Regency Centers Corporation

Greetings and welcome to the Regency Centers Corporation's second quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A brief 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. And as a reminder, this conference is being recorded. It is now my pleasure to introduce to you Christy McElroy, Senior Vice President of Capital Markets. Thank you, Christy. Please go ahead.

Good morning, and welcome to Regency Center's second quarter 2023 earnings conference call. Joining me today are Lisa Palmer, President and Chief Executive Officer, Mike Moss, Chief Financial Officer, Alan Roth, EVP, National Property Operations and East Region President, and Nick Wivenmeyer, EVP and West Region President. 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 these 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. Today's discussion may also contain forward-looking statements about the company's pending merger with Erstat Bittles, including forward pro forma earnings accretion estimates and projected timing of the merger close. While we currently expect the transaction to close in mid to late August, the closing remains subject to shareholder approval and conditions being satisfied or waived. Lisa?

Thank you, Christy. Good morning, everyone. We appreciate you joining us. We again had a really strong quarter. In fact, one of the strongest and most active quarters in Regency's history. Our success came from all facets of the business, including leasing, development starts, and, of course, the Erstadt-Biddle merger announcement in May. I've said many times since we emerged from the pandemic that Regency is so well positioned for sustained growth and that we're on our front foot, ready to capitalize on opportunities. Our achievements in the second quarter reflect this. They reflect the exceptional work of our team, supported by the strength of our portfolio, the current retail environment, and our balance sheet position. As we all know, there is still uncertainty in the macroeconomic landscape, but at Regency, we've not seen any signs of softening. As evidenced by our results, the fundamentals of our business remain very healthy and operating trends are strong. From a leasing perspective, tenant demand is robust, and the second quarter was one of our strongest quarters ever, and it's supported by sustained momentum in our LOI and lease negotiation pipelines. Tenant bankruptcies are playing out as we expected, but importantly, our exposure to these retailers is limited. From a capital allocation perspective, most of you know that we have been acutely focused on ramping our development and redevelopment activity back to our strategic goal of a pace of $200 to $250 million of average annual investment. I'm really proud and gratified by the success demonstrated by such a strong second quarter for New Project Starts. Nick will discuss our activity in more detail, but creating value through development and redevelopment has always been a core competency of Regency, and it is a competitive advantage for us that is often overlooked. As I've said before, I believe we have the best team and platform in the business, and with ground-up development, we can really move the needle in an environment where new supply of high-quality centers is lacking. Thank you. Even as we ramp our activity, our pipeline will continue to be self-funded on a leverage-neutral basis with free cash flow, driving accretion and a sustainable component of our earnings growth above and beyond the organic same-property NOI growth that our high-quality, well-located properties are generating. With regard to ERSTAT Biddle, we're proud of this transaction and are excited to integrate both the shopping centers and many other people into Regency. These centers align so well with our own and meaningfully expand our presence in these strong trade areas in the Northeast. The teams on both sides are working hard to affect an efficient and timely merger close. As Mike will discuss, we expect it to be immediately accretive to our core operating earnings, and we also look forward to unlocking value within the combined portfolio under the umbrella of our leading national leasing and asset management platform. Another highlight of the quarter was the release of our annual corporate responsibility report in late May. This report is a synthesis of our commitment to ESG and the many initiatives driving us forward. We are extremely proud of the progress that we continue to make toward achieving our long-term goals. The principles of our program are embodied throughout our organization and are integral to achieving our strategic and financial objectives. Before I turn it over to Alan, I'll reiterate that Regency is very well positioned in this environment, given the strength of our assets, the trade areas in which we operate, supported by the solid fundamentals of the grocery-anchored suburban shopping center business today. Our liquidity and balance sheet position will allow us to remain opportunistic, driving sustainable cash flow growth going forward.