) |
Other lease income |
|
| 3,310 |
|
|
| 4,265 |
|
|
| (955 | ) |
|
| 7,216 |
|
|
| 3,825 |
|
|
| 3,391 |
|
Straight line rent |
|
| 5,473 |
|
|
| 1,152 |
|
|
| 4,321 |
| ||||||||||||
Straight-line rent |
|
| 2,597 |
|
|
| 6,011 |
|
|
| (3,414 | ) | ||||||||||||
Above / below market rent amortization |
|
| 5,613 |
|
|
| 6,007 |
|
|
| (394 | ) |
|
| 5,865 |
|
|
| 5,689 |
|
|
| 176 |
|
Total lease income |
| $ | 292,864 |
|
|
| 276,730 |
|
|
| 16,134 |
|
| $ | 308,801 |
|
|
| 293,645 |
|
|
| 15,156 |
|
Other property income |
|
| 2,720 |
|
|
| 3,074 |
|
|
| (354 | ) |
|
| 3,138 |
|
|
| 3,104 |
|
|
| 34 |
|
Management, transaction, and other fees |
|
| 6,499 |
|
|
| 7,355 |
|
|
| (856 | ) |
|
| 6,038 |
|
|
| 6,684 |
|
|
| (646 | ) |
Total revenues |
| $ | 302,083 |
|
|
| 287,159 |
|
|
| 14,924 |
|
| $ | 317,977 |
|
|
| 303,433 |
|
|
| 14,544 |
|
LeaseTotal lease income increased $16.1$15.2 million on a net basis, driven by the following contractually billable components of rent to the tenants per the lease agreements:
Management, transaction, and other fees decreased $856,000$646,000 primarily from reductionsdue to decreases in leasing commissions and construction and property management fees due to sales and buyoutsresulting from a smaller portfolio of properties within our NYC, USAA and RegCal unconsolidated partnerships, as well as a reduction in debt placement fees.co-investment partnerships.
3331
Changes in our operating expenses are summarized in the following table:
|
| Three months ended June 30, |
|
|
|
|
| Three months ended March 31, |
|
|
|
| ||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| Change |
|
| 2023 |
|
| 2022 |
|
| Change |
| ||||||
Depreciation and amortization |
| $ | 79,350 |
|
|
| 74,217 |
|
|
| 5,133 |
|
| $ | 82,707 |
|
|
| 77,842 |
|
|
| 4,865 |
|
Operating and maintenance |
|
| 47,750 |
|
|
| 46,566 |
|
|
| 1,184 |
| ||||||||||||
Property operating expense |
|
| 51,022 |
|
|
| 46,461 |
|
|
| 4,561 |
| ||||||||||||
Real estate taxes |
|
| 38,477 |
|
|
| 36,869 |
|
|
| 1,608 |
| ||||||||||||
General and administrative |
|
| 17,645 |
|
|
| 19,187 |
|
|
| (1,542 | ) |
|
| 25,280 |
|
|
| 18,792 |
|
|
| 6,488 |
|
Real estate taxes |
|
| 36,700 |
|
|
| 35,447 |
|
|
| 1,253 |
| ||||||||||||
Other operating expenses |
|
| 617 |
|
|
| 1,177 |
|
|
| (560 | ) | ||||||||||||
Other operating (income) expenses |
|
| (497 | ) |
|
| 2,173 |
|
|
| (2,670 | ) | ||||||||||||
Total operating expenses |
| $ | 182,062 |
|
|
| 176,594 |
|
|
| 5,468 |
|
| $ | 196,989 |
|
|
| 182,137 |
|
|
| 14,852 |
|
Depreciation and amortization costs increased $5.1$4.9 million, on a net basis, as follows:
Operating and maintenance costsProperty operating expense increased $1.2$4.6 million, on a net basis, as follows:
Real estate taxes increased $1.6 million, on a net basis, as follows:
General and administrative costs decreased $1.5increased $6.5 million, on a net basis, as follows:
Other operating (income) expenses decreased $559,000had a favorable change of $2.7 million, primarily attributabledue to decreases in federal taxes anda $1.6 million fee for the cancelation of a land contract related to a development pursuit costs.pursuit. The remaining $1.1 million favorable change is driven by higher 2022 expenses for environmental remediation costs at one of our operating properties.
3432
The following table presents the components of otherOther expense (income):
|
| Three months ended June 30, |
|
|
|
| ||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| Change |
| |||
Interest expense, net |
|
|
|
|
|
|
|
|
| |||
Interest on notes payable |
| $ | 37,274 |
|
|
| 36,390 |
|
|
| 884 |
|
Interest on unsecured credit facilities |
|
| 495 |
|
|
| 479 |
|
|
| 16 |
|
Capitalized interest |
|
| (1,019 | ) |
|
| (1,016 | ) |
|
| (3 | ) |
Hedge expense |
|
| 109 |
|
|
| 109 |
|
|
| — |
|
Interest income |
|
| (160 | ) |
|
| (150 | ) |
|
| (10 | ) |
Interest expense, net |
| $ | 36,699 |
|
|
| 35,812 |
|
|
| 887 |
|
Provision for impairment of real estate, net of tax |
|
| — |
|
|
| 135 |
|
|
| (135 | ) |
Gain on sale of real estate, net of tax |
|
| (4,291 | ) |
|
| (19,781 | ) |
|
| 15,490 |
|
Net investment income |
|
| 5,468 |
|
|
| (1,998 | ) |
|
| 7,466 |
|
Total other expense (income) |
| $ | 37,876 |
|
|
| 14,168 |
|
|
| 23,708 |
|
The $887,000 net increase in Interest expense is primarily driven by an increase in mortgage interest expense from recently acquired properties.
|
| 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 June 30,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 $4.3 million for two land parcels. During the three months ended June 30, 2021, we recognized gains on sale of $19.8$101.9 million from one land parcel and one operating property and the receipt of property insurance proceeds.property.
Net investment income decreased $7.5increased $4.2 million, primarily driven by realizedfavorable changes in unrealized gains and unrealized losses during 2022 on investments held in the non-qualified deferred compensation plan and our captive insurance company. There is an offsetting charge$3.7 million expense in General and administrative costs related to participant obligations within the deferred compensation plans.
OurTotal equity in income of investments in real estate partnerships increasedchanged as follows:
|
|
|
| Three months ended June 30, |
|
|
|
|
| Three months ended March 31, |
|
|
|
| ||||||||||||||
(in thousands) |
| Regency's |
| 2022 |
|
| 2021 |
|
| Change |
|
| Regency's |
| 2023 |
|
| 2022 |
|
| Change |
| ||||||
GRI - Regency, LLC (GRIR) |
| 40.00% |
| $ | 9,031 |
|
|
| 8,313 |
|
|
| 718 |
|
| 40.00% |
| $ | 9,130 |
|
|
| 9,373 |
|
|
| (243 | ) |
New York Common Retirement Fund (NYC) |
| 30.00% |
|
| 8,945 |
|
|
| (923 | ) |
|
| 9,868 |
|
| 30.00% |
|
| (6 | ) |
|
| 266 |
|
|
| (272 | ) |
Columbia Regency Retail Partners, LLC (Columbia I) |
| 20.00% |
|
| 422 |
|
|
| 500 |
|
|
| (78 | ) |
| 20.00% |
|
| 458 |
|
|
| 521 |
|
|
| (63 | ) |
Columbia Regency Partners II, LLC (Columbia II) |
| 20.00% |
|
| 361 |
|
|
| 490 |
|
|
| (129 | ) |
| 20.00% |
|
| 528 |
|
|
| 557 |
|
|
| (29 | ) |
Columbia Village District, LLC |
| 30.00% |
|
| 434 |
|
|
| 382 |
|
|
| 52 |
|
| 30.00% |
|
| 453 |
|
|
| 266 |
|
|
| 187 |
|
RegCal, LLC (RegCal) |
| 25.00% |
|
| 3,625 |
|
|
| 431 |
|
|
| 3,194 |
|
| 25.00% |
|
| 118 |
|
|
| 626 |
|
|
| (508 | ) |
US Regency Retail I, LLC (USAA) (2) |
| 20.01% |
|
| — |
|
|
| 316 |
|
|
| (316 | ) | ||||||||||||||
Other investments in real estate partnerships |
| 31.00% - 50.00% |
|
| 1,024 |
|
|
| (9,074 | ) |
|
| 10,098 |
|
| 35.00% - 50.00% |
|
| 1,235 |
|
|
| 1,195 |
|
|
| 40 |
|
Total equity in income of investments in real estate partnerships | Total equity in income of investments in real estate partnerships |
| $ | 23,842 |
|
|
| 435 |
|
|
| 23,407 |
|
|
|
| $ | 11,916 |
|
|
| 12,804 |
|
|
| (888 | ) |
The $23.4 million increase$888,000 decrease in our equityEquity in income of investments in real estate partnerships iswas largely attributable to the following changes:
35
The following represents the remaining components that comprised netcomprise Net income attributable to common stockholdersshareholders and unit holders:
|
| Three months ended June 30, |
|
|
|
|
| Three months ended March 31, |
|
|
|
| ||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| Change |
|
| 2023 |
|
| 2022 |
|
| Change |
| ||||||
Net income |
| $ | 105,987 |
|
|
| 96,832 |
|
|
| 9,155 |
|
| $ | 98,488 |
|
|
| 196,816 |
|
|
| (98,328 | ) |
Income attributable to noncontrolling interests |
|
| (1,191 | ) |
|
| (1,342 | ) |
|
| 151 |
|
|
| (1,207 | ) |
|
| (1,588 | ) |
|
| 381 |
|
Net income attributable to common stockholders |
| $ | 104,796 |
|
|
| 95,490 |
|
|
| 9,306 |
| ||||||||||||
Net income attributable to common shareholders |
| $ | 97,281 |
|
|
| 195,228 |
|
|
| (97,947 | ) | ||||||||||||
Net income attributable to exchangeable operating partnership units |
|
| (452 | ) |
|
| (432 | ) |
|
| (20 | ) |
|
| (420 | ) |
|
| (863 | ) |
|
| 443 |
|
Net income attributable to common unit holders |
| $ | 105,248 |
|
|
| 95,922 |
|
|
| 9,326 |
|
| $ | 97,701 |
|
|
| 196,091 |
|
|
| (98,390 | ) |
Results from Operations
Comparison of the six months ended June 30, 2022 and 2021:
Our revenues changed as summarized in the following table:
|
| Six months ended June 30, |
|
|
|
| ||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| Change |
| |||
Lease income |
|
|
|
|
|
|
|
|
| |||
Base rent |
| $ | 403,605 |
|
|
| 378,169 |
|
|
| 25,436 |
|
Recoveries from tenants |
|
| 136,238 |
|
|
| 130,845 |
|
|
| 5,393 |
|
Percentage rent |
|
| 5,699 |
|
|
| 4,115 |
|
|
| 1,584 |
|
Uncollectible lease income |
|
| 11,046 |
|
|
| 8,895 |
|
|
| 2,151 |
|
Other lease income |
|
| 7,135 |
|
|
| 7,027 |
|
|
| 108 |
|
Straight line rent |
|
| 11,484 |
|
|
| 2,033 |
|
|
| 9,451 |
|
Above / below market rent amortization |
|
| 11,302 |
|
|
| 12,003 |
|
|
| (701 | ) |
Total lease income |
| $ | 586,509 |
|
|
| 543,087 |
|
|
| 43,422 |
|
Other property income |
|
| 5,824 |
|
|
| 5,027 |
|
|
| 797 |
|
Management, transaction, and other fees |
|
| 13,183 |
|
|
| 13,748 |
|
|
| (565 | ) |
Total revenues |
| $ | 605,516 |
|
|
| 561,862 |
|
|
| 43,654 |
|
Lease income increased $43.4 million, on a net basis, driven by the following contractually billable components of rent to the tenants per the lease agreements:
3633
Changes in our operating expenses are summarized in the following table:
|
| Six months ended June 30, |
|
|
|
| ||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| Change |
| |||
Depreciation and amortization |
| $ | 157,192 |
|
|
| 151,476 |
|
|
| 5,716 |
|
Operating and maintenance |
|
| 94,211 |
|
|
| 92,148 |
|
|
| 2,063 |
|
General and administrative |
|
| 36,437 |
|
|
| 40,474 |
|
|
| (4,037 | ) |
Real estate taxes |
|
| 73,569 |
|
|
| 71,613 |
|
|
| 1,956 |
|
Other operating expenses |
|
| 2,790 |
|
|
| 1,875 |
|
|
| 915 |
|
Total operating expenses |
| $ | 364,199 |
|
|
| 357,586 |
|
|
| 6,613 |
|
Depreciation and amortization costs increased $5.7 million, on a net basis, as follows:
Operating and maintenance costs increased $2.1 million, on a net basis, as follows:
General and administrative costs decreased $4.0 million, on a net basis, as follows:
Real estate taxes increased $2.0 million, on a net basis, as follows:
37
The following table presents the components of other expense (income):
|
| Six months ended June 30, |
|
|
|
| ||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| Change |
| |||
Interest expense, net |
|
|
|
|
|
|
|
|
| |||
Interest on notes payable |
| $ | 74,361 |
|
|
| 73,625 |
|
|
| 736 |
|
Interest on unsecured credit facilities |
|
| 975 |
|
|
| 1,077 |
|
|
| (102 | ) |
Capitalized interest |
|
| (1,815 | ) |
|
| (1,865 | ) |
|
| 50 |
|
Hedge expense |
|
| 219 |
|
|
| 219 |
|
|
| — |
|
Interest income |
|
| (303 | ) |
|
| (308 | ) |
|
| 5 |
|
Interest expense, net |
| $ | 73,437 |
|
|
| 72,748 |
|
|
| 689 |
|
Provision for impairment of real estate, net of tax |
|
| — |
|
|
| 135 |
|
|
| (135 | ) |
Gain on sale of real estate, net of tax |
|
| (106,239 | ) |
|
| (31,479 | ) |
|
| (74,760 | ) |
Net investment loss (income) |
|
| 7,962 |
|
|
| (3,484 | ) |
|
| 11,446 |
|
Total other expense (income) |
| $ | (24,840 | ) |
|
| 37,920 |
|
|
| (62,760 | ) |
During the six months ended June 30, 2022, we recognized gains on sale of $106.2 million for three land parcel and one operating property. During the six months ended June 30, 2021, we recognized gains on sale of $31.5 million from one land parcel and five operating properties.
Net investment income decreased $11.4 million primarily driven by realized and unrealized losses during 2022 of investments held in the non-qualified deferred compensation plan and our captive insurance company. There is an offsetting charge in General and administrative costs related to participant obligations within the deferred compensation plans.
Our equity in income of investments in real estate partnerships increased as follows:
|
|
|
| Six months ended June 30, |
|
|
|
| ||||||
(in thousands) |
| Regency's |
| 2022 |
|
| 2021 |
|
| Change |
| |||
GRI - Regency, LLC (GRIR) |
| 40.00% |
| $ | 18,404 |
|
|
| 15,933 |
|
|
| 2,471 |
|
New York Common Retirement Fund (NYC) |
| 30.00% |
|
| 9,211 |
|
|
| (139 | ) |
|
| 9,350 |
|
Columbia Regency Retail Partners, LLC (Columbia I) |
| 20.00% |
|
| 943 |
|
|
| 932 |
|
|
| 11 |
|
Columbia Regency Partners II, LLC (Columbia II) |
| 20.00% |
|
| 918 |
|
|
| 1,001 |
|
|
| (83 | ) |
Columbia Village District, LLC |
| 30.00% |
|
| 700 |
|
|
| 686 |
|
|
| 14 |
|
RegCal, LLC (RegCal) (1) |
| 25.00% |
|
| 4,251 |
|
|
| 956 |
|
|
| 3,295 |
|
US Regency Retail I, LLC (USAA) (2) |
| 20.01% |
|
| — |
|
|
| 550 |
|
|
| (550 | ) |
Other investments in real estate partnerships |
| 35.00% - 50.00% |
|
| 2,219 |
|
|
| (7,818 | ) |
|
| 10,037 |
|
Total equity in income of investments in real estate partnerships |
|
|
| $ | 36,646 |
|
|
| 12,101 |
|
|
| 24,545 |
|
The $24.5 million increase in our equity in income of investments in real estate partnerships is largely attributable to the following changes:
38
The following represents the remaining components that comprised net income attributable to common stockholders and unit holders:
|
| Six months ended June 30, |
|
|
|
| ||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| Change |
| |||
Net income |
| $ | 302,803 |
|
|
| 178,457 |
|
|
| 124,346 |
|
Income attributable to noncontrolling interests |
|
| (2,779 | ) |
|
| (2,311 | ) |
|
| (468 | ) |
Net income attributable to common stockholders |
| $ | 300,024 |
|
|
| 176,146 |
|
|
| 123,878 |
|
Net income attributable to exchangeable operating partnership units |
|
| (1,315 | ) |
|
| (796 | ) |
|
| (519 | ) |
Net income attributable to common unit holders |
| $ | 301,339 |
|
|
| 176,942 |
|
|
| 124,397 |
|
Supplemental Earnings Information
We use certain non-GAAP performance 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 performance 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 financial measures is they may exclude significant expense and income items that are required by GAAP to be recognized in our consolidated financial statements.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.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 of the Company.prospects.
Pro-Rata Same Property NOI:
Our Pro-rata same property NOI, with and withoutexcluding termination fees,fees/expenses, changed from the following major components:as follows:
|
| Three months ended June 30, |
|
|
|
|
| Six months ended |
|
|
|
|
| Three months ended March 31, |
|
|
|
| ||||||||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| Change |
|
| 2022 |
|
| 2021 |
|
| Change |
|
| 2023 |
|
| 2022 |
|
| Change |
| |||||||||
Base rent |
| $ | 221,717 |
|
|
| 215,203 |
|
|
| 6,514 |
|
| $ | 440,930 |
|
|
| 428,658 |
|
|
| 12,272 |
|
| $ | 232,919 |
|
|
| 223,265 |
|
|
| 9,654 |
|
Recoveries from tenants |
|
| 73,794 |
|
|
| 77,948 |
|
|
| (4,154 | ) |
|
| 148,354 |
|
|
| 149,124 |
|
|
| (770 | ) |
|
| 78,331 |
|
|
| 76,224 |
|
|
| 2,107 |
|
Percentage rent |
|
| 1,015 |
|
|
| 1,086 |
|
|
| (71 | ) |
|
| 6,511 |
|
|
| 4,897 |
|
|
| 1,614 |
|
|
| 7,671 |
|
|
| 5,515 |
|
|
| 2,156 |
|
Termination fees |
|
| 940 |
|
|
| 2,250 |
|
|
| (1,310 | ) |
|
| 2,888 |
|
|
| 2,666 |
|
|
| 222 |
|
|
| 4,718 |
|
|
| 1,948 |
|
|
| 2,770 |
|
Uncollectible lease income |
|
| 5,282 |
|
|
| 7,239 |
|
|
| (1,957 | ) |
|
| 12,095 |
|
|
| 9,046 |
|
|
| 3,049 |
|
|
| 1,860 |
|
|
| 6,634 |
|
|
| (4,774 | ) |
Other lease income |
|
| 2,866 |
|
|
| 2,894 |
|
|
| (28 | ) |
|
| 5,473 |
|
|
| 5,602 |
|
|
| (129 | ) |
|
| 2,850 |
|
|
| 2,629 |
|
|
| 221 |
|
Other property income |
|
| 2,196 |
|
|
| 2,435 |
|
|
| (239 | ) |
|
| 4,589 |
|
|
| 3,728 |
|
|
| 861 |
|
|
| 2,662 |
|
|
| 2,529 |
|
|
| 133 |
|
Total real estate revenue |
|
| 307,810 |
|
|
| 309,055 |
|
|
| (1,245 | ) |
|
| 620,840 |
|
|
| 603,721 |
|
|
| 17,119 |
|
|
| 331,011 |
|
|
| 318,744 |
|
|
| 12,267 |
|
Operating and maintenance |
|
| 48,120 |
|
|
| 47,918 |
|
|
| 202 |
|
|
| 95,881 |
|
|
| 94,148 |
|
|
| 1,733 |
|
|
| 51,794 |
|
|
| 48,832 |
|
|
| 2,962 |
|
Real estate taxes |
|
| 39,518 |
|
|
| 40,884 |
|
|
| (1,366 | ) |
|
| 79,597 |
|
|
| 81,419 |
|
|
| (1,822 | ) |
|
| 41,775 |
|
|
| 41,070 |
|
|
| 705 |
|
Ground rent |
|
| 2,952 |
|
|
| 2,953 |
|
|
| (1 | ) |
|
| 5,864 |
|
|
| 5,893 |
|
|
| (29 | ) |
|
| 3,044 |
|
|
| 2,913 |
|
|
| 131 |
|
Total real estate operating expenses |
|
| 90,590 |
|
|
| 91,755 |
|
|
| (1,165 | ) |
|
| 181,342 |
|
|
| 181,460 |
|
|
| (118 | ) |
|
| 96,613 |
|
|
| 92,815 |
|
|
| 3,798 |
|
Pro-rata same property NOI |
| $ | 217,220 |
|
|
| 217,300 |
|
|
| (80 | ) |
| $ | 439,498 |
|
|
| 422,261 |
|
|
| 17,237 |
|
| $ | 234,398 |
|
|
| 225,929 |
|
|
| 8,469 |
|
Less: Termination fees |
|
| 940 |
|
|
| 2,250 |
|
|
| (1,310 | ) |
|
| 2,888 |
|
|
| 2,666 |
|
|
| 222 |
|
|
| 4,718 |
|
|
| 1,948 |
|
|
| 2,770 |
|
Pro-rata same property NOI, excluding termination fees |
| $ | 216,280 |
|
|
| 215,050 |
|
|
| 1,230 |
|
| $ | 436,610 |
|
|
| 419,595 |
|
|
| 17,015 |
|
| $ | 229,680 |
|
|
| 223,981 |
|
|
| 5,699 |
|
Pro-rata same property NOI growth, excluding termination fees |
|
|
|
|
|
|
|
| 0.6 | % |
|
|
|
|
|
|
|
| 4.1 | % |
|
|
|
|
|
|
|
| 2.5 | % |
Real estate revenue increased $12.3 million, on a net basis, as follows:
39
Billable Base rent increased $6.5 million and $12.3$9.7 million during the three and six months ended June 30, 2022,March 31, 2023, due to rent steps in existing leases, positive rental spreads on new and renewal leases, and increases in occupancy.occupancy, as well as redevelopment projects completing and operating.
Recoveries from tenants decreased $4.2increased $2.1 million during the three months ended June 30, 2022,March 31, 2023, due to decreasesincreases in prior year recoveries.recoverable expenses.
Percentage rent increased $1.6 million during the six months ended June 30, 2022, due to improvements in tenant sales.
Termination fees decreased $1.3$2.2 million during the three months ended June 30, 2022,March 31, 2023, due to terminationincreases in tenant sales.
34
Termination fees from several tenants at various propertiesincreased $2.8 million during 2021, both wholly owned and within our partnerships.the three months ended March 31, 2023, driven by two anchor terminations that were recognized in 2023.
Uncollectible lease income decreased $2.0$4.8 million during the three months ended June 30, 2022,March 31, 2023, primarily driven by higher collection in 2021 of previously reserved amounts. Uncollectible lease income increased $3.0 million during the six months ended June 30, 2022 primarily driven by improvements in current period collection rates and collection of previously reserved amounts.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 increased $1.7 million during the six months ended June 30, 2022, due primarily to increases in insurance premiums and other tenant reimbursable costs.
Real estate taxes decreased $1.4 million and $1.8 million during the three and six months ended June 30, 2022, due to changes in assessed values at properties across our portfolio.expense.
Same Property Rollforward:
Our same propertySame Property pool includes the following property count, Pro-rata GLA, and changes therein:
|
| Three months ended June 30, |
| |||||||||||||
|
| 2022 |
|
| 2021 |
| ||||||||||
(GLA in thousands) |
| Property |
|
| GLA |
|
| Property |
|
| GLA |
| ||||
Beginning same property count |
|
| 393 |
|
|
| 41,220 |
|
|
| 397 |
|
|
| 41,212 |
|
Acquired properties owned for entirety of comparable periods (1) |
|
| — |
|
|
| 327 |
|
|
| — |
|
|
| — |
|
Disposed properties |
|
| (3 | ) |
|
| (103 | ) |
|
| (3 | ) |
|
| (297 | ) |
SF adjustments (2) |
|
| — |
|
|
| 2 |
|
|
| — |
|
|
| 3 |
|
Ending same property count |
|
| 390 |
|
|
| 41,446 |
|
|
| 394 |
|
|
| 40,918 |
|
|
| Six months ended June 30, |
|
| Three months ended March 31, |
| ||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||||||||||||||||||
(GLA in thousands) |
| Property |
|
| GLA |
|
| Property |
|
| GLA |
|
| Property |
|
| GLA |
|
| Property |
|
| GLA |
| ||||||||
Beginning same property count |
|
| 393 |
|
|
| 41,294 |
|
|
| 393 |
|
|
| 40,228 |
|
|
| 389 |
|
|
| 41,383 |
|
|
| 393 |
|
|
| 41,294 |
|
Acquired properties owned for entirety of comparable periods presented (1) |
|
| — |
|
|
| 327 |
|
|
| 2 |
|
|
| 378 |
|
|
| 5 |
|
|
| 771 |
|
|
| — |
|
|
| — |
|
Developments that reached completion by the beginning of earliest comparable period presented |
|
| 1 |
|
|
| 72 |
|
|
| 6 |
|
|
| 683 |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| 72 |
|
Disposed properties |
|
| (4 | ) |
|
| (191 | ) |
|
| (7 | ) |
|
| (407 | ) |
|
| — |
|
|
| — |
|
|
| (1 | ) |
|
| (88 | ) |
SF adjustments (2) |
|
| — |
|
|
| (56 | ) |
|
| — |
|
|
| 36 |
|
|
| — |
|
|
| (6 | ) |
|
| — |
|
|
| (58 | ) |
Change in intended property use |
|
| 1 |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||
Ending same property count |
|
| 390 |
|
|
| 41,446 |
|
|
| 394 |
|
|
| 40,918 |
|
|
| 395 |
|
|
| 42,148 |
|
|
| 393 |
|
|
| 41,220 |
|
40
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 June 30, |
|
| Six months ended June 30, |
|
| Three months ended March 31, |
| |||||||||||||||
(in thousands, except share information) |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||||
Reconciliation of Net income to Nareit FFO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net income attributable to common stockholders |
| $ | 104,796 |
|
|
| 95,490 |
|
| $ | 300,024 |
|
|
| 176,146 |
| ||||||||
Net income attributable to common shareholders |
| $ | 97,281 |
|
|
| 195,228 |
| ||||||||||||||||
Adjustments to reconcile to Nareit FFO: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Depreciation and amortization (excluding FF&E) |
|
| 85,738 |
|
|
| 81,177 |
|
|
| 169,868 |
|
|
| 165,671 |
|
|
| 89,035 |
|
|
| 84,130 |
|
Provision for impairment of real estate |
|
| — |
|
|
| 11,091 |
|
|
| — |
|
|
| 11,091 |
| ||||||||
Gain on sale of real estate, net of tax |
|
| (17,089 | ) |
|
| (19,777 | ) |
|
| (119,099 | ) |
|
| (31,847 | ) |
|
| (241 | ) |
|
| (102,010 | ) |
Exchangeable operating partnership units |
|
| 452 |
|
|
| 432 |
|
|
| 1,315 |
|
|
| 796 |
|
|
| 420 |
|
|
| 863 |
|
Nareit FFO attributable to common stock and unit holders |
| $ | 173,897 |
|
|
| 168,413 |
|
| $ | 352,108 |
|
|
| 321,857 |
|
| $ | 186,495 |
|
|
| 178,211 |
|
Reconciliation of Nareit FFO to Core Operating Earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Nareit Funds From Operations |
| $ | 173,897 |
|
|
| 168,413 |
|
|
| 352,108 |
|
|
| 321,857 |
|
| $ | 186,495 |
|
|
| 178,211 |
|
Adjustments to reconcile to Core Operating Earnings (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Early extinguishment of debt |
|
| 176 |
|
|
| — |
|
|
| 176 |
|
|
| — |
| ||||||||
Certain Non Cash Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Straight line rent |
|
| (2,534 | ) |
|
| (2,861 | ) |
|
| (6,012 | ) |
|
| (6,290 | ) | ||||||||
Uncollectible straight line rent |
|
| (3,071 | ) |
|
| 1,962 |
|
|
| (5,454 | ) |
|
| 4,535 |
| ||||||||
Straight-line rent |
|
| (2,389 | ) |
|
| (3,478 | ) | ||||||||||||||||
Uncollectible straight-line rent |
|
| (635 | ) |
|
| (2,383 | ) | ||||||||||||||||
Above/below market rent amortization, net |
|
| (5,323 | ) |
|
| (5,728 | ) |
|
| (10,715 | ) |
|
| (11,708 | ) |
|
| (5,665 | ) |
|
| (5,392 | ) |
Debt premium/discount amortization |
|
| (51 | ) |
|
| (183 | ) |
|
| (157 | ) |
|
| (92 | ) |
|
| (8 | ) |
|
| (106 | ) |
Core Operating Earnings |
| $ | 163,094 |
|
|
| 161,603 |
|
| $ | 329,946 |
|
|
| 308,302 |
|
| $ | 177,798 |
|
|
| 166,852 |
|
35
Reconciliation of Same Property NOI Reconciliation:to Nearest GAAP Measure:
Our reconciliation of Net income attributable to common stockholdersshareholders to Same Property NOI, on a Pro-rata basis, is as follows:
|
| Three months ended June 30, |
|
| Six months ended June 30, |
|
| Three months ended March 31, |
| |||||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||||
Net income attributable to common stockholders |
| $ | 104,796 |
|
|
| 95,490 |
|
| $ | 300,024 |
|
|
| 176,146 |
| ||||||||
Net income attributable to common shareholders |
| $ | 97,281 |
|
|
| 195,228 |
| ||||||||||||||||
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Management, transaction, and other fees |
|
| 6,499 |
|
|
| 7,355 |
|
|
| 13,183 |
|
|
| 13,748 |
|
|
| 6,038 |
|
|
| 6,684 |
|
Other (1) |
|
| 12,110 |
|
|
| 8,355 |
|
|
| 24,731 |
|
|
| 16,059 |
|
|
| 9,502 |
|
|
| 12,621 |
|
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Depreciation and amortization |
|
| 79,350 |
|
|
| 74,217 |
|
|
| 157,192 |
|
|
| 151,476 |
|
|
| 82,707 |
|
|
| 77,842 |
|
General and administrative |
|
| 17,645 |
|
|
| 19,187 |
|
|
| 36,437 |
|
|
| 40,474 |
|
|
| 25,280 |
|
|
| 18,792 |
|
Other operating expense |
|
| 617 |
|
|
| 1,177 |
|
|
| 2,790 |
|
|
| 1,875 |
|
|
| (497 | ) |
|
| 2,173 |
|
Other expense (income) |
|
| 37,876 |
|
|
| 14,168 |
|
|
| (24,840 | ) |
|
| 37,920 |
|
|
| 34,416 |
|
|
| (62,716 | ) |
Equity in income of investments in real estate excluded from NOI (2) |
|
| (375 | ) |
|
| 24,943 |
|
|
| 12,013 |
|
|
| 38,244 |
|
|
| 11,785 |
|
|
| 12,388 |
|
Net income attributable to noncontrolling interests |
|
| 1,191 |
|
|
| 1,342 |
|
|
| 2,779 |
|
|
| 2,311 |
|
|
| 1,207 |
|
|
| 1,588 |
|
Pro-rata NOI |
| $ | 222,491 |
|
|
| 214,814 |
|
| $ | 448,481 |
|
|
| 418,639 |
|
| $ | 236,639 |
|
|
| 225,990 |
|
Less non-same property NOI (3) |
|
| 5,271 |
|
|
| (2,486 | ) |
|
| 8,983 |
|
|
| (3,622 | ) |
|
| 2,241 |
|
|
| 61 |
|
Pro-rata same property NOI |
| $ | 217,220 |
|
|
| 217,300 |
|
| $ | 439,498 |
|
|
| 422,261 |
|
| $ | 234,398 |
|
|
| 225,929 |
|
41
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, which includesincluding 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 capital requirements of our in process and planned developments, redevelopments, andother 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.outstanding, in the current interest rate environment.
We have no unsecured debt maturities untilin 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.year, and in the longer term, although we can give no assurances.
36
In addition to our $118.1$65.2 million of unrestricted cash, we have the following additional sources of capital available:
(in thousands) | June 30, 2022 |
| March 31, 2023 |
| ||
ATM equity program |
|
| ||||
Original offering amount | $ | 500,000 |
| |||
Available capacity | $ | 350,363 |
| |||
Line of Credit |
|
|
|
| ||
Total commitment amount | $ | 1,250,000 |
| $ | 1,250,000 |
|
Available capacity (1) | $ | 1,240,619 |
| $ | 1,210,619 |
|
Maturity (2) | March 23, 2025 |
| March 23, 2025 |
|
The declaration of dividends is determined quarterly by our Board of Directors. On AugustMay 2, 2022,2023, our Board of Directors declared a common stock dividend of $0.625$0.65 per share, payable on October 4, 2022,July 6, 2023, to shareholders of record as of September 15, 2022.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 sixthree months ended June 30,March 31, 2023 and 2022, and 2021, we generated cash flow from operations of $327.8$162.1 million and $325.3$142.9 million, respectively, and paid $214.8$111.6 million and $202.1$107.4 million in dividends to our common stock and unit holders, respectively.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 July 2022,April 2023, we estimate that we will require capitalcash during the next twelve12 months of approximately $382.5$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 expect to generate the necessary cash to fund our long-term capital needs from cash flow from
42
operations, borrowings from our Line, proceeds from the sale of real estate, mortgage loan and unsecured bank financing, and when the capital markets are favorable, proceeds from the sale of equity or the issuance of new unsecured debt. If we borrow on our variable rate Line, with rising interest rates, our cost of borrowing would increase.
We endeavor to maintain a high percentage of unencumbered assets. As of June 30, 2022, 89.2%March 31, 2023, 90.2% of our wholly-owned real estate assets were unencumbered. SuchOur 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 twelve12 month Fixedfixed charge coverage ratio, including our Pro-rata share of our partnerships, was 4.6x and 4.5x4.7x for the periods ended June 30, 2022,March 31, 2023, and December 31, 2021, respectively,2022, and our Pro-rata net debt-to-operating EBITDAre ratio on a trailing twelve12 month basis was 5.0x4.9x and 5.1x,5.0x, respectively, for the same periods.
Our Line and unsecured loansdebt require that we remain in compliance with various covenants, which are described in the Notes to Consolidated Financial Statements included in our Annual Report on2022 Form 10-K for the year ended December 31, 2021.10-K. We arewere in compliance with all these covenants at June 30, 2022,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:
|
| Six months ended June 30, |
|
|
|
|
| Three months ended March 31, |
|
|
|
| ||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| Change |
|
| 2023 |
|
| 2022 |
|
| Change |
| ||||||
Net cash provided by operating activities |
| $ | 327,757 |
|
|
| 325,287 |
|
|
| 2,470 |
|
| $ | 162,099 |
|
|
| 142,892 |
|
|
| 19,207 |
|
Net cash (used in) provided by investing activities |
|
| (65,262 | ) |
|
| 73,034 |
|
|
| (138,296 | ) |
|
| (39,050 | ) |
|
| 58,354 |
|
|
| (97,404 | ) |
Net cash used in financing activities |
|
| (236,332 | ) |
|
| (490,158 | ) |
|
| 253,826 |
|
|
| (123,682 | ) |
|
| (117,543 | ) |
|
| (6,139 | ) |
Net increase (decrease) in cash and cash equivalents and restricted cash |
| $ | 26,163 |
|
|
| (91,837 | ) |
|
| 118,000 |
| ||||||||||||
Net (decrease) increase in cash and cash equivalents and restricted cash |
| $ | (633 | ) |
|
| 83,703 |
|
|
| (84,336 | ) | ||||||||||||
Total cash and cash equivalents and restricted cash |
| $ | 121,190 |
|
|
| 286,613 |
|
|
| (165,423 | ) |
| $ | 68,143 |
|
|
| 178,730 |
|
|
| (110,587 | ) |
37
Net cash provided by operating activities:
Net cash provided by operating activities increased primarily$19.2 million due to:
Net cash used in 2021 to settle interest rate swaps on our term loan which was repaid in January 2021.
Net cash (used in) provided by investing activities:
Net cash (used in) provided by investing activities changed by $138.3$97.4 million as follows:
|
| Six months ended June 30, |
|
|
|
|
| Three months ended March 31, |
|
|
|
| ||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| Change |
|
| 2023 |
|
| 2022 |
|
| Change |
| ||||||
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Acquisition of operating real estate, net of cash acquired of $3,061 in 2022 |
| $ | (139,775 | ) |
|
| 500 |
|
|
| (140,275 | ) | ||||||||||||
Acquisition of operating real estate |
| $ | — |
|
|
| (30,166 | ) |
|
| 30,166 |
| ||||||||||||
Real estate development and capital improvements |
|
| (99,470 | ) |
|
| (72,735 | ) |
|
| (26,735 | ) |
|
| (44,569 | ) |
|
| (53,605 | ) |
|
| 9,036 |
|
Proceeds from sale of real estate |
|
| 136,421 |
|
|
| 107,577 |
|
|
| 28,844 |
| ||||||||||||
Issuance of notes receivable |
|
| — |
|
|
| (20 | ) |
|
| 20 |
| ||||||||||||
Proceeds from sale of real estate and FF&E |
|
| 3,603 |
|
|
| 124,924 |
|
|
| (121,321 | ) | ||||||||||||
Investments in real estate partnerships |
|
| (11,549 | ) |
|
| (21,382 | ) |
|
| 9,833 |
|
|
| (604 | ) |
|
| (7,173 | ) |
|
| 6,569 |
|
Return of capital from investments in real estate partnerships |
|
| 48,473 |
|
|
| 58,699 |
|
|
| (10,226 | ) |
|
| — |
|
|
| 23,892 |
|
|
| (23,892 | ) |
Dividends on investment securities |
|
| 214 |
|
|
| 67 |
|
|
| 147 |
|
|
| 187 |
|
|
| 109 |
|
|
| 78 |
|
Acquisition of investment securities |
|
| (8,313 | ) |
|
| (14,065 | ) |
|
| 5,752 |
|
|
| (2,171 | ) |
|
| (5,554 | ) |
|
| 3,383 |
|
Proceeds from sale of investment securities |
|
| 8,737 |
|
|
| 14,393 |
|
|
| (5,656 | ) |
|
| 4,504 |
|
|
| 5,927 |
|
|
| (1,423 | ) |
Net cash (used in) provided by investing activities |
| $ | (65,262 | ) |
|
| 73,034 |
|
|
| (138,296 | ) |
| $ | (39,050 | ) |
|
| 58,354 |
|
|
| (97,404 | ) |
Significant changes in investing activities include:
43
During the same period in 2021, we invested $21.4 million, including:
38
We plan to continue developing and redeveloping shopping centers for long-term investment. During 2022,2023, we deployed capital of $99.5$44.6 million for the development, redevelopment, and improvement of our real estate properties, comprised of the following:
|
| Six months ended June 30, |
|
|
|
|
| Three months ended March 31, |
|
|
|
| ||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| Change |
|
| 2023 |
|
| 2022 |
|
| Change |
| ||||||
Capital expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Land acquisitions |
| $ | 11,545 |
|
|
| — |
|
|
| 11,545 |
|
| $ | — |
|
|
| 11,545 |
|
|
| (11,545 | ) |
Building and tenant improvements |
|
| 36,468 |
|
|
| 18,962 |
|
|
| 17,506 |
|
|
| 14,998 |
|
|
| 16,320 |
|
|
| (1,322 | ) |
Redevelopment costs |
|
| 31,708 |
|
|
| 36,986 |
|
|
| (5,278 | ) |
|
| 20,610 |
|
|
| 17,310 |
|
|
| 3,300 |
|
Development costs |
|
| 14,075 |
|
|
| 9,744 |
|
|
| 4,331 |
|
|
| 5,847 |
|
|
| 5,741 |
|
|
| 106 |
|
Capitalized interest |
|
| 1,789 |
|
|
| 1,838 |
|
|
| (49 | ) |
|
| 1,224 |
|
|
| 776 |
|
|
| 448 |
|
Capitalized direct compensation |
|
| 3,885 |
|
|
| 5,205 |
|
|
| (1,320 | ) |
|
| 1,890 |
|
|
| 1,913 |
|
|
| (23 | ) |
Real estate development and capital improvements |
| $ | 99,470 |
|
|
| 72,735 |
|
|
| 26,735 |
|
| $ | 44,569 |
|
|
| 53,605 |
|
|
| (9,036 | ) |
4439
The following table summarizes our development projects in process:in-process and completed:
(in thousands, except cost PSF) | (in thousands, except cost PSF) |
|
|
|
|
| June 30, 2022 |
| (in thousands, except cost PSF) |
|
|
|
|
| March 31, 2023 |
| ||||||||||||||||||||||||||||||||
Property Name |
| Market |
| Ownership |
| Start |
| Estimated |
| Estimated / Actual Net |
|
| GLA (3) |
| % of Costs Incurred |
|
| Cost PSF |
|
| Market |
| Ownership |
| Start |
| Estimated |
| Estimated Net |
|
| GLA (3) |
| Cost PSF |
|
| % of Costs Incurred |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Developments In-Process | Developments In-Process |
|
|
|
|
|
|
|
|
|
|
|
|
| Developments In-Process |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Carytown Exchange - Phase I & II |
| Richmond, VA |
| 64% |
| Q4-18 |
| 2024 |
| $ | 29,234 |
|
|
| 74 |
|
|
| 84 | % |
| $ | 393 |
| ||||||||||||||||||||||||
East San Marco |
| Jacksonville, FL |
| 100% |
| Q4-20 |
| 2024 |
|
| 19,285 |
|
|
| 59 |
|
|
| 79 | % |
|
| 327 |
| ||||||||||||||||||||||||
Glenwood Green |
| Old Bridge, NJ |
| 70% |
| Q1-22 |
| 2025 |
|
| 41,931 |
|
|
| 248 |
|
|
| 29 | % |
|
| 169 |
|
| Metro NYC |
| 70% |
| Q1-22 |
| 2025 |
|
| 45,530 |
|
|
| 247 |
|
|
| 184 |
|
|
| 50 | % |
Eastfield at Baybrook |
| Houston, TX |
| 50% |
| Q2-22 |
| 2025 |
|
| 10,384 |
|
|
| 25 |
|
|
| 17 | % |
|
| 415 |
|
| Houston, TX |
| 50% |
| Q2-22 |
| 2025 |
|
| 10,384 |
|
|
| 78 |
|
|
| 133 |
|
|
| 55 | % |
Total Developments In-Process | Total Developments In-Process |
|
|
|
|
|
|
| $ | 55,914 |
|
|
| 325 |
|
|
| 172 |
|
|
| 51 | % |
The following table summarizes our redevelopment projects in process and completed:
(in thousands, except cost PSF) | (in thousands, except cost PSF) |
|
|
| June 30, 2022 |
|
|
| (in thousands, except cost PSF) |
|
|
| March 31, 2023 |
| ||||||||||||||||||||||||||||
Property Name |
| Market |
| Ownership |
| Start Date |
| Estimated Stabilization Year (1) |
| Estimated Incremental |
|
| GLA (3) |
|
| % of Costs Incurred |
|
|
|
| Market |
| Ownership |
| Start Date |
| Estimated Stabilization Year (1) |
| Estimated Net |
|
| GLA (3) |
|
| % of Costs Incurred |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Redevelopments In-Process | Redevelopments In-Process |
|
|
|
|
|
|
|
|
|
|
| Redevelopments In-Process |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
The Crossing Clarendon |
| Metro DC |
| 100% |
| Q4-18 |
| 2024 |
| $ | 57,041 |
|
|
| 129 |
|
|
| 68 | % |
|
|
| Metro DC |
| 100% |
| Q4-18 |
| 2024 |
| $ | 55,838 |
|
|
| 129 |
|
|
| 77 | % |
The Abbot |
| Boston, MA |
| 100% |
| Q2-19 |
| 2024 |
|
| 58,379 |
|
|
| 65 |
|
|
| 80 | % |
|
|
| Boston, MA |
| 100% |
| Q2-19 |
| 2024 |
|
| 58,979 |
|
|
| 64 |
|
|
| 89 | % |
Preston Oaks |
| Dallas, TX |
| 100% |
| Q4-20 |
| 2023 |
|
| 22,327 |
|
|
| 103 |
|
|
| 71 | % |
|
| ||||||||||||||||||||
Serramonte Center |
| San Francisco, CA |
| 100% |
| Q4-20 |
| 2026 |
|
| 55,000 |
|
|
| 1,075 |
|
|
| 65 | % |
|
| ||||||||||||||||||||
Westbard Square Phase I |
| Bethesda, MD |
| 100% |
| Q2-21 |
| 2025 |
|
| 37,038 |
|
|
| 123 |
|
|
| 29 | % |
|
|
| Bethesda, MD |
| 100% |
| Q2-21 |
| 2025 |
|
| 37,537 |
|
|
| 123 |
|
|
| 54 | % |
Buckhead Landing |
| Atlanta, GA |
| 100% |
| Q2-22 |
| 2025 |
|
| 25,853 |
|
|
| 150 |
|
|
| 4 | % |
|
|
| 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 |
| 30% - 100% |
| Various |
| Various |
|
| 33,174 |
|
|
| 1,889 |
|
|
| 22 | % |
|
|
| Various |
| 20% - 100% |
| Various |
| Various |
|
| 41,993 |
|
|
| 1,179 |
|
|
| 54 | % |
Total Redevelopments In-Process | Total Redevelopments In-Process |
|
|
| $ | 246,581 |
|
|
| 1,698 |
|
|
| 57 | % | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Redevelopments Completed | Redevelopments Completed |
|
|
|
|
|
|
|
|
|
|
|
|
| Redevelopments Completed |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Sheridan Plaza |
| Hollywood, FL |
| 100% |
| Q3-19 |
| 2023 |
| $ | 12,115 |
|
|
| 507 |
|
|
| 91 | % |
|
| ||||||||||||||||||||
Various Properties |
| Various |
| 100% |
| Various |
| Various |
|
| 8,916 |
|
|
| 243 |
|
|
| 92 | % |
|
|
| Various |
| 100% |
| Various |
| Various |
| $ | 1,567 |
|
|
| 390 |
|
|
| 100 | % |
Total Redevelopments Completed | Total Redevelopments Completed |
|
|
| $ | 1,567 |
|
|
| 390 |
|
|
| 100 | % |
4540
Net cash used in financing activities:
Net cash flows from financing activities changed by $253.8$6.1 million during 2022,2023, as follows:
|
| Six months ended June 30, |
|
|
|
|
| Three months ended March 31, |
|
|
|
| ||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| Change |
|
| 2023 |
|
| 2022 |
|
| Change |
| ||||||
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net proceeds from common stock issuances |
| $ | 61,284 |
|
|
| — |
|
|
| 61,284 |
| ||||||||||||
Repurchase of common shares in conjunction with equity award plans |
|
| (6,388 | ) |
|
| (4,017 | ) |
|
| (2,371 | ) |
| $ | (7,066 | ) |
|
| (6,246 | ) |
|
| (820 | ) |
Common shares repurchased through share repurchase program |
|
| (71,898 | ) |
|
| — |
|
|
| (71,898 | ) |
|
| (20,006 | ) |
|
| — |
|
|
| (20,006 | ) |
Contributions from (distributions to) limited partners in consolidated partnerships, net |
|
| 1,234 |
|
|
| (1,989 | ) |
|
| 3,223 |
|
|
| 738 |
|
|
| (1,070 | ) |
|
| 1,808 |
|
Dividend payments and operating partnership distributions |
|
| (214,818 | ) |
|
| (202,140 | ) |
|
| (12,678 | ) |
|
| (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 |
|
| (5,728 | ) |
|
| (274,640 | ) |
|
| 268,912 |
|
|
| (31,142 | ) |
|
| (2,846 | ) |
|
| (28,296 | ) |
Payment of loan costs |
|
| (82 | ) |
|
| (7,468 | ) |
|
| 7,386 |
|
|
| (141 | ) |
|
| (82 | ) |
|
| (59 | ) |
Proceeds from sale of treasury stock, net |
|
| 64 |
|
|
| 96 |
|
|
| (32 | ) |
|
| 2 |
|
|
| 63 |
|
|
| (61 | ) |
Net cash used in financing activities |
| $ | (236,332 | ) |
|
| (490,158 | ) |
|
| 253,826 |
|
| $ | (123,682 | ) |
|
| (117,543 | ) |
|
| (6,139 | ) |
Significant financing activities during the sixthree months ended June 30,March 31, 2023 and 2022, and 2021, include the following:
4641
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) |
|
| Combined |
|
| Regency's Share (1) |
| ||||||||||||||||||||
(dollars in thousands) |
| June 30, 2022 |
|
| December 31, 2021 |
|
| June 30, 2022 |
|
| December 31, 2021 |
|
| March 31, 2023 |
|
| December 31, 2022 |
|
| March 31, 2023 |
|
| December 31, 2022 |
| ||||||||
Number of Co-investment Partnerships |
|
| 13 |
|
|
| 15 |
|
|
|
|
|
|
|
| 13 |
|
|
| 13 |
|
|
|
|
|
| ||||||
Regency's Ownership |
| 20% - 50% |
|
| 20% - 50% |
|
|
|
|
|
|
| 20% - 50% |
|
| 20% - 50% |
|
|
|
|
|
| ||||||||||
Number of Properties |
| 96 |
|
|
| 103 |
|
|
|
|
|
|
| 96 |
|
|
| 96 |
|
|
|
|
|
| ||||||||
Assets |
| $ | 2,619,505 |
|
|
| 2,755,444 |
|
| $ | 947,298 |
|
|
| 992,060 |
|
| $ | 2,600,152 |
|
|
| 2,608,005 |
|
| $ | 941,695 |
|
|
| 943,699 |
|
Liabilities |
|
| 1,551,827 |
|
|
| 1,555,942 |
|
|
| 552,711 |
|
|
| 553,550 |
|
|
| 1,503,027 |
|
|
| 1,497,630 |
|
|
| 533,545 |
|
|
| 530,915 |
|
Equity |
|
| 1,067,678 |
|
|
| 1,199,502 |
|
|
| 394,587 |
|
|
| 438,510 |
|
|
| 1,097,125 |
|
|
| 1,110,375 |
|
|
| 408,150 |
|
|
| 412,784 |
|
Basis difference | Basis difference |
|
|
|
|
| (63,700 | ) |
|
| (65,919 | ) | Basis difference |
|
|
|
|
| (61,760 | ) |
|
| (62,407 | ) | ||||||||
Investments in real estate partnerships | Investments in real estate partnerships |
|
|
|
| $ | 330,887 |
|
|
| 372,591 |
| Investments in real estate partnerships |
|
|
|
| $ | 346,390 |
|
|
| 350,377 |
|
Our equity method investments in real estate partnerships consist of the following:
(in thousands) |
| Regency's Ownership |
| June 30, 2022 |
|
| December 31, 2021 |
|
| Regency's Ownership |
| March 31, 2023 |
|
| December 31, 2022 |
| ||||
GRI-Regency, LLC (GRIR) |
| 40.00% |
| $ | 135,136 |
|
|
| 153,125 |
|
| 40.00% |
| $ | 152,011 |
|
|
| 155,302 |
|
New York Common Retirement Fund (NYC) (1) |
| 30.00% |
|
| 1,195 |
|
|
| 11,688 |
|
| 30.00% |
|
| 668 |
|
|
| 674 |
|
Columbia Regency Retail Partners, LLC (Columbia I) |
| 20.00% |
|
| 7,251 |
|
|
| 7,360 |
|
| 20.00% |
|
| 7,452 |
|
|
| 7,423 |
|
Columbia Regency Partners II, LLC (Columbia II) |
| 20.00% |
|
| 42,134 |
|
|
| 35,251 |
|
| 20.00% |
|
| 41,408 |
|
|
| 41,757 |
|
Columbia Village District, LLC |
| 30.00% |
|
| 5,707 |
|
|
| 5,554 |
|
| 30.00% |
|
| 5,809 |
|
|
| 5,836 |
|
RegCal, LLC (RegCal) (2) |
| 25.00% |
|
| 5,765 |
|
|
| 24,995 |
|
| 25.00% |
|
| 5,757 |
|
|
| 5,789 |
|
Individual Investors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Ballard Blocks |
| 49.90% |
|
| 63,831 |
|
|
| 63,783 |
|
| 49.90% |
|
| 62,332 |
|
|
| 62,624 |
|
Town & Country Center |
| 35.00% |
|
| 39,365 |
|
|
| 39,021 |
|
| 35.00% |
|
| 40,467 |
|
|
| 40,409 |
|
Others |
| 50.00% |
|
| 30,503 |
|
|
| 31,814 |
|
| 50.00% |
|
| 30,486 |
|
|
| 30,563 |
|
Total Investment in real estate partnerships |
|
|
| $ | 330,887 |
|
|
| 372,591 |
|
|
|
| $ | 346,390 |
|
|
| 350,377 |
|
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) |
| June 30, 2022 |
|
| March 31, 2023 |
| ||||||||||||||||||||||||||||||||||
Scheduled Principal Payments and Maturities by Year: |
| Scheduled |
|
| Mortgage |
|
| Unsecured |
|
| Total |
|
| Regency’s |
|
| Scheduled |
|
| Mortgage |
|
| Unsecured |
|
| Total |
|
| Regency’s |
| ||||||||||
2022 |
| $ | 3,378 |
|
|
| 64,843 |
|
|
| — |
|
|
| 68,221 |
|
|
| 24,343 |
| ||||||||||||||||||||
2023 |
|
| 3,194 |
|
|
| 216,931 |
|
|
| — |
|
|
| 220,125 |
|
|
| 83,325 |
| ||||||||||||||||||||
2023 (1) |
| $ | 1,826 |
|
|
| 125,108 |
| (2) |
| — |
|
|
| 126,934 |
|
|
| 50,662 |
| ||||||||||||||||||||
2024 |
|
| 2,205 |
|
|
| 33,690 |
|
|
| — |
|
|
| 35,895 |
|
|
| 14,298 |
|
|
| 2,205 |
|
|
| 33,690 |
|
|
| — |
|
|
| 35,895 |
|
|
| 14,298 |
|
2025 |
|
| 3,433 |
|
|
| 137,000 |
|
|
| — |
|
|
| 140,433 |
|
|
| 42,567 |
|
|
| 3,433 |
|
|
| 142,937 |
|
|
| — |
|
|
| 146,370 |
|
|
| 45,536 |
|
2026 |
|
| 3,807 |
|
|
| 125,255 |
|
|
| 7,300 |
|
|
| 136,362 |
|
|
| 43,671 |
|
|
| 3,807 |
|
|
| 221,354 |
|
|
| 23,800 |
|
|
| 248,961 |
|
|
| 80,606 |
|
2027 |
|
| 3,802 |
|
|
| 32,800 |
|
|
| — |
|
|
| 36,602 |
|
|
| 12,420 |
| ||||||||||||||||||||
Beyond 5 Years |
|
| 12,995 |
|
|
| 842,450 |
|
|
| — |
|
|
| 855,445 |
|
|
| 312,925 |
|
|
| 9,194 |
|
|
| 809,650 |
|
|
| — |
|
|
| 818,844 |
|
|
| 300,506 |
|
Net unamortized loan costs, debt premium / (discount) |
|
| — |
|
|
| (10,281 | ) |
|
| — |
|
|
| (10,281 | ) |
|
| (3,545 | ) |
|
| — |
|
|
| (10,487 | ) |
|
| — |
|
|
| (10,487 | ) |
|
| (3,660 | ) |
Total |
| $ | 29,012 |
|
|
| 1,409,888 |
|
|
| 7,300 |
|
|
| 1,446,200 |
|
|
| 517,584 |
|
| $ | 24,267 |
|
|
| 1,355,052 |
|
|
| 23,800 |
|
|
| 1,403,119 |
|
|
| 500,368 |
|
At June 30, 2022,March 31, 2023, our investments in real estate partnerships had notes payable of $1.4 billion maturing through 2034, of which 93.2%97.5% had a weighted average fixed interest rate of 3.5%3.7%. The remaining notes payable float with LIBOR or SOFR and had a weighted average variable interest rate of 3.1%.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 $517.6$500.4 million as of June 30, 2022.March 31, 2023. As notes payable mature, we expect they willare 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.
47
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 wasis 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.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 June 30, |
|
| Six months ended June 30, |
|
| Three months ended March 31, |
| |||||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||||
Asset management, property management, leasing, and other transaction fees |
| $ | 6,499 |
|
|
| 7,346 |
|
| $ | 13,183 |
|
|
| 13,730 |
|
| $ | 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 as theythat apply to our shopping centers, pertainingwhich primarily pertain to specific 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 have a blanketcarry 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 June 30, 2022,March 31, 2023, we had accrued liabilities of $11.1$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, liquidity,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, which will impact future interest costs. Otherwise, there have been no material changes fromissue. Please also refer to the quantitative and qualitative disclosures about market risk disclosed in item 7A of Part II of ourCompany's Annual Report on Form 10-K for the year ended December 31, 2021.2022, 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 periodperiods 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
48
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 secondfirst quarter of 20222023 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 periodperiods 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 secondfirst quarter of 20222023 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
We are a party to variousSee Note 12 — Commitments and Contingencies in the Notes for discussion regarding material legal proceedings that ariseand contingencies. Except as set forth in the ordinary coursesuch discussion, there have been no material developments in legal proceedings as reported in Item 3. “Legal Proceedings” of our business. We are not currently involved in any litigation, nor to our knowledge, is any litigation threatened against us, the outcome of which would, in our judgment based on information currently available to us, have a material adverse effect on our financial position or results of operations. However, no assurances can be given as to the outcome of any threatened or pending legal proceedings.2022 Form 10-K.
Item 1A. Risk Factors
Please refer to the discussion of the potential risks of inflation and rising interest rates on the Company and its tenants due to the challenges in the current macroenvironment and recent global events under note 1 in Item 1. Financial Statements and Item 2. Management's Discussion and Analysis for Financial Condition and Results of Operations, including but not limited to "Risks and Uncertainties."
During the first half of 2022 and continuing into the third quarter, the Board of Governors of the Federal Reserve System ("the U.S. Federal Reserve") has significantly raised its benchmark federal funds rate which has led to interest rates in the credit markets increasing. The U.S. Federal Reserve may continue to raise the federal funds rate which will likely lead to higher interest rates in the credit markets. In general, government policies implemented to address inflation, including actions by the U.S. Federal Reserve to increase interest rates, could result in adverse impacts on the U.S. economy, including a slowing of growth and potentially a recession.
Our exposure to increases in interest rates in the short term includes our variable-rate borrowings, which consist of borrowings under our unsecured senior line of credit and variable rate based secured notes payable and our real estate valuations. Increases in interest rates could increase our financing costs over time, either through near-term borrowings on our floating-rate line of credit or refinancing of our existing borrowings that may incur higher interest expenses related to the issuance of new debt. Historically, during periods of increasing interest rates, real estate valuations have generally decreased as a result of rising capitalization rates which tend to move directionally with interest rates. Consequently, prolonged periods of higher interest rates may negatively impact the valuation of our real estate asset portfolio and could result in the decline of our stock price and market capitalization which may adversely impact our ability and willingness to raise equity capital on favorable terms through sales of our common shares, including through our ATM program.
Although the extent of any prolonged periods of higher interest rates remains unknown at this time, negative impacts to our cost of capital may adversely affect our future business plans and growth, at least in the near term. In addition recently increased interest rates appear to have impacted the current market for the purchase and sale of properties such as those we own by decreasing the availability and increasing the cost of debt capital, thereby resulting, in some cases, in a smaller pool of potential buyers for certain assets and reduced asset prices.
49
Other than these matters, there have been no material developments from the risk factors disclosed in item 1A. of Part I of our Form 10-K for the year ended December 31, 2021.2022, 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.
44
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
During the three months ended June 30, 2022, we issued 18,613 shares of common stock of Regency Centers Corporation in connection with the redemption of common units of Regency Centers, L.P. in reliance on the exemption from registration requirements of the Securities Act of 1933, as amended, afforded by Section 4(a) (2) thereof. There were no other unregistered sales of equity securities during the three months ended June 30, 2022.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 June 30, 2022.March 31, 2023:
Period |
| Total number of shares purchased (1) |
|
| Average price paid per share (1) |
|
| 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 (2) |
| ||||
April 1 through April 30, 2022 |
|
| 377 |
|
| $ | 70.64 |
|
|
| — |
|
| $ | 250,000,000 |
|
May 1 through May 31, 2022 |
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | 250,000,000 |
|
June 1 through June 30, 2022 |
|
| 1,294,201 |
|
| $ | 58.25 |
|
|
| 1,294,201 |
|
| $ | 174,607,162 |
|
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 |
|
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
On August 2, 2022, the Board of Directors (the “Board”) of Regency Centers Corporation (“Regency” or the “Company”) approved Amended and Restated Bylaws (the “Amended and Restated Bylaws”), effective immediately upon approval by the Board. The Amended and Restated Bylaws had the effect of amending the previous Bylaws (the “Prior Bylaws”) of the Company by:
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The preceding summary does not purport to be complete and is qualified in its entirety by reference to the Amended and Restated Bylaws, a copy of which is included as Exhibit 3.1 to this report and incorporated herein by reference.None.
Item 6. Exhibits
In reviewing any agreements included as exhibits to this report,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:
45
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 reportReport not misleading. Additional information about the Company may be found elsewhere in this reportReport and the Company's other public files,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.).
51
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. |
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. |
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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.
| REGENCY CENTERS CORPORATION | |
By: | /s/ Michael J. Mas | |
Michael J. Mas, Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||
By: | /s/ | |
|
| 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/ | |
|
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