Regency Centers (NASDAQ:REG) reported first-quarter financial results on Thursday. The transcript from the company’s first-quarter earnings call has been provided below.
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Summary
Regency Centers reported strong financial performance with a 4.4% growth in same property NOI and robust operating fundamentals, driven by high-quality trade areas and essential retail anchoring.
The company highlighted its strategic focus on ground-up development as a key differentiator, with $42 million in completed projects and over $600 million in the in-process pipeline, yielding returns above 9%.
Regency Centers maintains a strong balance sheet with low leverage and high liquidity, having issued $450 million of notes at a favorable rate, supporting its strategic growth initiatives without needing to raise equity.
Management remains optimistic about future growth with expectations for continued NOI growth and a robust investment pipeline, projecting over $1 billion in development starts over the next three years.
The company expects to maintain its full-year guidance for same property NOI growth and core operating earnings, driven by strong leasing activity and favorable market conditions.
Full Transcript
OPERATOR
Greetings and welcome to the Regency Centers Corporation First Quarter 2026 Earnings Call. this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press Star0 on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Christy McElroy. Please go ahead.
Christy McElroy (Moderator)
Good morning and welcome to Regency Centers first quarter 2026 earnings conference call. Joining me today are Lisa Palmer, President and Chief Executive Officer Mike Moss, Chief Financial Officer Alan Roth, East Region President and Chief Operating Officer and Nick Wibbenmeier, West Region President and Chief Investment Officer. As a reminder, today’s discussion may contain forward looking statements about the company’s views of future business and financial performance including forward earnings guidance and future market conditions. These are based on the current beliefs and expectations of management and are subject to various risks and uncertainties. It is possible that actual results may differ materially from those suggested by these forward looking statements. We may make Factors that could cause actual results to differ materially from these statements may be included in our presentation today and are described in more detail in our filings with the SEC. Specifically in our most recent Form 10K and 10Q filings. In our discussion today we will also reference certain non GAAP financial measures. The comparable GAAP financial measures are included in this quarter’s earnings materials which include which are posted on our investor relations website. Please note that we have also posted a presentation on our website with additional information including disclosures related to forward earnings guidance. Our caution on forward looking statements also applies to these presentation materials. As a reminder, given the number of participants we have on the call today, we respectfully ask that you limit your questions to 1. Please rejoin the queue if you have additional follow up questions.
Lisa Palmer (President and Chief Executive Officer)
Lisa thank you Christy Good morning everyone and thank you for joining us. We are off to an outstanding start to the year. Building on the positive momentum from last year. In the first quarter we delivered strong same property NOI and earnings growth driven by robust operating fundamentals and effective capital allocation. Our results demonstrate the durability of our portfolio, the strength of our platform and the execution of our team. Our tenants are performing well in our centers supported by the resiliency and spending power of consumers in our strong suburban trade areas as well as our focus on essential retail anchored by top performing grocers. It is this combination of high quality trade areas and our concentration of necessity based value oriented and convenience retail that positions our portfolio to perform consistently even in uncertain macroeconomic environments. We also continue to see significant momentum across our investments platform. Our track record of success in ground up development is one of Regency’s greatest differentiators and is a key driver of our external growth strategy. In an environment with very little new retail supply, our ability to source, execute and deliver high quality developments across the country really sets Regency apart. Our project deliveries will translate into meaningful NOI contribution in 2026 and beyond, boosting total NOI growth and driving earnings and nav accretion as we look ahead. I’m really energized by our strong start to the year and by the opportunities in front of us. I want to reiterate just how distinct Regency’s growth story is. Our portfolio of high quality grocery anchored neighborhood and community centers located in some of the strongest trade areas in the country has consistently delivered durable cash flows across economic cycles. Our leading national development platform is creating meaningful value for shareholders at a time when few others can compete with our expertise, relationships and proven results. Our strong balance sheet gives us flexibility and the capacity to be opportunistic with low cost and substantial access to capital. And most importantly, we have the best team in the business. With this foundation, Regency is exceptionally well positioned to continue delivering strong and sustainable growth for our shareholders.
Alan Roth (East Region President and Chief Operating Officer)
Alan thank you Lisa and good morning everyone. We delivered another excellent quarter to start the year following what was a record breaking year for us in 2020. The fundamentals across our portfolio remain strong and I couldn’t be more proud of our team’s execution. Tenant demand continues to be robust across nearly all categories and regions spanning both anchor and shop space. Grocers, restaurants, health and wellness concepts and off price retailers are among the most active, but the breadth of engagement across our portfolio is really impressive. The availability of high quality space is increasingly scarce both at our centers and in our trade areas and that dynamic is working in our favor. Our same property percent leased, which is approaching 97%, was up 10 basis points over the fourth quarter. A sequential uptick in Q1 is seasonally unusual and it really speaks to the strength of the demand we’re experiencing and to the durability of our occupancy. Leased occupancy is now close to our prior peak, though I am confident further upside is achievable, particularly in anchor leasing where we continue to have meaningful engagement with leading national retailers. What is especially encouraging is the nature of our activity today. We continue having success proactively leasing occupied space, upgrading merchandising, bringing in new and vibrant concepts and replacing outdated or underperforming uses. Our same property commenced rate also increased 20 basis points in the quarter as we made meaningful progress commencing tenants within our S and O pipeline. The pipeline continues to be a significant tailwind to future NOI growth representing approximately $42 million of incremental base rent. We achieved robust cash re leasing spreads in the first quarter and gap spreads were near a record high. These results reflect our ability to achieve compelling mark to market rent increases in addition to embedding meaningful contractual rent steps into our leases. That success is the basis for our ability to drive strong sustainable rent growth within our portfolio over the long term. Same property NOI growth of 4.4% in the first quarter was reflective of these strong operating trends along with the substantial progress we’ve made raising occupancy and completing redevelopment projects. In closing, the trends we are seeing in leasing activity, tenant sales, collections and foot traffic remain very favorable. We are positioned for success and continued growth ahead and I’m excited about what our team will accomplish with that. I’ll hand it over to Nick thank
Nick Wibbenmeier (West Region President and Chief Investment Officer)
you Alan and good morning everyone. We continue to have significant momentum within our investments platform evident in an active first quarter of accretive investment activity. Our team is successfully executing on and delivering projects within our in process pipeline and we continue to source attractive new ground up projects. During the first quarter we completed $42 million of projects including Oakley Shops at Laurel Fields, a Safeway anchored neighborhood center we developed ground up in the Bay Area. Our team did an exceptional job bringing this project to fruition in less than 18 months, one of the quickest ground up deliveries that I can recall. We also started another $73 million of new projects this quarter including Crystal Brook Corner, a redevelopment on Long Island. We acquired this underutilized piece of real estate and are transforming it into a Whole Foods anchored neighborhood center. This project demonstrates our ability to look at acquisition opportunities through a differentiated lens, leveraging Regency’s platform, our relationships and our development expertise to drive near term value creation. Our in process pipeline now exceeds $600 million with exceptional leasing momentum and blended returns above 9%. The team has been executing these projects on time and on budget, which I want to emphasize is a direct result of the substantial risk mitigation we undertake before we break ground within our ground up development platform. We we continue to see remarkable results. An example includes Ellis Village in Northern California which we started in the second half of 2025. The project is already 100% leased with an anticipated anchor opening later this year. Our Sunbed and Stonebridge Ground UP projects in the Northeast. Each celebrated Whole Foods openings during the first quarter, both with strong community reception. As Lisa discussed, ground up development remains a substantial differentiator for Regency and our brand as a developer has never been stronger. We are the only national developer of high quality grocery anchored shopping centers at scale in an environment of otherwise limited new supply. Our teams are actively sourcing new projects and we continue to have visibility to a potential of more than $1 billion of project starts over the next three years. Leading grocers across the country remain engaged in a year to expand with us and shop tenants are excited to be part of our projects. Landowners trust us to deliver given our proven track record and the strength of our grocer relationships, particularly among master plan developers where our retail projects are providing a significant amenity and value to their communities. This positive momentum continues to enhance our success, strategically positioning us to capitalize on additional opportunities. We are creating real value for shareholders at meaningful spreads to market cap rates and we are excited about the opportunities for continued growth in our investments platform.
Mike Moss (Chief Financial Officer)
Mike thank you Nick Good morning everyone. Regency delivered another strong quarter to start the year, a testament to our team’s continued execution on our strategy and the favorable conditions of our markets. Same property NOI growth was 4.4% in the first quarter including 3.5% of base rent growth. Recall last quarter we discussed that Q1 would be above and that Q2 would fall below our full year guidance range with this quarter driven by the uneven nature of other income and next quarter driven by tough comp relative to last year’s favorable expense reconciliation performance. Most importantly, base rent continues to grow at very healthy levels, benefiting from increasing rents, commencing our SNO pipeline and delivering on our accretive redevelopment projects. Looking through the variables in first and second quarters, we are maintaining guidance for full year same property NOI growth of 3.25 to 3.75% as well as for growth in core operating earnings and NAREIT FFO per share each at 4.5%. At the midpoint we continue to expect total NOI growth north of 6% reflecting meaningful contributions from ground up development deliveries and the substantial acquisitions we completed last year. We did make a few minor assumption changes within our outlook. We modestly increased development and redevelopment spend as a result of increased starts expectations as well as our acquisitions guidance to now include known transactions. These changes reflect continued strong investment activity and support positive momentum in external growth and value creation. The strength of …
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