Regency Centers Corporation (REG) disclosed the opening of two new grocery stores of Whole Foods Market, Inc. (WFM) at two properties – Shops on Main and Hinsdale Lake Commons – in the Chicagoland area.
In particular, Regency signed a lease deal with Whole Foods Market, which replaced the previous tenant – Dominick’s – at the two community shopping centers. Shops on Main, which is presently under-construction and slated to open in spring of this year, is located in Indiana near Chicago.
The property boasts several outlets of renowned retailers including Ross Stores Inc. (ROST) and Gordmans Stores, Inc. (GMAN). Hinsdale Lake Commons situated in Willowbrook, Illinois also houses some well known retailers like Hallmark and Phillies Pizza Bar & Grill. Whole Foods Market will occupy 40,000 square foot and 69,540 square foot of space, respectively, at these two centers.
Notably, Regency boasts a cluster of industry leading grocers that are comparatively less affected in a challenging economy and drive traffic into its centers. Consequently, the company enjoys a stable source of rental revenue. Furthermore, this deal with WFM boosts its tenant roaster at these 2 centers and enhances the company's capabilities to grow its top line.
Continuing with its winning streak, Regency reported a positive earnings surprise of 3.1% in fourth-quarter 2013. The company’s fourth-quarter core funds from operations (core FFO) per share of 66 cents exceeded the Zacks Consensus Estimate by 2 cents and the year-ago quarter figure by 3 cents. Higher revenue growth and improved core portfolio fundamentals aided the results. Encouraged by its performance, Regency also raised its quarterly dividend by 1.6%.
This retail real estate investment trust (REIT) currently carries a Zacks Rank #3 (Hold).
Note: 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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