Regency Centers Corporation

Greetings and welcome to Regency Centers Corporation's second quarter 2021 earnings conference call. At this time, all participants are on 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. Thank you. You may begin.

Good morning, and welcome to Regency Center's second quarter 2021 earnings conference call. Joining me today are Lisa Palmer, President and Chief Executive Officer, Mike Moss, Chief Financial Officer, Jim Thompson, Chief Operating Officer, and Chris Levitt, SVP and Treasurer. As a reminder, today's discussion may contain forward-looking statements about the company's views of future business and financial performance, including forward earnings guidance and future market conditions. These are based on management's current beliefs and expectations and are subject to various risks and uncertainties. It is possible that 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 may be included in our presentation today and are described in more detail in our filings with the SEC, specifically in our most recent form 10-K and 10-Q filings. In our discussion today, we will also reference certain non-GAAP financial measures. The comparable GAAP financial measures are included in this quarter's earnings materials, which are posted on our investor relations website. Please note that we have also posted a presentation on our website with additional information, including additional disclosures related to forward earnings guidance and the impact of COVID-19 on the company's business. Lisa?

Thank you, Christy. Good morning, everyone, and thank you for joining us this morning. We are pleased to report another quarter of results reflecting strong progress toward recovery. The tide has continued to rise following the removal of most capacity restrictions across the country. Our portfolio foot traffic is now back to at least 100% of pre-COVID levels in nearly all of our markets. And we've made meaningful progress on rent collections. Retailer demand is healthy. This is reflected in our strong leasing activity. And we're seeing fewer tenant failures and therefore lower move-out activity than we expected. We acknowledge that we are not completely out of the woods yet. We are all keenly aware of rising virus cases in many cities across the country as we experience another wave of the pandemic. New masks and vaccine restrictions are emerging with the risk of perhaps even the return of capacity restrictions in some markets. But with the knowledge and experience that we, and our tenants have gained over the last year and a half. We feel good about where we stand long-term and our ability to weather additional storms. And importantly, if we do see new restrictions, we believe that that impact will be short-term. Our industry, and specifically Regency's portfolio, have proven its resiliency, and this is most evident in the meaningful improvement in our West Coast markets in recent months, as all of our tenants were finally allowed to fully operate as the market opened up. I've said this before and I'll say it again. The best shopping center assets will continue to thrive in the post-pandemic world. On last quarter's call, we discussed pivoting to offense. We are confident in our path to recovery and our strong balance sheet and access to low-cost capital give us a competitive advantage in developing and acquiring on an earnings and quality accretive basis. We have a really successful track record in that regard. And so with this pivot, We started our multi-phased West Bard project in Bethesda, Maryland, and we expanded our existing project in Richmond, Virginia, which I might add is experiencing robust tenant demand. Looking forward, we remain encouraged and excited about additional opportunities in our pipeline. Earlier this week, we also purchased our partner's 80% share in our USAA joint venture, a great opportunity to allocate capital on an accretive basis into high-quality assets that we have known and operate it for 20 years. We raised equity during the quarter through our ATM on a forward basis, funding this transaction as well as providing additional capacity for future investments. As always, we are active in pursuing and evaluating acquisition opportunities. In today's transaction market, however, we do continue to see even greater competition for deals. There's been meaningful capital formation targeting high-quality grocery-anchored neighborhood and community centers as the investment market appreciates the demonstrated performance and resiliency of these high-quality assets. So as a result, and as you would expect, we've seen continued compression in cap rates for these types of assets across all of our target markets. Before I turn over to Jim, I'd like to take just a moment to touch on something that's extremely important to Regency and to me. One of the highlights of the second quarter for us was the release of our 2020 Corporate Responsibility Report, which allows us the opportunity each year to showcase our leading ESG practices. We are proud of our accomplishments across all four pillars of our strategy, our people, our communities, governance, and environmental stewardship. So please allow me this opportunity to share several highlights from this report and our progress over the last year. And again, these are just highlights. The development and implementation of a more robust diversity, equity, and inclusion strategy. A gender pay gap that is now essentially zero. Impressive philanthropic efforts by our team members in what was a really challenging personal environment as well as professional. Increased tenant and community engagement during the pandemic, for which we were recently recognized by ICSC with three Maxi Awards. Further progress on board diversity and refreshment. The introduction of an ESG metric for executive compensation. The issuance of our first TCFD report on climate change risk. And finally, outperformance in our reduction targets for greenhouse gas emissions, energy efficiency, and waste diversion. Strong corporate responsibility is a foundation of our company. It's ingrained in our culture, and no doubt it's part of what makes us great. And just as we approach all aspects of our business, we look to continue to improve and evolve our best practices over time. Jim?