Regency Centers Corporation

Greetings and welcome to Regency Centers Corporation first quarter 2022 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 first quarter 2022 earnings conference call. Joining me today are Lisa Palmer, President and Chief Executive Officer, Mike Moss, Chief Financial Officer, Jim Thompson, Chief Operating Officer, Chris Levitt, SVP and Treasurer, Alan Roth, Senior Managing Director of the East Region, and Nick Wippenmeyer, Senior Managing Director of the West Region. 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 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 disclosures related to forward earnings guidance. Our caution on forward-looking statements also applies to these presentation materials. Lisa?

Thank you, Christy. Good morning, everyone, and thank you for joining us. We've had a great start to the year. Our operating trends are healthy, our investment pipelines are active, and our balance sheet is strong. With this even further strengthening our core business and accretion from our transaction activity, our outlook for 2022 has improved from a quarter ago. Our centers continue to benefit from positive structural tailwinds, including the strength of first-ring suburban trade areas, the greater amounts of time that people are spending near their homes as hybrid work becomes more permanent, and the growing emphasis among retailers on the importance of brick-and-mortar locations as a key component to last-mile distribution. This vibrancy in the retail environment is evidenced by strong tenant sales and continued robust leasing activity, and we're successfully pushing rents higher as we continue to make progress getting our portfolio back to historical high occupancy levels. We do see and acknowledge the risks of inflation and continued supply chain challenges and labor shortages on our business. But so far, we, and importantly our tenants, have largely been able to mitigate the impacts. Jim will discuss this in more detail in a few minutes. We're full steam ahead on our value creating development and redevelopment pipeline, which remains the best use of our free cash flow. We're excited to have started a new ground up target and ShopRite Anchored Center during the first quarter, And not only are we making great progress on this and our other in-process projects, but we continue to build our future pipeline. On the transaction front, the assets that we've purchased over the last year are very indicative and very much like those that we already own, high-quality, grocery-anchored neighborhood and community centers. And we will continue to look for opportunities to invest incremental capital accretively in these types of centers. We had a really successful and active first quarter doing just that. And as a result, we've raised our full year 2022 acquisition guidance to $170 million. And our largest acquisition so far this year, just after quarter end, we purchased our partners 75% interest in four centers in our JV with CalSTRS for approximately $90 million. Similar to the buyout of our USAA joint venture last year, we saw another great opportunity to allocate capital on an accretive basis into high quality assets that we know well. While higher interest rates could eventually have more of an impact on private market pricing, to this point, we've continued to see significant capital chasing grocery-anchored neighborhood and community shopping centers. Perhaps even more telling than the acquisitions we've completed in recent months are the other assets that we've seen trade at low to mid-4% cap rates for the type of high-quality, well-located centers that we own. There remains a sizable disconnect between public and private market values for our asset class. Before I turn it over to Jim, I do want to acknowledge our recent organizational announcement that he will retire at the end of this year. There's simply no possible way to appropriately recognize him on this call, or future calls for that matter, as this is not his last. We are grateful that he'll still be with us for the remainder of the year. Many of you already know Alan and Nick, who will be stepping up next year to take on Jim's responsibilities. They're both on the call with us today, and you will see them at upcoming conferences and other events. With Jim paving the way, I'm confident this will be a seamless transition, and I look forward to what the future brings. Jim?