Regency Centers Corporation (“Regency” or the “Company”)
(NASDAQ:REG) today reported financial and operating results for the
period ended June 30, 2021. For the three months ended June 30,
2021, Net Income was $0.56 per diluted share, compared to $0.11 per
diluted share for the three months ended June 30, 2020.
Second Quarter 2021
Highlights
- Reported Nareit
FFO of $0.99 per diluted share for the second quarter
- Updated 2021
Nareit FFO guidance to a range of $3.74 – $3.82 per diluted
share
- Reported that
Same Property Net Operating Income (“NOI”), excluding lease
termination fees, increased 30.8% during the second quarter over
the same period a year ago
- Increased
percent leased by 40 basis points sequentially to 92.9% in the Same
Property portfolio as of June 30, 2021
- Collected 96% of
second quarter Pro-rata base rent, as of August 2, 2021
- Executed 1.9
million square feet of new and renewal leases during the second
quarter at a blended rent spread of +2.7%
- Completed
property dispositions of $86 million, at Regency’s share of gross
sales price
- Entered into
forward sale agreements in connection with the ATM program to sell
an aggregate of 2.3 million shares of common stock at an average
gross price of $64.59 per share
- Realized
Pro-rata net debt-to-operating EBITDAre of 5.3x at June 30,
2021
- Issued the
annual Corporate Responsibility Report on June 7, 2021
Subsequent Highlights
- On August 1,
2021, completed the acquisition of our partner’s 80% interest in
the seven-property USAA Joint Venture (“USAA JV”) portfolio for
$178 million, including the $84 million assumption of our partner’s
share of mortgage debt outstanding
- On August 4,
2021, Regency’s Board of Directors (the “Board”) declared a
quarterly cash dividend on the Company’s common stock of $0.595 per
share
“Our results during the second quarter speak to
the meaningful progress we continue to see toward full recovery
from the effects of the pandemic, with an improved outlook
supported by strong foot traffic and leasing activity across our
portfolio,” said Lisa Palmer, President and Chief Executive
Officer. “In turn, our capital allocation strategy has pivoted to
offense, evidenced in the buyout of our JV partner’s interest in
seven high quality grocery-anchored neighborhood centers and
continued pursuit of value-creating investment opportunities,
including our development and redevelopment pipeline.”
Financial Results
Net Income
- For the three
months ended June 30, 2021, Net Income Attributable to Common
Stockholders (“Net Income”) was $95.5 million, or $0.56 per diluted
share, compared to Net Income of $19.0 million, or $0.11 per
diluted share, for the same period in 2020.
Nareit FFO
- For the three
months ended June 30, 2021, Nareit Funds From Operations (“Nareit
FFO”) was $168.4 million, or $0.99 per diluted share, compared to
$104.7 million, or $0.61 per diluted share, for the same period in
2020.
- Nareit FFO
continues to be unfavorably impacted by the COVID-19 pandemic
including tenant vacancy and uncollectible lease income related to
cash basis tenants, partially offset by revenue related to prior
period collections from cash basis tenants.
- Uncollectible
lease income associated with tenants on a cash basis of accounting
positively impacted revenues in the second quarter by $6.9 million
at Regency’s share, or $0.04 per diluted share, comprised of
reserves against 2021 billings of ($4.9) million, which was more
than offset by the collection of 2020 reserves of $11.8 million.
For additional detail, please refer to page 33 of the second
quarter 2021 supplemental disclosure.
Core Operating Earnings
- For the three
months ended June 30, 2021, Core Operating Earnings was $161.6
million, or $0.95 per diluted share, compared to $108.9 million, or
$0.64 per diluted share, for the same period in 2020.
Portfolio Performance
Same Property NOI
- Second quarter
2021 Pro-rata Same Property Net Operating Income (“NOI”), excluding
termination fees, increased by 30.8% compared to the same period in
2020.
Leased Occupancy
- As of June 30,
2021, Regency’s wholly-owned portfolio plus its Pro-rata share of
co-investment partnerships, was 92.5% leased.
- As of June 30,
2021, Regency’s Same Property portfolio was 92.9% leased, an
increase of 40 basis points sequentially.
- Same Property
anchor percent leased, which includes spaces greater than or equal
to 10,000 square feet, was 95.3%, an increase of 30 basis points
sequentially.
- Same Property
shop percent leased, which includes spaces less than 10,000 square
feet, was 88.8%, an increase of 50 basis points sequentially.
Leasing Activity
- For the three
months ended June 30, 2021, Regency executed 1.9 million square
feet of comparable new and renewal leases at blended rent spreads
of +2.7%.
- For the trailing
twelve months, the Company executed 6.4 million square feet of
comparable new and renewal leases at blended rents spreads of
+1.2%.
COVID-19 Update
- As of August 2,
2021, the Company collected 96% of second quarter Pro-Rata base
rent, and executed deferral agreements on an additional 1%.
- Additional
information regarding COVID-19 impacts can be found in our
“Business Update” presentation, posted on our website at
investors.regencycenters.com, as well as on pages 33 – 34 of the
second quarter 2021 supplemental disclosure.
Corporate Responsibility
- On June 7, 2021,
Regency issued its annual Corporate Responsibility Report,
illustrating the Company’s continued commitment to corporate
responsibility, as well as describing its key environmental,
social, and governance initiatives and achievements. The report can
be found on Regency’s Corporate Responsibility website.
Portfolio Enhancement and Capital
Allocation
Developments and Redevelopments
- As of June 30,
2021, Regency’s in-process development and redevelopment projects
had estimated net project costs of $346 million and estimated
remaining costs to complete of $173 million, each at the Company’s
share.
- During the
second quarter, Regency commenced construction of the first phase
of the redevelopment of Westbard Square in Bethesda, Maryland.
Phase I will include a new three-level retail building anchored by
Giant, a road realignment, and the development of ~100 senior
living units in a joint venture with a best-in-class operator.
Future phases of the project will start in the next few years, and
will include townhomes, multifamily rental and additional
retail.
- During the
second quarter, the Company also commenced construction of the
second phase of the in-process ground up development of Carytown
Exchange, a Publix-anchored shopping center in Richmond, Virginia.
Phase II will include an additional 36k square feet of retail
shops.
- During the
second quarter, Regency completed redevelopment projects with total
Pro-rata costs of $21.7 million, including the $17.5 million
redevelopment of Point 50 in Fairfax, Virginia.
Property Transactions
- During the
second quarter, the Company closed on the sales of Gateway 101,
Northborough Crossing, and Lantana, at a gross sales price of $86
million at Regency’s share.
- Subsequent to
quarter end on August 1, 2021, Regency completed the acquisition of
its partner’s 80% interest in the seven-property USAA JV portfolio
for $178 million, including the $84 million assumption of the
partner’s share of mortgage debt outstanding. The USAA JV structure
was liquidated following the completion of the acquisition.
- The Company will
recognize promote income triggered by the liquidation of
approximately $13 million in the third quarter of 2021, which is
included in the revised 2021 Nareit FFO guidance range but excluded
from Core Operating Earnings guidance.
- Regency is
currently under contract to sell the non-income producing former
Sears building at Hancock Center in Austin, Texas, for $19 million.
This sale is expected to close in the third quarter.
- The company is
also under contract to sell the Parnassus Heights Medical Center in
San Francisco, California, for $28 million, expected to close in
the fourth quarter.
Balance Sheet
- During the
second quarter, Regency entered into forward sale agreements in
connection with its ATM program to sell an aggregate of 2.3 million
shares of common stock at an average gross price of $64.59 per
share. The Company will settle a portion of the shares in the third
quarter to fund the purchase of its partner’s 80% equity interest
in the USAA JV.
- As of June 30,
2021, the Company had full capacity available under its $1.2
billion revolving credit facility.
- As of June 30,
2021, Regency’s Pro-rata net debt-to-operating EBITDAre ratio was
5.3x.
- Effective July
2, 2021, Regency’s margin for determining the interest rate on the
Company’s revolving credit facility was reduced by 0.01% in
accordance with the terms of the credit agreement, following our
achievement of a pre-determined sustainability metric related to
reduction in greenhouse gas (“GHG”) emissions.
Dividend
- On August 4,
2021, Regency’s Board declared a quarterly cash dividend on the
Company’s common stock of $0.595 per share. The dividend is payable
on October 5, 2021, to shareholders of record as of September 15,
2021.
2021 Guidance
Regency Centers provided updated 2021 guidance concurrently with
the second quarter 2021 earnings release, as summarized in the
table below.
Full Year 2021 Guidance |
All figures pro-rata and in thousands, except per share data |
|
|
Current |
|
Previous |
Net Income Attributable to Common Stockholders per diluted
share |
|
$1.95 - $2.03 |
|
$1.43 - $1.53 |
Nareit Funds
From Operations (“Nareit FFO”) per diluted share |
|
$3.74 - $3.82 |
|
$3.33 - $3.43 |
Core Operating Earnings per diluted share (1) |
|
$3.50 - $3.58 |
|
$3.16 - $3.26 |
Same Property
Net Operating Income (“SPNOI”) Growth (ex. termination fees) |
|
+13.5% to +15.5% |
|
+6.0% to +8.5% |
Included Impact of 2020 Reserve Collection on SP NOI Range |
|
+650bps |
|
+425bps |
Certain Non-Cash Items (2) |
|
+/- $28,500 |
|
+/- $30,000 |
Net G&A
Expense |
|
$77,000 - $79,000 |
|
$77,000 - $81,000 |
Net Interest Expense |
|
$165,500 - $166,500 |
|
$164,000 - $165,000 |
Recurring
Third Party Fees & Commissions |
|
$24,500 - $25,500 |
|
$23,000 - $24,000 |
Transaction Income (JV Promote) |
|
+/- $13,000 |
|
- |
Development
and Redevelopment Spend |
|
+/- $150,000 |
|
+/- $150,000 |
Acquisitions |
|
+/- $178,000 |
|
+/- $0 |
Cap rate (weighted average) |
|
5.5% |
|
0.0% |
Dispositions |
|
+/- $200,000 |
|
+/- $150,000 |
Cap rate (weighted average) (3) |
|
5.5% - 6.0% |
|
5.5% - 6.0% |
|
|
|
|
|
(1) Core Operating Earnings excludes certain non-cash items,
including straight-line rents, above/below market rent
amortization, and amortization of mark-to-market debt, |
as well as transaction related
income/expenses and debt extinguishment
charges. |
(2) Includes above and below market rent amortization,
straight-line rents, and amortization of mark-to-market debt
adjustments. |
|
|
(3) Weighted average cap rates exclude non-income producing assets
(dispositions of $48 million). |
|
|
|
|
|
|
|
|
|
Please refer to the Company’s “Business Update”
presentation for additional detail on guidance disclosure,
including a reconciliation of Nareit FFO per diluted share from
2020 to 2021, as well as a reconciliation of Same Property NOI from
the previous range to the current range. Additional guidance
details may also be found in the second quarter 2021 Supplemental
Package. All materials are posted on the website at
investors.regencycenters.com.
Conference Call Information
To discuss Regency’s second quarter results and
provide further business updates, management will host a conference
call on Friday, August 6, 2021, at 11:00 a.m. ET. Dial-in and
webcast information is listed below.
Second Quarter
2021 Earnings Conference Call |
Date: |
Friday, August 6, 2021 |
Time: |
11:00 a.m. ET |
Dial#: |
877-407-0789 or
201-689-8562 |
Webcast: |
investors.regencycenters.com |
Replay
Webcast Archive: Investor Relations page under
Events & Webcasts
Non-GAAP Disclosure
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 do not consider non-GAAP measures an
alternative to financial measures determined in accordance with
GAAP. 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. In addition, they reflect the exercise of management’s
judgment about which expense and income items are excluded or
included in determining these non-GAAP financial measures. In order
to compensate for these limitations, reconciliations of the
non-GAAP financial measures we use to their most directly
comparable GAAP measures are provided. Non-GAAP financial measures
should not be relied upon in evaluating the financial condition,
results of operations or future prospects of the Company.
Nareit FFO is a commonly used measure of REIT
performance, which the National Association of Real Estate
Investment Trusts (“Nareit”) defines as net income, computed in
accordance with GAAP, excluding gains on sale and impairments of
real estate, net of tax, plus depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint
ventures. Regency computes Nareit FFO for all periods presented in
accordance with Nareit's definition. Since Nareit FFO excludes
depreciation and amortization and gains on sales 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 the Company’s financial performance not immediately
apparent from net income determined in accordance with GAAP. Thus,
Nareit FFO is a supplemental non-GAAP financial measure of the
Company's 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. The Company provides a reconciliation of Net
Income Attributable to Common Stockholders to Nareit FFO.
Core Operating Earnings is an additional
performance measure that excludes from Nareit FFO: (i) transaction
related income or expenses; (ii) gains or losses from the early
extinguishment of debt; (iii) certain non-cash components of
earnings derived from above and below market rent amortization,
straight-line rents, and amortization of mark-to-market of debt
adjustments; and (iv) other amounts as they occur. The Company
provides a reconciliation of Net Income to Nareit FFO to Core
Operating Earnings.
Reconciliation of Net Income (Loss)
Attributable to Common Stockholders to Nareit FFO and Core
Operating Earnings - Actual (in
thousands)
For the Periods Ended
June 30, 2021 and 2020 |
Three Months Ended |
|
Year to Date |
|
2021 |
|
2020 |
|
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net
Income (Loss) to Nareit FFO: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable
to Common Stockholders |
$ |
95,490 |
|
19,046 |
|
|
$ |
176,146 |
|
(6,286 |
) |
Adjustments to reconcile to Nareit Funds From Operations (1): |
|
|
|
|
|
|
|
|
|
Depreciation and amortization (excluding FF&E) |
81,177 |
|
92,756 |
|
|
165,671 |
|
189,388 |
|
Goodwill impairment |
- |
|
- |
|
|
- |
|
132,128 |
|
Gain on sale of real estate |
(19,777 |
) |
(7,464 |
) |
|
(31,847 |
) |
(45,416 |
) |
Provision for impairment of real estate |
11,091 |
|
230 |
|
|
11,091 |
|
1,014 |
|
Exchangeable operating partnership units |
432 |
|
87 |
|
|
796 |
|
(28 |
) |
|
|
|
|
|
|
|
|
|
|
Nareit Funds From Operations |
$ |
168,413 |
|
104,655 |
|
|
$ |
321,857 |
|
270,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Nareit FFO to Core Operating Earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nareit Funds From
Operations |
$ |
168,413 |
|
104,655 |
|
|
$ |
321,857 |
|
270,800 |
|
Adjustments to reconcile to Core Operating Earnings (1): |
|
|
|
|
|
|
|
|
|
Straight line rent |
(2,861 |
) |
(3,733 |
) |
|
(6,290 |
) |
(7,730 |
) |
Uncollectible straight line rent |
1,962 |
|
18,585 |
|
|
4,535 |
|
23,258 |
|
Above/below market rent amortization, net |
(5,728 |
) |
(10,158 |
) |
|
(11,708 |
) |
(22,887 |
) |
Debt premium/discount amortization |
(183 |
) |
(402 |
) |
|
(92 |
) |
(812 |
) |
|
|
|
|
|
|
|
|
|
|
Core Operating Earnings |
$ |
161,603 |
|
108,947 |
|
|
$ |
308,302 |
|
262,629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares For Diluted Earnings per Share |
170,172 |
|
169,971 |
|
|
170,065 |
|
168,781 |
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares For Diluted FFO and Core Operating Earnings
per Share |
170,935 |
|
170,736 |
|
|
170,828 |
|
169,889 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes Regency's consolidated entities and its pro-rata share
of unconsolidated co-investment partnerships, net of pro-rata share
attributable to noncontrolling interests. |
|
|
Same property NOI is a key non-GAAP measure used
by management in evaluating the operating performance of Regency’s
properties. The Company provides a reconciliation of Net Income
Attributable to Common Stockholders to Pro-rata same property
NOI.
Reconciliation of Net Income (Loss)
Attributable to Common Stockholders to Pro-Rata Same Property NOI
- Actual (in thousands)
For the Periods Ended
June 30, 2021 and 2020 |
Three Months Ended |
|
Year to Date |
|
2021 |
|
2020 |
|
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable
to Common Stockholders |
$ |
95,490 |
|
19,046 |
|
|
$ |
176,146 |
|
(6,286 |
) |
Less: |
|
|
|
|
|
|
|
|
|
Management, transaction, and other fees |
(7,355 |
) |
(6,126 |
) |
|
(13,748 |
) |
(12,942 |
) |
Other(1) |
(8,355 |
) |
1,424 |
|
|
(16,059 |
) |
(12,386 |
) |
Plus: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
74,217 |
|
85,058 |
|
|
151,476 |
|
174,353 |
|
General and administrative |
19,187 |
|
21,202 |
|
|
40,474 |
|
34,907 |
|
Other operating expense |
1,177 |
|
2,480 |
|
|
1,875 |
|
3,817 |
|
Other expense |
14,168 |
|
28,798 |
|
|
37,920 |
|
166,064 |
|
Equity in income of investments in real estate excluded from NOI
(2) |
24,943 |
|
16,878 |
|
|
38,244 |
|
32,361 |
|
Net income attributable to noncontrolling interests |
1,342 |
|
528 |
|
|
2,311 |
|
1,077 |
|
NOI |
214,814 |
|
169,288 |
|
|
418,639 |
|
380,965 |
|
|
|
|
|
|
|
|
|
|
|
Less non-same property NOI (3) |
(1,620 |
) |
(5,654 |
) |
|
(4,170 |
) |
(11,243 |
) |
|
|
|
|
|
|
|
|
|
|
Same Property NOI |
$ |
213,194 |
|
163,634 |
|
|
$ |
414,469 |
|
369,722 |
|
|
|
|
|
|
|
|
|
|
|
Same Property NOI without Termination Fees |
$ |
211,404 |
|
161,638 |
|
|
$ |
412,261 |
|
365,585 |
|
|
|
|
|
|
|
|
|
|
|
Same Property NOI without Termination Fees or
Redevelopments |
$ |
190,592 |
|
145,118 |
|
|
$ |
369,681 |
|
327,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes straight-line rental income and expense, net of
reserves, above and below market rent amortization, other fees, and
noncontrolling interests. |
(2) Includes non-NOI expenses incurred at our unconsolidated real
estate partnerships, such as, but not limited to, straight-line
rental income, above and below
market rent amortization, depreciation and amortization, interest
expense, and real estate gains and impairments. |
(3) Includes revenues and expenses attributable to Non-Same
Property, Projects in Development, corporate activities, and
noncontrolling interests. |
Reported results are preliminary and not final
until the filing of the Company’s Form 10-Q with the SEC and,
therefore, remain subject to adjustment.
The Company has published forward-looking
statements and additional financial information in its second
quarter 2021 supplemental information package that may help
investors estimate earnings for 2021. A copy of the Company’s
second quarter 2021 supplemental information will be available on
the Company's website at investors.regencycenters.com or by written
request to: Investor Relations, Regency Centers Corporation, One
Independent Drive, Suite 114, Jacksonville, Florida, 32202. The
supplemental information package contains more detailed financial
and property results including financial statements, an outstanding
debt summary, acquisition and development activity, investments in
partnerships, information pertaining to securities issued other
than common stock, property details, a significant tenant rent
report and a lease expiration table in addition to earnings and
valuation guidance assumptions. The information provided in the
supplemental package is unaudited and includes non-GAAP measures,
and there can be no assurance that the information will not vary
from the final information in the Company’s Form 10-Q for the
period-ended June 30, 2021. Regency may, but assumes no obligation
to, update information in the supplemental package from time to
time.
About Regency Centers Corporation
(NASDAQ: REG)
Regency Centers is the preeminent national
owner, operator, and developer of shopping centers located in
affluent, infill suburban trade areas. 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.
Operating as a fully integrated real estate company, Regency
Centers is a qualified real estate investment trust (REIT) that is
self-administered, self-managed, and an S&P 500 Index member.
For more information, please visit RegencyCenters.com.
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 such as our 2021
Guidance, 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,” “should,” “expect,” “estimate,” “believe,”
“intend,” “forecast,” “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, those risk factors
described in our SEC filings. When considering an investment in our
securities, you should carefully read and consider these risks,
together with all other information in our Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q and our other filings 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 except as required by
law. These risks and events include, without limitation:
Risk Factors
Risk Factors Related to the COVID-19
Pandemic
Pandemics or other health crises, such as the
COVID-19 pandemic, may adversely affect our tenants’ financial
condition, the profitability of our properties, and our access to
the capital markets and could have a material adverse effect on our
business, results of operations, cash flows and financial
condition.
Risk Factors Related to Operating Retail-Based
Shopping Centers
Economic and market conditions may adversely
affect the retail industry and consequently reduce our revenues and
cash flow, and increase our operating expenses. Shifts in retail
trends, sales, and delivery methods between brick and mortar
stores, e-commerce, home delivery, and curbside pick-up may
adversely impact our revenues and cash flows. Changing economic and
retail market conditions in geographic areas where our properties
are concentrated may reduce our revenues and cash flow. Our success
depends on the continued presence and success of our “anchor”
tenants. A significant percentage of our revenues are derived from
smaller “shop space” tenants and our net income may be adversely
impacted if our smaller shop tenants are not successful. We may be
unable to collect balances due from tenants in bankruptcy. Many of
our costs and expenses associated with operating our properties may
remain constant or increase, even if our lease income decreases.
Compliance with the Americans with the Disabilities Act and fire,
safety and other regulations may have a negative effect on us.
Risk Factors Related to Real Estate
Investments
Our real estate assets may decline in value and
be subject to impairment losses which may reduce our net income. We
face risks associated with development, redevelopment and expansion
of properties.
We face risks associated with the development of
mixed-use commercial properties. We face risks associated with the
acquisition of properties. We may be unable to sell properties when
desired because of market conditions. Changes in tax laws could
impact our acquisition or disposition of real estate.
Risk Factors Related to the Environment
Affecting Our Properties
Climate change may adversely impact our
properties directly, and may lead to additional compliance
obligations and costs as well as additional taxes and fees.
Geographic concentration of our properties makes our business more
vulnerable to natural disasters, severe weather conditions and
climate change. Costs of environmental remediation may impact our
financial performance and reduce our cash flow.
Risk Factors Related to Corporate Matters
An uninsured loss or a loss that exceeds the
insurance coverage on our properties may subject us to loss of
capital and revenue on those properties. Failure to attract and
retain key personnel may adversely affect our business and
operations. The unauthorized access, use, theft or destruction of
tenant or employee personal, financial or other data or of
Regency’s proprietary or confidential information stored in our
information systems or by third parties on our behalf could impact
our reputation and brand and expose us to potential liability and
loss of revenues.
Risk Factors Related to Our Partnerships and
Joint Ventures
We do not have voting control over all of the
properties owned in our co-investment partnerships and joint
ventures, so we are unable to ensure that our objectives will be
pursued. The termination of our partnerships may adversely affect
our cash flow, operating results, and our ability to make
distributions to stock and unit holders.
Risk Factors Related to Funding Strategies and
Capital Structure
Our ability to sell properties and fund
acquisitions and developments may be adversely impacted by higher
market capitalization rates and lower NOI at our properties which
may dilute earnings. We depend on external sources of capital,
which may not be available in the future on favorable terms or at
all. Our debt financing may adversely affect our business and
financial condition. Covenants in our debt agreements may restrict
our operating activities and adversely affect our financial
condition. Increases in interest rates would cause our borrowing
costs to rise and negatively impact our results of operations.
Hedging activity may expose us to risks, including the risks that a
counterparty will not perform and that the hedge will not yield the
economic benefits we anticipate, which may adversely affect us. The
interest rates on our Unsecured Credit facilities as well as on our
variable rate mortgages and interest rate swaps might change based
on changes to the method in which LIBOR or its replacement rate is
determined.
Risk Factors Related to the Market Price for Our
Securities
Changes in economic and market conditions may
adversely affect the market price of our securities.
There is no assurance that we will continue to
pay dividends at historical rates.
Risk Factors Relating to the Company’s
Qualification as a REIT
If the Parent Company fails to qualify as a REIT
for federal income tax purposes, it would be subject to federal
income tax at regular corporate rates. Dividends paid by REITs
generally do not qualify for reduced tax rates. Certain foreign
stockholders may be subject to U.S. federal income tax on gain
recognized on a disposition of our common stock if we do not
qualify as a “domestically controlled” REIT.
Legislative or other actions affecting REITs may
have a negative effect on us. Complying with REIT requirements may
limit our ability to hedge effectively and may cause us to incur
tax liabilities.
Risks Related to the Company’s Common Stock
Restrictions on the ownership of the Parent
Company’s capital stock to preserve its REIT status may delay or
prevent a change in control. The issuance of the Parent Company's
capital stock may delay or prevent a change in control. Ownership
in the Parent Company may be diluted in the future.
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