The paragraph introduces the participants of the Regency Center Corporation's Second Quarter 2024 Earnings Conference Call, including the company's executives and representatives from various financial institutions. It also mentions the possibility of forward-looking statements being made during the call, which are subject to risks and uncertainties.

The paragraph discusses the factors and risks that could affect the company's actual results, including information from their recent SEC filings and the use of non-GAAP financial measures. It also mentions the company's strong operating performance and prudent capital allocation, despite the uncertain macroeconomic environment. The company's focus on high-quality tenants and strong leasing demand is driving rent growth and a record shop lease rate. This will continue into 2025 with a sizable pipeline of new leases. The company asks for participants to limit their questions to allow everyone a chance to ask.

Regency's success in leasing is due to their strong grocery-anchored centers and desirable suburban locations. Their value creation pipeline and ability to self-fund projects has been a key factor in their success. They continue to acquire new shopping centers and have a strong balance sheet and liquidity position. They also prioritize corporate responsibility and recently published their annual report highlighting their achievements and future goals.

Regency's best-in-class program has been recognized by third parties and has helped the company achieve important accomplishments. As the year progresses, the company is raising its full year guidance range due to strong leasing activity and results. The company's strategic competitive advantages, such as high-quality assets and a strong operating platform, position it well for continued success. In the second quarter, the company strategically allocated capital and is seeing robust demand from a variety of tenants in different categories.

The company's success is evident in their leasing pipeline, higher rents and occupancy rates, and expense recovery rate. They have a strong pipeline of retailers and are negotiating leases for 1.3 million square feet. They were able to drive strong rent spreads and achieved a record high in new lease transactions. Same-property NOI grew by 3.3% in the second quarter, and the company has 11 owned locations on the list of stores that Kroger and Albertsons plan to divest if a merger occurs.

The company remains confident in their real estate portfolio and is seeing increased demand for retail space. They have started new redevelopment projects and a ground-up development in Houston, and are working with master plan developers to create high-quality retail centers near residential communities. The company also has a strong in-process pipeline totaling $580 million.

The company's leasing activity is strong with a high occupancy rate and good returns. They have seen an increase in transaction activity and have recently purchased a shopping center and have another one under contract. While it is challenging to find high-quality investment opportunities, the company is actively sourcing them and believes their ability to create value sets them apart. They have a goal of starting over $1 billion in development and redevelopment projects in the next five years.

In the second quarter, the company reported strong financial results, including NAREIT FFO of $1.06 per share and core operating earnings of $1.02 per share. They also executed a share repurchase program, taking advantage of the difference between public and private market pricing. The company remains within their target leverage range and has the flexibility to continue investing in new opportunities. They have increased their core operating earnings guidance for the year.

The company has increased its same-property NOI growth range by 25 basis points, largely due to accelerated contributions from ground-up developments and capital allocation activity. They have also increased their NAREIT FFO range by $0.05 per share and expect further growth from leasing and redevelopment progress. The SNO pipeline is expected to bring in $49 million of annual base rent, with 65% of that scheduled to commence by the end of the year. The company also expects an outsized benefit to same-property NOI growth in 2025 from completed redevelopment projects.

In the paragraph, the speaker discusses the company's capital allocation priorities and recent actions, including buying and selling properties, repurchasing stock, and starting ground-up development. They mention their strong balance sheet and liquidity position and their goal to create value for shareholders. The speaker also addresses a question about the cap rates for acquisitions and the company's decision to buy back shares.

The company remains consistent in their belief that the best use of their capital is for development and redevelopment programs. They were able to execute a share repurchase program at an implied cap rate of 7%, due to the disconnect between public and private market pricing. They have also been active in the acquisition market, but are seeing assets at higher cap rates than they would prefer. The bidding pools for properties on the market are deeper than they were a quarter ago.

The company is being disciplined in their approach to acquisitions, only choosing opportunities that will positively impact their quality and growth. They have seen some opportunities in the market with lower cap rates, but they have stayed focused on driving accretion. The company has also refreshed their repurchase program at $250 million. There has been a slight decrease in small shop occupancy, but there is no concern over the underlying fundamentals.

The company is pleased with the health of its national and local mom-and-pop stores, with foot traffic and sales remaining strong and retention rates above historical trends. The teams have a rigorous process for ensuring occupancy durability. They are comfortable with their portfolio and are able to re-lease space at higher rents and with better merchandising. They are also monitoring the capital markets for potential new decisions to cover their $300 million drawn on their $1.5 billion revolver.

The company has a preference for long-term fixed-rate public unsecured financing and will closely monitor market trends. There has been a recent rally in base treasury rates, causing some credit spread weakness. The company remains well-positioned for development opportunities, despite potential competition from others who may have access to construction financing. The company's success in this area is due to strong relationships and expertise in finding and executing opportunities.

The company is confident in their ability to secure a large portion of upcoming opportunities in the market. Their shadow pipeline is growing and they have a strong outlook for growth in the strip sector. The team is excited about the potential for continued occupancy growth and has a significant amount of opportunities in their pipeline for the next few years.

The speaker discusses the company's strong portfolio, leasing team, and demand, and expresses confidence in their ability to replicate their success in the near future. They also mention their low tenant watch list exposure and the rigorous process they go through in evaluating tenant credit pre-signing. They attribute their success to being deliberate and thoughtful in their approach to leasing and creating value for shareholders.

The speaker discusses how the company creates long-term value through its leasing program and merchandise strategy. They also address questions about elevated CapEx and TI for new leases and assure that they are prudently managing capital. The company is expected to have strong growth in 2025, with factors such as a pipeline of 5% upside, contractual rent step-ups, and lease spreads contributing to this. However, not all tenants renew and there may be some known tenant move-outs in the future.

Mike Mas, Ki Bin, and Ron Kamdem are discussing the growth of their company and the potential for acquisitions in the open shopping center space. They are optimistic about the future and expect to see growth attributed to their redevelopment pipeline. However, they also acknowledge potential headwinds such as move-outs and bankruptcies. They are currently focused on their plan for the next year and anticipate positive momentum. Ron Kamdem asks about the presence of institutional capital in the space, but no specific comments are made on this topic.

Ron asks two questions about the occupancy gain in the peak commence slides. Lisa Palmer responds by saying that Nick has already addressed the first question about the bidding pools being deeper. Nick adds that they are seeing a lot of institutional capital pursuing assets. Mike Mas directs Ron to Page 8 of the investor presentation for more details on the composition of their existing SNO pipeline, which is 60% shops and 40% anchors. He also mentions that only 15% of the income will be recognized in 2024, with the majority being recognized in 2025. He adds that they have room to run on the anchor front and Alan Roth may have more information about that.

The speaker responds to a question about the potential impact of recent market trends on shopping center cap rates. They mention their current occupancy rate and the potential for growth in the future, particularly with the addition of new grocery stores. They also mention their conviction in the value of their assets and their belief that cap rates will not rise in the future based on their recent share repurchase.

The speaker discusses the potential for cap rates to go down due to lower financing costs and the stability of cash flows in grocery-anchored shopping centers. They also mention the positive contribution from redevelopments in 2025 being twice the average due to the completion of projects and not necessarily higher rental rates. They then address the high occupancy rate and the potential for it to continue into 2025.

The speaker addresses a question about the potential growth of a new pipeline and the company's leasing strategy over the next 12 months. They refer to a graph on Page 7 and explain that a 100 basis point increase in commenced occupancy can contribute to a 15 basis point growth in same property growth. They also mention the potential for 150 basis points of growth due to redevelopment, but timing is important. The next question asks about competition in the Northeast region and the speaker clarifies that the question is about transaction activity. They mention increased activity in the region and provide some insight into potential factors driving this increase.

The acquisition of UBP has increased Regency's presence in the Northeast market and they are seeing a lot of activity across the country. They have recently put a lot of capital to work in the Northeast, but they are also seeing opportunities in other regions. The company feels good about the opportunities they are seeing nationwide.

This summary was generated with AI and may contain some inaccuracies.