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Regency Centers Corp. has been able to hold its own at a time when competing retail REITs have fallen to the wayside. The Jacksonville, FL-based company has stuck to what it knows best, that being grocery-anchored shopping centers, but is facing the same challenges as other retail landlords, particulary in its home state. As Regency prepares for the International Council of Shopping Centers’ upcoming Florida Conference, Aug. 16-18 in Kissimmee, Jim Thompson, the company’s eastern vice president of investments, discusses where the REIT stands for the time being.

GlobeSt.com: Has Regency been able to take advantage of discounted acquisitions during the ongoing downturn?

Thompson: Right now we’re being pretty cautious. Our top priority is ensuring that our balance sheet continues to be strong and that we’re not being put in any sort of debt box.

We recently did a public offering where we raised about $300 million. There seem to be a lot of opportunities from distress, but we’re not jumping in with both feet to try to take advantage of that. We’re going to continue to be selective about what we do acquire.

The biggest challenge that I’ve seen so far is that a lot of the stuff out there is oversized, with more square footage than you can lease in this economy, and rents are higher than they need to be. There is still plenty of fallout yet to happen.

Our appetite from an acquisition standpoint is more focused on ground-up development opportunities that meet our current investment threshold with key customers that we’re accustomed to doing business with. We’re primarily a grocery-anchored developer-owner and in this kind of environment, that kind of product can be financed.

GlobeSt.com: Is grocery-anchored development still Regency’s preferred choice?

Thompson: Absolutely, that is our core business. I won’t say that we haven’t strayed from that, but we extrapolated our core grocery competency and did a few Target/Kohl’s/Home Depot type centers. The challenge with those bigger centers is that most of those guys aren’t doing business today and it’s very difficult to finance that type of development.

Our history has shown us that the type of tenants we have in our typical center, with 80,000 square feet and a grocery anchor, do better in bad economic times simply because they are more necessity service-oriented retailers. That’s clearly the kind of product that we are looking at.

Our thresholds for investment today are certainly more stringent than they were a year ago. We’re looking for only the very best, but then again our retailers are only looking, if they’re looking to do a deal, are only going to do the very best deal in the very best location.

Being a publicly traded company with a strong balance sheet and access to capital, we do have an edge on a lot of our competition. We can still do business and most of them can’t. But it’s not like we’re the only guys in town who are doing business. We’re in a very strange, awkward position right now between deals that are still tied up with developers and for whatever reason are not going forward.

It’s going to take a little more time for some of those opportunities to surface to see if retailers still want to do those deals and if they still make economic sense for all the players today versus when they were approved a year ago. There are still a lot of unknowns in the industry as a whole.

GlobeSt.com: What is Regency’s expectations for this year’s ICSC Florida Conference?

Thompson: Florida has been pretty hard hit. We experienced a bigger impact on the residential side with overbuilding, which related directly to retail.

We’ve got five or six current developments in Florida that are just coming out of the ground or available for lease. We are still an active developer/buyer for the right product type. We do have money. We’re looking for quality operators that want to be in the best product available, and we feel like our portfolio offers that.

GlobeSt.com: In times like these, is it better to go it alone as a developer or in a joint venture?

Thompson: From our perspective, JVs have been a big part of our business for the last several years. We also have historically been a big JV partner on bigger developments with landowners or smaller developers. A big part of our business has been a joint-venture scenario.

From an acquisition standpoint, we like to buy with a partner. On the development side, we still have an opportunity from a JV standpoint but with today’s underwriting and the size of deals it’s harder to do joint ventures from the acquisition side because there are such smaller deals with not much meat on the bone.

GlobeSt.com: Which regions stand out best for Regency?

Thompson: The District of Columbia market continues to be pretty vibrant. Texas today seems to be holding its own; they didn’t get caught up as much in the housing boom as many other markets. The DC and Northern California markets are still the stronger markets in the country. South Florida and Southern California probably took the biggest hits from housing, followed by Phoenix and Las Vegas.

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