Regency Centers Raises Same-Property NOI Growth Outlook to 4.25% After 5.1% Increase
Key Facts
Regency Centers reported on November 5 its third-quarter results for the period ended September 30, 2026, raising its 2026 outlook for same-property net operating income growth to at least 4.25%, from a range of 3.7% to 4.1%. The company said same-property net operating income increased 5.1% year over year in the quarter, with 4.0% growth in base rent contributing to the increase. Same-property portfolio occupancy was 97.0% at the end of September, up 60 basis points from a year earlier and 10 basis points from the previous quarter. Occupancy at properties where rent collection had commenced was 95.1%. The company raised its Nareit-defined adjusted earnings guidance to a range of $4.86–$4.88 per diluted share, compared with a previous range of $4.84 to $4.88.
Funds from operations (FFO) were $1.23 per share, exceeding the consensus estimate of $1.22 and rising 7% from the same quarter a year earlier, according to Zacks. Revenue reached $419.06 million, up 8.1% year over year, and Zacks said it exceeded the consensus estimate by 1.8%. During the quarter, the company executed new and renewed leases for 1.7 million square feet. Average lease spreads were 11.9% on a cash basis and 21.8% on a straight-line basis. Cash and straight-line spreads were 10.4% and 19.5%, respectively, in the previous quarter, according to Zacks, reflecting a widening gap between rents on new and renewed leases and previous rent levels.
Core operating earnings rose to $1.18 per diluted share in the third quarter, from $1.09 in the same period of 2025. By contrast, net income attributable to common shareholders fell to $75.1 million, or $0.41 per share, from $106 million, or $0.58 per share, a year earlier. The quarter's net income included a $65.1 million impairment charge. Chief Executive Lisa Palmer said the results reflected the portfolio's quality, strong operating fundamentals and the contribution of the investment platform. She added that performance and confidence in the business's resilience enabled the company to raise its annual outlook again and increase its distributions.
Regency announced a quarterly cash distribution of $0.800 per common share, an increase of 6%. The distribution is payable on January 5, 2027, to shareholders of record on December 14, 2026. In development activity, the company started $101 million of development and redevelopment projects during the quarter, bringing total project starts since the beginning of the year to about $241 million. The estimated net cost of projects under way was $682 million on September 30, with an estimated aggregate yield of about 9%. The company had about $1.4 billion of capacity under its revolving credit facility on that date, while net debt and preferred stock to trailing 12-month EBITDA stood at 4.9 times.
After the quarter ended, Regency acquired Hanover Village shopping center in Richmond, Virginia, on October 1. The 90,000-square-foot center is anchored by Aldi and was purchased for about $14 million. The company's shares, which trade under the ticker REG, closed at $76.28 on November 5, the day results were announced after the market close. Management scheduled a call to discuss the quarterly results and provide business updates for November 6 at 11:00 a.m. Eastern time. The call follows the company's increase to its outlook for same-property net operating income growth to at least 4.25%. The announced cash distribution is also payable on January 5, 2027, to shareholders of record on December 14, 2026.