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Regency Centers Corp. REG is slated to report fourth-quarter and full-year 2024 results on Feb. 6, after the closing bell. The company’s quarterly results are likely to display year-over-year growth in revenues and funds from operations (FFO) per share.
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In the last reported quarter, this Jacksonville, FL-based retail real estate investment trust (REIT) reported NAREIT FFO per share of $1.07, outpacing the Zacks Consensus Estimate of $1.04. Results reflected healthy leasing activity and a year-over-year improvement in the same property's net operating income and base rent.
Over the trailing four quarters, the company’s FFO per share exceeded the Zacks Consensus Estimate on three occasions and met in the remaining quarter, with the average beat being 2.66%. This is depicted in the graph below:
Regency Centers Corporation Price and EPS Surprise
Regency Centers Corporation price-eps-surprise | Regency Centers Corporation Quote
In this article, we will dive deep into the U.S. retail real estate market environment and the company's fundamentals and analyze the factors that may have contributed to its fourth-quarter 2024 performance.
US Retail Real Estate Market in Q4
Per a Cushman & Wakefield CWK report, there has been a pullback in net absorption for the U.S. shopping center market, resulting in a positive shift in the fourth quarter. Asking rents for the U.S. shopping center market grew from the year-ago quarter. However, with new constructions remaining subdued, the national vacancy rate remained unchanged sequentially, near a historic low of 5.4%.
The fourth quarter witnessed the strongest net absorption of 2024 in the U.S. shopping center market, totaling 1.43 million square feet (msf). The increase was due to positive net absorption observed in almost all the country’s regions except for the northeast region. With 89% of the annual net absorption total occurring in the fourth quarter, the retail market appears to be in good shape. The asking rents for U.S. shopping centers increased 2.8% year over year to $24.59 per square foot in the fourth quarter.
The lack of new construction is also contributing to the scarcity, as a record low 8.3 msf of new shopping center space was delivered in 2024. As of the fourth quarter of 2024, there are only 10.6 msf under construction with an inventory of 4.32 billion square feet.
Factors at Play for Regency
Regency’s premium portfolio is situated in affluent suburban areas and near urban trade areas of the United States. With more people continuing to move to the suburbs due to post-pandemic migration and the hybrid work setup, Regency’s suburban shopping center portfolio is expected to have benefited.