MIAMI—Shopping mall titan Equity One just release its first quarter 2014 results.
Total revenue increased from $81.43 million in the year-ago period to $92.7 million.

First quarter net income totaled $26.3 million, or $0.22 a share. That compares to $24.6 million, or $0.21 per share, in the year-ago period. Equity also generated FFO of $44.7 million compared to $40 million a year ago.

"We are pleased with our results for the first quarter of 2014,” says Jeff Olson, CEO of Equity. “Recurring FFO per share was higher than expected, occupancy increased by 150 basis points as compared to prior quarter and our development and redevelopment program is advancing nicely.”

The firm increased same-property net operating income (NOI) by 2.4% for the quarter, year-over-year, and shopping center occupancy increased to 93.9%, up 150 basis points compared to December 31, 2013, and up 210 basis points as compared to March 31, 2013.

Meanwhile, same-property occupancy increased 80 basis points to 93.9% as compared to December 31, 2013, and 20 basis points to 93.8% as compared to March 31, 2013. The firm executed 127 new leases, renewals, and options during the quarter and increased average base rents to $16.37 per square foot.

Construction activity at Broadway Plaza, a development site in the Bronx, New York, is on schedule. The initial phase of the project, spanning 115,000 square feet, is expected to open during the fourth quarter of 2014. The Sports Authority, TJ Maxx, Aldi's, and Party City, representing 72% of the space in the initial phase, are the initial anchors.

"The first phase of Broadway Plaza, our $66 million development in the Bronx, is expected to open on time and on budget this fall and we are making good progress in expanding and redeveloping our centers in Daly City, California and Bethesda, Maryland, among many others,” Olson says. Equity has sold five non-core assets for $34.9 million in 2014 and acquired two remaining Westwood Complex retail parcels in Bethesda, MD for $80 million, as well as the remaining 52% interest in Talega Village Center in San Clemente, CA, for $6.2 million.

Equity research firm Cowen is maintaining its “market perform” rating on Equity's shares. The two major variances in Cowen's model were on the minimum rent and other income lines. Recurring FFO in the first quarter of 2014 includes $4.2 million of a net termination benefit related to the Loehmann's lease at 101 7th Avenue and a $1.1 million reversal of bad debt expense associated with the settlement of historical real estate taxes with two tenants.

“The favorable variance on the minimum rent line is a result of the accelerated recognition of unamoratized below market rents related to the $4.2 million termination of the Loehmann's lease,” Cowen analysts James Sullivan and Matthew Pollinger wrote in a research note. “Other income was favorable because of a $1.1 million reversal of bad debt expense. Both the accelerated recognition of unamortized below market rents and bad debt reversal are included in the company's recurring FFO.”