(REG) Regency Centers Sells Assets – Rating Affirmed

Regency Centers Corporation (REG) disclosed that the company and its partners have chosen to vend the entire assets owned in Regency Retail Partners, LP (Fund). This portfolio of assets is currently under contract. Following the closure of the deal, the Fund (of which Regency possess a 20% interest) would be dissolved. The sale off is expected take place by the end of the third quarter.

Moreover, Fitch has recently affirmed Regency Centers’ Issuer Default Rating (IDR) at ‘BBB’ with a Stable outlook. This rating affirmation is based on Regency Centers’ appropriate leverage for the ‘BBB’ rating. In addition, it reflects an improvement in property-level basics as well as sufficient unencumbered asset coverage of unsecured debt. However, these positives are slightly offset by the low fixed-charge coverage and geographic concentration.

The rating agency also expects pro-rata same-store net operating income to exhibit positive growth in the low single digits, stable leverage and coverage and sufficient liquidity, going forward. This supports the company’s “Stable” rating outlook.

Regency Centers is actively spreading its wings in the high-income and high-barrier markets through the addition of upscale assets. Also, portfolio restructuring through asset dispositions as well as inclusion of premium development and redevelopment projects as well as leading national retailers as tenants are a strategic fit.

Such moves are expected to provide Regency considerable upside potential and boost its top-line growth going forward. Moreover, the rating affirmation plays a major role in preserving investor confidence in the stock and helps ensure its creditworthiness in the market.

Regency Centers currently holds a Zacks Rank #2 (Buy). Other REITS that are also performing well and deserve a look include Simon Property Group Inc. (SPG), Cousins Properties Incorporated (CUZ) and Federal Realty Investment Trust (FRT).

COUSIN PROP INC (CUZ): Free Stock Analysis Report

FED RLTY INV (FRT): Free Stock Analysis Report

REGENCY CTRS CP (REG): Free Stock Analysis Report

SIMON PROPERTY (SPG): Free Stock Analysis Report

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