x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FLORIDA (REGENCY CENTERS CORPORATION) | 59-3191743 | |
DELAWARE (REGENCY CENTERS, L.P) | 59-3429602 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
One Independent Drive, Suite 114 Jacksonville, Florida 32202 | (904) 598-7000 | |
(Address of principal executive offices) (zip code) | (Registrant's telephone number, including area code) |
Large accelerated filer | x | Accelerated filer | o | |
Non-accelerated filer | o | Smaller reporting company | o |
Large accelerated filer | o | Accelerated filer | x | |
Non-accelerated filer | o | Smaller reporting company | o |
• | Enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; |
• | Eliminates duplicative disclosure and provides a more streamlined and readable presentation; and |
• | Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports. |
Form 10-Q Report Page | ||
PART I - FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | |
Regency Centers Corporation: | ||
Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015 | ||
Consolidated Statements of Operations for the periods ended September 30, 2016 and 2015 | ||
Consolidated Statements of Comprehensive Income for the periods ended September 30, 2016 and 2015 | ||
Consolidated Statements of Equity for the periods ended September 30, 2016 and 2015 | ||
Consolidated Statements of Cash Flows for the periods ended September 30, 2016 and 2015 | ||
Regency Centers, L.P.: | ||
Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015 | ||
Consolidated Statements of Operations for the periods ended September 30, 2016 and 2015 | ||
Consolidated Statements of Comprehensive Income for the periods ended September 30, 2016 and 2015 | ||
Consolidated Statements of Capital for the periods ended September 30, 2016 and 2015 | ||
Consolidated Statements of Cash Flows for the periods ended September 30, 2016 and 2015 | ||
Notes to Consolidated Financial Statements | ||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | |
Item 4. | Controls and Procedures | |
PART II - OTHER INFORMATION | ||
Item 1. | Legal Proceedings | |
Item 1A. | Risk Factors | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 3. | Defaults Upon Senior Securities | |
Item 4. | Mine Safety Disclosures | |
Item 5. | Other Information | |
Item 6. | Exhibits | |
SIGNATURES | ||
2016 | 2015 | |||||
Assets | (unaudited) | |||||
Real estate investments at cost: | ||||||
Land, including amounts held for future development | $ | 1,654,389 | 1,479,814 | |||
Buildings and improvements | 3,086,287 | 2,896,396 | ||||
Properties in development | 157,537 | 169,690 | ||||
4,898,213 | 4,545,900 | |||||
Less: accumulated depreciation | 1,108,221 | 1,043,787 | ||||
3,789,992 | 3,502,113 | |||||
Investments in real estate partnerships | 274,940 | 306,206 | ||||
Net real estate investments | 4,064,932 | 3,808,319 | ||||
Cash and cash equivalents | 40,902 | 36,856 | ||||
Restricted cash | 4,005 | 3,767 | ||||
Accounts receivable, net of allowance for doubtful accounts of $5,690 and $5,295 at September 30, 2016 and December 31, 2015, respectively | 24,816 | 32,292 | ||||
Straight-line rent receivable, net of reserve of $3,688 and $1,365 at September 30, 2016 and December 31, 2015, respectively | 67,931 | 63,392 | ||||
Notes receivable | 10,480 | 10,480 | ||||
Deferred leasing costs, less accumulated amortization of $82,277 and $76,823 at September 30, 2016 and December 31, 2015, respectively | 68,455 | 66,367 | ||||
Acquired lease intangible assets, less accumulated amortization of $53,878 and $45,639 at September 30, 2016 and December 31, 2015, respectively | 122,738 | 105,380 | ||||
Trading securities held in trust, at fair value | 29,280 | 29,093 | ||||
Other assets | 24,749 | 26,935 | ||||
Total assets | $ | 4,458,288 | 4,182,881 | |||
Liabilities and Equity | ||||||
Liabilities: | ||||||
Notes payable | $ | 1,364,200 | 1,699,771 | |||
Unsecured credit facilities | 263,421 | 164,514 | ||||
Accounts payable and other liabilities | 145,689 | 164,515 | ||||
Acquired lease intangible liabilities, less accumulated accretion of $22,067 and $17,555 at September 30, 2016 and December 31, 2015, respectively | 56,455 | 42,034 | ||||
Tenants’ security, escrow deposits and prepaid rent | 28,239 | 29,427 | ||||
Total liabilities | 1,858,004 | 2,100,261 | ||||
Commitments and contingencies (note 11) | ||||||
Equity: | ||||||
Stockholders’ equity: | ||||||
Preferred stock, $0.01 par value per share, 30,000,000 shares authorized; 13,000,000 Series 6 and 7 shares issued and outstanding at September 30, 2016 and December 31, 2015, with liquidation preferences of $25 per share | 325,000 | 325,000 | ||||
Common stock, $0.01 par value per share,150,000,000 shares authorized; 104,492,738 and 97,212,638 shares issued at September 30, 2016 and December 31, 2015, respectively | 1,045 | 972 | ||||
Treasury stock at cost, 345,359 and 417,862 shares held at September 30, 2016 and December 31, 2015, respectively | (16,882 | ) | (19,658 | ) | ||
Additional paid in capital | 3,291,602 | 2,742,508 | ||||
Accumulated other comprehensive loss | (35,739 | ) | (58,693 | ) | ||
Distributions in excess of net income | (997,881 | ) | (936,020 | ) | ||
Total stockholders’ equity | 2,567,145 | 2,054,109 | ||||
Noncontrolling interests: | ||||||
Exchangeable operating partnership units, aggregate redemption value of $11,947 and $10,502 at September 30, 2016 and December 31, 2015, respectively | (2,006 | ) | (1,975 | ) | ||
Limited partners’ interests in consolidated partnerships | 35,145 | 30,486 | ||||
Total noncontrolling interests | 33,139 | 28,511 | ||||
Total equity | 2,600,284 | 2,082,620 | ||||
Total liabilities and equity | $ | 4,458,288 | 4,182,881 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Revenues: | ||||||||||||
Minimum rent | $ | 111,886 | 105,071 | $ | 329,506 | 308,766 | ||||||
Percentage rent | 495 | 486 | 2,651 | 2,593 | ||||||||
Recoveries from tenants and other income | 34,532 | 30,725 | 103,894 | 94,205 | ||||||||
Management, transaction, and other fees | 5,855 | 5,786 | 18,759 | 18,032 | ||||||||
Total revenues | 152,768 | 142,068 | 454,810 | 423,596 | ||||||||
Operating expenses: | ||||||||||||
Depreciation and amortization | 40,705 | 37,032 | 119,721 | 109,249 | ||||||||
Operating and maintenance | 23,373 | 19,761 | 69,767 | 61,119 | ||||||||
General and administrative | 16,046 | 14,750 | 48,695 | 46,227 | ||||||||
Real estate taxes | 17,058 | 16,044 | 49,697 | 46,842 | ||||||||
Other operating expenses | 1,046 | 1,880 | 5,795 | 4,825 | ||||||||
Total operating expenses | 98,228 | 89,467 | 293,675 | 268,262 | ||||||||
Other expense (income): | ||||||||||||
Interest expense, net | 21,945 | 25,099 | 70,489 | 78,407 | ||||||||
Provision for impairment | — | — | 1,666 | — | ||||||||
Early extinguishment of debt | 13,943 | — | 13,943 | (61 | ) | |||||||
Net investment (income) loss, including unrealized (gains) losses of ($383) and $1,296, and ($888) and $1,771 for the three and nine months ended September 30, 2016 and 2015, respectively | (821 | ) | 1,190 | (1,268 | ) | 190 | ||||||
Loss on derivative instruments | 40,586 | — | 40,586 | — | ||||||||
Total other expense | 75,653 | 26,289 | 125,416 | 78,536 | ||||||||
Income (loss) from operations before equity in income of investments in real estate partnerships | (21,113 | ) | 26,312 | 35,719 | 76,798 | |||||||
Equity in income of investments in real estate partnerships | 22,647 | 5,667 | 46,618 | 17,991 | ||||||||
Income from operations | 1,534 | 31,979 | 82,337 | 94,789 | ||||||||
Gain on sale of real estate, net of tax | 9,580 | 27,755 | 22,997 | 34,215 | ||||||||
Net income | 11,114 | 59,734 | 105,334 | 129,004 | ||||||||
Noncontrolling interests: | ||||||||||||
Exchangeable operating partnership units | (16 | ) | (94 | ) | (165 | ) | (204 | ) | ||||
Limited partners’ interests in consolidated partnerships | (527 | ) | (643 | ) | (1,380 | ) | (1,619 | ) | ||||
Income attributable to noncontrolling interests | (543 | ) | (737 | ) | (1,545 | ) | (1,823 | ) | ||||
Net income attributable to the Company | 10,571 | 58,997 | 103,789 | 127,181 | ||||||||
Preferred stock dividends | (5,266 | ) | (5,266 | ) | (15,797 | ) | (15,797 | ) | ||||
Net income attributable to common stockholders | $ | 5,305 | 53,731 | $ | 87,992 | 111,384 | ||||||
Income per common share - basic | $ | 0.05 | 0.57 | $ | 0.88 | 1.18 | ||||||
Income per common share - diluted | $ | 0.05 | 0.57 | $ | 0.88 | 1.18 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Net income | $ | 11,114 | 59,734 | $ | 105,334 | 129,004 | ||||||
Other comprehensive (loss) income: | ||||||||||||
Effective portion of change in fair value of derivative instruments: | ||||||||||||
Effective portion of change in fair value of derivative instruments | 1,294 | (15,768 | ) | (25,338 | ) | (11,274 | ) | |||||
Reclassification adjustment of derivative instruments included in net income | 43,111 | 2,155 | 48,063 | 6,654 | ||||||||
Unrealized gain (loss) on available-for-sale securities | 53 | (43 | ) | 90 | (73 | ) | ||||||
Other comprehensive income (loss) | 44,458 | (13,656 | ) | 22,815 | (4,693 | ) | ||||||
Comprehensive income | 55,572 | 46,078 | 128,149 | 124,311 | ||||||||
Less: comprehensive income (loss) attributable to noncontrolling interests: | ||||||||||||
Net income attributable to noncontrolling interests | 543 | 737 | 1,545 | 1,823 | ||||||||
Other comprehensive income (loss) attributable to noncontrolling interests | 158 | (149 | ) | (139 | ) | (134 | ) | |||||
Comprehensive income attributable to noncontrolling interests | 701 | 588 | 1,406 | 1,689 | ||||||||
Comprehensive income attributable to the Company | $ | 54,871 | 45,490 | $ | 126,743 | 122,622 |
REGENCY CENTERS CORPORATION Consolidated Statements of Equity For the nine months ended September 30, 2016 and 2015 (in thousands, except per share data) (unaudited) | ||||||||||||||||||||||||||||||||||
Noncontrolling Interests | ||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Treasury Stock | Additional Paid In Capital | Accumulated Other Comprehensive Loss | Distributions in Excess of Net Income | Total Stockholders’ Equity | Exchangeable Operating Partnership Units | Limited Partners’ Interest in Consolidated Partnerships | Total Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||
Balance at December 31, 2014 | $ | 325,000 | 941 | (19,382 | ) | 2,540,153 | (57,748 | ) | (882,372 | ) | 1,906,592 | (1,914 | ) | 31,804 | 29,890 | 1,936,482 | ||||||||||||||||||
Net income | — | — | — | — | — | 127,181 | 127,181 | 204 | 1,619 | 1,823 | 129,004 | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (4,559 | ) | — | (4,559 | ) | (7 | ) | (127 | ) | (134 | ) | (4,693 | ) | |||||||||||||||||
Deferred compensation plan, net | — | — | (56 | ) | 56 | — | — | — | — | — | — | — | ||||||||||||||||||||||
Restricted stock issued, net of amortization | — | — | — | 10,441 | — | — | 10,441 | — | — | — | 10,441 | |||||||||||||||||||||||
Common stock redeemed for taxes withheld for stock based compensation, net | — | — | — | (9,770 | ) | — | — | (9,770 | ) | — | — | — | (9,770 | ) | ||||||||||||||||||||
Common stock issued for dividend reinvestment plan | — | — | — | 966 | — | — | 966 | — | — | — | 966 | |||||||||||||||||||||||
Common stock issued for stock offerings, net of issuance costs | — | 1 | — | 945 | — | — | 946 | — | — | — | 946 | |||||||||||||||||||||||
Contributions from partners | — | — | — | — | — | — | — | — | 454 | 454 | 454 | |||||||||||||||||||||||
Distributions to partners | — | — | — | — | — | — | — | — | (2,792 | ) | (2,792 | ) | (2,792 | ) | ||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||
Preferred stock | — | — | — | — | — | (15,797 | ) | (15,797 | ) | — | — | — | (15,797 | ) | ||||||||||||||||||||
Common stock/unit ($1.455 per share) | — | — | — | — | — | (136,974 | ) | (136,974 | ) | (223 | ) | — | (223 | ) | (137,197 | ) | ||||||||||||||||||
Balance at September 30, 2015 | $ | 325,000 | 942 | (19,438 | ) | 2,542,791 | (62,307 | ) | (907,962 | ) | 1,879,026 | (1,940 | ) | 30,958 | 29,018 | 1,908,044 | ||||||||||||||||||
Balance at December 31, 2015 | $ | 325,000 | 972 | (19,658 | ) | 2,742,508 | (58,693 | ) | (936,020 | ) | 2,054,109 | (1,975 | ) | 30,486 | 28,511 | 2,082,620 | ||||||||||||||||||
Net income | — | — | — | — | — | 103,789 | 103,789 | 165 | 1,380 | 1,545 | 105,334 | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | 22,954 | — | 22,954 | 33 | (172 | ) | (139 | ) | 22,815 | |||||||||||||||||||||
Deferred compensation plan, net | — | — | 2,776 | (2,776 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||||
Restricted stock issued, net of amortization | — | 2 | — | 9,965 | — | — | 9,967 | — | — | — | 9,967 | |||||||||||||||||||||||
Common stock redeemed for taxes withheld for stock based compensation, net | — | — | — | (7,835 | ) | — | — | (7,835 | ) | — | — | — | (7,835 | ) | ||||||||||||||||||||
Common stock issued for dividend reinvestment plan | — | — | — | 804 | — | — | 804 | — | — | — | 804 | |||||||||||||||||||||||
Common stock issued for stock offerings, net of issuance costs | — | 71 | — | 549,474 | — | — | 549,545 | — | — | — | 549,545 | |||||||||||||||||||||||
Contributions from partners | — | — | — | — | — | — | — | — | 8,675 | 8,675 | 8,675 | |||||||||||||||||||||||
Distributions to partners | — | — | — | (538 | ) | — | — | (538 | ) | — | (5,224 | ) | (5,224 | ) | (5,762 | ) | ||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||
Preferred stock | — | — | — | — | — | (15,797 | ) | (15,797 | ) | — | — | — | (15,797 | ) | ||||||||||||||||||||
Common stock/unit ($1.50 per share) | — | — | — | — | — | (149,853 | ) | (149,853 | ) | (229 | ) | — | (229 | ) | (150,082 | ) | ||||||||||||||||||
Balance at September 30, 2016 | $ | 325,000 | 1,045 | (16,882 | ) | 3,291,602 | (35,739 | ) | (997,881 | ) | 2,567,145 | (2,006 | ) | 35,145 | 33,139 | 2,600,284 |
2016 | 2015 | |||||
Cash flows from operating activities: | ||||||
Net income | $ | 105,334 | 129,004 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 119,721 | 109,249 | ||||
Amortization of deferred loan cost and debt premium | 7,242 | 7,404 | ||||
(Accretion) and amortization of above and below market lease intangibles, net | (2,296 | ) | (1,250 | ) | ||
Stock-based compensation, net of capitalization | 7,554 | 8,379 | ||||
Equity in income of investments in real estate partnerships | (46,618 | ) | (17,991 | ) | ||
Gain on sale of real estate, net of tax | (22,997 | ) | (34,215 | ) | ||
Provision for impairment | 1,666 | — | ||||
Early extinguishment of debt | 13,943 | (61 | ) | |||
Distribution of earnings from operations of investments in real estate partnerships | 39,765 | 34,527 | ||||
Settlement of derivative instruments | — | (7,267 | ) | |||
Deferred compensation expense | 1,249 | (610 | ) | |||
Realized and unrealized loss (gain) on investments | (1,268 | ) | 189 | |||
Changes in assets and liabilities: | ||||||
Restricted cash | (84 | ) | 1,534 | |||
Accounts receivable, net | (4,269 | ) | (4,408 | ) | ||
Straight-line rent receivables, net | (4,894 | ) | (6,274 | ) | ||
Deferred leasing costs | (7,841 | ) | (8,268 | ) | ||
Other assets | (59 | ) | (2,257 | ) | ||
Accounts payable and other liabilities | 12,607 | 10,230 | ||||
Tenants’ security, escrow deposits and prepaid rent | (1,406 | ) | (1,152 | ) | ||
Net cash provided by operating activities | 217,349 | 216,763 | ||||
Cash flows from investing activities: | ||||||
Acquisition of operating real estate | (333,220 | ) | (42,983 | ) | ||
Advance deposits refunded (paid) on acquisition of operating real estate | 1,250 | (2,250 | ) | |||
Real estate development and capital improvements | (146,773 | ) | (150,967 | ) | ||
Proceeds from sale of real estate investments | 83,675 | 93,727 | ||||
Collection of notes receivable | — | 1,000 | ||||
Investments in real estate partnerships | (13,127 | ) | (18,644 | ) | ||
Distributions received from investments in real estate partnerships | 52,536 | 15,014 | ||||
Dividends on investment securities | 189 | 128 | ||||
Acquisition of securities | (53,290 | ) | (25,675 | ) | ||
Proceeds from sale of securities | 54,176 | 22,296 | ||||
Net cash used in investing activities | (354,584 | ) | (108,354 | ) | ||
Cash flows from financing activities: | ||||||
Net proceeds from common stock issuance | 549,545 | 946 | ||||
Proceeds from sale of treasury stock | 957 | 51 | ||||
Acquisition of treasury stock | (29 | ) | — | |||
Distributions to limited partners in consolidated partnerships, net | (3,126 | ) | (2,352 | ) | ||
Distributions to exchangeable operating partnership unit holders | (229 | ) | (223 | ) | ||
Dividends paid to common stockholders | (149,049 | ) | (136,008 | ) | ||
Dividends paid to preferred stockholders | (15,797 | ) | (15,797 | ) | ||
Repayment of fixed rate unsecured notes | (300,000 | ) | (350,000 | ) | ||
Proceeds from issuance of fixed rate unsecured notes, net | — | 248,160 | ||||
Proceeds from unsecured credit facilities | 395,000 | 445,000 | ||||
Repayment of unsecured credit facilities | (295,000 | ) | (305,000 | ) | ||
Proceeds from notes payable | 20,223 | 3,325 | ||||
Repayment of notes payable | (41,584 | ) | (76,027 | ) | ||
Scheduled principal payments | (4,462 | ) | (4,384 | ) | ||
Payment of loan costs | (1,954 | ) | (5,996 | ) | ||
Early redemption costs | (13,214 | ) | — | |||
Net cash provided by (used in) financing activities | 141,281 | (198,305 | ) | |||
Net increase (decrease) in cash and cash equivalents | 4,046 | (89,896 | ) | |||
Cash and cash equivalents at beginning of the period | 36,856 | 113,776 | ||||
Cash and cash equivalents at end of the period | $ | 40,902 | 23,880 |
2016 | 2015 | |||||
Supplemental disclosure of cash flow information: | ||||||
Cash paid for interest (net of capitalized interest of $2,622 and $5,403 in 2016 and 2015, respectively) | $ | 54,904 | 71,734 | |||
Cash paid for income taxes | $ | — | 871 | |||
Supplemental disclosure of non-cash transactions: | ||||||
Mortgage loans assumed for the acquisition of real estate | $ | — | 42,799 | |||
Change in fair value of derivative instruments | $ | (25,338 | ) | (10,845 | ) | |
Common stock issued for dividend reinvestment plan | $ | 804 | 966 | |||
Stock-based compensation capitalized | $ | 2,561 | 2,196 | |||
Contributions from limited partners in consolidated partnerships, net | $ | 8,674 | 13 | |||
Common stock issued for dividend reinvestment in trust | $ | 556 | 631 | |||
Contribution of stock awards into trust | $ | 1,513 | 1,633 | |||
Distribution of stock held in trust | $ | 4,096 | 1,898 | |||
Change in fair value of securities available-for-sale | $ | 90 | (73 | ) | ||
Deconsolidation of previously consolidated partnership: | ||||||
Real estate, net | $ | 14,075 | — | |||
Investments in real estate partnerships | $ | (3,355 | ) | — | ||
Notes payable | $ | (9,415 | ) | — | ||
Other assets and liabilities | $ | 640 | — | |||
Limited partners' interest in consolidated partnerships | $ | (2,099 | ) | — |
2016 | 2015 | |||||
Assets | (unaudited) | |||||
Real estate investments at cost: | ||||||
Land, including amounts held for future development | $ | 1,654,389 | 1,479,814 | |||
Buildings and improvements | 3,086,287 | 2,896,396 | ||||
Properties in development | 157,537 | 169,690 | ||||
4,898,213 | 4,545,900 | |||||
Less: accumulated depreciation | 1,108,221 | 1,043,787 | ||||
3,789,992 | 3,502,113 | |||||
Investments in real estate partnerships | 274,940 | 306,206 | ||||
Net real estate investments | 4,064,932 | 3,808,319 | ||||
Cash and cash equivalents | 40,902 | 36,856 | ||||
Restricted cash | 4,005 | 3,767 | ||||
Accounts receivable, net of allowance for doubtful accounts of $5,690 and $5,295 at September 30, 2016 and December 31, 2015, respectively | 24,816 | 32,292 | ||||
Straight-line rent receivable, net of reserve of $3,688 and $1,365 at September 30, 2016 and December 31, 2015, respectively | 67,931 | 63,392 | ||||
Notes receivable | 10,480 | 10,480 | ||||
Deferred leasing costs, less accumulated amortization of $82,277 and $76,823 at September 30, 2016 and December 31, 2015, respectively | 68,455 | 66,367 | ||||
Acquired lease intangible assets, less accumulated amortization of $53,878 and $45,639 at September 30, 2016 and December 31, 2015, respectively | 122,738 | 105,380 | ||||
Trading securities held in trust, at fair value | 29,280 | 29,093 | ||||
Other assets | 24,749 | 26,935 | ||||
Total assets | $ | 4,458,288 | 4,182,881 | |||
Liabilities and Capital | ||||||
Liabilities: | ||||||
Notes payable | $ | 1,364,200 | 1,699,771 | |||
Unsecured credit facilities | 263,421 | 164,514 | ||||
Accounts payable and other liabilities | 145,689 | 164,515 | ||||
Acquired lease intangible liabilities, less accumulated accretion of $22,067 and $17,555 at September 30, 2016 and December 31, 2015, respectively | 56,455 | 42,034 | ||||
Tenants’ security, escrow deposits and prepaid rent | 28,239 | 29,427 | ||||
Total liabilities | 1,858,004 | 2,100,261 | ||||
Commitments and contingencies (note 11) | ||||||
Capital: | ||||||
Partners’ capital: | ||||||
Preferred units of general partner, $0.01 par value per unit, 13,000,000 units issued and outstanding at September 30, 2016 and December 31, 2015, liquidation preference of $25 per unit | 325,000 | 325,000 | ||||
General partner; 104,492,738 and 97,212,638 units outstanding at September 30, 2016 and December 31, 2015, respectively | 2,277,884 | 1,787,802 | ||||
Limited partners; 154,170 units outstanding at September 30, 2016 and December 31, 2015 | (2,006 | ) | (1,975 | ) | ||
Accumulated other comprehensive loss | (35,739 | ) | (58,693 | ) | ||
Total partners’ capital | 2,565,139 | 2,052,134 | ||||
Noncontrolling interests: | ||||||
Limited partners’ interests in consolidated partnerships | 35,145 | 30,486 | ||||
Total noncontrolling interests | 35,145 | 30,486 | ||||
Total capital | 2,600,284 | 2,082,620 | ||||
Total liabilities and capital | $ | 4,458,288 | 4,182,881 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Revenues: | ||||||||||||
Minimum rent | $ | 111,886 | 105,071 | $ | 329,506 | 308,766 | ||||||
Percentage rent | 495 | 486 | 2,651 | 2,593 | ||||||||
Recoveries from tenants and other income | 34,532 | 30,725 | 103,894 | 94,205 | ||||||||
Management, transaction, and other fees | 5,855 | 5,786 | 18,759 | 18,032 | ||||||||
Total revenues | 152,768 | 142,068 | 454,810 | 423,596 | ||||||||
Operating expenses: | ||||||||||||
Depreciation and amortization | 40,705 | 37,032 | 119,721 | 109,249 | ||||||||
Operating and maintenance | 23,373 | 19,761 | 69,767 | 61,119 | ||||||||
General and administrative | 16,046 | 14,750 | 48,695 | 46,227 | ||||||||
Real estate taxes | 17,058 | 16,044 | 49,697 | 46,842 | ||||||||
Other operating expenses | 1,046 | 1,880 | 5,795 | 4,825 | ||||||||
Total operating expenses | 98,228 | 89,467 | 293,675 | 268,262 | ||||||||
Other expense (income): | ||||||||||||
Interest expense, net | 21,945 | 25,099 | 70,489 | 78,407 | ||||||||
Provision for impairment | — | — | 1,666 | — | ||||||||
Early extinguishment of debt | 13,943 | — | 13,943 | (61 | ) | |||||||
Net investment (income) loss, including unrealized (gains) losses of ($383) and $1,296, and ($888) and $1,771 for the three and nine months ended September 30, 2016 and 2015, respectively | (821 | ) | 1,190 | (1,268 | ) | 190 | ||||||
Loss on derivative instruments | 40,586 | — | 40,586 | — | ||||||||
Total other expense | 75,653 | 26,289 | 125,416 | 78,536 | ||||||||
Income (loss) from operations before equity in income of investments in real estate partnerships | (21,113 | ) | 26,312 | 35,719 | 76,798 | |||||||
Equity in income of investments in real estate partnerships | 22,647 | 5,667 | 46,618 | 17,991 | ||||||||
Income from operations | 1,534 | 31,979 | 82,337 | 94,789 | ||||||||
Gain on sale of real estate, net of tax | 9,580 | 27,755 | 22,997 | 34,215 | ||||||||
Net income | 11,114 | 59,734 | 105,334 | 129,004 | ||||||||
Limited partners’ interests in consolidated partnerships | (527 | ) | (643 | ) | (1,380 | ) | (1,619 | ) | ||||
Net income attributable to the Partnership | 10,587 | 59,091 | 103,954 | 127,385 | ||||||||
Preferred unit distributions | (5,266 | ) | (5,266 | ) | (15,797 | ) | (15,797 | ) | ||||
Net income attributable to common unit holders | $ | 5,321 | 53,825 | $ | 88,157 | 111,588 | ||||||
Income per common unit - basic | $ | 0.05 | 0.57 | $ | 0.88 | 1.18 | ||||||
Income per common unit - diluted | $ | 0.05 | 0.57 | $ | 0.88 | 1.18 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Net income | $ | 11,114 | 59,734 | $ | 105,334 | 129,004 | ||||||
Other comprehensive (loss) income: | ||||||||||||
Effective portion of change in fair value of derivative instruments: | ||||||||||||
Effective portion of change in fair value of derivative instruments | 1,294 | (15,768 | ) | (25,338 | ) | (11,274 | ) | |||||
Reclassification adjustment of derivative instruments included in net income | 43,111 | 2,155 | 48,063 | 6,654 | ||||||||
Unrealized gain (loss) on available-for-sale securities | 53 | (43 | ) | 90 | (73 | ) | ||||||
Other comprehensive income (loss) | 44,458 | (13,656 | ) | 22,815 | (4,693 | ) | ||||||
Comprehensive income | 55,572 | 46,078 | 128,149 | 124,311 | ||||||||
Less: comprehensive income (loss) attributable to noncontrolling interests: | ||||||||||||
Net income attributable to noncontrolling interests | 527 | 643 | 1,380 | 1,619 | ||||||||
Other comprehensive income (loss) attributable to noncontrolling interests | 91 | 86 | (172 | ) | (127 | ) | ||||||
Comprehensive income attributable to noncontrolling interests | 618 | 729 | 1,208 | 1,492 | ||||||||
Comprehensive income attributable to the Partnership | $ | 54,954 | 45,349 | $ | 126,941 | 122,819 |
REGENCY CENTERS, L.P. Consolidated Statements of Capital For the nine months ended September 30, 2016 and 2015 (in thousands) (unaudited) | ||||||||||||||||||
General Partner Preferred and Common Units | Limited Partners | Accumulated Other Comprehensive Loss | Total Partners’ Capital | Noncontrolling Interests in Limited Partners’ Interest in Consolidated Partnerships | Total Capital | |||||||||||||
Balance at December 31, 2014 | $ | 1,964,340 | (1,914 | ) | (57,748 | ) | 1,904,678 | 31,804 | 1,936,482 | |||||||||
Net income | 127,181 | 204 | — | 127,385 | 1,619 | 129,004 | ||||||||||||
Other comprehensive loss | — | (7 | ) | (4,559 | ) | (4,566 | ) | (127 | ) | (4,693 | ) | |||||||
Contributions from partners | — | — | — | — | 454 | 454 | ||||||||||||
Distributions to partners | (136,974 | ) | (223 | ) | — | (137,197 | ) | (2,792 | ) | (139,989 | ) | |||||||
Preferred unit distributions | (15,797 | ) | — | — | (15,797 | ) | — | (15,797 | ) | |||||||||
Restricted units issued as a result of amortization of restricted stock issued by Parent Company | 10,441 | — | — | 10,441 | — | 10,441 | ||||||||||||
Common units redeemed as a result of common stock redeemed by Parent Company, net of issuances | (7,858 | ) | — | — | (7,858 | ) | — | (7,858 | ) | |||||||||
Balance at September 30, 2015 | 1,941,333 | (1,940 | ) | (62,307 | ) | 1,877,086 | 30,958 | 1,908,044 | ||||||||||
Balance at December 31, 2015 | 2,112,802 | (1,975 | ) | (58,693 | ) | 2,052,134 | 30,486 | 2,082,620 | ||||||||||
Net income | 103,789 | 165 | — | 103,954 | 1,380 | 105,334 | ||||||||||||
Other comprehensive loss | — | 33 | 22,954 | 22,987 | (172 | ) | 22,815 | |||||||||||
Contributions from partners | — | — | — | — | 8,675 | 8,675 | ||||||||||||
Distributions to partners | (150,391 | ) | (229 | ) | — | (150,620 | ) | (5,224 | ) | (155,844 | ) | |||||||
Preferred unit distributions | (15,797 | ) | — | — | (15,797 | ) | — | (15,797 | ) | |||||||||
Restricted units issued as a result of amortization of restricted stock issued by Parent Company | 9,967 | — | — | 9,967 | — | 9,967 | ||||||||||||
Common units issued as a result of common stock issued by Parent Company, net of repurchases | 542,514 | — | — | 542,514 | — | 542,514 | ||||||||||||
Balance at September 30, 2016 | $ | 2,602,884 | (2,006 | ) | (35,739 | ) | 2,565,139 | 35,145 | 2,600,284 |
2016 | 2015 | |||||
Cash flows from operating activities: | ||||||
Net income | $ | 105,334 | 129,004 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 119,721 | 109,249 | ||||
Amortization of deferred loan cost and debt premium | 7,242 | 7,404 | ||||
(Accretion) and amortization of above and below market lease intangibles, net | (2,296 | ) | (1,250 | ) | ||
Stock-based compensation, net of capitalization | 7,554 | 8,379 | ||||
Equity in income of investments in real estate partnerships | (46,618 | ) | (17,991 | ) | ||
Gain on sale of real estate, net of tax | (22,997 | ) | (34,215 | ) | ||
Provision for impairment | 1,666 | — | ||||
Early extinguishment of debt | 13,943 | (61 | ) | |||
Distribution of earnings from operations of investments in real estate partnerships | 39,765 | 34,527 | ||||
Settlement of derivative instruments | — | (7,267 | ) | |||
Deferred compensation expense | 1,249 | (610 | ) | |||
Realized and unrealized loss (gain) on investments | (1,268 | ) | 189 | |||
Changes in assets and liabilities: | ||||||
Restricted cash | (84 | ) | 1,534 | |||
Accounts receivable, net | (4,269 | ) | (4,408 | ) | ||
Straight-line rent receivables, net | (4,894 | ) | (6,274 | ) | ||
Deferred leasing costs | (7,841 | ) | (8,268 | ) | ||
Other assets | (59 | ) | (2,257 | ) | ||
Accounts payable and other liabilities | 12,607 | 10,230 | ||||
Tenants’ security, escrow deposits and prepaid rent | (1,406 | ) | (1,152 | ) | ||
Net cash provided by operating activities | 217,349 | 216,763 | ||||
Cash flows from investing activities: | ||||||
Acquisition of operating real estate | (333,220 | ) | (42,983 | ) | ||
Advance deposits refunded (paid) on acquisition of operating real estate | 1,250 | (2,250 | ) | |||
Real estate development and capital improvements | (146,773 | ) | (150,967 | ) | ||
Proceeds from sale of real estate investments | 83,675 | 93,727 | ||||
Collection of notes receivable | — | 1,000 | ||||
Investments in real estate partnerships | (13,127 | ) | (18,644 | ) | ||
Distributions received from investments in real estate partnerships | 52,536 | 15,014 | ||||
Dividends on investment securities | 189 | 128 | ||||
Acquisition of securities | (53,290 | ) | (25,675 | ) | ||
Proceeds from sale of securities | 54,176 | 22,296 | ||||
Net cash used in investing activities | (354,584 | ) | (108,354 | ) | ||
Cash flows from financing activities: | ||||||
Net proceeds from common units issued as a result of common stock issued by Parent Company | 549,545 | 946 | ||||
Proceeds from sale of treasury stock | 957 | 51 | ||||
Acquisition of treasury stock | (29 | ) | — | |||
Distributions (to) from limited partners in consolidated partnerships, net | (3,126 | ) | (2,352 | ) | ||
Distributions to partners | (149,278 | ) | (136,231 | ) | ||
Distributions to preferred unit holders | (15,797 | ) | (15,797 | ) | ||
Repayment of fixed rate unsecured notes | (300,000 | ) | (350,000 | ) | ||
Proceeds from issuance of fixed rate unsecured notes, net | — | 248,160 | ||||
Proceeds from unsecured credit facilities | 395,000 | 445,000 | ||||
Repayment of unsecured credit facilities | (295,000 | ) | (305,000 | ) | ||
Proceeds from notes payable | 20,223 | 3,325 | ||||
Repayment of notes payable | (41,584 | ) | (76,027 | ) | ||
Scheduled principal payments | (4,462 | ) | (4,384 | ) | ||
Payment of loan costs | (1,954 | ) | (5,996 | ) | ||
Early redemption costs | (13,214 | ) | — | |||
Net cash provided by (used in) financing activities | 141,281 | (198,305 | ) | |||
Net increase (decrease) in cash and cash equivalents | 4,046 | (89,896 | ) | |||
Cash and cash equivalents at beginning of the period | 36,856 | 113,776 | ||||
Cash and cash equivalents at end of the period | $ | 40,902 | 23,880 |
2016 | 2015 | |||||
Supplemental disclosure of cash flow information: | ||||||
Cash paid for interest (net of capitalized interest of $2,622 and $5,403 in 2016 and 2015, respectively) | $ | 54,904 | 71,734 | |||
Cash paid for income taxes | $ | — | 871 | |||
Supplemental disclosure of non-cash transactions: | ||||||
Mortgage loans assumed for the acquisition of real estate | $ | — | 42,799 | |||
Change in fair value of derivative instruments | $ | (25,338 | ) | (10,845 | ) | |
Common stock issued by Parent Company for dividend reinvestment plan | $ | 804 | 966 | |||
Stock-based compensation capitalized | $ | 2,561 | 2,196 | |||
Contributions from limited partners in consolidated partnerships, net | $ | 8,674 | 13 | |||
Common stock issued for dividend reinvestment in trust | $ | 556 | 631 | |||
Contribution of stock awards into trust | $ | 1,513 | 1,633 | |||
Distribution of stock held in trust | $ | 4,096 | 1,898 | |||
Change in fair value of securities available-for-sale | $ | 90 | (73 | ) | ||
Deconsolidation of previously consolidated partnership: | ||||||
Real estate, net | $ | 14,075 | — | |||
Investments in real estate partnerships | $ | (3,355 | ) | — | ||
Notes payable | $ | (9,415 | ) | — | ||
Other assets and liabilities | $ | 640 | — | |||
Limited partners' interest in consolidated partnerships | $ | (2,099 | ) | — |
1. | Organization and Principles of Consolidation |
• | Those partnerships for which the partners only have protective rights are considered VIEs under ASC 810, Consolidation. Regency is the primary beneficiary of these VIEs as Regency has power over these partnerships and they operate primarily for the benefit of Regency. As such, Regency consolidates these entities and reports the limited partners’ interest as noncontrolling interests. |
• | Those partnerships for which the partners are involved in the day to day decisions and do not have any other aspects that would cause them to be considered VIEs, are evaluated for consolidation using the voting interest model. |
◦ | Those partnerships in which Regency has a controlling financial interest are consolidated and the limited partners’ ownership interest and share of net income is recorded as noncontrolling interest. |
◦ | Those partnerships in which Regency does not have a controlling financial interest are accounted for using the equity method and its ownership interest is recognized through single-line presentation as Investments in Real Estate Partnerships, in the Consolidated Balance Sheet, and Equity in Income of Investments in Real Estate Partnerships, in the Consolidated Statements of Operations. Distributions received from these partnerships are accounted for using the look-through method with returns of capital from property sales or debt financing considered investing cash flows and the remaining distributions generally considered operating cash flows. |
(in thousands) | September 30, 2016 | December 31, 2015 | |||
Assets | |||||
Real estate assets, net | $ | 84,586 | 81,424 | ||
Cash and cash equivalents | 7,822 | 790 | |||
Liabilities | |||||
Notes payable | 8,169 | 17,948 | |||
Equity | |||||
Limited partners’ interests in consolidated partnerships | 17,374 | 11,058 |
Standard | Description | Date of adoption | Effect on the financial statements or other significant matters | |||
Recently adopted: | ||||||
ASU 2015-02, February 2015, Consolidation (Topic 810): Amendments to the Consolidation Analysis | ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership, and affects the consolidation analysis of reporting entities that are involved with VIEs. | January 2016 | The adoption of this standard resulted in five additional investment partnerships being considered variable interest entities due to the limited partners' lack of substantive participation in the partnerships. This did not result in any impact to the Company's Consolidated Balance Sheets, Statements of Operations, or Cash Flows, but did result in additional disclosures about its relationships with and exposure to variable interest entities. | |||
ASU 2015-03, April 2015, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs | ASU 2015-03 simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. | January 2016 | The adoption and implementation of this standard has resulted in the retrospective presentation of debt issuance costs associated with the Company's notes payable and term loans as a direct deduction from the carrying amount of the related debt instruments (previously, included in deferred costs in the consolidated balance sheets). Unamortized debt issuance costs of $8.2 million has been reclassified to offset the related debt as of December 31, 2015. | |||
ASU 2015-15, August 2015, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements | ASU 2015-15 clarifies that debt issuance costs related to line-of-credit arrangements may be deferred and presented as an asset, amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. | January 2016 | The adoption of this standard resulted in debt issuance costs related to the Line of credit ("Line") to continue being presented as an asset in the Consolidated Balance Sheets, previously within deferred costs, and now presented within other assets. | |||
Standard | Description | Date of adoption | Effect on the financial statements or other significant matters | |||
Not yet adopted: | ||||||
ASU 2014-15, August 2014, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern | The standard requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. | December 2016 | The Company does not expect the adoption of this standard to have an impact on its Consolidated Balance Sheets, Statements of Operations, or Cash Flows but will result in more disclosure surrounding the Company's plans for addressing significant upcoming debt maturities. | |||
ASU 2016-09, March 2016, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting | This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions including income tax consequences, classification of awards as either equity or liabilities, an option to recognize stock compensation forfeitures as they occur, and changes to classification on the statement of cash flows. | January 2017 | The Company does not expect the adoption of this standard to have an impact on its financial statements and related disclosures. | |||
Revenue from Contracts with Customers (Topic 606): ASU 2014-09, May 2014, Revenue from Contracts with Customers (Topic 606) ASU 2016-08, March 2016, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations ASU 2016-10, April 2016, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ASU 2016-12, May 2016, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients | The standard will replace existing revenue recognition standards and significantly expand the disclosure requirements for revenue arrangements. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with remaining performance obligations as of the effective date. | January 2018 | The Company is currently evaluating the alternative methods of adoption and the impact it may have on its financial statements and related disclosures. | |||
Standard | Description | Date of adoption | Effect on the financial statements or other significant matters | |||
ASU 2016-01, January 2016, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities | The standard amends the guidance to classify equity securities with readily-determinable fair values into different categories and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. Equity investments accounted for under the equity method are not included in the scope of this amendment. Early adoption of this amendment is not permitted. | January 2018 | The Company does not expect the adoption and implementation of this standard to have a material impact on its results of operations, financial condition or cash flows. | |||
ASU 2016-15, August 2016, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments | The standard will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. Early adoption is permitted on a retrospective basis. | January 2018 | The ASU is consistent with the Company's current treatment and the Company does not expect the adoption and implementation of this standard to have an impact on its cash flow statement. | |||
ASU 2016-02, February 2016, Leases (Topic 842) | The standard amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets. It also makes targeted changes to lessor accounting, including a change to the treatment of initial direct leasing costs, which no longer considers fixed internal leasing salaries as capitalizable costs. Early adoption of this standard is permitted to coincide with adoption of ASU 2014-09. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. | January 2019 | The Company is currently evaluating the alternative methods of adoption and the impact it will have on its financial statements and related disclosures. | |||
ASU 2016-13, June 2016, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments | The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. | January 2020 | The Company is currently evaluating the alternative methods of adoption and the impact it will have on its financial statements and related disclosures. |
2. | Real Estate Investments |
(in thousands) | Nine months ended September 30, 2016 | |||||||||||||||
Date Purchased | Property Name | City/State | Property Type | Ownership | Purchase Price | Debt Assumed, Net of Premiums | Intangible Assets | Intangible Liabilities | ||||||||
2/22/16 | Garden City Park | Garden City Park, NY | Operating | 100% | $17,300 | — | 10,171 | 2,940 | ||||||||
3/4/16 | The Market at Springwoods Village (1) | Houston, TX | Development | 53% | 17,994 | — | — | — | ||||||||
5/16/16 | Market Common Clarendon | Arlington, VA | Operating | 100% | 280,500 | — | 15,428 | 15,662 | ||||||||
7/15/2016 | Klahanie Shopping Center | Sammamish, WA | Operating | 100% | 35,988 | — | 2,264 | 539 | ||||||||
8/4/2016 | The Village at Tustin Legacy | Tustin, CA | Development | 100% | 18,800 | — | — | — | ||||||||
Total property acquisitions | $370,582 | — | 27,863 | 19,141 | ||||||||||||
(1) Regency acquired a 53% controlling interest in the Market at Springwoods Village partnership to develop a shopping center on land contributed by the partner. As a result of consolidation, the Company recorded the partner's non-controlling interest of $8.4 million in Limited partners' interests in consolidated partnerships in the accompanying Consolidated Balance Sheets. | ||||||||||||||||
(in thousands) | Nine months ended September 30, 2015 | |||||||||||||||
Date Purchased | Property Name | City/State | Property Type | Ownership | Purchase Price | Debt Assumed, Net of Premiums | Intangible Assets | Intangible Liabilities | ||||||||
9/1/15 | University Commons | Boca Raton, FL | Operating | 100% | $80,500 | 42,799 | 64,482 | 14,039 |
September 30, 2016 | |||||||
(in thousands) | Three months ended | Nine months ended | |||||
Increase in total revenues | $ | 4,333 | 6,620 | ||||
Increase (decrease) in net income attributable to common stockholders (1) | 1,490 | (130 | ) |
(Pro Forma) | (Pro Forma) | ||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
(in thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | |||||||||
Total revenues | $ | 152,768 | 146,908 | 462,562 | 438,273 | ||||||||
Income from operations | (1) | 1,592 | 33,010 | 85,153 | 96,496 | ||||||||
Net income attributable to common stockholders | (1) | 5,363 | 54,761 | 90,808 | 113,091 | ||||||||
Income per common share - basic | $ | 0.05 | 0.57 | 0.89 | 1.17 | ||||||||
Income per common share - diluted | 0.05 | 0.57 | 0.89 | 1.16 |
Nine months ended | ||
(in years) | September 30, 2016 | |
Assets: | ||
In-place leases | 7.4 | |
Liabilities: | ||
Acquired lease intangible liabilities | 7.9 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||||
Net proceeds from sale of real estate investments | $ | 47,180 | $ | 67,345 | $ | 85,885 | (1 | ) | $ | 93,727 | |||||||
Gain on sale of real estate, net of tax | $ | 9,580 | $ | 27,755 | $ | 22,997 | $ | 34,215 | |||||||||
Provision for impairment | $ | — | $ | — | $ | (1,666 | ) | — | |||||||||
Number of operating properties sold | 3 | 2 | 7 | 4 | |||||||||||||
Number of land parcels sold | 2 | — | 12 | — | |||||||||||||
Percent interest sold | 100 | % | 100 | % | 100 | % | 100 | % |
(in thousands) | September 30, 2016 | December 31, 2015 | ||||
Notes payable: | ||||||
Fixed rate mortgage loans | $ | 418,358 | 475,214 | |||
Variable rate mortgage loans | 53,975 | (1) | 34,154 | |||
Fixed rate unsecured loans | 891,867 | 1,190,403 | ||||
Total notes payable | 1,364,200 | 1,699,771 | ||||
Unsecured credit facilities: | ||||||
Line of Credit (the "Line") | — | — | ||||
Term Loan | 263,421 | 164,514 | ||||
Total unsecured credit facilities | 263,421 | 164,514 | ||||
Total debt outstanding | $ | 1,627,621 | 1,864,285 |
September 30, 2016 | ||||
Weighted Average Effective Rate | Weighted Average Contractual Rate | |||
Mortgage loans | 6.0% | 6.0% | ||
Fixed rate unsecured loans | 5.3% | 4.5% | ||
Line (1) | 1.8% | 1.4% | ||
Term loan | 2.1% | 2.0% |
• | The Company has repaid three mortgages totaling $41.6 million that were scheduled to mature during 2016. |
• | The Company issued new variable rate mortgage debt of $20.0 million, related to one of the mortgages that matured during 2016, and fixed the rate at 2.803% with an interest rate swap. |
• | The Company amended its existing Term Loan, which increased the facility size by $100.0 million to $265.0 million, extended the maturity date to January 5, 2022 and reduced the applicable interest rate. The Term Loan now bears interest at LIBOR plus a ratings based margin of 0.95% per annum, subject to adjustment from time to time based on changes to the Company's corporate credit rating. At closing, the Company executed interest rate swaps for the full notional amount of the Term Loan, which fixed the interest rate at 2.0% through maturity. |
• | In August, the Company redeemed the entirety of its $300 million of 5.875% senior unsecured notes due June 15, 2017 ("$300 million notes") funded from proceeds from an equity offering, as discussed in note 7. The redemption payment included a $13.2 million make-whole premium that was expensed during the three months ended September 30, 2016. |
(in thousands) | September 30, 2016 | |||||||||||
Scheduled Principal Payments and Maturities by Year: | Scheduled Principal Payments | Mortgage Loan Maturities | Unsecured Maturities (1) | Total | ||||||||
2016 | $ | 1,428 | — | — | 1,428 | |||||||
2017 | 5,507 | 117,298 | — | 122,805 | ||||||||
2018 | 4,826 | 57,358 | — | 62,184 | ||||||||
2019 | 3,753 | 106,000 | — | 109,753 | ||||||||
2020 | 4,091 | 84,222 | 150,000 | 238,313 | ||||||||
Beyond 5 Years | 11,933 | 70,071 | 1,015,000 | 1,097,004 | ||||||||
Unamortized debt premium/(discount) and issuance costs | — | 5,846 | (9,712 | ) | (3,866 | ) | ||||||
Total | $ | 31,538 | 440,795 | 1,155,288 | 1,627,621 |
Fair Value | |||||||||||||||||||
(in thousands) | Assets (Liabilities)(2) | ||||||||||||||||||
Effective Date | Maturity Date | Early Termination Date (1) | Notional Amount | Bank Pays Variable Rate of | Regency Pays Fixed Rate of | September 30, 2016 | December 31, 2015 | ||||||||||||
10/16/13 | 10/16/20 | N/A | $ | 28,100 | 1 Month LIBOR | 2.196% | $ | (1,373 | ) | (898 | ) | ||||||||
8/1/16 | 1/5/22 | N/A | 200,000 | 1 Month LIBOR | 1.048% | 423 | — | ||||||||||||
8/1/16 | 1/5/22 | N/A | 65,000 | 1 Month LIBOR | 1.070% | 53 | — | ||||||||||||
4/7/16 | 4/1/23 | N/A | 20,000 | 1 Month LIBOR | 1.303% | (264 | ) | — | |||||||||||
6/15/17 | 6/15/27 | 12/15/17 | 20,000 | 3 Month LIBOR | 3.488% | (3) | — | (1,798 | ) | ||||||||||
6/15/17 | 6/15/27 | 12/15/17 | 100,000 | 3 Month LIBOR | 3.480% | (3) | — | (8,922 | ) | ||||||||||
6/15/17 | 6/15/27 | 12/15/17 | 100,000 | 3 Month LIBOR | 3.480% | (3) | — | (8,921 | ) | ||||||||||
Total derivative financial instruments | $ | (1,161 | ) | (20,539 | ) |
Derivatives in FASB ASC Topic 815 Cash Flow Hedging Relationships: | Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | Location and Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location and Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Missed Forecast) | |||||||||||||||||||||
Three months ended September 30, | Three months ended September 30, | Three months ended September 30, | ||||||||||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Interest rate swaps | $ | 1,294 | (15,768 | ) | Interest expense | $ | (2,525 | ) | (2,155 | ) | Loss on derivative instruments | $ | (40,586 | ) | — | |||||||||
Derivatives in FASB ASC Topic 815 Cash Flow Hedging Relationships: | Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | Location and Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location and Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Missed Forecast) | |||||||||||||||||||||
Nine months ended September 30, | Nine months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Interest rate swaps | $ | (25,338 | ) | (11,274 | ) | Interest expense | $ | (7,477 | ) | (6,654 | ) | Loss on derivative instruments | $ | (40,586 | ) | — |
September 30, 2016 | December 31, 2015 | ||||||||||||
(in thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||
Financial assets: | |||||||||||||
Notes receivable | $ | 10,480 | 10,460 | $ | 10,480 | 10,620 | |||||||
Financial liabilities: | |||||||||||||
Notes payable | $ | 1,364,200 | 1,478,100 | $ | 1,699,771 | 1,793,200 | |||||||
Unsecured credit facilities | $ | 263,421 | 264,800 | $ | 164,514 | 165,300 |
September 30, 2016 | December 31, 2015 | |||||||
Low | High | Low | High | |||||
Notes receivable | 6.8% | 6.8% | 6.3% | 6.3% | ||||
Notes payable | 2.7% | 3.8% | 2.8% | 4.2% | ||||
Unsecured credit facilities | 1.5% | 1.5% | 1.1% | 1.1% |
Fair Value Measurements as of September 30, 2016 | ||||||||||||
(in thousands) | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||
Assets: | Balance | (Level 1) | (Level 2) | (Level 3) | ||||||||
Trading securities held in trust | $ | 29,280 | 29,280 | — | — | |||||||
Available-for-sale securities | 8,017 | — | 8,017 | — | ||||||||
Interest rate derivatives | 476 | — | 476 | — | ||||||||
Total | $ | 37,773 | 29,280 | 8,493 | — | |||||||
Liabilities: | ||||||||||||
Interest rate derivatives | $ | (1,637 | ) | — | (1,637 | ) | — |
Fair Value Measurements as of December 31, 2015 | ||||||||||||
(in thousands) | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||
Assets: | Balance | (Level 1) | (Level 2) | (Level 3) | ||||||||
Trading securities held in trust | $ | 29,093 | 29,093 | — | — | |||||||
Available-for-sale securities | 7,922 | — | 7,922 | — | ||||||||
Total | $ | 37,015 | 29,093 | 7,922 | — | |||||||
Liabilities: | ||||||||||||
Interest rate derivatives | $ | (20,539 | ) | — | (20,539 | ) | — |
Nine months ended September 30, | |||||||
(dollar amounts are in thousands, except price per share data) | 2016 | 2015 | |||||
Shares issued (1) | 182,787 | 18,125 | |||||
Weighted average price per share | $ | 68.85 | 64.72 | ||||
Gross proceeds | $ | 12,584 | 1,173 | ||||
Commissions | $ | 157 | 15 | ||||
Issuance costs | $ | 80 | — | ||||
(1) Reflects shares traded in December and settled in January each year. |
Controlling Interest | Noncontrolling Interest | Total | |||||||||||||||||||
(in thousands) | Cash Flow Hedges | Unrealized gain (loss) on Available-For-Sale Securities | AOCI | Cash Flow Hedges | Unrealized gain (loss) on Available-For-Sale Securities | AOCI | AOCI | ||||||||||||||
Balance as of December 31, 2014 | $ | (57,748 | ) | — | (57,748 | ) | (750 | ) | — | (750 | ) | (58,498 | ) | ||||||||
Other comprehensive income before reclassifications | (11,022 | ) | (73 | ) | (11,095 | ) | (252 | ) | — | (252 | ) | (11,347 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income | 6,536 | — | 6,536 | 118 | — | 118 | 6,654 | ||||||||||||||
Current period other comprehensive income, net | (4,486 | ) | (73 | ) | (4,559 | ) | (134 | ) | — | (134 | ) | (4,693 | ) | ||||||||
Balance as of September 30, 2015 | $ | (62,234 | ) | (73 | ) | (62,307 | ) | (884 | ) | — | (884 | ) | (63,191 | ) | |||||||
Controlling Interest | Noncontrolling Interest | Total | |||||||||||||||||||
(in thousands) | Cash Flow Hedges | Unrealized gain (loss) on Available-For-Sale Securities | AOCI | Cash Flow Hedges | Unrealized gain (loss) on Available-For-Sale Securities | AOCI | AOCI | ||||||||||||||
Balance as of December 31, 2015 | $ | (58,650 | ) | (43 | ) | (58,693 | ) | (785 | ) | — | (785 | ) | (59,478 | ) | |||||||
Other comprehensive income before reclassifications | (25,015 | ) | 89 | (24,926 | ) | (322 | ) | — | (322 | ) | (25,248 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income | 47,880 | — | 47,880 | 183 | — | 183 | 48,063 | ||||||||||||||
Current period other comprehensive income, net | 22,865 | 89 | 22,954 | (139 | ) | — | (139 | ) | 22,815 | ||||||||||||
Balance as of September 30, 2016 | $ | (35,785 | ) | 46 | (35,739 | ) | (924 | ) | — | (924 | ) | (36,663 | ) |
AOCI Component | Amount Reclassified from AOCI into income | Affected Line Item(s) Where Net Income is Presented | |||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Interest rate swaps | $ | 43,111 | 2,155 | $ | 48,063 | 6,654 | Interest expense and Loss on derivative instruments |
(in thousands) | September 30, 2016 | December 31, 2015 | ||||
Assets: | ||||||
Trading securities held in trust | $ | 29,280 | 29,093 | |||
Liabilities: | ||||||
Accounts payable and other liabilities | $ | 28,875 | 28,632 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
(in thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | ||||||||||
Numerator: | ||||||||||||||
Income from operations attributable to common stockholders - basic | $ | 5,305 | 53,731 | $ | 87,992 | 111,384 | ||||||||
Income from operations attributable to common stockholders - diluted | $ | 5,305 | 53,731 | $ | 87,992 | 111,384 | ||||||||
Denominator: | ||||||||||||||
Weighted average common shares outstanding for basic EPS | 103,675 | 94,158 | 99,639 | 94,080 | ||||||||||
Weighted average common shares outstanding for diluted EPS (1) | 104,255 | 94,595 | 100,128 | 94,483 | ||||||||||
Income per common share – basic | $ | 0.05 | 0.57 | $ | 0.88 | 1.18 | ||||||||
Income per common share – diluted | $ | 0.05 | 0.57 | $ | 0.88 | 1.18 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
(in thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | ||||||||||
Numerator: | ||||||||||||||
Income from operations attributable to common unit holders - basic | $ | 5,321 | 53,825 | $ | 88,157 | 111,588 | ||||||||
Income from operations attributable to common unit holders - diluted | $ | 5,321 | 53,825 | $ | 88,157 | 111,588 | ||||||||
Denominator: | ||||||||||||||
Weighted average common units outstanding for basic EPU | 103,829 | 94,312 | 99,793 | 94,234 | ||||||||||
Weighted average common units outstanding for diluted EPU (1) | 104,409 | 94,749 | 100,282 | 94,637 | ||||||||||
Income per common unit – basic | $ | 0.05 | 0.57 | $ | 0.88 | 1.18 | ||||||||
Income per common unit – diluted | $ | 0.05 | 0.57 | $ | 0.88 | 1.18 |
• | Same Property information is provided for operating properties that were owned and operated for the entirety of both calendar year periods being compared and excludes Non-Same Properties and Properties in Development. |
• | A Non-Same Property is a property acquired, sold, or a development completion during either calendar year period being compared. Corporate activities, including the captive insurance company, are part of Non-Same Property. |
• | Property In Development is a property owned and intended to be developed, including partially operating properties acquired specifically for redevelopment and excluding land held for future development. |
• | Development Completion is a project in development that is deemed complete upon the earliest of: (i) 90% of total estimated net development costs have been incurred and percent leased equals or exceeds 95%, or (ii) the project features at least two years of anchor operations, or (iii) three years have passed since the start of construction. Once deemed complete, the property is termed an Operating Property. |
• | Pro-Rata information includes 100% of our consolidated properties plus our ownership interest in our unconsolidated real estate investment partnerships. |
• | The amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting or allocating noncontrolling interests, and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses; and |
• | Other companies in our industry may calculate their pro-rata interest differently, limiting the usefulness as a comparative measure. |
• | Core EBITDA is defined as earnings before interest, taxes, depreciation and amortization, real estate gains and losses, and development and acquisition pursuit costs. |
• | Fixed Charge Coverage Ratio is defined as Core EBITDA divided by the sum of the gross interest and scheduled mortgage principal paid to our lenders plus dividends paid to our preferred stockholders. |
• | Net Operating Income ("NOI") is the sum of minimum rent, percentage rent and recoveries from tenants and other income, less operating and maintenance, real estate taxes, and provision for doubtful accounts. NOI excludes straight-line rental income, above and below market rent amortization and other fees. The Company also provides disclosure of NOI excluding termination fees, which excludes both termination fee income and expenses. |
• | NAREIT Funds from Operations ("NAREIT FFO") is a commonly used measure of REIT performance, which the National Association of Real Estate Investment Trusts ("NAREIT") defines as net income, computed in accordance with GAAP, excluding gains and losses from sales of depreciable property, net of tax, excluding operating real estate impairments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We compute NAREIT FFO for all periods presented in accordance with NAREIT's definition. Many companies use different depreciable lives and methods, and real estate values historically fluctuate with market conditions. Since NAREIT FFO excludes depreciation and amortization and gains and losses from depreciable property dispositions, and impairments, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition and development activities, and financing costs. This provides a perspective of our financial performance not immediately apparent from net income determined in accordance with GAAP. Thus, NAREIT FFO is a supplemental non-GAAP financial measure of our operating performance, which does not represent cash generated from operating activities in accordance with GAAP; and, therefore, should not be considered a substitute measure of cash flows from operations. |
• | Core FFO is an additional performance measure used by Regency as the computation of NAREIT FFO includes certain non-cash and non-comparable items that affect the Company's period-over-period performance. Core FFO excludes from NAREIT FFO, but is not limited to: (a) transaction related gains, income or expense; (b) impairments on land; (c) gains or losses from the early extinguishment of debt; and (d) other non-core amounts as they occur. The Company provides a reconciliation of NAREIT FFO to Core FFO. |
• | First-rate performance of our exceptionally merchandised and located national portfolio; |
• | Value-enhancing services of the best team of professionals in the business; and |
• | Creation of superior growth in shareholder value. |
• | Sustain average annual 3% NOI growth from a high-quality, growing portfolio of thriving community and neighborhood shopping centers; |
• | Develop new, and redevelop existing, high quality shopping centers at attractive returns on investment from a disciplined development program; |
• | Maintain our strong balance sheet to provide financial flexibility, to cost effectively fund uses of capital, and to weather economic downturns; and |
• | Engage a talented and dedicated team with high standards of integrity that operates efficiently and is recognized as a leader in the real estate industry. |
• | We achieved pro-rata same property NOI growth, excluding termination fees, of 3.4% during the nine months ended September 30, 2016. |
• | Our pro-rata same property percent leased was 96.0% at September 30, 2016, representing a small decline from 96.2% at December 31, 2015, primarily related to the Sports Authority bankruptcy. |
• | We grew rental rates 10.7% on new and renewal leases of comparable size space during the nine months ended September 30, 2016. |
• | We invested in the acquisition of three operating properties, for a gross purchase price of $333.8 million. |
• | During the nine months ended September 30, 2016, we started $108.5 million of development and redevelopment projects, net of partner funding requirements, with a weighted average projected return of 8.2%. |
• | At September 30, 2016, we have five ground-up developments in process, with total expected net development costs of $112.0 million, net of partner funding requirements, and have $40.0 million of net costs to complete. These developments are projecting returns on capital of 7.9% and are currently 85.4% leased. |
• | At September 30, 2016, our net debt-to-core EBITDA ratio on a pro-rata basis for the trailing twelve months was 4.4x versus 5.2x at December 31, 2015. We had $40.9 million of cash and no outstanding balance on our $800.0 million Line. |
• | In June 2016, we settled 1.85 million of the 3.1 million shares of the forward equity offering resulting in net proceeds of $137.5 million, which was used to partially repay the Line balance. |
• | In July 2016, we amended our existing Term Loan, which increased the facility size by $100.0 million to $265.0 million, extended the maturity date to January 5, 2022 and fixed the interest rate at 2.00%. |
• | In July 2016, we issued 5.0 million shares of common stock resulting in net proceeds of $400.1 million, used to (i) repay in full our $300 million notes, including a make-whole payment, (ii) settle the forward interest rate swaps, and (iii) fund investment activities and general corporate purposes. |
(GLA in thousands) | September 30, 2016 | December 31, 2015 | ||
Number of Properties | 197 | 200 | ||
Properties in Development | 5 | 7 | ||
GLA | 23,753 | 23,280 | ||
% Leased – Operating and Development | 95.4% | 95.4% | ||
% Leased – Operating | 95.7% | 95.9% | ||
Weighted average annual effective rent per square foot ("PSF"), net of tenant concessions. | $19.74 | $18.95 |
(GLA in thousands) | September 30, 2016 | December 31, 2015 | ||
Number of Properties | 110 | 118 | ||
GLA | 13,882 | 14,755 | ||
% Leased – Operating | 96.4% | 96.3% | ||
Weighted average annual effective rent PSF, net of tenant concessions | $19.50 | $18.81 |
September 30, 2016 | December 31, 2015 | |||
% Leased – Operating | 95.8% | 95.9% | ||
Anchor | 97.7% | 98.5% | ||
Shop space | 92.8% | 91.7% |
Nine months ended September 30, 2016 | ||||||||||||||||
Leasing Transactions (1) | SF (in thousands) | Base Rent PSF (2) | Tenant Improvements PSF (2) | Leasing Commissions PSF (2) | ||||||||||||
Anchor Leases | ||||||||||||||||
New | 11 | 312 | $ | 13.92 | $ | 4.98 | $ | 3.75 | ||||||||
Renewal | 64 | 1302 | $ | 13.29 | $ | 0.35 | $ | 0.83 | ||||||||
Total Anchor Leases (1) | 75 | 1,614 | $ | 13.41 | $ | 1.24 | $ | 1.39 | ||||||||
Shop Space | ||||||||||||||||
New | 313 | 561 | $ | 29.93 | $ | 12.00 | $ | 13.83 | ||||||||
Renewal | 696 | 1066 | $ | 31.57 | $ | 1.48 | $ | 4.18 | ||||||||
Total Shop Space Leases (1) | 1009 | 1,627 | $ | 31.00 | $ | 5.11 | $ | 7.51 | ||||||||
Total Leases | 1084 | 3,241 | $ | 22.24 | $ | 3.18 | $ | 4.46 |
Nine months ended September 30, 2015 | ||||||||||||||||
Leasing Transactions (1) | SF (in thousands) | Base Rent PSF (2) | Tenant Improvements PSF (2) | Leasing Commissions PSF (2) | ||||||||||||
Anchor Leases | ||||||||||||||||
New | 8 | 111 | $ | 15.62 | $ | 5.71 | $ | 5.32 | ||||||||
Renewal | 33 | 767 | $ | 11.33 | $ | 0.01 | $ | 1.02 | ||||||||
Total Anchor Leases (1) | 41 | 878 | $ | 11.87 | $ | 0.74 | $ | 1.56 | ||||||||
Shop Space | ||||||||||||||||
New | 334 | 542 | $ | 30.59 | $ | 10.30 | $ | 13.65 | ||||||||
Renewal | 697 | 1079 | $ | 31.06 | $ | 0.70 | $ | 3.95 | ||||||||
Total Shop Space Leases (1) | 1031 | 1,621 | $ | 30.90 | $ | 3.91 | $ | 7.19 | ||||||||
Total Leases | 1072 | 2,499 | $ | 24.22 | $ | 2.79 | $ | 5.22 |
September 30, 2016 | ||||||
Grocery Anchor | Number of Stores (1) | Percentage of Company- owned GLA (2) | Percentage of Annualized Base Rent (2) | |||
Kroger | 58 | 9.0% | 4.6% | |||
Publix | 40 | 5.7% | 3.0% | |||
Albertsons/Safeway | 49 | 4.8% | 2.8% | |||
Whole Foods | 20 | 2.3% | 2.3% | |||
(1) Includes stores owned by grocery anchors that are attached to our centers. | ||||||
(2) Includes Regency's pro-rata share of Unconsolidated Properties and excludes those owned by anchors. |
Three months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Minimum rent | $ | 111,886 | 105,071 | 6,815 | ||||||
Percentage rent | 495 | 486 | 9 | |||||||
Recoveries from tenants | 31,443 | 28,294 | 3,149 | |||||||
Other income | 3,089 | 2,431 | 658 | |||||||
Management, transaction, and other fees | 5,855 | 5,786 | 69 | |||||||
Total revenues | $ | 152,768 | 142,068 | 10,700 |
• | $1.9 million increase from rent commencing at development properties; |
• | $5.1 million increase from new acquisitions of operating properties; and |
• | $1.5 million increase in minimum rent from same properties from redevelopments, rental rate growth on new and renewal leases, and contractual rent steps; |
• | reduced by $1.7 million from the sale of operating properties. |
• | $775,000 increase from rent commencing at development properties; |
• | $1.5 million increase from new acquisitions of operating properties; and |
• | $1.4 million increase from same properties associated with higher recoverable costs; |
• | reduced by $544,000 from the sale of operating properties. |
Three months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Asset management fees | $ | 1,611 | 1,573 | 38 | ||||||
Property management fees | 3,197 | 3,249 | (52 | ) | ||||||
Leasing commissions and other fees | 1,047 | 964 | 83 | |||||||
Total management, transaction, and other fees | $ | 5,855 | 5,786 | 69 |
Three months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Depreciation and amortization | $ | 40,705 | 37,032 | 3,673 | ||||||
Operating and maintenance | 23,373 | 19,761 | 3,612 | |||||||
General and administrative | 16,046 | 14,750 | 1,296 | |||||||
Real estate taxes | 17,058 | 16,044 | 1,014 | |||||||
Other operating expenses | 1,046 | 1,880 | (834 | ) | ||||||
Total operating expenses | $ | 98,228 | 89,467 | 8,761 |
• | $945,000 increase as we began depreciating costs at development properties where tenant spaces were completed and became available for occupancy; |
• | $3.0 million increase from new acquisitions of operating properties; and |
• | $749,000 million increase from same properties, attributable to recent capital improvements and redevelopments; |
• | reduced by $1.0 million from the sale of operating properties and other corporate asset disposals. |
• | $651,000 increase from operations commencing at development properties; |
• | $1.3 million increase from new acquisitions of operating properties; and |
• | $2.1 million increase from same properties primarily in recoverable costs; |
• | reduced by $381,000 from the sale of operating properties. |
• | $2.0 million increase from the change in the value of participant obligations within the deferred compensation plan; |
• | reduced by $629,000 of higher development overhead capitalization due to the timing of project starts. |
• | $252,000 increase from development properties where capitalization ceased as tenant spaces became available for occupancy; and |
• | $1.1 million increase from acquisitions of operating properties; |
• | reduced by $329,000 from sold properties. |
Three months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Interest expense, net | ||||||||||
Interest on notes payable | $ | 19,828 | 23,552 | (3,724 | ) | |||||
Interest on unsecured credit facilities | 1,556 | 1,064 | 492 | |||||||
Capitalized interest | (857 | ) | (1,388 | ) | 531 | |||||
Hedge expense | 1,807 | 2,155 | (348 | ) | ||||||
Interest income | (389 | ) | (284 | ) | (105 | ) | ||||
Interest expense, net | 21,945 | 25,099 | (3,154 | ) | ||||||
Early extinguishment of debt | 13,943 | — | 13,943 | |||||||
Net investment (income) loss | (821 | ) | 1,190 | (2,011 | ) | |||||
Loss on derivative instruments | 40,586 | — | 40,586 | |||||||
Total other expense (income) | $ | 75,653 | 26,289 | 49,364 |
• | $3.7 million decrease in interest on notes payable from refinancing and deleveraging activities in 2015 and the early redemption of our $300 million notes in August 2016; offset by, |
• | $492,000 increase in interest expense related to higher average balances on our unsecured credit facilities; and |
• | $531,000 increase due to lower interest capitalization on our development and redevelopment projects. |
Three months ended September 30, | |||||||||||
(in thousands) | Ownership | 2016 | 2015 | Change | |||||||
GRI - Regency, LLC (GRIR) | 40.00% | $ | 6,862 | 4,194 | 2,668 | ||||||
Columbia Regency Retail Partners, LLC (Columbia I) | 20.00% | 314 | 377 | (63 | ) | ||||||
Columbia Regency Partners II, LLC (Columbia II) | 20.00% | 366 | 158 | 208 | |||||||
Cameron Village, LLC (Cameron) | 30.00% | 150 | 115 | 35 | |||||||
RegCal, LLC (RegCal) | 25.00% | 205 | 115 | 90 | |||||||
US Regency Retail I, LLC (USAA) | 20.01% | 227 | 198 | 29 | |||||||
Other investments in real estate partnerships | 50.00% | 14,523 | 510 | 14,013 | |||||||
Total equity in income of investments in real estate partnerships | $ | 22,647 | 5,667 | 16,980 |
Three months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Income from operations | $ | 1,534 | 31,979 | (30,445 | ) | |||||
Gain on sale of real estate, net of tax | 9,580 | 27,755 | (18,175 | ) | ||||||
Income attributable to noncontrolling interests | (543 | ) | (737 | ) | 194 | |||||
Preferred stock dividends | (5,266 | ) | (5,266 | ) | — | |||||
Net income attributable to common stockholders | $ | 5,305 | 53,731 | (48,426 | ) | |||||
Net income attributable to exchangeable operating partnership units | 16 | 94 | (78 | ) | ||||||
Net income attributable to common unit holders | $ | 5,321 | 53,825 | (48,504 | ) |
Nine months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Minimum rent | $ | 329,506 | 308,766 | 20,740 | ||||||
Percentage rent | 2,651 | 2,593 | 58 | |||||||
Recoveries from tenants | 94,684 | 87,651 | 7,033 | |||||||
Other income | 9,210 | 6,554 | 2,656 | |||||||
Management, transaction, and other fees | 18,759 | 18,032 | 727 | |||||||
Total revenues | $ | 454,810 | 423,596 | 31,214 |
• | $9.5 million increase from rent commencing at development properties; |
• | $10.8 million increase from new acquisitions of operating properties; and |
• | $5.4 million increase in minimum rent from same properties, reflecting a $7.3 million increase from redevelopments, rental rate growth on new and renewal leases, and contractual rent steps, offset by a $1.9 million charge to straight line rent primarily attributable to expected early terminations; |
• | reduced by $4.9 million from the sale of operating properties. |
• | $2.4 million increase from rent commencing at development properties; |
• | $3.2 million increase from new acquisitions of operating properties; and |
• | $3.4 million increase from same properties associated with higher recoverable costs; |
• | reduced by $1.9 million from the sale of operating properties. |
• | $1.7 million in same properties primarily as a result of lease termination and easement fees; and |
• | $774,000 in parking income related to the acquisition of Market Common Clarendon. |
Nine months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Asset management fees | $ | 4,935 | 4,694 | 241 | ||||||
Property management fees | 9,819 | 9,880 | (61 | ) | ||||||
Leasing commissions and other fees | 4,005 | 3,458 | 547 | |||||||
Total management, transaction, and other fees | $ | 18,759 | 18,032 | 727 |
Nine months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Depreciation and amortization | $ | 119,721 | 109,249 | 10,472 | ||||||
Operating and maintenance | 69,767 | 61,119 | 8,648 | |||||||
General and administrative | 48,695 | 46,227 | 2,468 | |||||||
Real estate taxes | 49,697 | 46,842 | 2,855 | |||||||
Other operating expenses | 5,795 | 4,825 | 970 | |||||||
Total operating expenses | $ | 293,675 | 268,262 | 25,413 |
• | $3.6 million increase as we began depreciating costs at development properties where tenant spaces were completed and became available for occupancy; |
• | $5.7 million increase from new acquisitions of operating properties; and |
• | $3.5 million increase from same properties, attributable to recent capital improvements and redevelopments; |
• | reduced by $2.3 million from the sale of operating properties and other corporate asset disposals. |
• | $1.9 million increase from operations commencing at development properties; |
• | $4.3 million increase from new acquisitions of operating properties; and |
• | $3.6 million increase in recoverable costs at same properties; |
• | reduced by $1.2 million from the sale of operating properties. |
• | $1.9 million increase from the change in the value of participant obligations within the deferred compensation plan; and |
• | $694,000 increase in compensation costs. |
• | $892,000 increase from development properties where capitalization ceased as tenant spaces became available for occupancy; |
• | $2.2 million increase from new acquisitions of operating properties; and |
• | $949,000 increase at same properties from increased tax assessments; |
• | reduced by $1.2 million from sold properties. |
Nine months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Interest expense, net | ||||||||||
Interest on notes payable | $ | 63,899 | 75,299 | (11,400 | ) | |||||
Interest on unsecured credit facilities | 3,829 | 2,667 | 1,162 | |||||||
Capitalized interest | (2,622 | ) | (5,403 | ) | 2,781 | |||||
Hedge expense | 6,306 | 6,656 | (350 | ) | ||||||
Interest income | (923 | ) | (812 | ) | (111 | ) | ||||
Interest expense, net | 70,489 | 78,407 | (7,918 | ) | ||||||
Provision for impairment | 1,666 | — | 1,666 | |||||||
Early extinguishment of debt | 13,943 | (61 | ) | 14,004 | ||||||
Net investment (income) loss | (1,268 | ) | 190 | (1,458 | ) | |||||
Loss on derivative instruments | 40,586 | — | 40,586 | |||||||
Total other expense (income) | $ | 125,416 | 78,536 | 46,880 |
• | $11.4 million decrease in interest on notes payable due to lower interest rates from refinancing and deleveraging activities during 2015 and the early redemption of our $300 million notes in August 2016; offset by |
• | $1.2 million increase related to higher average balances on unsecured credit facilities during the nine months ended September 30, 2016; and |
• | $2.8 million increase due to lower interest capitalization on our development and redevelopment projects. |
Nine months ended September 30, | |||||||||||
(in thousands) | Ownership | 2016 | 2015 | Change | |||||||
GRI - Regency, LLC (GRIR) | 40.00% | $ | 23,975 | 13,524 | 10,451 | ||||||
Columbia Regency Retail Partners, LLC (Columbia I) | 20.00% | 2,557 | 1,127 | 1,430 | |||||||
Columbia Regency Partners II, LLC (Columbia II) | 20.00% | 2,236 | 452 | 1,784 | |||||||
Cameron Village, LLC (Cameron) | 30.00% | 487 | 477 | 10 | |||||||
RegCal, LLC (RegCal) | 25.00% | 684 | 349 | 335 | |||||||
US Regency Retail I, LLC (USAA) | 20.01% | 739 | 606 | 133 | |||||||
Other investments in real estate partnerships | 50.00% | 15,940 | 1,456 | 14,484 | |||||||
Total equity in income of investments in real estate partnerships | $ | 46,618 | 17,991 | 28,627 |
Nine months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Income from operations | $ | 82,337 | 94,789 | (12,452 | ) | |||||
Gain on sale of real estate, net of tax | 22,997 | 34,215 | (11,218 | ) | ||||||
Income attributable to noncontrolling interests | (1,545 | ) | (1,823 | ) | 278 | |||||
Preferred stock dividends | (15,797 | ) | (15,797 | ) | — | |||||
Net income attributable to common stockholders | $ | 87,992 | 111,384 | (23,392 | ) | |||||
Net income attributable to exchangeable operating partnership units | 165 | 204 | (39 | ) | ||||||
Net income attributable to common unit holders | $ | 88,157 | 111,588 | (23,431 | ) |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
(in thousands) | 2016 | 2015 | Change | 2016 | 2015 | Change | ||||||||||||||
Base rent | $ | 122,745 | 119,756 | 2,989 | $ | 366,428 | 356,391 | 10,037 | ||||||||||||
Percentage rent | 602 | 623 | (21 | ) | 3,708 | 3,756 | (48 | ) | ||||||||||||
Recovery revenue | 35,402 | 34,894 | 508 | 108,455 | 107,619 | 836 | ||||||||||||||
Other income | 2,548 | 2,186 | 362 | 8,299 | 5,533 | 2,766 | ||||||||||||||
Operating expenses | 44,442 | 43,818 | 624 | 133,867 | 132,482 | 1,385 | ||||||||||||||
Pro-rata same property NOI (1) | $ | 116,855 | 113,641 | 3,214 | $ | 353,023 | 340,817 | 12,206 | ||||||||||||
Less: Termination fees | 115 | 144 | (29 | ) | 945 | 376 | 569 | |||||||||||||
Pro-rata same property NOI excluding termination fees | $ | 116,740 | 113,497 | 3,243 | $ | 352,078 | 340,441 | 11,637 | ||||||||||||
Same property NOI growth | 2.9 | % | 3.4 | % |
Three months ended September 30, | |||||||||
2016 | 2015 | ||||||||
(GLA in thousands) | Property Count | GLA | Property Count | GLA | |||||
Beginning same property count | 298 | 26,964 | 303 | 26,682 | |||||
Disposed properties | (6 | ) | (295 | ) | (1 | ) | (145 | ) | |
SF adjustments (1) | — | — | — | 4 | |||||
Ending same property count | 292 | 26,669 | 302 | 26,541 | |||||
Nine months ended September 30, | |||||||||
2016 | 2015 | ||||||||
(GLA in thousands) | Property Count | GLA | Property Count | GLA | |||||
Beginning same property count | 300 | 26,508 | 298 | 25,526 | |||||
Acquired properties owned for entirety of comparable periods | 6 | 443 | 4 | 427 | |||||
Developments that reached completion by beginning of earliest comparable period presented | 2 | 342 | 3 | 790 | |||||
Disposed properties | (16 | ) | (660 | ) | (3 | ) | (220 | ) | |
SF adjustments (1) | — | 3 | — | 18 | |||||
Ending same property count | 292 | 26,636 | 302 | 26,541 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
(in thousands, except share information) | 2016 | 2015 | 2016 | 2015 | ||||||||||
Reconciliation of Net income to NAREIT FFO | ||||||||||||||
Net income attributable to common stockholders | $ | 5,305 | 53,731 | $ | 87,992 | 111,384 | ||||||||
Adjustments to reconcile to NAREIT FFO:(1) | ||||||||||||||
Depreciation and amortization (excluding FF&E) | 47,826 | 45,606 | 143,373 | 135,990 | ||||||||||
Provision for impairment to operating properties | — | — | 659 | — | ||||||||||
Gain on sale of operating properties, net of tax | (23,067 | ) | (27,806 | ) | (38,016 | ) | (35,281 | ) | ||||||
Exchangeable operating partnership units | 16 | 94 | 165 | 204 | ||||||||||
NAREIT FFO attributable to common stock and unit holders | $ | 30,080 | 71,625 | $ | 194,173 | 212,297 | ||||||||
Reconciliation of NAREIT FFO to Core FFO | ||||||||||||||
NAREIT FFO attributable to common stock and unit holders | $ | 30,080 | 71,625 | $ | 194,173 | 212,297 | ||||||||
Adjustments to reconcile to Core FFO:(1) | ||||||||||||||
Development pursuit costs | (47 | ) | 213 | 1,766 | 303 | |||||||||
Acquisition pursuit and closing costs | 287 | 367 | 907 | 800 | ||||||||||
Gain on sale of land | (628 | ) | 35 | (7,886 | ) | (33 | ) | |||||||
Provision for impairment to land | 35 | — | 547 | — | ||||||||||
Hedge ineffectiveness | 40,586 | 3 | 40,589 | 6 | ||||||||||
Early extinguishment of debt | 13,943 | 2 | 13,957 | (58 | ) | |||||||||
Gain on sale of investments | — | — | — | (416 | ) | |||||||||
Core FFO attributable to common stock and unit holders | $ | 84,256 | 72,245 | $ | 244,053 | 212,899 |
Three months ended September 30, | ||||||||||||||||||||
2016 | 2015 | |||||||||||||||||||
(in thousands) | Same Property | Other (1) | Total | Same Property | Other (1) | Total | ||||||||||||||
Income from operations | $ | 76,502 | (74,968 | ) | 1,534 | $ | 59,012 | (27,033 | ) | 31,979 | ||||||||||
Less: | ||||||||||||||||||||
Management, transaction, and other fees | — | 5,855 | 5,855 | — | 5,786 | 5,786 | ||||||||||||||
Other (2) | 1,020 | 2,660 | 3,680 | 1,904 | 2,764 | 4,668 | ||||||||||||||
Plus: | ||||||||||||||||||||
Depreciation and amortization | 34,967 | 5,738 | 40,705 | 34,218 | 2,814 | 37,032 | ||||||||||||||
General and administrative | — | 16,046 | 16,046 | — | 14,750 | 14,750 | ||||||||||||||
Other operating expense, excluding provision for doubtful accounts | 78 | 420 | 498 | 41 | 1,153 | 1,194 | ||||||||||||||
Other expense (income) | 6,570 | 69,083 | 75,653 | 7,040 | 19,249 | 26,289 | ||||||||||||||
Equity in income (loss) of investments in real estate excluded from NOI (3) | (242 | ) | 126 | (116 | ) | 15,234 | 1,372 | 16,606 | ||||||||||||
Pro-rata NOI | $ | 116,855 | 7,930 | 124,785 | $ | 113,641 | 3,755 | 117,396 | ||||||||||||
Nine months ended September 30, | ||||||||||||||||||||
2016 | 2015 | |||||||||||||||||||
(in thousands) | Same Property | Other (1) | Total | Same Property | Other (1) | Total | ||||||||||||||
Income from operations | $ | 209,303 | (126,966 | ) | 82,337 | $ | 178,420 | (83,631 | ) | 94,789 | ||||||||||
Less: | ||||||||||||||||||||
Management, transaction, and other fees | — | 18,759 | 18,759 | — | 18,032 | 18,032 | ||||||||||||||
Other(2) | 3,183 | 7,987 | 11,170 | 5,994 | 6,190 | 12,184 | ||||||||||||||
Plus: | ||||||||||||||||||||
Depreciation and amortization | 106,011 | 13,710 | 119,721 | 102,070 | 7,179 | 109,249 | ||||||||||||||
General and administrative | — | 48,695 | 48,695 | — | 46,227 | 46,227 | ||||||||||||||
Other operating expense, excluding provision for doubtful accounts | 973 | 3,373 | 4,346 | 29 | 2,832 | 2,861 | ||||||||||||||
Other expense (income) | 20,255 | 105,161 | 125,416 | 21,452 | 57,084 | 78,536 | ||||||||||||||
Equity in income (loss) of investments in real estate excluded from NOI (3) | 19,664 | 2,017 | 21,681 | 44,840 | 4,353 | 49,193 | ||||||||||||||
Pro-rata NOI | $ | 353,023 | 19,244 | 372,267 | $ | 340,817 | 9,822 | 350,639 |
(in thousands) | September 30, 2016 | |||
ATM equity program | ||||
Original offering amount | $ | 200,000 | ||
Available capacity | $ | 70,800 | ||
Forward Equity Offering | ||||
Original offering amount | $ | 233,300 | ||
Available equity offering to settle (1) | $ | 94,063 | ||
Line of Credit | ||||
Total commitment amount | $ | 800,000 | ||
Available capacity (2) | $ | 794,200 | ||
Maturity (3) | May 13, 2019 | |||
(1) We have 1.25 million shares to settle prior to June 23, 2017 at an offering price of $75.25 per share before any underwriting discount and offering expenses. | ||||
(2) Net of letters of credit. | ||||
(3) The Company has the option to extend the maturity for two additional six-month periods. |
Nine months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Net cash provided by operating activities | $ | 217,349 | 216,763 | 586 | ||||||
Net cash used in investing activities | (354,584 | ) | (108,354 | ) | (246,230 | ) | ||||
Net cash provided by (used in) financing activities | 141,281 | (198,305 | ) | 339,586 | ||||||
Net increase (decrease) in cash and cash equivalents | $ | 4,046 | (89,896 | ) | 93,942 | |||||
Total cash and cash equivalents | $ | 40,902 | 23,880 | 17,022 |
• | $23.6 million increase in cash from operating income; |
• | $5.2 million increase in operating cash flow distributions from our unconsolidated real estate partnerships as several redevelopment projects were completed and began generating operating cash flows; and, |
• | $5.1 million net increase in cash due to timing of cash receipts and payments related to operating activities; offset by |
• | $40.6 million and $7.3 million paid during 2016 and 2015, respectively, to settle forward starting interest rate swaps put in place to hedge changes in interest rates on expected issuance of ten year fixed rate debt. The $40.6 million paid in 2016 was recognized through net income since the previously forecasted transaction is now probable to no longer occur. The $7.3 million paid in 2015 was recognized in Other comprehensive income and is being reclassified to earnings over the period of the ten year debt issued in 2015. |
Nine months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Cash flows from investing activities: | ||||||||||
Acquisition of operating real estate | $ | (333,220 | ) | (42,983 | ) | (290,237 | ) | |||
Advance deposits refunded (paid) on acquisition of operating real estate | 1,250 | (2,250 | ) | 3,500 | ||||||
Real estate development and capital improvements | (146,773 | ) | (150,967 | ) | 4,194 | |||||
Proceeds from sale of real estate investments | 83,675 | 93,727 | (10,052 | ) | ||||||
Collection of notes receivable | — | 1,000 | (1,000 | ) | ||||||
Investments in real estate partnerships | (13,127 | ) | (18,644 | ) | 5,517 | |||||
Distributions received from investments in real estate partnerships | 52,536 | 15,014 | 37,522 | |||||||
Dividends on investment securities | 189 | 128 | 61 | |||||||
Acquisition of securities | (53,290 | ) | (25,675 | ) | (27,615 | ) | ||||
Proceeds from sale of securities | 54,176 | 22,296 | 31,880 | |||||||
Net cash used in investing activities | $ | (354,584 | ) | (108,354 | ) | (246,230 | ) |
• | We acquired three operating properties during 2016 for $333.2 million compared to $43.0 million for one operating property in 2015. |
• | We invested $4.2 million less in 2016 than 2015 on real estate development and capital improvements, as further detailed in a table below. |
• | We received proceeds of $83.7 million from the sale of seven shopping centers and twelve land parcels in 2016, compared to $93.7 million for four shopping centers in 2015. |
• | We invested $13.1 million in our real estate partnerships during 2016 to fund our share of maturing mortgage debt and redevelopment activity, compared to $18.6 million during 2015. |
• | Distributions from our unconsolidated real estate partnerships include return of capital from sales or financing proceeds. The $52.5 million received in 2016 is primarily driven by proceeds from the sale of nine shopping centers within the partnerships. During 2015, we received $15.0 million, primarily attributable to $12.7 million of proceeds from the sale of one shopping center with a co-investment partner and $2.3 million of financing proceeds. |
• | Acquisition of securities and proceeds from sale of securities pertain to equity and debt securities held by our captive insurance company and our deferred compensation plan. The majority of our investing activity during 2016 relates to reallocation of plan assets. |
Nine months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Capital expenditures: | ||||||||||
Land acquisitions for development | $ | 8,654 | — | 8,654 | ||||||
Building and tenant improvements | 19,393 | 22,211 | (2,818 | ) | ||||||
Redevelopment costs | 35,695 | 34,523 | 1,172 | |||||||
Development costs | 71,067 | 78,921 | (7,854 | ) | ||||||
Capitalized interest | 2,622 | 5,403 | (2,781 | ) | ||||||
Capitalized direct compensation | 9,342 | 9,909 | (567 | ) | ||||||
Real estate development and capital improvements | $ | 146,773 | 150,967 | (4,194 | ) |
• | During 2016 we acquired one land parcel for a new development project. |
• | Building and tenant improvements decreased during 2016 primarily related to timing of capital projects. |
• | Redevelopment expenditures are slightly higher in 2016 due to the timing, magnitude, and number of projects currently in process. We intend to continuously improve our portfolio of shopping centers through redevelopment which can include adjacent land acquisition, existing building expansion, new out-parcel building construction, and tenant improvement costs. The size and magnitude of each redevelopment project varies with each redevelopment plan. |
• | Development expenditures are lower in 2016 due to the progress towards completion of our development projects currently in process. At September 30, 2016 and December 31, 2015, we had five and seven development projects, respectively, that were either under construction or in lease up. See the tables below for more details about our development projects. |
• | Interest is capitalized on our development and redevelopment projects and is based on cumulative actual development costs expended. We cease interest capitalization when the property is no longer being developed or is available for occupancy upon substantial completion of tenant improvements but in no event would we capitalize interest on the project beyond 12 months after the anchor opens for business. Capitalized interest decreased in 2016 as compared to 2015 as our development or redevelopment projects neared substantial completion and we commenced fewer new projects. |
• | We have a staff of employees who directly support our development and redevelopment program. Internal compensation costs directly attributable to these activities are capitalized as part of each project. Changes in the level of future development and redevelopment activity could adversely impact results of operations by reducing the amount of internal costs for development and redevelopment projects that may be capitalized. A 10% reduction in development and redevelopment activity without a corresponding reduction in the compensation costs directly related to our development and redevelopment activities could result in an additional charge to net income of $1.4 million per year. |
(in thousands, except cost PSF) | September 30, 2016 | |||||||||||||||||
Property Name | Location | Start Date | Estimated /Actual Anchor Opening | Estimated Net Development Costs (1) | % of Costs Incurred (1) | GLA | Cost PSF of GLA (1) | |||||||||||
Willow Oaks Crossing | Concord, NC | Q2-14 | Dec-15 | $ | 13,914 | 97% | 69 | $ | 202 | |||||||||
CityLine Market Ph II | Richardson, TX | Q4-15 | June-16 | 6,172 | 80% | 22 | 281 | |||||||||||
Northgate Marketplace Ph II | Medford, OR | Q4-15 | Oct-16 | 39,165 | 77% | 176 | 223 | |||||||||||
The Market at Springwoods Village (2) | Houston , TX | Q1-16 | May-17 | 28,192 | 35% | 167 | 169 | |||||||||||
The Village at Tustin Legacy | Tustin, CA | Q3-16 | Oct-17 | 37,822 | 40% | 112 | 338 | |||||||||||
Total | $ | 125,265 | 61% | 546 | $ | 229 | ||||||||||||
(1) Includes leasing costs and is net of tenant reimbursements. | ||||||||||||||||||
(2) Estimated Net Development Costs are reported at full project cost. Our ownership interest in this consolidated property is 53%. |
(in thousands, except cost PSF) | Nine months ended September 30, 2016 | |||||||||||||
Property Name | Location | Completion Date | Net Development Costs (1) | GLA | Cost PSF of GLA (1) | |||||||||
Belmont Chase | Ashburn, VA | Q1-16 | $ | 28,308 | 91 | $ | 311 | |||||||
CityLine Market | Richardson, TX | Q1-16 | 27,861 | 81 | 344 | |||||||||
Village at La Floresta | Brea, CA | Q2-16 | 32,451 | 87 | 373 | |||||||||
Brooklyn Station on Riverside | Jacksonville, FL | Q3-16 | 14,987 | 50 | 300 | |||||||||
$ | 103,607 | 309 | $ | 335 |
Nine months ended September 30, | ||||||||||
(in thousands) | 2016 | 2015 | Change | |||||||
Cash flows from financing activities: | ||||||||||
Equity issuances | $ | 549,545 | 946 | 548,599 | ||||||
Distributions to limited partners in consolidated partnerships, net | (3,126 | ) | (2,352 | ) | (774 | ) | ||||
Dividend payments | (165,075 | ) | (152,028 | ) | (13,047 | ) | ||||
Unsecured credit facilities | 100,000 | 140,000 | (40,000 | ) | ||||||
Proceeds from debt issuance | 20,223 | 251,485 | (231,262 | ) | ||||||
Debt repayment | (359,260 | ) | (430,411 | ) | 71,151 | |||||
Payment of loan costs | (1,954 | ) | (5,996 | ) | 4,042 | |||||
Proceeds from sale of treasury stock, net | 928 | 51 | 877 | |||||||
Net cash provided by (used in) financing activities | $ | 141,281 | (198,305 | ) | 339,586 |
• | We raised $549.5 million during 2016 through equity issuances: |
◦ | We issued 182,787 shares of common stock through our ATM program at an average price of $68.85 per share resulting in net proceeds of $12.3 million, |
◦ | We settled 1.85 million shares under our forward equity offering at an average price of $74.32 per share resulting in proceeds of $137.5 million, and |
◦ | We issued 5.0 million shares of common stock at $79.78 per share resulting in net proceeds of $400.1 million. |
• | During 2016, our dividend payments increased as a result of the greater number of common shares outstanding and an increase in our dividend rate. |
• | We received proceeds of $100.0 million, upon expanding our Term Loan during 2016 to partially fund the acquisition of Market Common Clarendon, as compared to $140.0 million borrowed on the Line and Term Loan in 2015 to partially fund the repayment of the $300 million notes. |
• | We received $20.2 million of mortgage proceeds in 2016 upon the encumbrance of one operating property. During 2015, debt issuance includes $250.0 million of new fixed rate ten-year unsecured public debt. |
• | During 2016, we used $359.3 million to repay debt, including: |
◦ | $313.2 million for the early redemption of our $300 million notes, including a $13.2 million make-whole premium, and |
◦ | $46.1 million for scheduled principal payments and three mortgage repayments. |
◦ | $350.0 million to redeem our notes that matured in 2015, and |
◦ | $80.4 million for scheduled principal payments and three mortgage repayments. |
• | We paid $2.0 million in loan closing costs during 2016, primarily to amend the Term Loan, while we paid $6.0 million during 2015 for the new fixed rate unsecured public debt and the modification to our Line. |
Combined | Regency's Share (1) | |||||||||||||
(dollars in thousands) | September 30, 2016 | December 31, 2015 | September 30, 2016 | December 31, 2015 | ||||||||||
Number of Co-investment Partnerships | 11 | 11 | ||||||||||||
Regency’s Ownership | 20%-50% | 20%-50% | ||||||||||||
Number of Properties | 110 | 118 | ||||||||||||
Assets | $ | 2,537,966 | 2,675,385 | $ | 893,279 | 936,066 | ||||||||
Liabilities | 1,439,484 | 1,491,864 | 509,233 | 521,385 | ||||||||||
Equity | 1,098,482 | 1,183,521 | 384,046 | 414,681 | ||||||||||
less: Impairment of investment in real estate partnerships | (1,300 | ) | (1,300 | ) | ||||||||||
less: Ownership percentage or Restricted Gain Method deferral | (29,603 | ) | (28,972 | ) | ||||||||||
less: Net book equity in excess of purchase price | (78,203 | ) | (78,203 | ) | ||||||||||
Investments in real estate partnerships | $ | 274,940 | 306,206 |
(in thousands) | Regency's Ownership | September 30, 2016 | December 31, 2015 | |||||
GRI - Regency, LLC (GRIR) | 40.00% | $ | 201,426 | 220,099 | ||||
Columbia Regency Retail Partners, LLC (Columbia I) | 20.00% | 12,022 | 15,255 | |||||
Columbia Regency Partners II, LLC (Columbia II) | 20.00% | 5,203 | 8,496 | |||||
Cameron Village, LLC (Cameron) | 30.00% | 11,796 | 11,857 | |||||
RegCal, LLC (RegCal) | 25.00% | 21,542 | 17,967 | |||||
US Regency Retail I, LLC (USAA) | 20.01% | (409 | ) | 161 | ||||
Other investments in real estate partnerships | 50.00% | 23,360 | 32,371 | |||||
Total investment in real estate partnerships | $ | 274,940 | 306,206 |
(in thousands) | September 30, 2016 | |||||||||||||||
Scheduled Principal Payments and Maturities by Year: | Scheduled Principal Payments | Mortgage Loan Maturities | Unsecured Maturities | Total | Regency’s Pro-Rata Share | |||||||||||
2016 | $ | 4,305 | — | — | 4,305 | 1,593 | ||||||||||
2017 | 17,795 | 66,885 | 19,635 | 104,315 | 23,887 | |||||||||||
2018 | 18,983 | 67,022 | — | 86,005 | 27,799 | |||||||||||
2019 | 18,231 | 65,939 | — | 84,170 | 21,766 | |||||||||||
2020 | 15,133 | 222,199 | — | 237,332 | 85,660 | |||||||||||
Beyond 5 Years | 21,254 | 817,432 | — | 838,686 | 319,488 | |||||||||||
Net unamortized loan costs, debt premium / (discount) | — | (8,951 | ) | — | (8,951 | ) | (3,320 | ) | ||||||||
Total | $ | 95,701 | 1,230,526 | 19,635 | 1,345,862 | 476,873 | ||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||
Asset management, property management, leasing, and investment and financing services | $ | 5,821 | 5,703 | 18,415 | 17,696 |
• | should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; |
• | have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; |
• | may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and |
• | were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. |
* | Furnished, not filed. |
November 4, 2016 | REGENCY CENTERS CORPORATION | |
By: | /s/ Lisa Palmer Lisa Palmer, President and Chief Financial Officer (Principal Financial Officer) | |
By: | /s/ J. Christian Leavitt J. Christian Leavitt, Senior Vice President and Treasurer (Principal Accounting Officer) |
November 4, 2016 | REGENCY CENTERS, L.P. | |
By: | Regency Centers Corporation, General Partner | |
By: | /s/ Lisa Palmer Lisa Palmer, President and Chief Financial Officer (Principal Financial Officer) | |
By: | /s/ J. Christian Leavitt J. Christian Leavitt, Senior Vice President and Treasurer (Principal Accounting Officer) |