Q1 2024 Regency Centers Corp Earnings Call

Operator: Greetings and welcome to the Regency Centers Corporation first quarter 2024 earnings conference 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Christy McElroy, Senior Vice President, Capital Markets. Thank you.

Greetings and welcome to the Regency Centers Corporation first quarter 2024 earnings Conference 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.

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Kristy to calibrate senior Vice President capital markets. Thank you you may begin.

Christy McElroy: Good morning, and welcome to Regency Center's first quarter 2024 earnings conference call. Joining me today are Lisa Palmer, President and Chief Executive Officer, Mike Mas, Chief Financial Officer, Alan Roth, East Region President and Chief Operating Officer, and Nick Wibbenmeyer, West Region President and Chief Investment Officer.

Kristy: Good morning, and welcome to Regency Centers' first quarter 2024 earnings Conference call. Joining me today are Lisa Palmer, President and Chief Executive Officer, Mike Mas, Chief Financial Officer, Alan Ross East region, President and Chief operating Officer, and Nick with admire West region, President and Chief Investment Officer as a reminder, today's.

Christy McElroy: 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. Such statements 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 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 our most recent Form 10-K and 10-Q filings.

Kristy: [noise] discussion may contain forward looking statements about the company's view as the future business and financial performance and cleaning forward earnings guidance and future market conditions. There 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 these forward looking statements we may make.

Kristy: 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.

Christy McElroy: 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.

Kristy: 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 a caution on forward looking statements also applies to these presentation materials Lisa thank.

Lisa Palmer: Lisa?

Lisa Palmer: Thank you Christy and good morning everyone. We had another really solid quarter in line with our expectations and driven by a continuation of very healthy leasing fundamentals. Robust tenant demand is driving significant leasing activity across all of our shopping centers, and this is evident in an even higher percent lease rate and strong rent growth. With this robust demand and activity, we are poised to accelerate growth into 2025. And, as you will hear more from Alan, we're having great success quickly releasing space.

Lisa Palmer: Thank you Christy and good morning, everyone. We had another really solid quarter in line with our expectations and driven by a continuation of very healthy leasing fundamentals.

Lisa Palmer: Robust tenant demand is driving significant leasing activity across all of our shopping centers and this is evident and an even higher percent leased rate and strong rent growth.

Lisa Palmer: With this robust demand and activity, we are poised to accelerate growth into 2025.

You'll hear more from Alan we're having great success quickly re leasing space.

Lisa Palmer: And I will note some of which we've intentionally recaptured with upgraded merchandising by leading operators and at higher rents. As a result, our pipeline of executed leases is larger than it's ever been, and we look forward to these tenants coming online, propelling our future growth. I'm also really excited about the progress our team has made executing on our value creation pipeline. Sustained development activity over the long term, which creates value and enhances growth, is an important part of our business and is a differentiator for Regency in our sector today. The strength of our platform provides us with an unequaled strategic advantage. Our talented and experienced national development team.

Lisa Palmer: And I will note some of which we've intentionally recaptured with upgraded merchandising of leading operators and at higher rents.

Lisa Palmer: As a result, our pipeline of executed leases is larger than it's ever been and we look forward to these tenants coming online propelling our future growth.

Lisa Palmer: I'm also really excited about the progress our team has made executing on our value creation pipeline sustained development activity over the long term, which creates value and enhances growth is an important part of our business and is a differentiator for regency in our sector today.

Lisa Palmer: Strength of our platform provides us an unequaled strategic advantage.

Lisa Palmer: Talented and experienced national development team.

Lisa Palmer: Our relationships with top grocers and retailers, and Ready Access to Capital, all are enabling strong execution on an impressive lineup of great in-process projects and continued growth in our pipeline of opportunities. As you'll hear from Nick, following our impressive execution in 2023, with over $250 million of development and redevelopment starts, we expect to drive a similar level of success this year. The benefits from this ramp-up in activity will continue to grow as NOI comes online in 2025 and beyond.

Lisa Palmer: Our relationships with top grocers and retailers and ready access to capital all are enabling strong execution on an impressive lineup of upgrade in process projects and continued growth in our pipeline of opportunities.

Lisa Palmer: As you'll hear from Nick following our impressive execution in 2023 with over $250 million of development and redevelopment starts we expect to drive a similar similar level of success this year.

Lisa Palmer: The benefits from this ramp up in activity will continue to grow as NOI comes online in 2025 and beyond.

Lisa Palmer: Importantly, the strength of our balance sheet and our liquidity position is what provides Regency with the ability to sustain a meaningful value creation pipeline through cycles, to remain opportunistic in our capital allocation strategy, and to consistently grow our dividends. And we are really gratified to see this position of strength acknowledged by Moody's with a credit rating upgrade to A3, which occurred in February. We are currently the only REIT in the open-air shopping center sector with an A rating, and we are already seeing the benefits in our relative bond market pricing, further supporting our cost-of-capital advantage.

Speaker Change: Importantly, the strength of our balance sheet and our liquidity position is what provides regency, but the ability to sustain a meaningful value creation pipeline through cycles to remain opportunistic in our capital allocation strategy and to consistently grow our dividend.

Speaker Change: And we were really gratified to see this position of strength acknowledged by Moody's with a credit rating upgrade to Ace III, which occurred in February.

Speaker Change: We are currently the only REIT in the open Air shopping center sector with an a rating and we are already seeing the benefits in a relative bond market pricing further supporting our cost of capital advantage.

Lisa Palmer: This is a big accomplishment and a direct result of our team's consistent track record of operational excellence and balance sheet strength over the long term. It's a reflection of what I speak about often, which is what we believe to be Regency's unique and unparalleled combination of strategic advantages that differentiates us from our peers and allows us to drive above average earnings per share, dividend, and free cash flow growth. It's the favorable attributes of our portfolio, including quality tenants and a merchandising mix.

This is a big accomplishment and a direct result of our team's consistent track record of operational excellence and balance sheet strength over the long term.

Speaker Change: It's a reflection of what I speak too often which is what we believe to be regency's unique and unparalleled combination of strategic advantages that differentiates us from our peers and allows us to drive above average earnings per share dividend and free cash flow growth.

Speaker Change: It's the favorable attributes of our portfolio, including quality tenants and merchandising mix format and trade area demographics, driving rent growth and durability of occupancy it's the expertise of our people and the strength of our operating platform.

Lisa Palmer: Format, and Trade Area Demographics, driving rent growth and durability of occupancy. It's the expertise of our people and the strength of our operating platform. It's our ability to create value through development and redevelopment consistently over time. It's the strength of our balance sheet, and it's our commitment to corporate responsibility and stakeholder stewardship. High-quality suburban shopping centers, especially with the particular strength of our portfolio and the trade areas in which we operate, will continue to benefit from structural tailwinds that support continued excellent performance and long-term growth of our business.

Speaker Change: Our ability to create value through development and redevelopment consistently over time.

Speaker Change: It's the strength of our balance sheet, and it's our commitment to corporate responsibility and stakeholder stewardship.

Speaker Change: High quality suburban shopping centers, especially with a particular strength of our portfolio and the trade areas in which we operate will continue to benefit from structural tailwind that support continued excellent performance and long term growth of our business Alan Thank.

Alan Todd Roth: Alan?

Alan Todd Roth: Thank you Lisa and good morning, everyone.

Alan Todd Roth: Thank you, Lisa, and good morning, everyone. We had another great quarter of leasing activity in Q1, as tenant demand for our centers remained very strong. The tremendous appetite for space that we saw in 2023 has continued unabated, enabling our team to achieve both higher rents and push our lease rates to even higher levels. We are executing leases with high-quality tenants, further improving upon the strength of our merchandising and creating value at our centers.

We had another great quarter of leasing activity in Q1 as tenant demand for our centers remained very strong.

Alan Todd Roth: The tremendous appetite for space that we saw in 2023 has continued unabated, enabling our team to achieve both higher rents and push our leased rate to even higher levels.

Alan Todd Roth: We are executing leases with high quality tenants further improving upon the strength of our merchandising and creating value at our centers.

Alan Todd Roth: Our same property percent lease rate increased by another 20 basis points this quarter to 95.8%. This is especially impressive given the significant anchor moveouts that I discussed on last quarter's call, which I'll come back to in a moment, coupled with the seasonality of higher moveouts we historically experienced in the first quarter.

Alan Todd Roth: Our same property percent leased rate increased by another 20 basis points this quarter to 95, 8%.

Alan Todd Roth: This is especially impressive given the significant anchor move outs that I discussed on last quarter's call.

Which I'll come back to in a moment, coupled with the seasonality of higher move outs, we historically experienced in the first quarter.

Alan Todd Roth: Our shop lease rate was up 10 basis points sequentially in the first quarter, reaching yet another new record high for shops of 93.5 percent. Base rent growth in 2024 is benefiting from shop commencement activity, given our record year of lease up in 2023. You'll recall that a quarter ago, we discussed an expected decline in our commenced occupancy rate in the first quarter, driven by anchor move out. Consistent with our plan, while our lease rate has moved even higher, our same property commenced rate ended the first quarter, down 70 basis points from year end. Roughly half of this decline was attributable to the intentional recapture of a Walmart store in Norwalk, Connecticut.

Alan Todd Roth: Our shop lease rate was up 10 basis points sequentially in the first quarter, reaching yet another new record high for shops 93, 5%.

Alan Todd Roth: Base rent growth in 2024 is benefiting from shop commencement activity given our record year of lease up in 2023.

Alan Todd Roth: You'll recall that a quarter ago, we discussed an expected decline in our commenced occupancy rate in the first quarter driven by anchor move outs.

Alan Todd Roth: Assistant with our plan, while our leased rate has moved even higher our same property commenced rate ended the first quarter down 70 basis points from year end roughly half of this decline was attributable to the intentional recapture of a Walmart store in Norwalk, Connecticut.

Alan Todd Roth: Some of you were with us on a recent tour of the property, seeing firsthand this great opportunity to create value from an anchor tenant lease exploration in an exceptional location. We will experience some downtime impact while the space is built out and the center undergoes a transformative redevelopment, but the new lease with Target has already been executed with significant accretion. This is just one example of similar scenarios within the portfolio.

Alan Todd Roth: Some of you were with US on a recent tour of the property seeing firsthand this great opportunity to create value from an anchor tenant lease exploration in an exceptional location.

Alan Todd Roth: We will experience some downtime impact while the space is built out and the center undergoes a transformative redevelopment, but the new lease with target has already been executed with significant accretion.

Alan Todd Roth: This is just one example of similar scenarios within the portfolio.

Alan Todd Roth: On the surface, this disconnect between leased occupancy and rent-paying occupancy would appear counterintuitive, but the strength of the leasing environment, coupled with our deliberate approach to asset management, is enabling us to take advantage of these accretive opportunities quickly and, in many cases, before the tenant vacates. We are re-merchandising with upgraded stores and at higher rents, improving and growing the long-term value of our centers, and we look forward to getting these new anchors open for business in the coming months.

Alan Todd Roth: On the surface. This disconnect between leased occupancy and rent paying occupancy would appear counterintuitive, but the strength in the leasing environment, coupled with our deliberate approach to asset management is enabling us to take advantage of these accretive opportunities quickly and in many cases before the tenant Vacates we are.

Alan Todd Roth: Merchandising with upgraded stores and at higher rents, improving and growing our long term value of our centers and we look forward to getting these new anchors open for business in the coming months.

Alan Todd Roth: As we've replenished this vacating space with new leases, our pipeline of executed leases has grown. We stand today with a 370 basis point delta between our same property leased and commenced occupancy rates, which is an all-time high for us, reflecting an incremental $50 million of annual base rent that will be very rewarding as these leases commence within our operating portfolio. Beyond what's already baked, we have another 1.4 million square feet of space under letter of intent or in negotiation, with consistent demand across the portfolio from a wide variety of categories, including grocers, restaurants, health and wellness, off-price, and personal services.

Alan Todd Roth: As we replenish this vacating space with new leases our pipeline of executed leases has grown we stand today with a 370 basis point Delta between our same property leased and commenced occupancy rates, which is an all time high for us, reflecting an incremental $50 million of annual base rent.

Alan Todd Roth: That will be very rewarding as these leases commence within our operating portfolio.

Alan Todd Roth: Beyond what's already Bay, we have another one 4 million square feet of space under letter of intent or in negotiation with consistent demand across the portfolio from a wide variety of categories, including grocers restaurants health and wellness off price and personal services.

Alan Todd Roth: Cash releasing spreads in the first quarter were more than 8% on a blended basis, and including the highest spread for renewals that we've seen since 2019, an indication of our ability to increase rents further as occupancy rises and available space is limited, a reflection of the strong demand in today's environment. Both gap and net effect of rent spreads were in the mid-teens this quarter, given the strength and contractual rent steps in the majority of our leases and our prudent use of leasing capital.

Alan Todd Roth: Cash re leasing spreads in the first quarter were more than 8% on a blended basis, including the highest spread for renewals that we've seen since 2019, an indication of our ability to increase rents further as occupancy rises and available space is limited a reflection of the strong demand in today's environment.

Alan Todd Roth: Both GAAP and net effective rent spreads were in the mid teens this quarter given strength in contractual rent steps and the majority of our leases and our prudent use of leasing capital.

Alan Todd Roth: Our team across the country is energized by the unwavering strength in leasing activity we are seeing. Supported by a limited supply of high-quality retail space available and a surplus of great retailers actively looking to expand, we look forward to harvesting the benefits of our record-high SNO pipeline, getting those tenants open and operating, and continuing to move the occupancy needle higher in the months ahead. Nick. Thank you, Alan. Good morning.

Alan Todd Roth: Our team across the country is energized by the unwavering strength and leasing activity we are seeing.

Alan Todd Roth: Supported by a limited supply of high quality retail space available and a surplus of great retailers actively looking to expand.

Alan Todd Roth: We look forward to harvesting the benefits of our record high S. N O pipeline getting those tenants open and operating and continuing to move the occupancy needle higher in the months ahead, Nick. Thank you Alan Good morning, everyone motivated by our tremendous success in 2023, including the started more than 250 million.

Nicholas Andrew Wibbenmeyer: Good morning, everyone. Motivated by our tremendous success in 2023, including the start of more than $250 million in new projects, our team remains very active, both executing and growing our development and redevelopment pipeline. Among our first quarter starts were the shops at Stonebridge in Cheshire, Connecticut.

Nick: A new projects our team remains very active both executing and growing our development and redevelopment pipelines.

Alan Todd Roth: Among our first quarter starts was the shops at Stonebridge in Cheshire, Connecticut.

Nicholas Andrew Wibbenmeyer: The $67 million ground-up development will be anchored by Whole Foods as well as TJ Maxx. And while we just broke ground last month, we are already seeing significant leasing demand. The project serves as the retail component of a new master plan community, a format with which we've had great success over the years. We recognize the mutual benefits and value that these relationships with master plan developers can provide for our shopping centers, as well as the communities they serve.

Alan Todd Roth: $67 million ground up development will be anchored by whole foods as well as T. J Maxx and while we just broke ground last month, we are already seeing significant leasing demand.

Alan Todd Roth: The project serves as the retail component of a new master planned community.

Alan Todd Roth: Format, with which we've had great success over the years, we recognize the mutual benefits and value that these relationship with Masterplan developers can provide for our shopping centers as well as the communities they serve.

Nicholas Andrew Wibbenmeyer: In addition to new starts, we continue to make great progress executing on our in-process pipeline and bringing NOI online. In total, we now have more than a half a billion dollars in process, which is nearly 90% leased with blended returns of 9%. And in 2024, we plan to complete over $200 million of these projects. Some examples of this tremendous progress are several exciting recent anchor openings that are worthy of highlighting. At our Glenwood Green ground-up development in Old Bridge, New Jersey, both Target and ShopRite celebrated successful grand openings last month, and the project is now nearly 95%- Exciting retail tenants opening soon include Honeygrove, Duck Donuts, and Playa Bowls.

Alan Todd Roth: In addition to new starts we continue to make great progress executing on our in process pipeline and bringing NOI online.

Alan Todd Roth: In total we now have more than a half a billion dollars in process, which is nearly 90% leased with blended returns of 9%.

Alan Todd Roth: And then 2024, we plan to complete over $200 million of these projects.

Alan Todd Roth: Some examples of the tremendous progress or several exciting recent anchor openings that are worthy of highlighting.

Alan Todd Roth: At our Glenwood Green ground up development in Old Bridge, New Jersey, both target and shop right celebrated successful Grand openings last month and the project is now nearly 95% leased.

Alan Todd Roth: Exciting shop tenants opening soon include honey grow duck Donuts and payables.

Nicholas Andrew Wibbenmeyer: At West Bard Square in Bethesda, the new giant grocery store opened in January, and rent will start coming from the shop space over the coming months, including tenants such as Tate, Stretch Zone, Silver & Sons BBQ, and Oak Barrel & Diner.

Alan Todd Roth: At West Bard square in Bethesda, the new giant grocery store opened in January and rent will start commencing from the shop space over the coming months, including tenants such as taught day strike zone, silver and sons, barbecue and oak barrel and died.

Nicholas Andrew Wibbenmeyer: Turning to the private transactions market, although data points and deal volumes remain below historical norms, we are seeing increased activity in deeper bidding pools in the marketplace, and cap rates remain low. The implications of the recent move in treasuries remain to be seen, but our team is actively underwriting acquisition opportunities that fit within our portfolio quality, growth, and earnings accretion requirements. This includes a great asset that we are buying in Westport, Connecticut, immediately adjacent to one of our existing centers, adding to our already strong portfolio in that. As we look ahead, our team is focused on sourcing a creative investment opportunity to cross our national platform.

Alan Todd Roth: Turning to the private transactions market, although data points and deal volumes remained below historical norms. We are seeing increased activity in deeper bidding pools in the marketplace and cap rates remained low.

Alan Todd Roth: The implications of the recent move in treasuries remains to be seen but our team is actively underwriting acquisition opportunities that fit within our portfolio of quality growth and earnings accretion requirements.

Alan Todd Roth: This includes a great asset that we were buying in Westport, Connecticut immediately adjacent to one of our existing centers, adding to our already strong portfolio in that region.

Alan Todd Roth: As we look ahead, our team is focused on sourcing accretive investment opportunities across our national platform.

Nicholas Andrew Wibbenmeyer: We expect to execute on acquisitions opportunistically, and we have great visibility on development and redevelopment activity as we continue to grow our pipeline. We are planning for another year of project starts north of $200 million and remain on track to meet our strategic objective of completing more than $1 billion of projects over the next five years. We are partnering with leading grocers looking to grow their footprints in high-quality centers within our attractive trade areas, and our recent project successes are also driving additional opportunities to further grow our pipeline.

We expect to execute on acquisitions, Opportunistically, and we have great visibility on development and redevelopment activity as we continue to grow our pipelines.

We are planning for another year of project starts north of $200 million and remain on track to meet our strategic objective of completing more than $1 billion of projects over the next five years.

Alan Todd Roth: We are partnering with leading grocers looking to grow their footprints in high quality centers within our attractive trade areas and our recent project successes are also driving additional opportunities to further grow our pipeline.

Nicholas Andrew Wibbenmeyer: The strong momentum within our program is supported by macro tailwinds within the shopping center business, but more importantly, by Regency's sourcing and execution capability. As you hear me repeatedly say, we have the best development team in the business, which, combined with our free cash flow and balance sheet, give us an unequaled ability to fund and drive significant value creation within our investment program.

Alan Todd Roth: The strong momentum within our program is supported by macro tailwind within the shopping center business, but more importantly by regency's sourcing and execution capabilities.

Alan Todd Roth: As you hear me repeatedly say, we have the best development team in the business, which combined with our free cash flow and balance sheet give us an unequaled ability to fund and drive significant value creation within our investments program.

Alan Todd Roth: Mike.

Unknown Executive: Thank you, Nick, and good morning, everyone. I'll start with some highlights from our first quarter results and then walk through updates to our 2024 guidance and forward expectations before ending with comments on our balance sheet position. We reported an AREED FFO of $1.08 per share and core operating earnings of $1.04 per share for the first quarter.

Michael J. Mas: Thank you Nick and good morning, everyone I'll start with some highlights from our first quarter results and then walk through updates to our 2020 for guidance and forward expectations before ending with comments on our balance sheet position.

Michael J. Mas: We reported NAREIT <unk> of $1 eight per share and core operating earnings of $1 four per share for the first quarter.

Unknown Executive: Same property NOI growth, excluding term fees and COVID period reserve collection, was 2.1%. It's worth a reminder that while bad debt this quarter trended closer to our historical averages, we are comping against a year ago bad debt number that was met positively, which we know is unusual.

Michael J. Mas: Same property NOI growth, excluding term fees and Covid period reserve collections was two 1%.

Michael J. Mas: It's worth a reminder, that while bad debt this quarter trended closer to our historical averages we are comping against a year ago bad debt bad debt number that was met positive which.

Unknown Executive: This anomaly impacted our first quarter growth rate by 60 basis points. At 2.7%, base rent was the largest contributor to same property NOI growth and continues to be the best indicator of portfolio performance. This was largely driven by our team driving rent growth through embedded rent steps and releasing spreads, as well as executing on our redevelopment pipeline. Our same property leased occupancy rate is 95.8%, up another 20 basis points in the quarter, reflecting the continued strong leasing environment.

Michael J. Mas: Which we know is unusual.

Anomaly impacted our first quarter growth rate by 60 basis points.

Michael J. Mas: At two 7% base rent was the largest contributor to same property NOI growth and continues to be the best indicator of portfolio performance.

Michael J. Mas: This was largely driven by our team driving rent growth through embedded rent steps and releasing spreads as well as executing on our redevelopment pipeline.

Michael J. Mas: Our same property leased occupancy rate is 95, 8% up another 20 basis points in the quarter, reflecting the continued strong leasing environment.

Unknown Executive: First quarter earnings results benefited from a penny of timing-related items outside of the same property pool, as well as a penny of straight-line rent, which you can see in our increased full-year non-cash guidance. Additionally, recall that we typically recognize more than half of our annual percentage rents in the first quarter, benefiting Q1 by about three cents compared to the implied run rate for the balance of the year. I also would like to point out our new ASFO disclosure on page 9 of our supplementary, which highlights what, in our view, is one of the most important performance metrics reflecting a REIT's ability to grow dividends and to invest back into its business in order to grow earnings.

Michael J. Mas: First quarter earnings results benefited from a penny of timing related items outside of the same property pool.

Michael J. Mas: As well as a penny of straight line rent, which you can see in our increased full year noncash guidance.

Michael J. Mas: Additionally, recall that we typically recognize more than half of our annual percentage rents in the first quarter.

Michael J. Mas: Benefiting Q1 by about three cents compared to the implied run rate for the balance of the year.

Michael J. Mas: I also would like to point out our new E. SSO disclosure on page nine of our supplemental.

Which highlights what in our view is one of the most important performance metrics, reflecting our recent ability to grow dividends and to invest back into its business in order to grow earnings.

Unknown Executive: This added disclosure also provides transparency around the level of capital used to drive same-property NOI growth and allows for a greater apples-to-apples comparison across the peer group. Turning to our guidance updates, as always, I'll refer you to the helpful detail on slides five through six in our earnings presentation. We raised our NARED SSO Outlook by a penny at the midpoint, which corresponds to the increase in our guidance for non-cash items. However, our guidance for same property NOI growth remains unchanged at two to two and a half percent. Excluding term fees and COVID period reserve collections.

Michael J. Mas: This added disclosure also provides transparency around the level of capital used to drive same property NOI growth and allows for greater apples to apples comparison across the peer group.

Michael J. Mas: Turning to our guidance updates as always I'll refer you to the helpful detail on slides five through six of our earnings presentation.

Michael J. Mas: We raised our NAREIT SSO outlook by a penny at the midpoint, which corresponds to the increase in our guidance for noncash items.

Michael J. Mas: Our guidance for same property NOI growth remains unchanged at two to two 5% excluding term fees and Covid period reserve collections.

Unknown Executive: We also adjusted our full-year transactions outlook. As Nick referenced earlier, the asset we are buying in Westport is now included in our acquisition guidance. And we modestly increased our dispositions guidance to include the potential sale of a few smaller non-core lower growth assets. Notably, our core operating earnings guidance, earnings per share guidance, excluding COVID period reserve collection, implies growth of more than 3% at the mid. Despite higher interest rates and the impact of our debt refinancing.

Michael J. Mas: We also adjusted our full year transactions outlook.

Michael J. Mas: As Nick referenced earlier the asset we are buying in Westport is now included in our acquisition guidance and we modestly increased our dispositions guidance to include the potential sale of a few smaller non core lower growth assets.

Michael J. Mas: Notably our core operating earnings guidance earnings per share guidance, excluding excluding Covid period reserve collections implies growth of more than 3% at the midpoint.

Michael J. Mas: Despite higher interest rates and the impact of our debt refinancing this year.

Unknown Executive: As we look beyond the calendar year, we wanted to highlight some tailwinds we see impacting our growth, especially as it relates to items where we have greater visibility. We've discussed the meaningful growth coming from our pipeline of executed leases, where outsized commencement activity will begin as we approach year end and move into 2025. As Alan mentioned, our SNO pipeline sits at an historical high of more than $50 million in annual base rent, of which about 65% is scheduled to commence by the end of this year.

Michael J. Mas: As we look beyond the calendar year, we wanted to highlight some tail winds, we see impacting our growth, especially as it relates to items, where we have greater visibility.

Michael J. Mas: We've discussed the meaningful growth coming from our pipeline of executed leases were outsized commencement activity will begin as we approach year end and move into 2025.

Michael J. Mas: As Alan mentioned, our S. N O pipeline sits at a historical high of more than $50 million of annual base rent of which about 65% is scheduled to commence by the end of this year.

Unknown Executive: In fact, we expect our spot commenced occupancy rate to end this year roughly 50 basis points higher as compared to year-end 2023. However, as these lease commencements are weighted to the second half of the year, the NOI and earnings impact will largely occur in 2025. And as Nick discussed, we've continued to ramp up our in-process development and redevelopment activity and look forward to completing these projects, delivering space, and commencing rent. We expect same property NOI to benefit from this redevelopment activity and for growth to accelerate into 2025.

Michael J. Mas: In fact, we expect our spot commenced occupancy rate and this year, roughly 50 basis points higher as compared to year end 2023.

Michael J. Mas: As these lease commencements are weighted to the second half of the year, the NOI and earnings impact will largely occur in 2025.

Michael J. Mas: And as Nick discussed we have continued to ramp up our in process development and redevelopment activity.

Michael J. Mas: And look forward to completing these projects delivering space and commencing rent.

Michael J. Mas: We expect same property NOI to benefit from this redevelopment activity and for growth to accelerate into 2025.

Unknown Executive: The positive contribution to same-property NOI is likely to exceed 100 basis points next year, leading to above-trend overall growth, and Total NOI Growth will also benefit from the continued momentum of our Ground Up development program, which will also start to bear fruit as we head into next year.

Michael J. Mas: Positive contribution to same property NOI is likely to exceed 100 basis points next year, leading to above trend overall growth.

Michael J. Mas: And total NOI growth will also benefit from the continued momentum of our ground up development program, which will also start to bear more fruit as we head into next year.

Unknown Executive: Finally, turning to our balance sheet, the recent credit rating upgrade from Moody's to A3 further validates Regency's balance sheet strategy and liquidity position. As a result, we are relatively insulated from the current volatility in the debt capital market, as our balance sheet is in phenomenal shape. The majority of this year's maturities have been pre-funded following our bond issuance in January, which we are gratified to price at a 10-year Treasury yield, meaningfully below where it sits today, and our next unsecured bond maturity is not until November 2025.

Finally, turning to our balance sheet. The recent credit rating upgrade from Moody's to a three further validates regency's balance sheet strategy and liquidity position.

We are relatively insulated from the current volatility in the debt capital markets as our balance sheet isn't phenomenal shape.

Michael J. Mas: Majority of this year's maturities have been pre funded following our bond issuance in January which we are gratified to price at a 10 year treasury yield meaningfully below where it sits today and our next unsecured bond maturity is not until November 2025.

Unknown Executive: Nearly all of our debt is fixed, our weighted average maturity is close to seven years, and we remain near the low end of our targeted leverage range of five to five and a half times net debt preferred to EBITDA. We have approximately $1.7 billion of liquidity today, including nearly full capacity on our revolver, and we remain on track to generate free cash flow of more than $160 million. With that said, we are happy to take your questions.

Michael J. Mas: Nearly all of our debt is fixed our weighted average maturity is close to seven years.

Michael J. Mas: We remain near the near the low end of our targeted leverage range of five to five five times net debt preferred to EBITDA.

We have approximately $1 $7 billion of liquidity today, including nearly full capacity on our revolver.

Michael J. Mas: And we remain on track to generate free cash flow of more than $160 million. This year.

Speaker Change: With that we're happy to take your questions.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. This call comes from the line of Jeff Spector with Bank of America. Please proceed with your question.

Speaker Change: Thank you we will now be conducting a question and answer session.

Speaker Change: If you would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Information tone will indicate your line is in the question queue.

You May press Star two if you would like to remove your question from the queue.

Speaker Change: Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Comes from the line of Jeff Spector with Bank of America. Please proceed with your question.

unknown: I guess we'll see Dori tonight. I think to ask about sort of, maybe like the Bennetts.

Speaker Change: Hi.

Would it be Duane cannot.

Speaker Change: Okay.

Speaker Change: Out.

Speaker Change: Sort of me too.

Speaker Change: Got it.

unknown: We cannot hear the question. I don't know if it's us or if it's... Lizzie, you're breaking up a bit.

Speaker Change: We cannot we cannot hear the question I don't know, if it's us or if it's living you're breaking up.

unknown: Hello, can you hear me now? Yes. Okay, I'm sorry. So, I was asked to be and if any of the benefits of the same store flowed through in the first quarter. Just seeing if maybe any upside from losing or additional sources of accretion might have exceeded your expectations as we're through the early part of the year.

Speaker Change: Hello can you hear me now.

Yes.

Speaker Change: Okay.

Alright, so now Oh.

Speaker Change: It would be and any of the benefit to same store flow through and the first corner.

Speaker Change: I'm just seeing if maybe.

Speaker Change: Any upside for Hussein, where additional accretion might have exceeded our expectations. The asthma through the early part of the year.

Unknown Executive: I think, Lizzie, you're still breaking up a little bit in the early parts, but I think I understand the gist of your question. Maybe cadence on earnings given the beat in the first quarter versus the run rate for the balance of the year. I think that's what I heard you ask.

Speaker Change: I think you're still.

Speaker Change: Breaking up a little bit in the early parts of I think I understand but just of your question maybe cadence on earnings and given the beat in the first quarter versus the run rate for the balance of the year I think that's what I heard you ask.

Speaker Change:

Unknown Executive: Let me just kind of go back to some of the comments I made in my remarks and maybe color some of that a little bit for you. Let me start by saying, at a very high level, we thought we delivered a really solid quarter. We were very happy with our performance. We met our plan. Our confidence in our outlook was simply confirmed, as you can see through our limited guidance. There was some timing in the first quarter that, as I outlined in my remarks, did impact our forward run rate, right? So the percentage rent is the biggest one. That is a seasonal issue.

Speaker Change: Let me let.

Speaker Change: Let me just kind of go back to some of the comments I made the remarks.

Speaker Change: Maybe color some of that up a little bit for you.

Unknown Executive: It's 50% or more of that rent is collected in the first quarter. That does lead to about a 3 cent kind of deceleration from an earnings impact perspective going forward on our run rate. And then there was some timing, little timing issues coming out of the non-same property portfolio, which, again, as a reminder, is a little larger than it customarily is because we have our entire Erstat Biddle merged portfolio designated as non-same for 2024. But those timing issues didn't change our outlook for the year, right? So those aren't going to flow through in any kind of additive way.

Speaker Change: Let me start by saying at a very high level.

Speaker Change: We thought we delivered a really solid quarter, we were very happy with our performance we met our plan our confidence in our outlook was simply confirmed as long as you can see through our limited guidance changes.

Speaker Change: There was some timing in the first quarter that I as I outlined on the call on the remarks.

Speaker Change: That do impact our forward run rate right. So percentage rent is the biggest one that is a seasonal issue.

Speaker Change: It's 50% or more of that is collected in the first quarter that does lead to about a reset kind of deceleration from an earnings impact perspective going forward on a run rate.

Speaker Change: And then there was some timing timing little timing issues coming out of the non same property portfolio.

Speaker Change: Which is again as a reminder is a little larger than it customarily is because we have our entire earth that that'll merged portfolio designated as I'm, not I'm, saying for 2024.

But what what those timing issues didn't change our outlook for the year right. So those arent going to flow through and any kind of additive way. So at this point. We continue to you know a lot of confidence in the guide that we shared last quarter. We did raise NAREIT SSO by a penny that is incremental to the plan that's coming from noncash revenue.

Unknown Executive: So at this point, we continue to have, you know, a lot of confidence in the guide that we shared last quarter. We did raise NARED FFO by a penny. That is incremental to the plan that's coming from non-cash revenue and specifically straight-line rents coming out of – improved straight-line rents coming out of the development pipeline. We also had a mark-to-market adjustment following a mortgage paydown that we executed this quarter. So that led to the $2 million that we increased our non-cash guidance, and that's what you're seeing flow through it from a NARED FFO perspective. Let me just end with this.

Speaker Change: And specifically straight line rents coming out of improved straight line rents coming out of the development pipeline. We also had a mark to market adjustment following the mortgage pay down that.

Speaker Change: That we have executed on this quarter. So are those that that led to the $2 million that we increased our noncash guidance.

Speaker Change: That's what you're seeing flow through up at my neighborhood episode perspective.

unknown: From a same property growth point of view, we didn't modify the range. We have a lot of conviction in that range. We – you know, the fallout in percent commencement that we anticipated and communicated last quarter happened as we planned. And the best part of that is we've released as much space as we've gotten back and then some. We have done a remarkable job there, and our outlook for the balance of the year and the commencement of that rent going into the end of 2024 and the end of 2025, we feel really good about.

Speaker Change: Let me just end with this from a same property growth. We didn't we didn't modify the range. We have a lot of conviction in that range. We you know the fallout in percent commenced that we anticipated and communicated last quarter happened as we planned.

And the best part of that is we've released we've really re leased as much space as we've gotten back and then some <unk> done a remarkable job there and our outlook for the balance of the year and commencing that rent going into end of 'twenty four and into 'twenty five we feel really good about.

unknown: Okay, thanks for that walkthrough. That's helpful. And I apologize for the connection issues.

Speaker Change: Okay. Thanks for that work through that's helpful and apologize for the connection issue.

Speaker Change: Just as a follow up I know you all said that you know you're you're viewing external growth opportunities Opportunistically and there's a lot to go on the development redevelopment crime.

Speaker Change: Just curious on maybe what kind of opportunity would look nice but in the.

Speaker Change: Interesting to you today, maybe white.

Speaker Change: What you're seeing out in the market a more color on that would be helpful.

Speaker Change: I'll I'll take that and.

Speaker Change: Allow Nick to come over top of me if he wants to he wants to add a little more a little more detail.

Nick: Really unchanged or investments strategy, whether it's for acquisitions, which we've had we've had recent success with or whether it's for development is aligning with our operating portfolio.

Nick: So above average quality with regards to merchandising mix of tenants and to the extent that we can add our expertise to make that happen, we're looking for those opportunities as well.

Nick:

Nick: Grocery anchored primarily and also in great trade areas with above average demographics are we've had we've had success from both the acquisition and development strategy.

Nick: Our strategy in doing that and remaining disciplined and we continue to find opportunities I really want to reiterate because I know that we continue to get questions about our development pipeline remember, we're generating ample free cash flow and the best use of that free cash flow is into our developments and redevelopments and we have had a we have had a really impressive track record with that.

Nick: I'm late 2023 was an exceptional year and as I said in my prepared remarks, we expect that to continue into 2024, and I'm not saying that it's easy, but when you take what we have which is a talented experienced development team across the country. When you have access to capital with the strength of our balance sheet.

Nick: And when you have the relationships that we have with top grocers top retailers Master plan community developers and it's it's equaling success and we're really proud of that.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: Our next question comes from the line of Michael Goldsmith with UBS. Please proceed with your question.

unknown: Just as a follow-up, I know you all said that you're viewing external growth opportunities opportunistically. And there's a lot to go on the development and redevelopment front. But just curious about maybe what kind of opportunities would look most, the most interesting to you today. And maybe what you're seeing out in the market. More color on that would be helpful, and I'll

Michael Goldsmith: Good morning, Thanks, a lot, particularly my question our same property NOI growth of two 1% in the quarter, Mike you called out a tough bad debt comparison of 60 basis points with base rent contribution of two 7%, though looking forward can you remind us or maybe any other moving pieces in the comparison.

unknown: Um, I'll take that, and I'll allow Nick to come over top of me if he wants to if he wants to add a little more, a little more detail really unchanged our investment strategy, whether it's for acquisitions, which we've had recent success with, or whether it's for development, is aligning with our operating portfolio, so above average quality with regard to the merchandising mix. Tenants, and to the extent that we can add our expertise to make that happen.

Michael Goldsmith: Then if we should use that to serve in the high 2% range is the right base rent growth as the forward trajectory and did you say that next year should be about 100 basis points above trend. Thanks.

Speaker Change: Thanks, Michael.

Speaker Change: As I as we look through the balance of 24, 2% to 2.5% guide range, we still have a lot of confidence in that expectation its going to hover around.

Speaker Change: Its going to hover within that range quarter over quarter, and really pretty consistent I would say as we look out through the balance and I appreciate you.

Speaker Change: Highlighting the fact that Q1 did have a unique anomaly in the prior in the prior year basis.

Speaker Change: I did say plus 100 was let's make sure we understand what that means that's the positive contribution coming from redevelopment deliveries to our same property growth rate, where we are really excited about that and have growing conviction in that pipeline and that delivery of projects.

Speaker Change: And you can see it on our on our redevelopment disclosure page by the way and get really comfortable yourselves with thinking about when that income will be delivered remember and we've spent a lot of time kind of talking about our.

unknown: We're looking for those opportunities as well, groceryanchored primarily and also in great trade areas with above average demographics. We've had success from both the acquisition and the development strategy in doing that and remaining disciplined. And we continue to find opportunities. I really want to reiterate that because I know that we continue to get questions about our development pipeline. Remember, we're generating ample free cash flow, and the best use of that free cash flow is for our developments and redevelopments.

Speaker Change: Our steady state growth rate generally redevelopments are going to provide about plus or minus 50 basis point positive contribution to our growth.

Speaker Change: Plus 100 basis points and our outlook for 'twenty 'twenty five is materially better than that and again I would just come back to the conviction we have over that given the projects that we see the leasing that the team has executed on and really it's just a matter of executing on deliveries.

Speaker Change: He knows rents, which you'll start to see.

Speaker Change: It happened in earnest towards the end of this year and into 2025.

Speaker Change: I'll just add in.

Speaker Change: Promise like I won't give guidance for.

For 2025, but what I would like to add Michael If you just go back and you look at long term growth rate same property NOI growth <unk> growth rate pick five years, you'll see that regency is at the top of the sector. It with that and that is a result of our strategy.

unknown: And we have had a really impressive track record with that, especially of late. Twenty twenty three was an exceptional year. And as I said in my prepared remarks, we expect that to continue into twenty twenty four. And I'm not saying that it's easy, but when you take what we have, which is a talented, experienced development team across the country, when you have access to capital with the strength of our balance sheet, and when you have the relationships that we have with top grocers, top retailers, and master plan community developers, it's equating to success And we're really proud of that.

It's all of the things right, it's our unequaled strategic advantages that I talked about in my prepared remarks, and with that given 'twenty 'twenty four is a temporary dip from those long term expectations. We would expect 2025 would kind of make up for that and that with the growth of 2025.

Speaker Change: We expect all else being equal with regards to the economy and we would still we will rise to the top of the sector.

Speaker Change: Thanks for that and my follow up is on the pipeline. It took a snapping up here now.

Speaker Change: Currently sitting at 270 basis points or $50 million.

Speaker Change: Would you have to know pipeline, what's the elevated what's the trajectory from here is it should we expect that to be worked down through 'twenty, four and 'twenty five or should it kind of still remain elevated and choppy just trying to understand it better.

Speaker Change: Better around how you how quickly you can monetize.

Speaker Change: Thanks.

Speaker Change:

Speaker Change: Listen I hope.

Speaker Change: For the right reasons I hope it grows and I'm looking at al and when I say that because you'd say the same thing I think we have a lot of conviction in our leasing team's ability, we know our properties and and how well they are desired by the by the time you need it.

Speaker Change: And we have a lot of conviction and continuing to at least at a high rate. So I wouldn't be you know honestly I I'd like to see that number increase but from an economic impact perspective.

Speaker Change: Our commitments about the commenced occupancy rate is the essence of your question and we do think.

Speaker Change: As we look at our at our plants, we do think that we've trough on a spot basis from a commence perspective all planned we knew these many of these move outs were going to occur.

Speaker Change: In the first quarter of this year and now it's about moving and delivering space moving that commenced commensurate up I mean, it gives you something to help you with your question.

Speaker Change: Little bit over $50 million of S. N O pipeline from an AVR perspective sick.

Speaker Change: 65% of those leases will commence by year end, but that's not rent right, so $14 million plus or minus I'm going to be in the area. We should recognize into earnings and 24. So that's the only you know a quarter of that pipeline. So that that tells you that that adds to that conviction we have in 2025.

Speaker Change: Balance of that ABR is going to come online as we delivered units into 2025.

Speaker Change: Thank you very much.

unknown: Our next question comes from the line of Michael Goldsmith with UBS. Please proceed with your question.

Speaker Change: Our next question comes from the line of Juan Sanabria with BMO capital markets. Please proceed with your question.

Juan Carlos Sanabria: Hi, good morning, Thanks for the time I'm just curious on the decisions in some cases to be proactive and trying to increase the or improve their merchandise mix and increase rents.

Juan Carlos Sanabria: And if that is how how are you making that decision and it.

Speaker Change: It seems like that's obviously a product or a <unk>.

Speaker Change: Stronger market here could you do more of that in 'twenty five that could temporarily offset grocers trying to play Devil's advocate here.

Speaker Change: Okay.

unknown: Good morning. Thanks a lot for taking my question.

Speaker Change: One this is Alan Thank you. Thank you for the question, we've always taken a long term view of intense asset management and so to answer. Your question. We're absolutely all about what is the right long term decision for the asset to the portfolio.

unknown: Same property NOI growth of 2.1% in the quarter. Mike, you called out a tough bad debt comparison of 60 basis points with base rent contribution at 2.7%. So looking forward, can you remind us of maybe any other moving pieces in the comparisons and whether we should use that 2.7, the high 2% range as the right base rent growth as the forward trajectory? And did you say that next year should be about 100 basis points above trend?

unknown: Thanks, Michael. As we look through the balance of 24, two to two and a half percent guide range, we still have a lot of confidence in that expectation. It's going to hover around. It's going to hover within that range, quarter over quarter and be really pretty consistent, I would say, as we look through the balance. And I appreciate you highlighting the fact that Q1 did have a unique anomaly in the prior, on a prior year basis. I did say plus 100. Let's, let's make sure we understand what that means.

Speaker Change: And for the future success of Regency.

Speaker Change: I said last quarter that we moved three office supply stores out of our portfolio I'm not so sure that I actually identified who's replacing them, but to take those those units in and replace those with sprouts in one location at home Center and another location in a Baptist health medical facility and a third location I think.

Speaker Change: It's just really good examples of how we look at enhancing the merchandising providing durability to our occupancy through better tenant credit and to your point getting significant rent growth. So it's certainly the mindset of how were trained at certainly the mindset of how we think about managing our portfolio and I would expect that to continue.

Speaker Change: Great. Thanks, and then just curious.

Speaker Change: On how first that is performing if that would have been it's included in those same store numbers additive.

Speaker Change: And.

Speaker Change: Presumably there's more lease up opportunities there does that maybe then create a tough comp issue.

Speaker Change: <unk> that's folded into the.

Speaker Change: The same store pool.

Speaker Change: Okay.

Speaker Change: Let me take it first and then I was like Alan but to give some color on what he's seen.

Speaker Change: In the in the portfolio, but from my perspective.

Speaker Change: Theres that portfolio's performing right on plan and we have high expectations for the portfolio and the team is doing a remarkable job of delivering on those expectations.

Speaker Change: So just to reiterate that we called for about a point and a half worth of accretion, we're going to deliver that and we havent come off you know plus or minus that expectation.

Speaker Change: And there was a little bit of timing noise from a cadence perspective as I indicated in the first quarter.

Speaker Change: And that will level off by year end.

Speaker Change: It is additive there would have been additive had we called at St. St property by about the same amount as I mentioned last quarter, which we said where we're up to about a quarter of a point so.

Speaker Change: I'll leave it at that and if Alan has any comment yeah. One the only thing I would add is we continue to be thrilled with the expanded platform, but I am personally probably more thrilled with the great people that are that have come into the organization as a result of it and we did have another productive quarter, we signed about 50 transactions and in that portfolio and as I.

I said the last few quarters, there's runway there we are going to grow that 93% formerly leased portfolio.

Alan Todd Roth: And leverage the platform certainly that we have and that is the hyper focus of all of the company right now relative to that acquisition Redevelopments are something that are more medium to long term.

unknown: That's the positive contribution coming from redevelopment deliveries to our same property growth rate. We are really excited about and have growing conviction in that pipeline and that delivery of projects, and you can see it on our, on our redevelopment disclosure page, by the way, and get really comfortable yourselves with thinking about when that income will be delivered. Our steady-state growth rate, generally redevelopments are going to provide about a plus or minus 50 basis point positive contribution to our growth.

Alan Todd Roth: You know, we're doing some small little pad deals out in the parking lots, maybe evaluating a couple of multi tenant deals but largely.

Alan Todd Roth: Largely it's a it's a hyper focus on leasing and and the team is doing well.

Speaker Change: Thank you very much.

unknown: Plus 100 basis points in our outlet for 2025 is materially better than that. And again, I would just come back to the conviction we have over that, given the projects that we see, the leasing that the team is executing on. And really, it's just a matter of executing on deliveries and commencing those rents, which you'll start to see happen in earnest towards the end of this year and into 2025.

Speaker Change: Our next question comes from the line of Greg Mcginniss with Scotiabank. Please proceed with your question.

Greg Michael McGinniss: Hello. This is victor fatty on this Greg Mcginniss. So we've noticed that your new leases tenant allowances landlord work as a percentage of new base rents have increased both on a quarter over quarter and year over year basis. It's curious wasn't something unique this quarter or is that current market environment. So you need to provide higher ta since landlord work.

New leases done.

Greg Michael McGinniss: Victor This is Alan Thank you for the question. The short answer is we're not seeing any material shift at all although there is a slight elevation. This quarter I'll start on the renewal front. The elevation you see there is one tenant that we did a turnkey relocation to make way for a larger junior box if you.

unknown: I'll just add, and I promise, Mike, I won't give guidance for 2025, but what I would like to add, Michael, if you just go back and you look at long-term growth rates, same property I know I'm growing, FFO growth rate, pick five years, you will see that Regency is at the top of the sector with that, and that is a result of our strategy. It's all of the things,

Greg Michael McGinniss: That went out our capitals are absolutely in line with historic levels, and again, I think that ties back to the.

The intense asset management mindset of what's what's right for the asset on the new leasing front I would just tell you. It's it's largely elevated by anchor leasing and we had four anchor transactions, notably one of them was a space that was vacant for over seven years, and so again I think theres some mix.

Greg Michael McGinniss: <unk> issue in terms of just anchor transactions, that's driving that but we're not seeing any market shifts as a result, I think it's yeah. It's important to just reiterate that.

unknown: It's our unequaled strategic advantages that I talked about in my prepared remarks. And with that, given 2024 is a temporary dip from those long-term expectations, we would expect 2025 to kind of make up for that. And that with the growth of 2025 that we expect, all else being equal with regard to the economy, we would still rise to the top of the sector.

Greg Michael McGinniss: Our strategy and our approach hasn't changed.

Greg Michael McGinniss: Very judicious.

Greg Michael McGinniss: With our leasing capitals and do believe that that is clear.

Greg Michael McGinniss: Clearly leads to.

Greg Michael McGinniss: But again ample free cash flow growth, but also helps drive our <unk> growth, which if you were to if you were to look at long term as we went to lead the sector.

Speaker Change: Got it got it. Thank you and then as a follow up could you. Please provide some additional color on that remaining 75 million of dispositions. So far both dispositions and 24 are in Florida and apart from property as being non core or was it also driven by just relatively more attractive pricing and transaction market and floor.

Speaker Change: And should we expect other dispositions be within the same submarket are there are no other noncore assets in that sub market.

unknown: I think we have a lot of conviction in our leasing team's ability. We know our properties and how well they are desired by the community. And we have a lot of conviction in continuing to lease at a high rate. So I wouldn't be, you know, honestly, I'd like to see that number increase.

unknown: Thanks for that. And my follow-up question is on the S&O pipeline. It took a step up here, now currently sitting at 370 basis points or 50 million. With the S&O pipeline, what's the trajectory from here? Should we expect that to be worked down through 2024 and 2025? Or should it kind of still remain elevated and choppy? Just try to understand it better, better around how you, you know, how quickly you can monetize this elevated pipeline. Thanks.

Speaker Change: Victor This is Nick and I. Appreciate the question. Good morning, No as you referenced I mean, you you answered part of the question in your question, which is we are always looking to fortify our growth profile and we're always looking to potentially sell noncore nonstrategic assets at attractive cap rates and so as we look into the future.

unknown: Listen, for the right reasons, I hope it grows. And I'm looking at Alan when I say that, and he'd say the same thing.

unknown: But from an economic impact perspective, it's about our commenced occupancy rate, is the essence of your question. And we do think, as we look at our plans, we do think that we've troughed on a spot basis from an economic perspective. All planned, we knew these move outs were going to occur in the first quarter of this year. And now it's about moving and delivering space, moving that commenced rate up. So that tells you that it adds to that conviction we have in 2025 that the balance of that ABR is going to come online as we deliver units into 2025.

Speaker Change: And our guidance now we do expect to continue to sell assets at attractive cap rates recycle that capital into more accretive opportunities that we may see them and so it just so happens. These two are in Florida, but I would not tell you strategically we are trying to exit Florida. As you know we have a tremendous portfolio in Florida and so these are really case by case decision to act.

Speaker Change: Asset by asset trade area by trade area, and so I would not expect these additional assets necessarily be in Florida.

Speaker Change: Understood. Thank you.

unknown: Our next question comes from Juan Sanabria with BMO Capital Markets. Please proceed with your question.

Speaker Change: Our next question comes from the line of Ronald Camden with Morgan Stanley. Please proceed with your question.

Ronald Kamdem: Hey, just two quick ones. So why not just on the acquisition front, obviously the $46 million.

Ronald Kamdem: Add in the guidance, maybe could you talk about just how that came about and has has sort of opportunities sprung up or change given sort of the move in rates is that sort of slowed activity.

unknown: Hi, good morning. Thanks for the time.

unknown: I'm just curious about the decisions in some cases to be proactive and trying to increase or improve their merchandise mix and increase rents. And if that's what you're making that decision? And it seems like that's obviously a product of a stronger market here. Could you do more of that in 25 that could temporarily offset growth? Just trying to play devil's advocate here.

Ronald Kamdem: Good morning, Ronald This is Nick again I appreciate the question.

unknown: Juan, this is Alan. Thank you. Thank you for the question. We've always taken the long-term view of intense asset management. And so to answer your question, we're absolutely all about what is the right long-term decision for the asset, for the portfolio, and for the future success of Regency. You know, it's interesting. I said last quarter that we moved three office supply stores out of our portfolio. I'm not so sure that I actually identified who's replacing them, but to take those units and replace them with Sprouts in one location, HomeSense in another location, and a Baptist Health medical facility in a third location, I think they're just really good examples of how we look at enhancing the merchandising, providing durability to our occupancy through better tenant credit So it's certainly the mindset of how we're trained. It's certainly the mindset of how we think about managing our portfolio, and I would expect that to continue.

Nick: So let me talk first to the first part of your question, which is about the the acquisition, we've now guided to and so that that asset. We're very excited about it's a 76000 square foot shopping center in Westport, Connecticut at Cvs anchored.

unknown: Great, thanks. And then just curious about how ERSTAT is performing, if that would have been if it had been included in the same store numbers additive, and presumably there are more lease up opportunities there. Did that maybe then create a tough comp issue next year that's folded into the same store pool?

unknown: Let me take it first, and then I'd like Alan to give some color on what he's seen in the portfolio. But from my perspective, the IRRSAT portfolio is performing right on plan. And we had high expectations for the portfolio, and the team's doing a remarkable job of delivering on those expectations. So just to reiterate that, we called for about a point and a half worth of accretion. We're going to deliver that, and we haven't come off, you know, plus or minus that expectation.

unknown: And there was a little bit of timing noise from a cadence perspective, as I indicated in the first quarter, and that'll level off by year-end. It is additive, or would have been additive, had we called it the same property, by about the same amounts I mentioned last quarter, which we said were up to about a quarter of a point. So I'll leave it at that, and if Alan has any comments.

unknown: Yeah, Juan, the only thing I would add is that we continue to be thrilled with the expanded platform, but I am personally probably more thrilled with the great people that have come into the organization as a result of it. And we did have another productive quarter. We signed about 50 transactions in that portfolio, and as I said in the last few quarters, there's runway there. We are going to grow that 93% formally leased portfolio and leverage the platform, certainly, that we have.

Nick: And for those of you recently on our tour in the North East you'll be familiar with its into the center directly across the street from our trader Joe's asset that we own at the corner of copper eroded post road and so just a tremendous opportunity to bring a great asset into a region that we already are really really familiar with and are excited about it.

unknown: And that is the hyper-focus of the company right now relative to that acquisition. Redevelopments are something that are more medium to long-term, but, you know, we're doing some small little pad deals out in the parking lot, maybe evaluating a couple multi-tenant deals, but largely it's a hyper-focus on leasing, and the team is doing well.

unknown: Our next question comes from the line of Greg McGinniss with Scotiabank. Please proceed with your question.

unknown: Hello, this is Viktor Fediv. I'm with Greg McGinniss.

unknown: So we've noticed that your new leases, tenant allowances, and landlocked work as a percentage of new base rent have increased, both on a quarter-to-quarter and year-over-year basis. I was curious, was it something unique this quarter, or is it the current market environment, so you need to provide higher TAs and landlocked work to get new leases done?

Nick: Adding to that great portfolio, and so that asset was fully marketed and so we we competed in an on market a process and I think given our reputation and our presence in the market definitely helped us as it related to that competition and so excited to get that closed here very very soon maybe even as soon as today.

unknown: Victor, this is Alan. Thank you for the question. The short answer is we're not seeing any material shift at all, although there is a slight increase this quarter. I'll start on the renewal front. The elevation you see there is one tenant that we did a turnkey relocation to make way for a larger junior box. If you take that one out, our capitals are absolutely in line with historic levels. And again, I think that ties back to the intense asset management mindset of what's right for the asset.

unknown: On the new leasing front, I would just tell you it's largely elevated by anchor leasing. And we had four anchor transactions. Notably, one of them was a space that was vacant for over seven years. And so, again, I think there are some mixed issues in terms of just anchor transactions that's driving that. But we're not seeing any market shifts as a result. I think it is.

Nick: And so beyond that we continue to be again opportunistic as Lisa indicated earlier, which is looking across the country for opportunities that we believe we can create and add value to our shopping centers and so there there is definitely more opportunities on the market over the last quarter than they were the quarter before but as we all know treasuries have.

Nick: Here in the last couple of weeks and so it's TBD or does that slow transaction volume or not.

Nick: But from the chatter we're hearing we do expect transaction volume to stay pretty darn study and we're gonna take advantage of any opportunity. We see that we think we can add value to them.

Speaker Change: Does that complete your question.

Speaker Change: I guess my second question was just on the on the same store look I'm I'm getting the theme of the call, which seems to be acceleration in 2025.

Speaker Change: On on the same store I guess the question is is the conviction coming from sort of the fact that you have sort of a sign that lease pipeline and you have visibility.

Speaker Change: Or is it more of that the sort of the tenant health, there's no sort of larger Ah you know move outs or bankruptcies that that could be a headwind next year or both right just trying to figure out where the convictions coming.

Speaker Change: I'll answer that just very high level and to the extent that.

Speaker Change: So you want to add any more specific color, but it is both I'm glad that you added that at the end.

You can see with our leasing.

Speaker Change: Success and results to health in the portfolio and where we can see some records are meant to be broken and we continue to drive our our percent leased higher and higher and that S. N O pipeline is Israel and so that does create real visibility to rent.

Speaker Change: That will commence and and we also have been really successful with our redevelopment pipeline and Mike.

Speaker Change: Mike talked about those in the prepared remarks and in one of the questions in and we have real visibility to that also being additive in 2025. So it's all of the above.

Michael J. Mas: Alright, thanks, so much.

Michael J. Mas: Our next question comes from the line of <unk> St. Juste with Mizuho. Please proceed with your question.

Hi, Good morning. This is Rob you've made there on the line for Hondo Hope you guys are doing well.

Rob: We've heard from you and your peers that leasing leasing environment is very strong and robust, but I just wanted to ask particularly around med tail and urgent care centers and things along that line, you're starting to hear some softness in.

Rob: And demand from some of the operators, there, notably Walmart and just wanted to hear your thoughts on what Youre seeing from what we've seen demand perspective. Thanks.

Rob: Yeah Ravi good morning, it's Alan.

Alan Todd Roth: So our current medical exposure is about 7% of ABR and that has grown from 5%, where we were pre COVID-19.

Alan Todd Roth: We are very comfortable not only with where it is but certainly comfortable if it were to continue to grow interestingly, we signed nearly 20, new medical leases in the first quarter and that was our second highest category for new leasing from a square footage.

Alan Todd Roth: Perspective, and it was largely dentist optometrists physical therapy, you know primary care and included a new ground lease that we also did with the largest primary care operator in Houston, where theyre going to build a new a new medical building where regions. He didn't even invest any capital in that but overall work.

Alan Todd Roth: Were comfortable certainly with with that that category from an urgent care specifically to answer that question. It's just not a significant piece of our medical exposure is less than 1% of our ABR.

Alan Todd Roth: We interestingly also of all the medical transactions, we did in the first quarter and none of our new leasing activity. This quarter was in the urgent care facility Arena, but you know I would just take us back to.

Alan Todd Roth: The strict vetting process that we do for all of our operators, whether medical personal services restaurants, et cetera, and and I think the team does a really nice job to make sure we're aligning with with the right operators.

Speaker Change: Got it. Thank you that's helpful. Just one more here.

Speaker Change: Where do you think Capex goes as a percent of it as a percentage of NOI. It goes from here for you and I guess broadly for the sector as it were seeing great Occupancies are.

Speaker Change: More more leases or renewals and new ones.

Speaker Change: How do you think this could impact <unk> growth.

Speaker Change: Maybe over the next couple of years and.

Speaker Change: Is there a reason.

Speaker Change: Approaching an inflection point I guess is the this is the crux of the question.

Michael J. Mas: Hey, Ravi it's Mike.

Ravi: Maybe I'll give you a bit of a boring answer, but we don't see any change I've been pretty we've been pretty consistent on this topic for some time.

Ravi: 11% area is kind of a run rate and that's all capex right. So that's maintenance and leasing capitals.

Ravi: And we don't see that changing on balance on average over the long run you're going to have periods of time, where as you're adding to commenced occupancy as we are now.

Ravi: Where that could increase over that line up that average life again because of the volume of activity Youre doing but the team does an incredible job of ensuring that we're investing the right amount of money into the operator's business and we're getting our fair market, leading wrapped in most cases at market leading.

Ravi: Tariffs.

Ravi: And there just <unk>.

Ravi: Very judicious with our capital spend and I think that's appropriate.

Ravi: Capital is precious we're going to generate as much free cash flow as we can so that we can reinvest that at least this point back into our development and redevelopment business and and when we have available capital outside of that buy properties like the great asset were going to add to the portfolio Westport. So.

Ravi: I don't see that 11% area changing over the long run and I do just want I want to reiterate because it is it's an intentional strategy to maximize went well.

unknown: I think it's, yeah, it's important to just reiterate that our strategy and our approach hasn't changed. We're very judicious with our leasing capital and do believe that that is, you know, clearly leads to ample free cash flow growth but also helps drive our AFFO growth, which if you were to look at, you know, long-term AFFO growth, we do lead the second.

Ravi: Limiting leasing capital trying to stay within our parameters of our expectations and it's the strength of our asset quality in our in our shopping centers that that allows us to do that and we are successful in doing so and it is it is a reason that we it does drive our SSO growth.

Got it thank you.

unknown: Got it, got it. Thank you.

Ravi: Our next question comes from the line of Craig Mailman with Citi. Please proceed with your question.

unknown: And then as a follow-up, would you please provide some additional color on the remaining 75 million in dispositions? So far, both dispositions in 24 were in Florida. And apart from properties being non-core, was it also driven by just a relatively more attractive pricing and transaction market in Florida now? And should we expect other dispositions to be within the same submarket, or are there no other non-core assets in that submarket?

Craig Allen Mailman: Hey, everyone just want to follow up I know you guys increased dispositions a little bit here to partly pay for the Westport acquisition, but I'm just from a S. A need of capital being 125 million with the free cash flow you guys throw off.

Craig Allen Mailman: Is this just a placeholder because you think you could get more acquisitions or is this necessary to fund the redevelopment you're trying to get at that accelerated pace of dispose.

Craig Allen Mailman: Just given given the spending you guys have.

Speaker Change: Yeah, I think this will help you Craig.

Speaker Change: We don't need to sell the properties to afford or pay for the Westport acquisition that as we have.

Speaker Change: Free cash flow and position we have the balance sheet capacity, we have on a leverage neutral basis. If you take our free cash flow expectations, we have over $300 million of kind of investment capacity.

Speaker Change: At our fingertips, so to speak so honestly the $25 million at was simply identifying some noncore small noncore assets.

Speaker Change: And in our portfolio, where we have received.

Speaker Change: Indications of interest that show pretty low cap rates and when we think about that trade of exiting a noncore asset on an accretive basis.

Speaker Change: Into.

Speaker Change: Either or developments or Redevelopments on acquisition somebody's.

Speaker Change: Some of these assets you could you could argue could pay down debt and its accretive so when we see that trade opportunity, we're going to take it and that's all we're doing here is just a little bit of pruning.

Speaker Change: I think kind of smartly and and over time, that's going to lead to a more durable income stream.

Speaker Change: And earnings growth as well.

Speaker Change: And the remaining $95 million that you guys have.

Speaker Change: Kind of dialed then how much of that do you have visibility on at this point and maybe what do you think timing could be on some of these sales.

Speaker Change: I think I mean, the 25 million that we've added we have visibility on all of it and it's on the market is actively being discussed the $25 million, it's going to be backend weighted and and I think I still have a lot of confidence that we're going to execute on that plan. The other are the.

Speaker Change: The other transactions or R.

Speaker Change: No they're going to occur these arent speculative.

Speaker Change: Disposition assumptions. These are these are actionable dispose that we have a lot of confidence in them.

Okay. So I guess I was getting at you guys have done 30.

Speaker Change: 25 is incrementally can sink, but then the other 70 million is kind of known what's the timing on those.

Speaker Change: Timing.

Speaker Change: But to the team to help me out of Q3 and into Q3.

Speaker Change: On the Saturday roughly.

Speaker Change: That's how I would think about it.

Speaker Change: I think about it at the kind of end of third quarter.

Speaker Change: And Craig we also announce that we did another physician and the second part of it was tamarac and we disclosed that in the press release, it's just not in the transactions like that.

Craig Allen Mailman: Okay perfect. Thanks.

Our next question comes from the line of keeping Kim with Truest. Please proceed with your question.

Craig Allen Mailman: Okay.

Thank you.

So.

Kim: There's been a couple of retailers in the media like Starbucks and Mcdonald's and you know I think grocers has been talking about a smaller basket sizes and.

Kim: Certain consumers being stretch for some time I was just curious if you've noticed any of that conversation.

Kim: In your dialogue with tenants today, and I know, both things can coexist where demand could be good for a while now even though there might be some churn.

Kim: Challenges I'm, just curious what you're seeing on the ground.

Speaker Change: But let me just take it generally first and then I'll, let Alan talk about the actual discussions with with tenants.

Speaker Change: I mean, the future is always uncertain right and in today's world.

Speaker Change: The macroeconomic I don't know that any of us can predict what is going to happen.

Speaker Change:

Speaker Change: But what we do know is that we have high quality centers in our trade areas have been to this point and we expect to be able to and we expect to continue.

Speaker Change: Especially given the types of that cut types of abuses within our centers right its value convenience.

Speaker Change:

Speaker Change: Service that we would expect that our shopping centers the trade areas with consumers in our trade areas are going to be capable of absorbing the macro pressures that we're seeing today, we are generally seeing that through the results in our shopping centers.

Speaker Change: You also made a comment about stretched for time, which I think is really important because.

Speaker Change: This even goes to the medical that we spoke about it as a real structural tailwind that there is and you've heard US say this a renewed appreciation for our physical presence of the shopping centers near and close to People's homes.

Speaker Change: And to service their needs and two to buy goods because they are stretched for time and it is why that we really do have this tailwind the suburban shopping centers for all the types of abuses that we are offering at our shopping centers and I think that that is we don't see that we don't see that softening today.

Speaker Change: Okay, Great and is giving me hand signals that he thinks I hit it so.

Speaker Change: Got that.

Speaker Change: Okay and on development.

Speaker Change: Thank you guys have a large land bank and you know, but you guys have been very successful in starting some projects at high yields.

Speaker Change: I was just curious about the second round of development that you might be pursuing how might not be different in terms of yields versus the current pipeline, especially given your kind of lamping pollution.

unknown: Victor, this is Nick. I appreciate the question. Good morning.

Sure Keith This is Nick I appreciate the question you're absolutely right, we do not land bank as the strategy for our development program and so we are very very thoughtful about derisking. These projects as part of our diligence, while we control the real estate prior to closing and so our processes are we make sure we have control of the real estate.

unknown: Victor, this is Nick.

Speaker Change: Make sure we have really high quality tenants committed to the projects, especially our grocery tenants. We worked through the entitlement process, we worked through the pricing exercise and as we've talked about in previous quarters. It is a challenging environment to bring all of those pieces of the puzzle together, but it is a core competency of ours and our teams continue to do a really.

Speaker Change: Really tremendous job of finding those opportunities across our platform across the country and as we've said on multiple occasions, we feel really bullish about the future of our development program, we continue to lean into it and our teams are continuing to find more than our fair share of those opportunities and.

Speaker Change: In terms of your questions of yield as you can see in our in process, our yields range from between seven and 9% on our development and redevelopment program and that's where we're still targeting and we expect to have additional success in that range.

Speaker Change: Okay. Thank you.

Speaker Change: Yeah.

unknown: No, as you referenced, I mean, you answered part of the question in your question, which is that we are always looking to fortify our growth profile, and we're always looking to potentially sell non-core, non-strategic assets at attractive cap rates. And so as we look into the future, as you see in our guidance, now, we do expect to continue to sell assets at attractive cap rates and recycle that capital into more creative opportunities that we may see.

Speaker Change: Our next question comes from the line of Floris Van Dyke and with Compass point. Please proceed with your question.

unknown: And so it just so happens these two were in Florida, but I would not tell you strategically; we are trying to exit Florida. As you know, we have a tremendous portfolio in Florida. And so these are really case by case decisions, asset by asset, trade by trade area. And so I would not expect these additional assets necessarily to be in Florida.

unknown: Our next question comes from Ronald Kamdem with Morgan Stanley. Please proceed with your question.

Speaker Change: Thanks, guys.

Speaker Change: I guess, that's more of a follow up question in terms of the.

unknown: Hey, just two quick ones. One on just on the acquisition front, obviously the 46 million added in the guidance, maybe can you talk about how that came about and whether any opportunities have sprung up or changed given sort of the moving rates, has that sort of slowed activity? Good morning, Ronald. This is Nick again.

Speaker Change: The development versus redevelopment.

unknown: Good morning, Ronald. This is Nick again.

Speaker Change: You know one of Regency's core competencies has always been the development I think Lisa.

Speaker Change: You guys have you're somewhat unique because I think most most of your peers are saying that.

Speaker Change: Rents probably need to rise by anyway over 25% in order to justify new development on the on a national basis, but obviously, there's always unique opportunities.

Speaker Change: And I suspect gesture is one of those but how much.

Oven advantage or how much of your development future development pipeline do you think is going to come from your existing portfolio versus brand new opportunities like Cheshire and and also what's the difference in return on those kinds of.

Speaker Change: Opportunities in your view.

unknown: I appreciate the question. So let me talk first about the first part of your question, which is about the acquisition we've now guided to. And so that asset we're very excited about. It's a 76,000 square foot shopping center in Westport, Connecticut at CVS Anchored.

unknown: And for those of you who were on our recent tour in the Northeast, you'll be familiar with it since it's the center directly across the street from our Trader Joe's asset that we own at the corner of Compra Road and Post Road. And so, just a tremendous opportunity to bring a great asset into a region that we already are really, really familiar with and excited about, again, adding to that great portfolio. And so that asset was fully marketed.

Speaker Change: I'll start and then I'll, let Nick I'll, let Matt finish I think you've been following us since that you you do you have seen that the percentages were more weighted towards redevelopment in the in the recent past, but we have we have created a tightly we've generated a ton of momentum in.

unknown: And so we competed in an on-market process. And I think given our reputation and our presence in the market definitely helped us as it related to that competition. And so we are very excited to get that closed here very, very soon, maybe even as soon as today. And so beyond that, we continue to be, again, opportunistic, as Lisa indicated earlier, which is looking across the country for opportunities that we believe we can create and add value to shopping centers.

unknown: And so there are definitely more opportunities on the market in the last quarter than there were in the quarter before. But, as we all know, treasuries have moved here in the last couple of weeks. And so it's TBD whether that slows transaction volume or not. But from the chatter we're hearing, we do expect transaction volume to stay pretty darn steady. And we're going to take advantage of any opportunity we see that we think we can add value to.

unknown: Does that complete your question?

unknown: My second question was just about the same store. Look, I'm getting the theme of a call, which seems to be acceleration 2025 in the same store. I guess the question is, is the conviction coming from sort of the fact that you have sort of the sign-not lease pipeline and you have visibility? Or is it more that the sort of tenant health, there's no sort of larger, you know, move out to bankruptcy that could be a headwind next year or both? Right, just trying to figure out where the conviction is coming from. I'll answer that shortly.

Speaker Change: The ground upside and again this goes back to the renewed appreciation for.

Speaker Change: For the for bricks and mortar and for being close to customers' homes and for the retailers to be able to service their customers through all channels and one is for the customer to walk through the front door.

Speaker Change: And also to buy online and pick up in store all of the all tailwind for our business and you're correct and I. Appreciate the acknowledgement that development has been a differentiator for us with a competitive advantage for as long as I've been at the company and I've been here almost 28 years and we have a an extremely successful track record in that regard and that matters.

Speaker Change: Because we have an experienced talented national team with these relationships that that is helping us find and Nick and the team reminds me all the time and I'm not saying that it's not easy.

But that's what makes us so good.

Speaker Change: And so that I would expect that we're going to continue to see more momentum on.

Speaker Change: On the ground upside redevelopment will also continue to happen as Alan talked about we intensely manage our existing portfolio and it's an important part of fortifying our future NOI growth, but I do expect that youre going to see ground up grow.

Speaker Change: So over the next few years.

unknown: I'll answer that just at a high level and to the extent that my partners here want to add any more specific color, but it is both. I'm glad that you added that at the end. I mean, I think you can see with our leasing success and results, the health of the portfolio, and we can see some records are meant to be broken, and we continue to drive our percent leased higher and higher, and that SNO pipeline is real.

Speaker Change: And all I would add to that floor is as we as Mike alluded to earlier and we continue to be very vocal about the great news is for us it's not an either or process. We are in an enviable position with our capital that we are going to take advantage of opportunities that we see in our existing portfolio and as you see in our in process. The team has found a.

unknown: And so that does create real visibility to the rent that will commence. And we also have been really successful with our redevelopment pipeline, and Mike talked about that in the prepared remarks and in one of the questions. And we have real visibility to that also being additive in 2025. So it's all of the above.

unknown: Our next question comes from the line of Hondell St. Just with Mizzou Hill. Please proceed with your question.

Speaker Change: A lot of opportunities at very accretive and attractive returns to invest new capital into our existing portfolio.

unknown: Hi, good morning. This is Ravi Vaidya on the line for Handel.

Speaker Change: But we also are going to continue to take advantage of every opportunity we see underground out basis that we know we can derisk and we can put a shovel in the ground and an attractive return there and we have the capability. We have the team that's across the country focused on that and we have the capital.

Speaker Change: So where we are blessed to be in a position of not not choosing between the two we're gonna do both.

Speaker Change: And and and maybe in terms of the return.

Speaker Change: Thresholds. So I guess, maybe if you could talk about like.

Speaker Change: Imagine that some of the redevelopment.

Speaker Change: Opportunities are going to have higher AR.

Speaker Change: Turns, but how does that compare to buy for example, something today.

Speaker Change: Today in the market like a west border or other things that youre looking at how much higher does the returns need to be in order for you to to pull the trigger on opportunities.

Speaker Change: Yeah, Tyler I just reiterate.

Speaker Change: Sorry, I was just going to reiterate Nick what you already said earlier and that was the 7% to 9% is the target threshold hasnt changed for developments and acquisitions are gonna. It's been a very it's going to depend on the total return if you will what's the what's the future growth right. We acquired no plaza, which had a tremendous amount of upside in the much lower cap rate for example.

Speaker Change: We did our Chicago acquisition higher cap rate not as much there was not as much leasing upside or redevelopment upside. So that's the acquisitions are going to really vary depending upon the actual individual opportunity development, 7% to 9%. Historically, we have always we've tried to target a minimum of 150 basis points.

Speaker Change: Read over what that shopping center upon completion would sell in the market and I think we are.

Speaker Change: We're still pretty successful with that.

Speaker Change: Thanks Lisa.

Speaker Change: Yeah.

unknown: I hope you guys are doing well. We've heard from you and your peers that, you know, the leasing environment is very strong and robust. But I just wanted to ask, particularly around MedTail and urgent care centers and things along that line, we've started to hear some softness and decreased demand from some of the operators there, notably Walmart, and just wanted to hear your thoughts on what you're seeing from a retail demand perspective. Thanks.

Speaker Change: Our next question comes from the line of Linda Tsai with Jefferies. Please proceed with your question.

Linda Tsai: Yes, hi, or the 39 anchors that are signed but not yet commenced just wondering who some of those anchor tenants are like you know how many of those are grocers and then I guess just my second question is you know do.

Linda Tsai: Do you think your grocer penetration, if it's plus 80% right now could get much higher.

unknown: Yeah, Ravi, good morning. It's Alan.

Linda Tsai: Linda This is Alan I don't have the actual number of what percent were groceries, but there certainly were a number of transactions that are in there. The target that we had mentioned in Norwalk. We are very excited about the first whole foods daily shop, I think that was announced here a few months ago and Manhattan.

unknown: So our current medical exposure is about 7% of ABR, and that has grown from 5% where we were pre-COVID. We are very comfortable, not only with where it is but certainly comfortable if it were to continue to grow. Interestingly, we signed nearly 20 new medical leases in the first quarter, and that was our second highest category for new leasing from a square footage perspective. And it was largely dentists, optometrists, physical therapy, you know, primary care, and it included a new ground lease that we also did with the largest primary care operator in Houston, where they're going to build a new medical building where Regency didn't even invest any capital in that.

Alan Todd Roth: Which you'll be opening are likely in the fourth quarter of this year and if you haven't heard about that concept that's their new quick and convenient shopping experience for for that urban customer. We've got a couple of public deals that are under redevelopment right. Now. So I would tell you there's a pretty significant amount of grocer activity that is within.

Alan Todd Roth: That number we're excited again both of those are Kroger deals excuse me public steels open which are down in Atlanta.

Alan Todd Roth: And so it's a significant part of it.

Alan Todd Roth:

Alan Todd Roth: Second part of your question I'm, having a moment, whether it's sorry, we're not grocer penetrate but you know, we're 80% grocery anchored and I don't I don't think we see that number materially changing from this point forward. The bias here is around grocery and will continue to pursue a grocery anchored shopping centers as a rule but.

Alan Todd Roth: I don't think you're going to see that go materially.

Alan Todd Roth: Range materially from here.

Alan Todd Roth: Thanks.

unknown: Thank you. That's helpful. Just, just one more here.

unknown: Where do you think CapEx goes as a percent of it as a percentage of NOI goes from here for you and, I guess, broadly, for the sector as we're seeing greater occupancies are more leases or renewals and new ones. How do you think this could impact as full growth? You know, maybe over the next couple years? And maybe we are

Alan Todd Roth: Our next question comes from the line of Mike Mueller with JP Morgan. Please proceed with your question.

unknown: Hey, Robbie, it's Mike. Maybe I'll give you a bit of a boring answer, but we don't see any change. I've been pretty consistent; we've been pretty consistent on this topic for some time. 11% is kind of our run rate. And that's all CapEx, right? So that's maintenance and leasing capital. And we don't see that changing on balance on average over the long run. You're going to have periods of time where as you're adding to initial occupancy, as we are now, where that could increase over that line of that average line, again, because of the volume of activity you're doing.

Michael William Mueller: Yeah, Hi.

unknown: But the team does an incredible job of ensuring that we're investing the right amount of money into the operator's business, and we're getting a market-leading wrap in those cases and market-leading terms. And they're just very judicious with our capital spend, and I think that's appropriate. Capital's precious. We're going to generate as much free cash flow as we can so that, to Lisa's point, we can reinvest that back into our development and redevelopment business. And when we have available capital outside of that, we buy properties like the great asset we're going to add to the portfolio in Westport. So I don't see that 11% area changing over the long run.

unknown: And I do just want to reiterate, because it is, it's an intentional strategy to maximize rent while, you know, limiting leasing capital, trying to stay within our parameters of our expectations, and it's the strength of our asset quality in our shopping centers that allows us to do that. And we are successful in doing so. And it is, it is a reason that we, it does drive our AFFO growth.

Michael William Mueller: For the Stonebridge development, that's part of a master plan community, how mature early stages, the community and as being part of a project like that changed the risk profile or economics compare to a development not one of those communities.

unknown: Our next question comes from the line of Craig Mailman with Citi. Please proceed with your question.

Michael William Mueller: I. Appreciate the question. This is Nick and I'm glad you actually pointed out that it is part of the Master plan community because to US These partnering and working with Masterplan developers as a real competitive advantage of ours and so if you put yourselves in the shoe of a master plan developer one of the most import.

Michael William Mueller: Things you can have to make sure that you continue to sell high quality homes to our high quality purchasers is retail amenities and grocery being a really important part of that and so.

Michael William Mueller: And the communities that we're servicing these are wealthy areas with the expected high purchase prices for the homes and so they want high quality grocers, we have the relationships with high quality grocers, we have the expertise to design those assets at a really high level. They know we have the capital to build them and they know we anticipate owning those.

Michael William Mueller: And so we're making every decision along the way from a long term ownership perspective, and so when you put your shoes. When you put yourself in the seat of a master plan developer. We're really one of the best partners that you can hope for to execute on that important amenity and therefore, that's why we've had a lot of success in that and so as you mentioned Cheshire is an example of that our Bay Brookdale.

Michael William Mueller: H E B development down in Houston, as an example of that or C. N. A project is an example of that and we continue to work with a lot of large masterplan developers around the country and that's part of our pipeline, but I'll just add to that because these are not greenfield areas. These are not tertiary markets. These are in fill master plan communities that are.

Michael William Mueller: Been underway for in some cases decades, and so that's where the the sort of perfect formulas coming together, where there is demand at high enough rents to make or deals pencil and that's the sweet spot, we're working and continue to focus on.

Speaker Change: Got it okay. Thank you.

Speaker Change: Our next question comes from the line of Kyle aka Sanyo with Deutsche Bank. Please proceed with your question.

Speaker Change: Hi, Yes, good afternoon, everyone will get based on all the commentary on the call everything seems to be going really really well up the company. So I guess just going back to guidance again I'm trying to understand the solid beat in one Hugh you know understanding all of the items that doesn't kind of translate to a bigger increase.

And guidance and kind of that's what I'm trying to connect those two docile, but what am I missing.

unknown: Hey everyone, I just want to follow up. I know you guys increased dispositions a little bit here to partly pay for the Westport acquisition, but just from a need for capital, I mean $125 million with the free cash flow you guys throw off. Is this just a placeholder because you think you could get more acquisitions? Or is this necessary to fund the redevelopment? Just trying to get at that accelerated pace at Dispo's, just given the spending you guys have.

Speaker Change: Hey, Tyler.

unknown: Yeah, I think this will help you, Craig. We don't need to sell the properties to afford or pay for the Westport acquisition. That is, we have the free cash flow in position; we have the balance sheet capacity. We have, on a leverage-neutral basis, if you take our free cash flow expectations, we have over $300 million of investment capacity at our fingertips, so to speak. So, honestly, the $25 million ad was simply identifying some small non-core assets in our portfolio where we have received indications of interest that show pretty low cap rates, and when we think about that trade of exiting a non-core asset on an accretive basis into either our developments or redevelopments, or an acquisition, some of these assets, you could argue you could pay down debt on, and it's accretive.

Tyler: Listen I think it's timing.

Tyler: Really every just about every line item in our in our outlook. We've delivered on a full year basis, what we anticipate delivering but some of that timing was frontloaded.

Tyler: Again, I'll just reiterate in the percent right, that's kind of a classic first quarter.

Issue issue, but it occurs largely in the first quarter again over half of our percentage rents are on that.

Tyler: And the balance is coming from other line items like other income where the.

Tyler: The income streams within those line items can be nonlinear and it just so happens that some of that was occurred in the first quarter for example, rather than our plan, which was in the second so some of those items are just kind of idiosyncratic, but on a full year basis, whereas we kind of zoom out we're delivering on all of them at the level that we anticipated.

Tyler: So it's just not translating to the full year expectations, what you're what you're sensing, though in our commentary is that the incredible quarter, we have from a leasing perspective and combined with the incredible momentum we continue to generate on the development side of the business is leading to this added conviction over our future growth and that's what.

unknown: So when we see that trade opportunity, we're going to take it, and that's all we're doing here is just a little bit of pruning, which I think kind of smartly and over time, that's going to lead to a more durable income stream and earnings growth as well.

Tyler: That's what we're trying to convey today is that that plus 100 basis point contribution at the same property NOI from leader as a 25 of it you didn't hear us talk about that last quarter that that's I think what's happening is the quality of Q1 is translating into our conviction over the end of 'twenty four and full year 'twenty five.

Speaker Change: Understood. Thank you.

Speaker Change: As a reminder, if you would like to ask a question press star one on your telephone keypad.

unknown: And the remaining 95 million that you guys have kind of dialed in, how much of that do you have visibility on at this point? And maybe what do you think the timing could be on some of these sales?

Speaker Change: Our next question comes from the line of our J Milligan with Raymond James. Please proceed with your question.

RJ Milligan: Hey, good morning, first off really appreciate the April disclosure hopefully the rest of your peers that don't already provided all your lead.

J Milligan: But aside from the lack of disclosure from some of your peers. There's there's always a lot of different buckets of Capex and so I have more of a philosophical question.

J Milligan: And you're a fool calculation you don't include redevelopment Capex and I think as an industry. Some of your peers are pretty discerning as to what's really redevelopment I E. Gross capex well I think some are pretty liberal and throwing a lot of re tenant ing into that redevelopment bucket, which really looks a lot more like maintenance capex. So I'm just.

J Milligan: How you think about pocketing those costs to get to your African calculation.

unknown: I think, I mean, the $25 million that we've added, we have visibility on all of it, and it's on the market, and it's actively being discussed.

Speaker Change: I'm happy to take it and Archie I. Appreciate the question I thought the team did a nice job really nice job enhancing our disclosure. So thank you for the kudos.

unknown: It's going to be back-end weighted, and I still have a lot of confidence that we're going to execute on that plan. The other transactions are known. They're going to occur. These aren't speculative disposition assumptions. These are actionable dispositions that we have a lot of confidence in.

Speaker Change: I would encourage you to look at it all look through basis. That's my simple answer to it you know and I understand that Redevelopments are hybrids. They are they can be challenging to differentiate between maintenance capital and added capital. We as we think about our bucket in it as we densify the site, we're adding GLA where signet.

Speaker Change: Significantly repositioning the asset within the market and when that occurs we are designating that as a redevelopment if it's straight lease released box for box.

Speaker Change: Reefer, Saudi in that space has is that's leasing capex and we're going to put that into the leasing bucket.

Speaker Change: But I would encourage you as you think about regency versus others, but at all and call redevelopment capital. We're happy for you to do it and then can then compare on an apples to apples basis, and we like how we stack up.

Speaker Change: But Mike is trying to say is that whether you look at it just the leasing.

Speaker Change: Only we're at the low end and if you bump if you throw everything together, we're still at the low end and it goes back again to just our intentional or intentional approach to.

Speaker Change: Leasing capital.

Speaker Change: Great I appreciate the disclosure thanks guys.

unknown: Timing, I'm going to look to the team to help me out, Q3, end of Q3, estimate on the 70 roughly is how I would think about it. Yeah, I think about it at the end of the third quarter.

Speaker Change: Our next question comes from the line of Anthony Powell with Barclays. Please proceed with your question.

unknown: Craig, we also announced that we did another addition in the second quarter with Tamarack, and we disclosed that in the press release. It's just not on the transactions list yet.

unknown: Okay, so I guess I was getting at you guys have done 30. 25 is incremental, you kind of think, but then the other 70 million is kind of known. What's the timing on those?

Anthony Franklin Powell: Hi, Good afternoon question on the Kroger Albertsons merger in the back and forth with the FTC and that this will be our.

Anthony Franklin Powell: Dispositions any concerns that that merger may be taking a bit longer to complete than you expected or any impact and if it's not.

Anthony Franklin Powell: Commenced a got a few questions on that from clients in the past few months.

Speaker Change: I can I can appreciate that you probably are getting questions for that but we don't have any new information. We're reading, we're reading, what you're reading them and it has not it doesn't it the timing of it isn't impacting our operations whatsoever, they're still operating as two separate companies, they're talking with us as two separate companies.

Speaker Change: And then there are key their key customers of ours. So we do have really we do have good relationships with them, but they're not allowed to give us any inside information and we continue to feel really we continue to feel really good about our real estate.

And I think you've heard us and you've heard me say this before.

Speaker Change: If the merger goes through we believe that that will create a stronger more well capitalized grocer that will better be able to compete with some of their competitors and will be a really strong operator for us and if it does happen the spinoff of stores that would what would that would happen certainly has the greatest area of uncertainty.

Speaker Change: But again, we feel really good about our stores and those are productive grocery locations and we would expect them to continue to be so.

It doesn't happen there are really good operators and we're happy to have both of them.

Operating a portfolio.

Speaker Change: Okay. Thank you for that.

Speaker Change: Yeah.

Speaker Change: Thank you Ms. Palmer, we have no further questions at this time I would like to turn the floor back over to you for closing comments.

unknown: Okay, perfect. Thanks.

Lisa Palmer: Thank you all for joining us this morning I appreciate your interest and have a great weekend. Thank you.

unknown: Our next question comes from a line of Ki, Bin, and Kim with Truist. Please proceed with your question.

unknown: [inaudible] There's been a couple of retailers in the media, like Starbucks and McDonald's, and you know, I think grocers have been talking about smaller basket sizes and certain consumers being stretched for some time. I was just curious if you've noticed any of that conversation in your dialogue with tenants today. And I know both things can coexist where demand could be good for a while. You know, even though there might be some challenges. Just curious what you're seeing on the ground.

unknown: Let me just take it generally first, and then I'll let Alan talk about the actual discussions with tenants. I mean, the future is always uncertain, right? And in today's world, the macroeconomic, I don't know that any of us can predict what is going to happen. But what we do know is that we have high-quality centers and our trade areas have been to this point, and we expect to be able to continue, especially given the types of uses within our centers, right?

unknown: Got it. Okay. Thank you. Our next question comes from the line of Teo Acquisagna with Deutsche Bank. Please proceed with your question.

unknown: It's value, convenience, service that we would expect that our shopping centers, the trade areas, the consumers in our trade areas are going to be capable of absorbing the macro pressures that we're seeing today. And we are generally seeing that through the results in our shopping centers. You also made a comment about stress for time, which I think is really important because this even goes to the medical issue that we spoke about. It's a real structural tailwind that there is, and you've heard us say this, a renewed appreciation for a physical presence of the shopping centers near and close to people's homes, to service their needs and to buy goods because they are stretched for time.

unknown: Our next question comes from the line of Teo Acquisagna with Deutsche Bank. Please proceed with your question. Yes, good afternoon, everyone.

unknown: And it is why that we really do have this tailwind, the suburban shopping centers, for all the types of uses that we are offering at our shopping centers. And I think that that is, we don't see that; we don't see that soften.

unknown: Hey, Tao. Listen, I think it's time. Really, on just about every line item in our outlook, we've delivered on a full year basis what we anticipate delivering, but some of that timing was front loaded. Again, I'll just reiterate on the percent rent, that's kind of a classic first quarter issue, but it occurs largely in the first quarter. Again, over half of our percent rents are earned then. And the balance is coming from other line items, like other income, where the income streams within those line items can be nonlinear. And it just so happens that some of that happened in the first quarter, for example, rather than our plan, which was in the second. So some of those items are just kind of odd.

unknown: Alan's giving me hand signals that he thinks I've hit it, so he's not going to add. Okay, and on development, you know. I don't think you guys have a large land bank, but you guys have been very successful in starting some projects at high yields. I was just curious about the second round of development that you might be pursuing, you know, how might that be different in terms of yields versus the current pipeline, especially given your kind of land bank position. Stephen, this is Nick.

unknown: But on a full year basis, as we kind of zoom out, we're delivering on all of them at the level that we anticipated. So it's just not translating to full year expectations. What you're sensing, though, in our commentary, is that the incredible quarter we have from a leasing perspective, combined with the incredible momentum we continue to generate on the development side of this, is leading to this added conviction over our future growth.

Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

unknown: Sure, Steven, this is Nick. I appreciate the question. You're absolutely right. We do not land bank as a strategy for our development program.

unknown: And that's what we're trying to convey today, is that plus 100 basis points contribution on the same property and a life of redef as a 25 of that. You didn't hear us talk about that last quarter. That I think what's happening. The quality of Q1 is translating into our conviction over the end of 24 and full year 25.

Speaker Change: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.

unknown: And so we are very, very thoughtful about de-risking these projects as part of our diligence while we control the real estate prior to closing. And so our process is, we make sure we have control of the real estate, and we make sure we have really high-quality tenants committed to the projects, especially our grocer tenants. We are working through the entitlement process, and we are working through the pricing exercise. And, as we have talked about in previous quarters, it is a challenging environment to bring all of those pieces of the puzzle together.

unknown: As a reminder, if you would like to ask a question, press star one on your telephone keypad. Our next question comes from the line of R.J. Milligan with Raymond James. Please proceed with your question.

unknown: But it is a core competency of ours, and our teams continue to do a really, really tremendous job of finding those opportunities across our platform, across the country. And, as we have said on multiple occasions, we feel really bullish about the future of our development program. We continue to lean into it, and our teams are continuing to find more than our fair share of those opportunities. And as you know, in terms of your questions of yield, as you can see in our end process, our yields range between 7% and 9% on our development and redevelopment programs, and that is where we are still targeting. And we expect to have additional success with that.

unknown: Hey, good morning. First off, I really appreciate the AFFO disclosure; hopefully, the rest of your peers that don't already provide it will follow your lead. But aside from the lack of disclosure from some of your peers, there's always a lot of different bucketing of CapEx, and so I have more of a philosophical question. In your AFFO calculation, you don't include redevelopment CapEx. And I think as an industry, some of your peers are pretty discerning as to what's really redevelopment, i.e.

unknown: Our next question comes from the line of Floris Van Dijkum with Compass Point. Please proceed with your question.

unknown: growth CapEx. Well, I think some are pretty liberal in throwing a lot of re-tenanting into that redevelopment bucket, which really looks a lot more like maintenance CapEx. So I'm just curious how you think about bucketing those costs to get to your AFFO calculation.

unknown: Thanks, guys. I guess it's more of a follow-up question in terms of the... The development versus redevelopment debate. One of Regency's core competencies has always been development, I think, Lisa. You guys are somewhat unique as I think most of your peers are saying that rents probably need to rise by anywhere between 25 percent in order to justify new development on a national basis, but obviously, there are always unique opportunities, and I suspect Cheshire is one of those, but how much of an advantage or how much of your development, future development pipeline do you think is going to come from your existing portfolio versus brand new opportunities like Cheshire? And also, what's the difference in return on those kinds of opportunities, in your view?

unknown: I'm happy to take it. And Arjay, I appreciate the question. The team did a nice job, really nice job, enhancing our disclosure. So thank you for the kudos.

unknown: I'll start and then I'll let Nick I'll let Nick finish. I think you've been following us and so you you do you have seen that the percentages were more weighted towards redevelopment in the in the recent past but we have we have created a ton we've generated a ton of momentum in the ground up side and again this goes back to the renewed appreciation for the for bricks and mortar and for being close to customers homes and for the retailers to be able to service their customers through all channels and one is for the customer to walk through the front door and also to buy online and pick up in store all of the all tailwinds for our business and you're correct and I appreciate the acknowledgement that development has been a differentiator for us and a competitive advantage for as long as I've been at the company and I've been here almost 28 years and we have a an extremely successful track record in that regard and that matters because we have an experienced talented national team with these relationships that that is helping us find and Nick and the team reminds me all the time and I'm not saying that it's not easy but that's what makes us so good and so that I would expect that we're going to continue to see more momentum on the ground up side redevelopments will also continue to happen as Alan talked about we've intensely managed our existing portfolio and it's an important part of fortifying our future and I grow but I do expect that you're going to see ground up grow over the next few years.

unknown: I would encourage you to look at it on a look-through basis. That's my simple answer to it. And I understand that redevelopments are hybrids. However, they can be challenging to differentiate between maintenance capital and added capital. We, as we think about our bucketing, it is, we're densifying the site, we're adding GLA, and we're significantly repositioning the asset within the market. And when that occurs, we are designating that as a redevelopment. If it's straight lease for lease, box for box, refacing that space as is, that's leasing capex.

unknown: And all I would add to that, Floris, is that we, as Mike alluded to earlier, and we continue to be very vocal about, the great news is, for us, it's not an either-or process. We are in an enviable position with our capital that we are going to take advantage of opportunities that we see in our existing portfolio. And as you see in our end process, the team has found a lot of opportunities with very creative and attractive returns to invest new capital into our existing portfolio.

unknown: And we're gonna put that into the leasing capex. But I would encourage you, as you think about Regency versus others, put it all in. Call Redevelopment Capital, we're happy for you to do it, and then compare us on an apples-to-apples basis, and we like how we stack up.

unknown: But we are also going to continue to take advantage of every opportunity we see on a ground-up basis that we know we can de-risk, and we can put a shovel in the ground and an attractive return on there. And we have the capability, we have the team that's across the country focused on that, and we have the capital. And so we are blessed to be in a position of not choosing between the two; we're going to do both.

unknown: I think what Mike is trying to say is that whether you look at it, just the leasing only, we're at the low end. And if you bump, if you throw everything together, we're still at the low end. And it goes back again to just our intentional approach to leasing capital.

unknown: And maybe in terms of the return thresholds, I guess maybe if you could talk about, I would imagine that some of the redevelopment, you know, you know, opportunities are going to have higher returns. But how does that compare to buying, for example, something today in the market, like a West Border or other things that you're looking at? How much higher does the return need to be in order for you to pull the trigger on?

unknown: Great. Appreciate the disclosure. Thanks, guys. Our next question comes from the line of Anthony Powell with Barclays. Please proceed with your question. Good afternoon.

unknown: [inaudible] Sorry, I was just going to reiterate, Nick, what you already said earlier, and that was the seven to nine percent is the target threshold hasn't changed for developments and acquisitions, but it's going to vary. It's going to depend on the total return, if you will.

unknown: Our next question comes from the line of Anthony Powell with Barclays. Please proceed with your question. Good afternoon.

unknown: What's the future growth, right? We acquired an old plaza which had a tremendous amount of upside and a much lower cap rate. For example, we did our Chicago acquisition, a higher cap rate, but not as much. There was not as much leasing upside or redevelopment upside. So those acquisitions are going to really vary depending upon the actual individual opportunity development, seven to nine percent. Historically, we have always tried to target a minimum of one hundred and fifty basis points spread over what that shopping center, upon completion, would sell in the market. And I think we're, we're, we're being pretty, we're still pretty successful with that. Our next question comes from the line of Linda Tsai with Jeffrey. Please proceed with your question.

unknown: I can, I can appreciate that you probably are getting questions from that, but we don't have any new information. We're reading, we're reading what you're reading, and it has not, it doesn't, the timing of it isn't impacting our operations whatsoever. They're still operating as two separate companies. They're talking with us as two separate companies. I mean, and they're key customers of ours. So we do really have good relationships with them, but they're not allowed to give us any inside information.

unknown: Linda, this is Alan. I don't have the actual number of what percent were grocers, but there certainly were a number of transactions that were in there. The target that we had mentioned in Norwalk, we are very excited about the first Whole Foods Daily Shop, which I think was announced here a few months ago in Manhattan, which will be opening probably in the fourth quarter of this year.

unknown: If the merger goes through, we believe that that will create a stronger, more well-capitalized grocer that will be better able to compete with some of its competitors and will be a really strong operator for us. And if it does happen, the spinoff of stores that would happen is certainly the greatest area of uncertainty. But again, we feel really good about our stores, and those are productive grocery locations, and we would expect them to continue to be so. But if the merger doesn't happen, they're really good operators, and we're happy to have both of them in our portfolio.

unknown: And if you haven't heard about that concept, that's their new quick and convenient shopping experience for that urban customer. We've got a couple of Publix deals that are under redevelopment right now. So I would tell you there's a pretty significant amount of grocer activity that is within that number. We're excited to get both of those Kroger deals, excuse me, Publix deals, open, which are down in Atlanta.

Lisa Palmer: Thank you. Miss Palmer, we have no further questions at this time. I would like to turn the floor back over to you for closing comments.

unknown: And so it's a significant part of it. The second part of your question. I'm having a moment with it.

Operator: Thank you all for joining us this morning. I appreciate your interest, and have a great weekend. Thank you.

unknown: Sorry, we're not gross repenetrate. You know, we're 80% grocery anchored, and I don't I don't think we see that number materially changing from this point forward. The bias here is around grocery, and we'll continue to pursue grocery-anchored shopping centers as a rule. But, you know, I don't think you're going to see that go materially or change materially. Our next question comes from the line of Mike Muller with J.P. Morgan. Please receive your...

unknown: Our next question comes from the line of Mike Muller with J.P. Morgan. Please answer your question. Yeah, hi.

unknown: Mike, I appreciate the question. This is Nick.

unknown: And I'm glad you actually pointed out that it is part of the master plan community because, to us, partnering and working with master plan developers is a real competitive advantage of ours. And so if you put yourselves in the shoe of a master plan developer, one of the most important things you can have to make sure that you continue to sell high-quality homes to high-quality purchasers is retail amenities, and grocers are a really important part of that. And so in the communities that we're servicing, these are wealthy areas with expected high purchase prices for the homes. And so they want high-quality grocers. We have relationships with high-quality grocers.

unknown: We have the expertise to design those assets at a really high level. They know we have the capital to build them, and they know we anticipate owning them. And so we're making every decision along the way from a long-term ownership perspective.

unknown: And so when you put yourself in the seat of a master plan developer, we're really one of the best partners that you could hope for to execute on that important amenity. And therefore, that's why we've had a lot of success with that. And so, as you mentioned, Cheshire is an example of that. Our Baybrook development, our HEB development down in Houston is an example of that. Our Siena project is an example of that.

unknown: And we continue to work with a lot of large master plan developers around the country, and that's part of our pipeline. But I'll just add to that: these are not greenfield areas. These are not tertiary markets. These are infill master plan communities that have been underway for, in some cases, decades. And so that's where the sort of perfect formula is coming together, where there is demand at high enough rents to make our deals pencil. And that's the sweet spot we're working in and will continue to focus on.