Improving Occupancy Leads to Regency Centers Beating Our Fourth-Quarter Estimates

Regency Centers reported fourth-quarter results that were ahead of our expectations, though we don’t see anything that would materially change our $76 fair value estimate for the no-moat company. Same-store occupancy increased 40 basis points sequentially and 80 basis points year over year to 95.1%, which was better than our 94.6% estimate. Re-leasing spreads remained strong at 7.2% in the fourth quarter, though that was slightly below our estimate of new rent improving 9.1% over prior terms. Same-store revenue increased 3.6% in the fourth quarter, while same-store operating expenses increased 3.0%, leading to same-store net operating income, or NOI, growth of 3.8% that beat our estimate of just 0.7%. Regency reported core funds from operations, or FFO, of $0.98 per share in the fourth quarter that was 3 cents higher than our $0.95 estimate and 6 cents higher than the $0.92 figure the company reported in the fourth quarter of 2021.