Core Insights - The article discusses the investment opportunities presented by the preferred stocks of Regency Centers Corporation (REG), a leading REIT specializing in commercial properties and shopping centers [1]. Group 1: Company Overview - Regency Centers Corporation is identified as a prominent player in the REIT sector, focusing on commercial properties and shopping centers [1]. Group 2: Investment Strategy - The article highlights the investment strategies employed by Denislav Iliev, who leads a team of analysts that identify mispriced investments in fixed-income and closed-end funds [1]. - The investing group Trade With Beta offers features such as frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, and hedging strategies [1].

Financial Performance - Net income attributable to common shareholders for the nine months ended September 30, 2025, was $314.7 million, compared to $303.7 million for the same period in 2024, reflecting a year-over-year increase [136]. - Total lease income for the three months ended September 30, 2025, increased by $28.7 million to $377.8 million, compared to $349.1 million for the same period in 2024 [145][147]. - Net income attributable to common shareholders increased by $11.1 million to $314.7 million for the nine months ended September 30, 2025, compared to $303.7 million in 2024 [165]. - Total lease income rose by $67.9 million to $1.1 billion for the nine months ended September 30, 2025, driven by a $42.1 million increase in base rent and a $20.8 million increase in recoveries from tenants [156][158]. - Net income attributable to common shareholders for Q3 2025 was $105,960,000, up from $98,056,000 in Q3 2024 [171]. - Nareit FFO for Q3 2025 was $213,499,000, an increase of $18,414,000 (9.4%) compared to Q3 2024 [172]. - Core Operating Earnings for Q3 2025 were $202,610,000, reflecting an increase of $14,847,000 (7.9%) from Q3 2024 [173]. - AFFO for Q3 2025 was $176,522,000, up from $158,216,000 in Q3 2024, representing a growth of 11.5% [173]. Leasing and Occupancy - Pro-rata same property NOI, excluding termination fees, grew by 5.5% compared to the nine months ended September 30, 2024, driven by improvements in occupancy rates and contractual rent increases [136]. - A total of 1,418 new and renewal leasing transactions were executed, representing 5.3 million Pro-rata square feet, with positive rent spreads of 10.4% during the nine months ended September 30, 2025 [136]. - The total property portfolio was 96.0% leased as of September 30, 2025, compared to 96.3% and 95.6% for December 31, 2024, and September 30, 2024, respectively [136]. - The same property portfolio was 96.4% leased as of September 30, 2025, compared to 96.7% and 96.0% for December 31, 2024, and September 30, 2024, respectively [136]. - The percentage leased for operating properties remains stable at 96.5% for both September 30, 2025, and December 31, 2024 [138]. - The company experienced a 10.4% positive rent spread for new and renewal leases for the nine months ended September 30, 2025, compared to 9.0% for the same period in 2024 [140]. Capital Structure and Debt Management - The company maintained a conservative capital structure with sufficient liquidity to meet capital needs and manage debt maturities [137]. - The company issued $400 million of senior unsecured notes due 2032 with a coupon rate of 5.0% on May 13, 2025 [139]. - The company has $646.3 million of loans maturing within the next 12 months, with $250 million repaid upon maturity on November 3, 2025 [139]. - The company plans to require approximately $1,085.5 million in capital over the next 12 months for leasing commissions, tenant improvements, and maturing debt repayments [184]. - As of September 30, 2025, the Company had $646.3 million of debt maturing within the next 12 months, including $450 million of unsecured public and private placement debt [179]. - The company expects to repay maturing notes payable from new borrowings and/or partner capital contributions, with potential higher interest expenses if refinancing occurs in a high-rate environment [200]. - The average interest rate for fixed rate debt is projected to be 4.19% in 2025, increasing to 4.79% by 2029 [209]. - The total fair value of fixed rate debt as of September 30, 2025, is $4.81 billion [209]. Investment and Development - Estimated pro-rata project costs for current development and redevelopment projects totaled $668.1 million as of September 30, 2025, up from $497.3 million at December 31, 2024 [139]. - The Company invested $307.3 million in development, redevelopment, and capital improvements during the nine months ended September 30, 2025, an increase of $71.998 million from the prior year [193]. - Total net development costs for projects in-process amount to $371.1 million, with 54% of costs incurred as of September 30, 2025 [196]. - The company has completed redevelopment projects with total costs of $38.9 million, achieving a 95% cost incurred rate [196]. - The company has 16 real estate partnerships with combined assets of $2.8 billion and liabilities of $1.7 billion as of September 30, 2025 [198]. Shareholder Value and Dividends - The company aims to create shareholder value by increasing earnings and dividends per share, targeting total returns at or near the top of its shopping center peers [136]. - The Company declared a quarterly cash dividend of $0.705 per share on October 2, 2025, and plans to increase the dividend to $0.755 per share for January 2026, representing a 7.1% increase [187]. - The company paid $14.4 million more in dividends in 2025 compared to 2024 due to a higher dividend rate and an increase in shares outstanding [197]. Operating Expenses and Income - Total operating expenses for the three months ended September 30, 2025, increased by $8.3 million to $244.2 million, compared to $235.9 million for the same period in 2024 [147]. - Interest expense, net increased by $16.5 million to $149.6 million for the nine months ended September 30, 2025, primarily due to new public debt issuances [160]. - Provision for impairment of real estate, net of tax was recognized at $4.6 million during the nine months ended September 30, 2025, related to the sale of five operating properties [160]. - Net investment income decreased by $1.9 million to $(2.6) million for the nine months ended September 30, 2025, primarily due to market volatility [164]. - Other operating expenses decreased by $1.9 million, mainly due to the phase-out of transition costs related to the acquisition of Urstadt Biddle Properties [150]. Market Conditions and Risks - The company continuously monitors capital market conditions to assess financing options for maturing debt obligations [205]. - Strategies to mitigate interest rate risk include the use of interest rate swaps and prioritizing refinancing of maturing debt with long-duration fixed-rate debt [177]. - A 100 basis point increase in interest rates could decrease future earnings and cash flows by approximately $0.3 million per year based on a $30 million floating rate line of credit [206]. - The Adjusted SOFR plus applicable margin was 4.965% as of September 30, 2025, indicating exposure to interest rate risk [204]. - The company has the capacity to fund its pro-rata share of capital requirements from existing cash balances and operating cash flows [201].

Group 1 - Regency Centers Corporation (REG) is one of the largest REITs focused on neighborhood and community shopping center formats, with over 480 properties and peer-leading AFFO growth [1] - The stock has been relatively stable [1] Group 2 - The analyst has over 10 years of experience researching companies across various sectors, including commodities and technology [1] - The analyst has researched over 1000 companies and has transitioned to a value investing-focused YouTube channel after writing a blog for three years [1] - The analyst expresses a preference for covering metals and mining stocks but is also comfortable with other industries such as consumer discretionary/staples, REITs, and utilities [1]

Core Insights - The article discusses the investment positions held by the author in specific companies, indicating a long position in FRT and KIM [1] Group 1 - The author expresses personal opinions on the investment landscape without receiving compensation from the companies mentioned [1] - The article emphasizes the importance of conducting due diligence and research before making investment decisions [2] - It highlights that past performance does not guarantee future results, and no specific investment recommendations are provided [3]

Core Insights - Regency Centers Corporation (REG) reported third-quarter 2025 NAREIT funds from operations (FFO) per share of $1.15, reflecting a 7.5% increase year-over-year and meeting the Zacks Consensus Estimate [1][9] - The company experienced strong leasing activity, with improvements in same-property net operating income (NOI) and base rents, leading to an increased 2025 NAREIT FFO per share outlook [1][11] Financial Performance - Total revenues for the quarter reached $387.6 million, a 7.6% increase from the previous year, surpassing the Zacks Consensus Estimate of $385.3 million [2][9] - Same-property NOI, excluding lease termination fees, rose 4.8% year-over-year to $273.5 million, driven by a 4.7% increase in same-property base rent growth [4][9] Leasing Activity - Regency Centers executed approximately 1.8 million square feet of comparable new and renewal leases at a blended cash rent spread of 12.8% during the third quarter [3] - As of September 30, 2025, the same property portfolio was 96.4% leased, an increase of 40 basis points year-over-year [3] Dividend and Capital Allocation - The board of directors declared a quarterly cash dividend of 75.5 cents per share, reflecting an increase of over 7% from the prior payout [2] - The company has deployed more than $750 million into accretive investments this year, enhancing organic growth [2] Portfolio Activity - In Q3 2025, Regency Centers acquired a portfolio of five shopping centers for $357 million and disposed of five assets for approximately $32 million [6][7] - The company also acquired its partner's interests in several properties, increasing its ownership to 100% in those assets [7] Balance Sheet and Outlook - As of September 30, 2025, Regency Centers had nearly $1.5 billion of capacity under its revolving credit facility, with a pro-rata net debt and preferred stock to trailing 12 months operating EBITDAre ratio of 5.3X [10] - The company raised its 2025 NAREIT FFO per share guidance to a range of $4.62-$4.64, compared to the previous guidance of $4.59-$4.63 [11]

Financial Data and Key Metrics Changes - The company reported strong same-property NOI growth of nearly 5%, driven primarily by base rent growth of 4.7% [10] - Full-year earnings growth outlook has been raised, with anticipated same-property NOI growth of 5.25%-5.5% and mid-7% growth for NAREIT FFO [17][20] - The company has increased its dividend by more than 7% this quarter, reflecting strong performance [8][17] Business Line Data and Key Metrics Changes - The same-property percent lease rate stands at 96.4%, with expectations to exceed prior peak levels due to strong demand and limited new supply [10] - Cash-free leasing spreads were strong at 13% in Q3, while gap rent spreads reached near record high levels at 23% [12] - The company signed three new grocer leases in Q3, enhancing foot traffic and merchandising at key assets [11] Market Data and Key Metrics Changes - The company has a robust leasing pipeline, with 1 million sq ft of leases in negotiation, indicating continued strong leasing activity [12][68] - The tenant base remains healthy, with historically low bad debt levels and strong sales performance [7][10] Company Strategy and Development Direction - The company emphasizes ground-up development as a key differentiator, being the only national developer of grocery-anchored shopping centers at scale [8] - The development pipeline is expected to reach approximately $300 million in starts for 2025, with a total of $800 million over the past three years [14][15] - The company is focused on maintaining a strong balance sheet and generating significant free cash flow to fund external growth [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the competitive advantages that position the company well for sustainable cash flow growth [9] - The outlook for 2026 anticipates same-property NOI growth in the mid-3% area, with continued contributions from development projects [19][30] - Management highlighted the importance of tenant health and strong demand in the retail environment, which supports future growth [10][20] Other Important Information - The company has successfully integrated acquisitions, including a five-property portfolio valued at $350 million [15][16] - The balance sheet remains strong, with leverage within the target range of 5x-5.5x and nearly full availability on a $1.5 billion credit facility [18] Q&A Session Summary Question: Can you provide some color on the 11 asset distribution transaction with your JV partner? - Management indicated that the transaction allowed for better capital recycling and alignment of interests with their long-term partner [22] Question: What's changing from the environment that you're seeing for 2026? - Management expects credit loss provisions to remain similar to 2025, with a healthy tenant roster contributing to stable growth [26][28] Question: How should we think about the potential on development and redevelopment starts into next year? - Management expressed confidence in finding investment opportunities, with a shift towards ground-up development [34][36] Question: Can you provide more color on the mix of new leasing being done on the anchor side versus shops? - Management noted that the increase in anchor transactions was coincidental and not development-driven [40] Question: What are you seeing in the market regarding cap rates or IRRs? - Management indicated that cap rates are trending lower due to increased capital flow into the sector, with a focus on maintaining quality investments [44][46] Question: Can you give a sense of where you're underwriting rents for anchor and small shop versus current market rents? - Management emphasized the importance of relationships with grocers and the expertise in underwriting to ensure successful developments [76][78]

Financial Data and Key Metrics Changes - The company reported strong same-property NOI growth of nearly 5%, primarily driven by a 4.7% increase in base rent [10][17] - Full-year earnings growth outlook has been raised, with anticipated same-property NOI growth of 5.25% to 5.5% and mid-7% growth for NAREIT FFO [17][20] - The dividend has been increased by more than 7%, reflecting strong performance and commitment to shareholder returns [8][17] Business Line Data and Key Metrics Changes - The same-property percent lease rate stands at 96.4%, with expectations to exceed prior peak levels due to strong demand and limited new supply [10][11] - Cash-free leasing spreads were strong at 13%, while gap rent spreads reached near record high levels at 23%, indicating effective rent growth strategies [12][52] Market Data and Key Metrics Changes - The company has successfully signed three new grocer leases in Q3, enhancing foot traffic and merchandising at key assets [11] - The leasing pipeline includes approximately 1 million square feet of leases in negotiation, indicating continued strong leasing activity [12][68] Company Strategy and Development Direction - The company emphasizes ground-up development as a key differentiator, being the only national developer of grocery-anchored shopping centers at scale [8][15] - The development pipeline is robust, with over $170 million in new projects started in Q3, bringing the year-to-date total to more than $220 million [14][15] - The company is focused on maintaining a strong balance sheet and generating significant free cash flow to fund external growth [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the health of the tenant base and the favorable retail environment, which supports continued above-trend same-property NOI growth [13][20] - The company anticipates a mid-3% same-property NOI growth for 2026, with expectations of similar credit loss conditions as in 2025 [19][30] Other Important Information - The company has integrated a recently acquired portfolio and is actively working to source attractive acquisition opportunities [16][45] - The balance sheet remains strong, with leverage within the target range and nearly full availability on a $1.5 billion credit facility [18][20] Q&A Session Summary Question: Can you provide some color on the 11 asset distribution transaction with your JV partner? - Management highlighted the long-term partnership with GRI and the strategic alignment of the portfolio, allowing for a mini DIK transaction to enhance ownership of high-performing assets [22] Question: What's changing from the environment that you're seeing for 2026? - Management expects credit loss provisions to remain similar to 2025, with a focus on base rent growth contributing to the mid-3% same-property NOI growth forecast [26][30] Question: How should we think about the potential on development and redevelopment starts into next year? - Management indicated confidence in finding investment opportunities, with a shift towards ground-up development as the success of the development program continues [34][36] Question: Can you provide more color on the mix of new leasing being done on the anchor side versus shops? - Management noted that the increase in anchor transactions was coincidental for the quarter and not development-driven, with a focus on maintaining strong cash rent spreads [39][40] Question: What are you seeing in the market regarding cap rates or IRRs? - Management observed a competitive market with cap rates trending lower, indicating strong demand for quality assets [44][46] Question: Can you give a sense of where you're underwriting rents for anchor and small shop versus current market rents? - Management emphasized the importance of relationships with grocers and the expertise in underwriting to ensure successful development projects [76][78]

Financial Data and Key Metrics Changes - The company reported strong same-property NOI growth of nearly 5%, primarily driven by a 4.7% increase in base rent [7][14] - Full-year earnings growth outlook has been raised, with anticipated same-property NOI growth of 5.25% to 5.5% and mid-7% growth for NAREIT FFO [13][14] - The dividend has been increased by more than 7%, reflecting strong performance and commitment to shareholder returns [5][14] Business Line Data and Key Metrics Changes - The same-property percent lease rate is at 96.4%, with expectations to exceed prior peak levels due to strong demand and limited new supply [7][8] - Cash-free leasing spreads were strong at 13%, while gap rent spreads reached near record high levels at 23% [9][44] - The company has signed three new grocer leases in Q3, enhancing foot traffic and merchandising at key assets [8][9] Market Data and Key Metrics Changes - The company is experiencing significant demand across nearly all retailer categories, with a healthy tenant base and historically low bad debt [4][7] - The leasing pipeline remains robust, with 1 million square feet of leases in negotiation, indicating continued strong leasing activity [9][60] Company Strategy and Development Direction - The company emphasizes its unique position as the only national developer of grocery-anchored shopping centers at scale, focusing on high-quality developments [5][11] - The development pipeline is expected to reach approximately $300 million in starts for 2025, with a total of $800 million over the past three years [11][15] - The company aims to leverage its strong balance sheet and competitive advantages to drive sustainable cash flow growth [6][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operating environment, citing strong retailer demand and favorable leasing fundamentals [10][15] - The company anticipates continued above-trend same-property NOI growth in 2026, with expectations for total NOI growth in the mid-6% area [14][15] - Management highlighted the health of the tenant base and the positive impact of capital allocation strategies on earnings growth [4][13] Other Important Information - The company has successfully integrated newly acquired properties and is actively working to source attractive investment opportunities [12][13] - The balance sheet remains strong, with leverage within the target range and significant free cash flow available for funding growth [14][15] Q&A Session Summary Question: Can you provide some color on the 11 asset distribution transaction with your JV partner? - Management indicated that the transaction allowed for better capital recycling and alignment of interests with their long-term partner [18][19] Question: What are your expectations for same-property NOI growth in 2026? - Management expects a mid-3% growth, driven by base rent and a healthy tenant roster, with credit loss provisions similar to 2025 [21][24] Question: How should we think about the potential on development and redevelopment starts into next year? - Management expressed confidence in finding investment opportunities, with a shift towards ground-up development expected to continue [26][29] Question: Can you provide more color on the mix of new leases between anchors and shops? - Management noted that the increase in anchor transactions was coincidental for the quarter and not development-driven [32][33] Question: What are you seeing in the market regarding cap rates and IRRs? - Management reported that cap rates are trending lower due to increased capital flow into the sector, with a focus on maintaining quality in acquisitions [36][39] Question: Can you elaborate on your leasing pipeline and expectations for rent spreads? - Management highlighted strong rent spreads and the importance of embedded rent steps in their leasing strategy [43][44] Question: What is prompting early discussion about 2026 expectations? - Management clarified that providing early guidance has been a practice to ensure transparency, especially following the COVID period [80][81] Question: How does retailer sentiment today compare to previous high occupancy periods? - Management indicated that current retailer sentiment is strong, with a healthy tenant base contributing to high occupancy levels [88]

Financial Performance & Guidance - The company forecasts mid-7% year-over-year growth in Nareit FFO per share at the midpoint of guidance[34] - Same property NOI growth is guided at +5.25% to +5.5%, increased from a prior range of +4.5% to +5.0%[30, 34] - Non-cash revenues are guided at +/- $49 million[30] - The company expects a weighted average diluted share count of approximately 184.5 million for the calculation of Nareit FFO in 2025[35] Portfolio & Operations - Over 85% of the portfolio is grocery-anchored neighborhood and community centers[24] - The company has more than $668 million of development and redevelopment projects in process[24] - The signed-not-occupied (SNO) pipeline represents ~$36 million of base rent, reflecting a 200bps leased-to-occupied spread[36, 41, 43] - Of the $36 million ABR in the SNO pipeline, 32% is expected to rent commence by year-end 2025, and 99% by year-end 2026[45] Capital Structure & Investments - Net Debt & Preferred Stock to Trailing 12-Month EBITDAre is 5.3x[24] - The company has ~$1.5 billion revolver availability as of 9/30/2025[24] - Total capitalization is $19.3 billion, with equity representing 70%[62] - The company commenced a new ground-up development project in Jacksonville, FL, with total project costs of ~$112 million and a stabilized yield of ~8%[52, 56]

Core Insights - Regency Centers (NASDAQ: REG) has underperformed in the equity market over the past year, missing out on significant market rallies [1] - The company recently reported strong financial results, raised its guidance, and increased its dividend, which may enhance investor confidence [1] Financial Performance - Regency Centers reported solid results, indicating a positive turnaround in its financial performance [1] - The company has raised its guidance, suggesting an optimistic outlook for future earnings [1] - An increase in the dividend may attract more investors and improve the stock's appeal [1]