Regency Centers Q1 2025 Earnings Report

Regency Centers EPS Results

• Actual EPS: $1.15
• Consensus EPS: $1.14
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $1.08

Regency Centers Revenue Results

• Actual Revenue: $370.35 million
• Expected Revenue: $364.64 million
• Beat/Miss: Beat by +$5.71 million
• YoY Revenue Growth: N/A

Regency Centers Announcement Details

• Quarter: Q1 2025
• Date: 4/29/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, April 30, 2025
• Conference Call Time: 11:00AM ET

Regency Centers (NASDAQ:REG) is a preeminent national owner, operator, and developer of shopping centers located in suburban trade areas with compelling demographics. 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.

Regency Centers Q1 2025 Earnings Call Transcript

Key Takeaways

• Regency delivered 4.3% same property NOI growth in Q1, fueled by base rent increases, a 10 bps rise in leased occupancy, 8% cash rent spreads and nearly 19% GAAP rent spreads.
• The company’s S&OP pipeline totals $46 million of incremental annualized base rent with 80% of commencements slated for 2025, and April foot traffic rose 7%, showing no material shift in tenant or consumer behavior.
• Key investment activity included the acquisition of Brentwood Place in Nashville and a grocery-anchored deal in the Northeast JV, alongside $500 million of in-process developments yielding >9% returns and a plan for $250 million of annual project starts.
• Management reaffirmed 2025 guidance—targeting ~6% NAREIT FFO growth, 3.6% same property NOI growth and a 75–100 bps credit loss range—with a modest Q2 NOI uptick due to percentage rent timing.
• With an A− credit rating from S&P, leverage at 5–5.5× and ample liquidity, Regency emphasizes its grocery-anchored, essential-service centers as resilient assets poised to outperform through cycles.

Presentation

[Christy McElroy, SVP, Capital Markets at Regency Centers]

morning, and welcome to Regency Center's first quarter twenty twenty five 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 Wibenmeyer, 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, include forward earnings guidance and future market conditions. These are based on management's current beliefs and expectations and are subject to various risks and uncertainties. It's possible that actual results may differ materially from those suggested by these forward looking statements we may make.

[Christy McElroy, SVP, Capital Markets at Regency Centers]

Factors and risks 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 10 ks and 10 Q 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 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.

[Christy McElroy, SVP, Capital Markets at Regency Centers]

As a reminder, given the number of participants we have on the call today, we respectfully ask that you limit your questions to one and then rejoin the queue with any additional follow-up questions. Lisa?

[Lisa Palmer, President & CEO at Regency Centers]

Thank you, Christine. Good morning, everyone. We are pleased with another quarter of outstanding results, highlighted by strong same property NOI growth and earnings growth. Our results are reflective of continued robust operating fundamentals within our trade areas and at our shopping centers, amplified by the commencement of leases within our S and O pipeline and accretion from investments, including our ground up development, redevelopment and acquisitions. Positive trends and activity continued into April and the conversations that we've had with our tenants over the last few weeks have indicated no impact on sales or shifts in consumer behavior.

[Lisa Palmer, President & CEO at Regency Centers]

Within our portfolio, we've seen growth in foot traffic accelerate in April from Q1 levels. And for the remainder of the year, our lease commencement plans are largely committed, supported by a strong pipeline of leases already executed and awaiting rent commencement, and our lease negotiation pipeline remains full. Our tenants are healthy and continue to look long term. Planning for space needs years ahead of time amid a scarcity of high quality available space. In addition, external growth remains visible, largely driven by in process development and redevelopment projects coming online.

[Lisa Palmer, President & CEO at Regency Centers]

Additional acquisitions in 2025 would be opportunistic and additive to our plan. As we look longer term, I'll highlight as I often do, the competitive advantages that make Regency unique across the REIT sector peers and why we believe we are positioned to outperform across cycles. Our grocery anchored neighborhood and community centers serve the essential non discretionary needs of our shoppers within a format that caters to service, convenience and value. The trade areas in which we operate are supported by strong demographics with above average income and employment, while the retailers within our centers are predominantly in the top tiers of performance across their chains. As a result, our tenant base is on the whole more insulated from the impacts of potential inflation and volatility in the macro backdrop.

[Lisa Palmer, President & CEO at Regency Centers]

We are also in a great position to continue growing opportunistically, supported by our substantial liquidity and access to low cost capital. In closing, we acknowledge the elevated volatility and macro uncertainty in the economy today. But importantly, we continue to feel really good about how Regency is positioned as we are built to thrive across changing economic cycles. We hold our long term playbook and strategic objectives firm, maintaining our focus on driving growth, and we remain confident in our competitive edge with the unique combination of our strategic advantages. Alan?

[Alan Roth, COO & President of East Region at Regency Centers]

Thank you, Lisa, and good morning, everyone. Our first quarter results were again marked by solid leasing activity and continued success growing NOI and particularly base rent. We made significant progress delivering on as well as further building our leasing pipelines with strong demand from various tenant categories, including grocers, restaurants, health and wellness and off price retailers. Activity in the quarter was led by continued strength in shop leasing, where we were able to drive another 10 basis points of growth in leased occupancy on top of our 60 basis point increase last year. Notably, our same property metrics now include the former Erstat Biddle properties, which entered the pool this year.

[Alan Roth, COO & President of East Region at Regency Centers]

We also made meaningful progress commencing new leases representing approximately $10,000,000 of ABR, while driving the same property percent commenced rate up another 20 basis points in the quarter. While we've been actively rent commencing pre leased space, the value of our SNO pipeline is up to $46,000,000 of incremental base rent, as we continue to replenish the pipeline with newly signed leases, providing further support for future commenced occupancy. Cash rent spreads were 8% in Q1, while GAAP rent spreads were nearly 19%, positively impacted by achieving higher average embedded rent steps executed leases, given a greater mix of shop space in the quarter. I am proud of our team delivering these exceptional operating results reflected in same property NOI growth of 4.3%, primarily driven by growth in base rent. As Lisa mentioned, we acknowledge the macro uncertainty, but as we've moved through April, our leasing activity, foot traffic and rent collection trends within our portfolio remain highly favorable.

[Alan Roth, COO & President of East Region at Regency Centers]

We are well positioned due to the quality and location of our assets, durability of occupancy within our neighborhood and community center format, manageable exposure to watch list retailers, and a strong tenant health profile, including top performing grocers. Nick?

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

Thank you, Alan, and good morning, everyone. We had another active quarter of accretive investment activity, including closing on a large high quality acquisition, continued successful execution of our in process development projects on time and on budget, and further progress sourcing new projects to drive growth in our future pipeline. During the quarter, we acquired Brentwood Place in Brentwood, Tennessee, 1 of the most desirable submarkets in Nashville. Brentwood Place is a 320,000 square foot community center with best in class retailers, including national anchors that perform well above their chain averages. Furthermore, the future mark to market leasing opportunities give us clear visibility to significant growth in coming years at this prominent center.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

Additionally, we have a high quality grocery anchored shopping center under contract within our joint venture platform located in the Northeast. We expect to close in the second quarter and look forward to sharing more details at a later time. Pivoting to development, I'm really proud of our team's execution on our $500,000,000 of in process development and redevelopment projects. Leasing activity remains strong, and we are managing costs in line with our underwriting. Roundup development remains a key component of our strategy and a unique differentiator for Regency, especially in an environment with limited new retail supply and capital constraints for other developers.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

We believe our development platform, combined with accretive redevelopments within our existing portfolio, continues to be the best use of our levered free cash flow with blended returns exceeding 9%. The vast majority of our projects involve partnering with leading grocers where we continue to see significant demand for space as they further expand their footprints and reach. Our team remains highly engaged sourcing and underwriting investment opportunities, and we continue to have confidence in maintaining an annual plan pace of $250,000,000 of project starts. Mike?

[Mike Mas, EVP & CFO at Regency Centers]

Good morning, everyone. Highing on the comments from Lisa, Alan and Nick, we are certainly gratified with our strong first quarter results, evidenced across our same property NOI, core operating earnings and NAREIT FFO metrics. This is a testament of our team's ability to drive both occupancy and rent growth within our portfolio, amplified by astute capital allocation, including execution within our value add development and redevelopment platform in addition to sourcing accretive acquisitions. We are reaffirming our 2025 earnings outlook, which implies growth in NAREIT FFO of nearly 6% and growth in same property NOI of 3.6%, each at the midpoint of our guidance ranges. This includes maintaining our credit loss guidance of 75 to 100 basis points, which combines the expected impact of both uncollectible lease income and loss revenues from bankruptcy related move outs.

[Mike Mas, EVP & CFO at Regency Centers]

One item to point out within same property NOI growth, we do expect a modestly elevated growth rate in the second quarter, driven primarily by the timing of percentage rent and other income. These items will not affect base rent growth, which we expect to remain fairly consistent quarter to quarter. As a reminder, core operating earnings accretion from our Q1 acquisition of Brentwood Place was previously included within guidance. This quarter and with the closing behind us, you'll see within the guidance slides of our earnings presentation that we made a few adjustments for non cash items related to the below market leases and below market debt associated with that acquisition, which were a wash for NAREIT FFO. These small tweaks comprise the only changes to our earnings outlook for 2025.

[Mike Mas, EVP & CFO at Regency Centers]

Moving to the balance sheet. In February, S and P upgraded Regency's credit rating to A minus. This follows our upgrade to an A3 rating by Moody's approximately one year ago. We now hold the only A credit ratings from either Moody's or from S and P in the shopping center REIT sector. We are extremely proud of this accomplishment and the validation from the agencies, reflecting the strength of our business and appreciation for our balance sheet strategy.

[Mike Mas, EVP & CFO at Regency Centers]

Our balance sheet strength and liquidity remain key advantages, with leverage well within our target range of five to 5.5 times, strong annual free cash flow generation and plentiful availability on our credit facility. From this position of strength, we will remain opportunistic, investing accretively and driving earnings growth and shareholder value over the long term and through economic cycles. With that, we look forward to your questions.

[Operator]

Thank you. At this time, we'll be conducting a question and answer session. You may press star two if you'd like to remove your question from the queue. As a reminder, we ask that you please limit to one question and then re queue. For participants using speaker equipment, it may be necessary to pick up your handset Our first question comes from Michael Goldsmith with UBS.

[Operator]

Please proceed with your question.

[Michael Goldsmith, US REITs Analyst at UBS Securities LLC]

Good morning. Thanks a lot for taking my question. The question is on the watch list and bad debt. Clearly the market is concerned about the impact of tariffs and the potential pressured consumers may follow-up from that. So as you're looking at your tenant base, have you made any changes to the watch list or has there been anything noticeable from your perspective in terms of accounts receivable or in the small shop?

[Michael Goldsmith, US REITs Analyst at UBS Securities LLC]

Are you expecting anything? With that, can you remind us of your Rite Aid exposure?

[Alan Roth, COO & President of East Region at Regency Centers]

Michael, good morning. This is Alan. That was a loaded lot of questions in there. So let me see if I can unpack these one

[Alan Roth, COO & President of East Region at Regency Centers]

at a

[Alan Roth, COO & President of East Region at Regency Centers]

time. So from the watch list perspective, we are constantly evaluating and updating that watch list, but from an exposure perspective, it stays consistent with where it's been in the past. So we feel really good about how we are proactively approaching our watch list tenant. From a Rite Aid exposure, we have 30 basis points of ABR that is out there. Again, the team's not just from a Rite Aid perspective, but the totality of the watch list standpoint, we are aggressively out in front of proactively what we call leasing occupied space where appropriate.

[Alan Roth, COO & President of East Region at Regency Centers]

And from an AR perspective, I would just tell you it remains below historic levels. And I think that addressed your questions, Michael.

[Michael Goldsmith, US REITs Analyst at UBS Securities LLC]

I only ask because I knew you can handle it. Thank you very much.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

I appreciate it.

[Lisa Palmer, President & CEO at Regency Centers]

Thanks, Michael.

[Operator]

Our next question comes from Sameer Hanal with Bank of America. Please proceed with your question.

[Samir Khanal, Director at Bank of America]

Thank you and good morning everybody. I guess Lisa just maybe expanding on your opening remarks there, maybe post sort of April to talk about kind of how leasing discussions have been going, how activity sort of has been trending. I mean even for your existing tenants, I mean, they're certainly going to I mean, if this tariff situation doesn't get resolved to a certain degree, the more this lingers, how are you sort of approaching these conversations given the higher costs that they'll have to incur? Thanks.

[Lisa Palmer, President & CEO at Regency Centers]

Appreciate the questions, Tahira. I'll start, but think it might be best to have Alan address the specific conversations with tenants. I will, again, just reiterate that, and you've said this in your question, the kind of reality, the scale, the impact from tariffs is so unknown right now and uncertain, and we acknowledge that. I'm speaking, many of you know Hap, I speak with Hap earlier this week and it's like, our eyes are wide open and do not want anyone to think that they're not, but I wanna remind you and just reiterate what I did say in my prepared remarks, and that is our sector, our product type, we really do cater to essential non discretionary service convenience value. That's the product that our centers offer to our shoppers and we not immune, we know we're not immune, but we are much more resistant as a result of that, and able to kind of absorb economic uncertainty and cycles.

[Lisa Palmer, President & CEO at Regency Centers]

Recession is what would impact us. It's when people lose their jobs and when there's a lack of, when they don't have income coming in when they really cut back on spending, but again, remind you of the trade areas in which we operate much more well positioned to absorb those pressures. So if you think historically, because I've been at the company for quite some time now, have lived through different cycles, there were really two major economic downturns that impacted us. I'll say they only impacted us by 200 to two fifty basis points of occupancy, and they were severe. That was the GFC and COVID.

[Lisa Palmer, President & CEO at Regency Centers]

I don't have a crystal ball. I have no idea where we're going. I'd be surprised if we have something that severe. So I feel really good about the strength and quality of our tenant base. As you just heard Alan say about ARs, they're healthy.

[Lisa Palmer, President & CEO at Regency Centers]

The quality of our tenants, they're able to navigate and get through challenges. And also again, emphasizing service, convenience, value, essential goods. So no, we're not immune, but I feel really good about how well positioned we are to perform through and even outperform and thrive in economic downturns.

[Alan Roth, COO & President of East Region at Regency Centers]

Sameer, I thought that was such a well articulated answer. I'm not going to add anything to that.

[Samir Khanal, Director at Bank of America]

No, thank you so much for that.

[Lisa Palmer, President & CEO at Regency Centers]

Thanks, Samir.

[Alan Roth, COO & President of East Region at Regency Centers]

Thanks,

[Operator]

Our next question comes from Craig Mailman with Citi. Please proceed with your question.

[Craig Mailman, Managing Director & Equity Research Analyst at Citigroup Global Markets Inc.]

Hey, good morning. Lisa, appreciate the comments that you just made and kind of in that vein with pretty decent conviction here that you guys are a little bit more immune, at least in the near term. You guys talked also about the balance sheet capacity and you've been opportunistic. You bought the Nashville asset. Just kind of how are you thinking about keeping powder dry until things maybe we get better visibility on what ultimately plays out from a tariff perspective versus looking at opportunity today and how much you would want to kind of put to work if you think that maybe this is less of an issue and there's some dislocation in the market and you can find some opportunities?

[Lisa Palmer, President & CEO at Regency Centers]

Appreciate the question. And I also appreciate the recognition of the strength of the balance sheet and strategically, it is not by accident that we're the only A rated company in the sector. We intentionally keep balance sheet capacity so that we can play offense again through all cycles, and so that we can take advantage of and capitalize on opportunities. Our best use of our free cash flow, and we've said this often, is development program today, and that's because it gives us the best return on our invested capital, and that will continue to be the case. So we will always evaluate opportunities as they're presented to us, and if it's compelling enough, which gets to your question about using it now versus saving it, we'll know if it's compelling, and if it's compelling, we'll act and we have the capacity to act.

[Lisa Palmer, President & CEO at Regency Centers]

Again, in my prepared remarks, made the comment about the playbook and our objectives remain firm and that's the case and we will continue to operate that way.

[Christy McElroy, SVP, Capital Markets at Regency Centers]

Thanks, Greg.

[Operator]

Our next question comes from Todd Thomas with KeyBanc Capital Markets. Please proceed with your question.

[Todd Thomas, Managing Director & Equity Research Analyst at KeyBanc Capital Markets]

Hi, good morning. I just wanted to dig in a little bit and follow-up on Sameer's question. Just curious, has there been any change at all in the timeline to get lease deals done, whether you're seeing any slowdown at all in the decision making process or whether there's any pushback at all on new lease deal conversations regarding rent escalators or move in rents given what might be a little bit more of an uncertain outlook for tenants trying to budget sales at a new location?

[Alan Roth, COO & President of East Region at Regency Centers]

Todd, good morning. Thank you for the question. So we always closely monitor lease activity, foot traffic, collections, pipeline, and quality of the pipeline. And simply put, as we look at April post quarter close, we're simply just not seeing any translation from this volatility in our April results. Activity was really solid in April.

[Alan Roth, COO & President of East Region at Regency Centers]

In fact, twenty twenty five new activity exceeded the April 24 new activity. Foot traffic for the first three weeks was up 7% year over year. As I mentioned in Michael's question, AR remains well below our historical averages and our pipeline still remains strong with quality operators. We're going to continue to stand tall, as Lisa said, with our eyes wide open and our antenna up, but April was another really good month for us and nothing has transitioned.

[Operator]

Our next question comes from Ronald Kamzin with Morgan Stanley. Please proceed with your question.

[Ronald Kamdem, Managing Director & Head of US REITs and CRE Research at Morgan Stanley]

Hey, just on the construction side, development side if you will, just any sort of quick early indications of how much construction costs are up and how are you guys thinking about sort of the evolution of yields that you're targeting sort of

[Ronald Kamdem, Managing Director & Head of US REITs and CRE Research at Morgan Stanley]

in this post tariff environment? Thanks so much.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

Ronald, appreciate the question. This is Nick and good morning. So yes, we're obviously very closely monitoring construction costs, as you all can appreciate, the last four or five years have been a challenging time to do that for a host of reasons. And so with the new volatility, our team's digging in as they always do, to really make sure that we understand every line item. And as you can see in our in process, the team continues to do an amazing job.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

We really do de risk these projects significantly before we even start construction. So our in process continue to perform really, really well. And then as we look forward to our projects that have not yet started construction, same thing, the team is digging in line item by line item, and yes, these proposed tariffs could impact some of those line items without a doubt. The good news is though, other line items we have seen some pullback in cost. Steel prices are down year over year, Crude prices are down year over year.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

And so, net net, we still feel really good that we can deliver the projects that are in our pipeline at a budget and a return that we think is appropriate. And to your question on return, you can see where we have our eyesight, as we've always articulated our development program, we want a spread above what we think those assets are worth post being built. And so we're looking at 150 basis point spread, and we continue to achieve that and then some. And so feel really good about in process and feel really comfortable with what we have planned to start as we move forward this year or next.

[Operator]

Thanks so much. Our next question comes from Juan Sanabria with BMO Capital Markets. Please proceed with your question.

[Juan Sanabria, Managing Director at BMO Capital Markets]

Hi, good morning. Just hoping you could talk a little bit about the transactions market, how higher tents have changed? Are there more or less players looking to acquire in the space and kind of where you see cap rates trending? Have you seen any diminution of foreign investors looking at The US? Thank you.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

Thank you for the question Juan. The reality is, we're in early innings from the volatility. Let me say that, and sometimes the transaction market's a little backwards looking. But every data point we're looking at, we continue to see cap rates in the 5% to 6% range for high quality grocery anchored assets, the type of assets we're pursuing. And in recent conversation, anecdotally, it does seem like there's been a little pullback in the public and international markets compared to the private market.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

And so it does appear deals that are on the market right now continue to have a lot of interest from private capital and are still pricing aggressively.

[Operator]

Next question comes from Michael Griffin Evercore ISI. Please proceed with your question.

[Michael Griffin, Director at Evercore]

Great, thanks. Maybe sticking in the acquisition vein, just wanted to get some more color and context on the Brentwood deal. It looks like a going in cap rate of call it the mid-5s, but it seems like there is some opportunity to realize mark to market as those leases roll. I'm curious, number one, how quickly do you think you can realize that mark to market within the center? And then what are you looking at on sort of a stabilized cap rate basis from that acquisition?

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

Appreciate the question, Michael. So a couple of things. One is we do feel really good about those mark to market opportunities. And so as you articulated, we're comfortable with the going in yield and how that project was financed, especially with the low market debt, but we're even more excited about the future growth potential of that asset. So, in that initial ten year hold, our eyesight is really at a high single digit IRR.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

And so we feel good about the ability to achieve that IRR. But then what's even more exciting about that asset is we have visibility beyond even that initial ten year hold of future material mark to market opportunities. And so that asset based on the quality of that market, the quality of the asset within that market and the quality of the income stream on a go forward basis, we're extremely excited to bring that one into the mix.

[Michael Griffin, Director at Evercore]

Great. Thanks so much.

[Lisa Palmer, President & CEO at Regency Centers]

Thank you.

[Operator]

Our next question comes from Greg McGinnis with Scotiabank. Please proceed with your question.

[Viktor Fediv, Senior Equity Research Associate at Scotiabank]

Hello. This is Victor Fetty on with Greg McGinnis. And let's stick with acquisitions. I'd like to kind of understand your forward looking thinking. So essentially, you've doubled your tenancy exposure with this acquisition and obviously great asset.

[Viktor Fediv, Senior Equity Research Associate at Scotiabank]

But what are your future plans? Are you planning to kind of expand in this market, your foot footprint or which markets are your areas of interest as of now?

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

Sure. Appreciate the question. As we've talked about before and as Lisa has alluded to a couple of times on just this call, the good news in our business plan is we don't have to meet our business objectives. And so let me state that first and foremost. But that being said, we are very, very focused on growing our exposure in high quality markets across the country.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

And so every one of our 22 plus offices is waking up every day trying to figure out what are the opportunities within that market to own a best in class retail that we feel like has appropriate growth profile. And so Nashville has been on that list for quite some time. It's a very tight market and so there's no doubt not a lot trades in that market. We continue to be focused on Nashville, but I'll tell you, are also focused on the other great markets we operate around the country. And so feel good that we'll win more than our fair share of these opportunities as they present themselves.

[Viktor Fediv, Senior Equity Research Associate at Scotiabank]

Thank you.

[Operator]

Our next question comes from Jamie Feldman with Wells Fargo. Please proceed with your question.

[Jamie Feldman, Managing Director, Head of REIT Research at Wells Fargo]

Great. Thank you for taking the question. I guess sticking with tariffs a little bit, I mean, have you are you able to provide any color from conversations with tenants or even your own math in terms of just tariffs as proposed, what they would do to cost of goods sold for your tenants, what it could mean for credit coverage, just anything you can kind of quantify from either work you've done or conversations you're having with tenants. And then along those lines, the president's going be in office for four more years, maybe more, but we'll see. Does it change at all your view on the types of tenants you want, types of categories you want in the portfolio or even where you want to own assets longer term?

[Lisa Palmer, President & CEO at Regency Centers]

I'll start and again, I'll have Alan add if he so desires. I'm just going go ahead and reiterate that holding our playbook firm, our strategy firm, and we really like it. It's why that we're in this business, the format that we own neighborhood community shopping centers, mostly grocery anchored, catering to essential needs, catering to service convenience and value. I do not expect that to change. We feel really good about it.

[Lisa Palmer, President & CEO at Regency Centers]

We feel really good about the sustainability of cash flows and the ability to sustain growth in those cash flows as a result of the offering that we have to both our customers, which are people we're leasing space to, and the customers of those merchants, the shoppers. Reiterate once again, foot traffic is up year over year, it was up in April over Q1. We feel really good about the positioning and the ability to perform through cycles, because there will always be cycles. And we have proven that we can and will perform.

[Alan Roth, COO & President of East Region at Regency Centers]

And Jamie, I would just add, as we think about categories, and again, we don't know, but apparel, luxury, hobby, home improvement, variety stores, largely discretionary type retailers. And that's a very small part of our portfolio and those that could be impacted. We certainly have the very well capitalized operators that are top in their sector and are time tested, really knowing how to operate through uncertain times. And so as we think about our approach to leasing, I would say it's not going to change. It has been and it will always be very intentional, very deliberate as we think about how to qualify operators based on their experience, based

[Lisa Palmer, President & CEO at Regency Centers]

on their balance sheet, and we're just not filling space to fill space. And I will remind you that the retail world is always changing and gonna have operators that cannot navigate challenges, changes in their environment and they'll fail. Really interesting, was telling some of the people that I work with that I went back and did a quick reread of Good to Great, and one of the companies that they highlight is Circuit City as a great company, and we all know what happened with Circuit City. So it's just an example of doesn't mean that we're gonna be perfect. It doesn't mean that we're gonna have a 100% batting average or a 1000% batting average, that there will always be failures in our business.

[Lisa Palmer, President & CEO at Regency Centers]

We plan for those, we expect those, but we also manage it really proactively. And as a result of that, the impacts in our portfolio tend to be pretty small and pretty immaterial and insignificant and we manage through it.

[Jamie Feldman, Managing Director, Head of REIT Research at Wells Fargo]

All right, thanks for your thoughts.

[Operator]

Our next question comes from Haendel St. Juste with Mizuho. Please proceed with your

[Ravi Vaidya, Vice President at Mizuho Financial Group]

This is Ravi Vaidy on the line for Haendel. Hope you guys are doing well. Just trying to do the math here on Page nine of the presentation. Looking at the timing of commencements and contributions to the snow pipeline, how should we think about rent recognition either being pulled forward or pushed back in the current environment? Thank you.

[Mike Mas, EVP & CFO at Regency Centers]

Hey, Robbie. That's a good question. So the slide that just to position everybody, we get some details on our S and O pipeline and the delivery of the same. So again, just a level set 80% of our S and O pipeline is set to commence in 2025. However, only about a third of that will be recognized as income this year.

[Mike Mas, EVP & CFO at Regency Centers]

And what that really says to us is that that positions us for continued positive momentum and tailwind going into '26, as we'll continue to deliver at the strong leasing efforts of the team. The variability on these line items from a commencement perspective is rather small. I mean, we tend to, on the vast majority of our leases, contractual rental rate increase dates commencement dates. So the tenant is obligated to commence rent as the earlier when they open or abate certain. So we know we have tremendous amount of visibility into that certainty of that income stream.

[Mike Mas, EVP & CFO at Regency Centers]

Our ability to pull that forward and accelerate that opening to commence rent is what this team is about and what this team has been doing a great job accelerating build outs to get that rent commencing sooner. So the risk would be in the difference between that ability and the contractual increase, which I would characterize as relatively small.

[Ravi Vaidya, Vice President at Mizuho Financial Group]

Got it. That's really helpful. Just one more here. In terms of your leasing pipeline, how

[Christy McElroy, SVP, Capital Markets at Regency Centers]

Limited to one question. If you could re queue, that would be great.

[Ravi Vaidya, Vice President at Mizuho Financial Group]

Okay, thank you.

[Christy McElroy, SVP, Capital Markets at Regency Centers]

Thank you.

[Operator]

Our next question comes from Ki Bin Kim with Truist Securities. Please proceed with your question.

[Ki Bin Kim, Managing Director at Truist Securities]

Thank you. So, just going back to your comments about April being better than last April, I'm guessing the dentist probably isn't too impacted by tariffs. So, if you looked at some of the tenant categories that might be more impacted, is that

[Ki Bin Kim, Managing Director at Truist Securities]

the same case, or are some

[Ki Bin Kim, Managing Director at Truist Securities]

of those a lot more impacted? Thank you.

[Alan Roth, COO & President of East Region at Regency Centers]

Ki Bin, so I'm not sure I 100% follow that question, to be honest. I feel bad about that. But let me just say a few things.

[Alan Roth, COO & President of East Region at Regency Centers]

QSR and medical were our top categories in the first quarter in terms of who we transacted with. And then there were a lot of tenants that we did multiple deals with that are aggressively out there expanding Shake Shack, a remarkable QSR operator, Paris Baguette, Warby Parker, Great Cliffs. Those are just a few that come to mind that we did multiple transactions with. We're constantly doing portfolio reviews and continued one off deals with a lot of nationals as well, who still remain committed. And I think importantly, as Lisa mentioned, looking long term, right?

[Alan Roth, COO & President of East Region at Regency Centers]

And it's certainly multiple grocers that are out there, off price financial services, vet clinics, to name a few. And so things are still really good and really active. I hope that addressed your question. Haven't seen a shift in the character

[Mike Mas, EVP & CFO at Regency Centers]

of our leasing activity in April versus Q1. And it's the same talent's point that we're working with a lot of the same tenants are looking to expand their businesses. Similarly, the impact of more heavier tariff impact tenants is small, therefore it is not as materially represented in our leasing activity. So as of today, Ki Bin, we're just not seeing anything in the numbers.

[Lisa Palmer, President & CEO at Regency Centers]

And anecdotally, reiterating what I said in my remarks, the conversations, I think getting a little bit more direct to your question Ki Bin, the conversations we have had with our tenants have not indicated any shifts in consumer behavior. And the fact that we did see overall foot traffic accelerate from Q1, I think just reinforces that.

[Ki Bin Kim, Managing Director at Truist Securities]

Okay, thank you.

[Operator]

Our next question comes from Michael Gorman with BTIG. Please proceed with your question.

[Michael Gorman, Managing Director at BTIG]

Yes, thanks. Good morning. Maybe just going back to the transactions market for a minute here. Can you and I know there's more details to come, but can you maybe give a little bit of background on the grocer anchored asset that's under contract for the JV platform? Kind of what drove that into the JV platform versus wholly owned and kind of maybe the appetite that you see out there for institutional capital still coming into the space given some of the recent market volatility?

[Michael Gorman, Managing Director at BTIG]

Thanks.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

Sure. Appreciate the question, Michael. So let me start with a little more clarity on the assets. So again, once we close, we'll share all of the details. But what I will share at this point is it's a phenomenal grocery anchored shopping center and a great submarket.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

And I'll keep it as simple as that as it relates to the specific on the transaction, but it's definitely right in line with other great assets we own in the Northeast and so very excited about the opportunity. And then in terms of the structure with the joint venture, it's a long term institutional JV partner we've had for years and years that is still very bullish on the sector for the same reasons we are. And so we do have a program rotation with them to offer them opportunities as we have the ability to acquire them. And the hit rate is very high when we say we want to buy an asset, they are usually hand in hand with us, and this is just the case in this scenario of they're taking their opportunity within the rotation to partner with us on this asset.

[Operator]

Our next question comes from Floris Van Dukum with Compass Point. Please proceed with your question.

[Floris van Dijkum, Managing Director at Compass Point Research & Trading]

Hey, thanks for taking my question. So I believe that Brentwood had something like 4,300,000 visits last year. Where would that rank in your portfolio and how many assets do you have that actually do more than Brentwood gets in terms of annual visitors? I'm sure you have that data somewhere. Nick, I'd love to get your perspective on that.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

Loris, I'm laughing, so I love the question. Talk about a detailed question. To your point, it is a phenomenal asset, and it is heavily trafficked. I have to admit off the top of my head, I don't know where it ranks in our portfolio. We can circle back with you and give you that specific answer, but it's definitely on the top end.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

But again, as you can appreciate, Floris, the size matters, and so it's a larger asset, and so by default, traffic counts are going be higher. And so, not only do we look at total volume, we also look at traffic based on GLA as well, which also gives us a really accurate prediction on volumes and success for our retailers. And so, we can circle back with you on the exact on that one, but I think your assumption is correct that it's at the higher end of our portfolio.

[Operator]

Our

[Operator]

next question comes from Paulina Rojas with Green Street. Please proceed with your question.

[Paulina Rojas-Schmidt, Senior Analyst, Retail at Green Street Advisors, LLC]

Good morning. Regarding developments, I have a follow-up to a prior question. You are looking for spread over the value or the cap rate the property would sell for. But I imagine cap rates are likely becoming less of a certain thing in this environment. So I wonder how you're navigating that uncertainty.

[Paulina Rojas-Schmidt, Senior Analyst, Retail at Green Street Advisors, LLC]

And then second, as you continue to evaluate new development projects, are you seeing any consistent pattern in the types of projects that are emerging? And who are other developers that you are seeing in the market today?

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

Sure. Pauline, let me take your first question first related to yields and spreads. And so you're right, as I articulated before, we definitely are looking to get a spread above what we think the value of that asset would be stabilized. But it's not because we anticipate selling that asset, it really is to make sure we're getting an appropriate risk adjusted return. And as you've heard Lisa mention even several times on this call, that is our best use of capital.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

When you look at the yields we're getting on our development program, in comparison to what acquisitions would be, there's no question it's a better source, a better use of our capital in terms of what that long term return is. Then I would just stress, yes, we want that spread because of the risk of that transaction, but we do a phenomenal job de risking these development opportunities. The team is highly focused on getting entitlements in hand, significant pre leasing construction bids and drawings in hand before we close, which is why you've seen usually right after closing, are starting construction. And so when you combine that going in yield compared to what an acquisition would be and how well these assets are de risked. And I think our track record shows we do a very good job of delivering these projects on time and on budget.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

That really is why our eyesight continues to be focused on development. But we are continuing to monitor those yields. We'll continue to push development yields to the best of our ability to be as high as we can get. Look, it's to our benefit to build to as high yields as we can achieve. And so feel good about that business plan, and you're starting to see the impact of that come through.

[Nick Wibbenmeyer, West Region President and Chief Investment Officer at Regency Centers]

And then in relation to what we're seeing in terms of competition and the type of developments, it's really what we've talked about the last couple of years, which is the grocery side of the business. And so at our scale, we have phenomenal relationships with all of the key grocers in every major market in the country, and they continue to invest right now in their brick and mortar side of their business. They know stores are a critical component to driving their top line, and we're there to partner with them and help them execute on that side of the business. And so, the vast majority of the opportunities we're looking at are with our tremendous grocery partners.

[Lisa Palmer, President & CEO at Regency Centers]

I feel like it's a great opportunity for me to jump in and just remind everyone, development is something that we have been committed to for as long as we have been a company and certainly as long as we've been a public company for decades. The combination of kind of factors are what really allow us to have such success and it's why it is the best use of our capital because it does provide us the best returns on our invested capital. That is so can't turn it on and off, you've heard me say that and you can't build it in a year. So it has been decades of this. We have the experience of our team is second to none, and the talent that goes along with that experience, the relationships with the grocers and the retailers and the master plan community developers, and then our cost of capital.

[Lisa Palmer, President & CEO at Regency Centers]

And you combine those things and we will remain committed to it, and we will develop through cycles, and it will enhance our growth rate.

[Operator]

Our next question comes from Mike Mueller with JPMorgan. Please proceed with your question.

[Mike Mueller, Analyst at JPMorgan Chase]

Yes, hi. I guess for the full year bad debt guide, it looks like what you booked in the first quarter was extremely low, but you maintained the full year guidance. I guess, is it just conservatism given the world? Or is there some known kind of chunky fallout coming down the pike soon?

[Mike Mas, EVP & CFO at Regency Centers]

Hey, Mike, appreciate the question. Remember, we gave guidance not even three months ago, so two, two and a half months ago. We had a pretty good indication at the time that the first quarter would come in light. And we still provided an annual guidance range on credit losses, 75 to 100 basis points. And the reason for the first quarter being light is the health of the tenant base, as Alan articulated, we knew that our cash basis tenancy collection rate on some annual reconciliations would be high, that would be recognized in the first quarter.

[Mike Mas, EVP & CFO at Regency Centers]

And what you're seeing as a result of that, right? So kind of a detailed way of articulating, we understood that this would be a first half to second half story, where the first half would be a little bit higher from a run rate perspective than the second on the growth. But nothing was out of out of the ordinary, nothing was beyond our expectations. So I wouldn't go as far to call it added conservatism, but an in line quarter to our expectations and our outlook remaining the same, given that the current conditions that we're seeing haven't changed.

[Operator]

Okay, thanks. Our next question comes from Linda Tsai with Jefferies. Please proceed with your question.

[Linda Tsai, Senior Analyst at Jefferies]

Hi, thanks for taking my question. On foot traffic being up 7% the first three weeks in April, how much do you think that came from pull forward demand? And then just any color on variances in traffic by region?

[Lisa Palmer, President & CEO at Regency Centers]

I'll take the first part and I'll let Alan address the regions. I've read the same things that you have and have seen the data come through of some kind of forward front loading and spending, but I have to think about when you think about, again, our tenant types, there wouldn't be a lot of that. People are not going grocery shopping for months in advance, when they go out to eat, they're going out to eat for that day. So I would doubt that there's much of that at our centers.

[Alan Roth, COO & President of East Region at Regency Centers]

Linda, I would just add that there were marginal differences around the country on traffic count, but importantly, every single region was up. So I think that's really the way I would answer the question. And so there really was no read through from a foot traffic perspective as we tried bifurcate the region.

[Linda Tsai, Senior Analyst at Jefferies]

Thanks.

[Operator]

Our next question comes from Floris van Dijkum with Compass Point. Please proceed with your question.

[Floris van Dijkum, Managing Director at Compass Point Research & Trading]

Hey, Lisa, a question for you. And I think you're in good position to comment on this. As retailers are gonna have margin pressure because of tariffs and etcetera, What do you think the impact is on the store and owners like yourselves, in particular owners with high quality real estate?

[Lisa Palmer, President & CEO at Regency Centers]

Appreciate the question and I think it's possible we've spoken about this. Retailers have been feeling margin pressures over the past five years and I am on the board of trustees with ICSC, so I do have the opportunity to sit with many of them and I have said this often, it's gonna be a win win. We want our tenants to be successful and be productive, so that we can continue to raise and increase our cash flows, which comes from rent. And there's no question that there continues to be tailwinds despite all of these headwinds that we've focused on on this call. There's also tailwinds in our industry due to the limited new supply that has come online over the last decade, really, plus fifteen years.

[Lisa Palmer, President & CEO at Regency Centers]

And as a result, and I said this in my prepared remarks, there's still a scarcity of quality space available and retailers are gonna wanna continue to grow and they're gonna continue to grow in the best locations and where they're gonna have the opportunity to produce the best sales, which will then help them with margin pressures that they're facing. So again, to say that we're immune to any impacts of inflation or recessions, I know we're not, but I feel really good about the quality of our trade areas, the quality of the locations within those trade areas and the quality of the retailers in which we do business. I think that we will manage through that and we will continue to grow same property NOI for the years ahead.

[Floris van Dijkum, Managing Director at Compass Point Research & Trading]

Thanks, Lisa.

[Operator]

We have reached the end of the question and answer session. I would now like to turn the call back over to Lisa Palmer for closing comments.

[Lisa Palmer, President & CEO at Regency Centers]

Thank you all for your time. Appreciate the questions and have a great rest of your day. Thank you.

[Operator]

This concludes today's conference. You may disconnect your lines at this time and we thank you for your participation.

Participants

Executives

• Christy McElroy, SVP, Capital Markets
• Lisa Palmer, President & CEO
• Alan Roth, COO & President of East Region
• Nick Wibbenmeyer, West Region President and Chief Investment Officer
• Mike Mas, EVP & CFO

Analysts

• Michael Goldsmith, US REITs Analyst at UBS Securities LLC
• Samir Khanal, Director at Bank of America
• Craig Mailman, Managing Director & Equity Research Analyst at Citigroup Global Markets Inc.
• Todd Thomas, Managing Director & Equity Research Analyst at KeyBanc Capital Markets
• Ronald Kamdem, Managing Director & Head of US REITs and CRE Research at Morgan Stanley
• Juan Sanabria, Managing Director at BMO Capital Markets
• Michael Griffin, Director at Evercore
• Viktor Fediv, Senior Equity Research Associate at Scotiabank
• Jamie Feldman, Managing Director, Head of REIT Research at Wells Fargo
• Ravi Vaidya, Vice President at Mizuho Financial Group
• Ki Bin Kim, Managing Director at Truist Securities
• Michael Gorman, Managing Director at BTIG
• Floris van Dijkum, Managing Director at Compass Point Research & Trading
• Paulina Rojas-Schmidt, Senior Analyst, Retail at Green Street Advisors, LLC
• Mike Mueller, Analyst at JPMorgan Chase
• Linda Tsai, Senior Analyst at Jefferies