Chief Financial Officer at Regency Centers
Thank you, Nick, and good morning, everyone. I'll take you through some highlights from our Q4 and full-year results, then walk through our 2023 guidance and assumptions before ending with some color on our balance sheet position.
Our strong performance last year was underpinned by growth in NOI and more specifically from base rent growth. Excluding the collection of 2020 and 2021 reserves, which I'll refer to today as COVID collections, we delivered same-property NOI growth of 5.8% in the fourth quarter and 6.3% for the full year. Again, most importantly, we saw a 3.6% contribution from base rent growth in 2022, accelerating to 4.8% in the fourth quarter. This growth in base rent over the last year has been driven by contractual rent steps, mark-to-market on re-leasing, increases in occupancy and commencement of rent from redevelopment projects.
As Alan mentioned, our leased occupancy rate is now back to pre-pandemic levels, but our eyes are set even higher. COVID collections were about $2 million in the fourth quarter and totaled $20 million for the year. That's down from $46 million in 2021. During the fourth quarter, we converted another 2% of our tenants back to an accrual basis of accounting from cash, and as a result, recognized nearly $5 million of non-cash income from the reversal of straight-line rent reserves. We ended the year with 7% of our tenants remaining on a cash basis of accounting.
For uncollectible lease income, in 2022, we were close to our historical average of 50 basis points on current year billings by nearly all metrics but for some limited exposure to higher profile potential bankruptcies, our in-place tenancy is about as strong as it's ever been. Looking ahead to 2023 and after excluding COVID collections, we are guiding to core operating earnings per share growth of close to 4% year-over-year at the midpoint.
We'd like to point you to Slides 5 through 8 in our earnings presentation, which I'm certain you'll find extraordinarily helpful as you work through our outlook. We expect same property NOI growth, excluding COVID collections of 2% to 3%, which is the largest positive driver of earnings into 2023. The primary contributor continues to be base rent growth, driven by embedded rent steps, rent growth from new leasing and shop space commencement as well as the delivery of completed redevelopment projects.
Importantly, our same-property NOI guidance range also assumes credit loss impact of roughly 75 basis points to 100 basis points from anticipated tenant bankruptcies and early store closures, including from those tenants that Alan discussed. This credit loss impact includes an assumption that current year uncollectible lease income will be modestly above our pre-pandemic average of 50 basis points as well as the potential for occupancy to end the year flat to lower -- should bankruptcy-driven move-outs occur. Again, this range excludes any impact from COVID collections, which I'll discuss in a minute.
As you think about reconciling NAREIT FFO of $4.10 last year to a guided midpoint of $4.07 in 2023, remember that this metric continues to be significantly impacted by COVID era accounting adjustments, including the collection of rents previously reserved as well as the impact on non-cash revenues from converting tenants from cash to accrual. Our operating fundamentals continue to strengthen, as they have in 2022 and as they are expected to continue this year. And these pandemic-related items can mask our true growth in cash earnings.
It's important to take this a step further this morning as these two items meaningfully impact year-over-year comparability. First, we are anticipating lower COVID collections of $3 million in 2023 compared to $20 million last year. And second, we are also anticipating lower non-cash revenues of $36 million at the midpoint in 2023 compared to $47 million in 2022. Please note that we increased our full-year non-cash revenue guidance from $30 million a quarter ago to account for new information, including an assumption that we will continue converting tenants to accrual accounting in 2023, as well as the likelihood that we will recognize accelerated below-market rent amortization triggered by the potential for bankruptcy-related store closures.
This is why we focus on core operating earnings, which strips out the non-cash adjustments and also why we provide same-property NOI excluding COVID collections. With this added transparency, you can better see the underlying positive growth. Again, I encourage you to use the materials in our earnings presentation, as I'm certain you'll find it very helpful in evaluating these impacts. The good news is that we are fast approaching the point where these COVID-related impacts will no longer create meaningful noise in our reported results.
To finish and to pivot from guidance, we feel great about how we are positioned from a balance sheet perspective with one of the strongest in the REIT sector at a time when it matters most. Our leverage is at the lower end of our targeted range of 5 times to 5.5 times debt-to-EBITDA. And we expect to generate free cash flow north of $140 million this year, self-funding our development and redevelopment commitments.
While the financing markets have moved in our favor over the last three months, we have no need to access the capital markets this year. Our revolving credit line was undrawn at year-end, and we have no unsecured debt maturities until mid-2024. Our liquidity position and maturity profile provide us the ability to remain patient and act when we need and walk to.
With that, we look forward to taking your questions.