Regency Centers Earnings: Growth Remains Solid While Management Repurchases Shares at a Discount

Regency Centers reported second-quarter results that were relatively in line with our estimates, leading us to reaffirm our $76 fair value estimate for the no-moat company. Same-store occupancy remained at 95.8% quarter over quarter. Re-leasing spreads were 9.2% in the second quarter, which was slightly better than the 8.5% figure reported in the first quarter but slightly below our estimate of new rents being 10.2% higher than prior rent terms. Base rent increased 2.7% and same-store revenue increased 2.3% in the second quarter. However, same-store operating expenses only increased 1.0%, so same-store net operating income, or NOI, grew 3.0%, which was slightly better than our estimate of 2.5% growth. Regency reported core funds from operations, or FFO, of $1.02 per share, which matched our estimate for the quarter and was 7.0% higher than the $0.96 figure the company reported in the second quarter of 2023.