‘Foundation for Growth’ in Shopping Center REITs

When its merger with Equity One is finalized, Regency Centers’ portfolio will expand by 112 properties, including Sheridan Plaza in Hollywood, FL.

PHOENIX—For Regency Centers Corp. (REG) and other shopping center REITs presenting at NAREIT’s annual REITWorld conference this week, the near-term outlook is generally stable, with strong fundamentals underpinning future growth. That’s a key takeaway from meetings which analysts held with real estate trusts in the retail space, as well as other sectors, on the conference’s first day.

The big news for REG, of course, is that it’s about to become the largest REIT by equity value in the shopping center index, as a consequence of its pending merger with Equity One (EQY). Noting that REG expects “healthy growth” from the EQY locations in its post-merger portfolio, analysts with RBC Capital Markets wrote in a client note, “We believe there is an opportunity to boost the small shop leasing at EQY properties” and that when the deal closes REG could see cost benefits from its larger scale, “which should benefit the whole portfolio.”