Regency Centers Corporation

Greetings and welcome to Regency Center's Corporation Third Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Christy McElroy. Senior Vice President of Capital Markets. Please go ahead.

Good morning, everyone, and welcome to Regency Center's third quarter 2020 earnings conference call. Joining me today are Lisa Palmer, President and Chief Executive Officer, Mike Moss, Chief Financial Officer, Mack Chandler, Chief Investment Officer, Jim Thompson, Chief Operating Officer, and Chris Levitt, SEP and Treasurer. As a reminder, today's discussion contains forward-looking statements about the company's future business and financial performance, as well as future market conditions. These are based on management's current beliefs and expectations and are subject to various risks and uncertainties. It is possible actual results may differ materially from those suggested by the forward-looking statements we may make. Factors and risks that could cause actual results to differ materially from these statements are included in our presentation today and in our filings with the SEC. The discussion today also contains non-GAAP financial measures. The comparable GAAP financial measures are included in this quarter's earnings materials, all of which are posted on our investor relations website. Please note that we have again provided additional disclosures in this quarter's supplemental package related to COVID-19 and its impact on the company's business, and have also posted a presentation on our website with additional information. Lisa?

Thank you, Christy, and welcome to Regency. We're really glad to have you on the team. Good morning, everyone. I want to start by again thanking our Regency team for all of the amazing work they have done for our company, our tenants, and our communities over the last eight months. I could not be more proud and appreciative of the dedication and commitment that our employees continue to demonstrate. As many of you have heard us say throughout the years, we do believe that bigger can be better, but better is always best, particularly in an uncertain environment. And while Regency enjoys the advantages from our size, scale, and national presence, One of the things that makes us better are the people in our 22 offices across the country. Our local presence provides us the boots on the ground in close proximity to our properties, enabling us to act small and to take a personalized, relationship-driven approach with our tenants. With the challenges we are all facing, our ability to provide focused attention to our tenants is really important to the improving current performance as well as to future results. We are encouraged by our meaningful progress as demonstrated by increasing cash collections and productive tenant discussions over the past few months. As of the end of October, we collected 86% of third quarter rent. Importantly, and Jim will discuss this in more detail, we have seen a direct correlation between tenant reopenings with increased rent collections and executed deferral agreements as restrictions are lifted. As tenants are able to reopen even with capacity restrictions, they gain the visibility they need to start paying their rent, or to enter into a deferral plan that both they and we can feel confident in. In many cases, tenants that we originally thought we might have to defer were collecting rent instead. And we're always remembering that our goal is to maximize the likelihood of long-term success for our tenants. Where tenants are able to open and operate safely, we are seeing customers return, engaging with their local neighborhood businesses and community centers. We hear this from our tenants, and we see this in recovering foot traffic in regions around the country that have continued to gradually reopen and lift restrictions, such as Colorado, parts of the Northeast, Texas, and most of the Southeast. The experience may be different today. In fact, we know it is different today versus pre-pandemic, but we've been impressed by the resiliency of our tenants and the value placed on local retail shopping, dining, and services by the American consumer. These results give us confidence that the improvement we've experienced over the last several months will continue as more markets and businesses find a pathway to reopening safely and operating successfully in the new normal. This is especially relevant as we think about the Pacific Coast, and particularly California, where the most restrictions on nonessential businesses and restaurants remain in place. This geographic and category concentration comprises the majority of our uncollected rent. and we expect continued improvement in our results as California reopens. Supported by the continued improvement in our cash collections and overall financial performance, and consistent with our longstanding commitment to building total shareholder value over the long term, we have again maintained our quarterly dividend, which has remained consistent throughout the pandemic. As always, on a quarterly basis, our board and management team will continue to monitor and revisit all relevant metrics and factors when making future dividend decisions. While we are pleased with the improvements in the progress, we also recognize that meaningful uncertainty about the future remains. The restrictions that remain in place in some markets are putting a strain on the health of the impacted tenants. And in that context, while our tenant fallout has been limited to date, we're mindful of both the cyclical and structural challenges impacting many tenant categories. And we acknowledge the risks of further tenant bankruptcies and store closures in this environment. But again, there are clearly visible green shoots, and we are on the road to recovery, still likely to be an extended one, and the length of which could be dependent on the existence and timing of medical solutions. While we certainly can't control the hand we've all been dealt, what we can control is that Regency came into this pandemic as prepared as we possibly could have been due to our unique combination of unequaled strategic advantages, which include and have never been more critical Our geographically diverse portfolio of high-quality, grocery-anchored, open-air centers that serve as the backbone of our communities with a focus on necessity, service, convenience, and value. Our sector-leading balance sheet and liquidity position affording us financial flexibility. Our strong but flexible value-creating development pipeline that has allowed us to quickly adapt to the evolving retail landscape. And finally, our people. It's times like these when the value of experience and relationships become most apparent and important. We acknowledge the challenges facing our industry, accepting that we are not unaffected, but the game is always changing, and our playbook will continue to evolve along with it as it has throughout the years. We are not standing still. Regency is working with, partnering with, and helping our tenants adapt to the new normal. And we are certainly in a relative sweet spot with a seasoned team, a high-quality grocer-anchored portfolio, and a strong balance sheet. Jim?