Regency Centers Corporation

Greetings and welcome to Regency Centers Corporation fourth quarter and full year 2021 earnings 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. It is now my pleasure to introduce your host, Christy McElroy, Senior Vice President of Capital Markets. Thank you. You may begin.

Good morning and welcome to Regency Center's fourth quarter 2021 earnings conference call. Joining me today are Lisa Palmer, President and Chief Executive Officer, Mike Voss, 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's 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 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 disclosures related to forward earnings guidance and the impacts of COVID-19 on the company's business. Our caution on forward-looking statements also applies to these presentation materials. Lisa?

Thank you, Christy. Good morning, everyone. Thank you for joining us. Reflecting back on 2021, Regency accomplished a great deal over the course of the year, and we have a lot to be proud of. With the disruption caused by the pandemic, it was a year of recovery, but the pace of our progress is a testament to the resiliency of retail properties like ours. As we sit here today, we feel really good about the financial health of our tenants. Our leasing activity is robust. Our investment pipeline is full, and our balance sheet is back to pre-pandemic strength. And of course, this didn't just happen. We wouldn't be where we are without the tireless efforts of our people. So if you would, please just give me a moment to thank the Regency team. Thank you, team. It truly takes all of us. So as we've transitioned into 2022 and look ahead, our story is no longer about recovery. We've moved forward with a focus on growth and also with the benefit of hindsight from the last two years. While we do see lingering effects of the pandemic on our tenants, specifically the impacts of inflation and labor shortages, these headwinds have thus far not impacted demand for our space. This focus on growth did begin last year with regards to our capital allocation strategy, as we've discussed on prior calls. We pivoted to offense in 2021. We completed nearly $500 million of acquisitions last year on an accretive, leverage-neutral basis. During the fourth quarter, we not only closed on the acquisition of our Turducken – Blakeney Shopping Center, but we also announced the purchase of a four-property, grocery-anchored, neighborhood-centered portfolio in Long Island. You've heard me say it before. These types of investments are the bread and butter of what we do, what our company does. Our focus is to invest in strong, well-located, grocery-anchored shopping centers. Overall, the private transaction market for the centers we want to own remains really strong. We continue to see cap rate compression and value appreciation and even steeper competition for deals. But despite this, our acquisition pipeline remains active. That's because our balance sheet and access to capital give us a competitive advantage, as does our reach, given the boots on the ground in most of our target markets. Our Long Island portfolio acquisition was an off-market transaction. It was a group of family-owned assets. Kudos to our team in that market for sourcing this deal. We will continue to look for opportunities like these where the assets meet our criteria for location, quality, format, and growth. We also announced recent dispositions, and in that context, I want to spend a minute on our sale of Costa Verde, since this was previously a part of our redevelopment pipeline. As most of you know, we had been really excited to undertake a mixed-use densification project there that featured retail at its core. We worked for years to entitle the asset, de-leasing the property, all in preparation for future redevelopment. But as time went on, the project evolved into predominantly life science, and the highest and best use was no longer a retail-centric asset. This changed the nature of the project and the risk profile materially. We made the decision to sell as it became clear to us that this was the best path to maximize value and manage our risk for the benefit of our shareholders. Importantly, we did get paid well for the value we created at that site. and we immediately reinvested the proceeds. To be very clear, we don't see another Costa Verde in our portfolio. This asset was somewhat of a unicorn, but we do own really great real estate, and there will be other opportunities to add non-retail uses or to densify our properties. To the extent that makes sense, we will again pursue a similar path. This could mean partnering with experienced operators, a ground lease, or a sale of the non-retail components. but always with the goal of extracting and retaining control over the retail. As an example, we have our West Bard Square project currently underway in Bethesda, Maryland. The redevelopment of this shopping center essentially features a refresh of all the retail, including a new store for our already successful giant grocery anchor, but will also include the development of senior living and apartment components on which we have partnered with others. Before I turn it over to Jim, I'll conclude by saying that Regency emerged from 2020 a stronger company, and we and our tenants spent 2021 adapting to position ourselves for success in the new normal, and we've done just that. We've recovered from the pandemic, we maintained and even raised our dividend, and we are on our front foot today. This consistency that you've seen from us over the years, even through the toughest of times, is evidence of the quality of our assets, our investment discipline, the strength of our balance sheets. and most importantly, our people. Jim?