Regency (REG) Makes Sound Progress On Equity One Integration

Regency Centers Corporation (NYSE:REG) has made solid progress in the Equity One merger integration and the company has engaged RealFoundations (RF) to provide guidance, planning, program management and data conversion services for this. The efficient moves have permitted Regency to already realize the anticipated $27 million of G & A synergies.

Notably, a program of 24 projects within six work streams was created by Regency and RF. Also, in the Technology Asset Integration work stream, RF provided JD Edwards data-migration services to combine Equity One's system with that of Regency's.

As a matter of fact, Regency has considerable experience in the retail real estate industry, with 227 shopping centers’ development since 2000, denoting an investment at completion of over $3.5 billion. On Mar 1, the company announced the closure of the Equity One merger deal, a move that created a combined company with a total market capitalization of around $16 billion, and resulted in its inclusion on the S&P 500 Index.

This merger, which is anticipated to be accretive to core FFO per share, created a high quality portfolio of 429 properties, comprising 59 million square feet of gross leasable area, mainly grocery anchored for Regency. Such strategic acquisitions are expected to drive the company’s long-term growth. Moreover, together with projects successfully transitioned during the merger, Regency now boasts of over $500 million in developments and redevelopments.

Regency’s focus on building a premium portfolio of grocery-anchored shopping centers augurs well for the long term. Such centers are usually necessity driven and attract huge traffic. However, shift in retail shopping from brick and mortar stores to internet sales, and rate hikes remain concerns for the company.

Regency currently has a Zacks Rank #3 (Hold).

Shares of Regency underperformed the Zacks categorized REIT and Equity Trust – Retail industry over the past six months. In fact, the company’s shares have lost 10.5%, against 9.2% decline of the industry.



Stocks to Consider

Better-ranked stocks in the REIT space include Equity LifeStyle Properties, Inc. (NYSE:ELS) , PS Business Parks, Inc. (NYSE:PSB) and Sunstone Hotel Investors, Inc. (NYSE:SHO) . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Equity LifeStyle Properties currently has long-term growth rate of 4.7%.

PS Business Parks’ estimates for 2017 FFO per share inched up 1.8% to $6.09, over the past 30 days.

Sunstone Hotel currently has long-term growth rate of 5.0%.

Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.


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Regency Centers Corporation (REG): Free Stock Analysis Report

Equity Lifestyle Properties, Inc. (ELS): Free Stock Analysis Report

PS Business Parks, Inc. (PSB): Free Stock Analysis Report

Sunstone Hotel Investors, Inc. (SHO): Free Stock Analysis Report

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