Regency Centers Corporation BofA NY Global Real Estate Conference 2026

Thank you, Samir. Good afternoon, everyone. Just because I'm joined with Christy McElroy. I actually played softball when I was a teenager with Nina McElroy.

I often- Okay I often want to call- Everyone calls me McElroy.

It's also Rory, right? Rory. Is it Rory? For those of you that are golfers. Thank you again. Appreciate you having this great conference. We had a nice room upstairs with windows versus where we are right now. Regency is having an exceptional year. Hopefully, you all have had the opportunity to follow us along. Strong NOI and earnings growth, which is supported by really strong operating, robust fundamentals. Importantly, disciplined capital allocation. Tenant demand across our grocery-anchored shopping centers remains broad-based. I think you also know the availability of high-quality space remains very limited. Again, playing into our favor, that combination continues to give our leasing team meaningful negotiating leverage. That's allowing us to drive contractual rent growth and cash re-leasing spreads above our historical averages quarter after quarter.

Again, if you follow us along, you always hear Alan say, "Records are meant to be broken." We're moving our occupancy beyond prior highs. Reflecting that momentum, as well as improved visibility into the balance of the year, we did raise our 2026 earnings guidance with our second quarter results, including our same property NOI growth, Nareit FFO, and core operating earnings ranges. Our development program continues to be a highlight of our capital allocation strategy and an important differentiator for Regency. Today, we have nearly $700 million of development and redevelopment projects in process at blended yields of approximately 9%. Importantly, our pipeline of future opportunities continues to expand. The success of the platform, the track record, that's what continues to create additional opportunities for us to source great projects.

As a result, we continue to increase our annual pace of development and redevelopment starts, which we now expect to approach $400 million this year. Again, against the backdrop of very limited new retail supply, our ability to consistently source and execute high-quality projects anchored by leading grocers at attractive returns represents a durable competitive advantage for us. We are also delivering these centers at substantial spreads to market cap rates of at least 150 basis points. That is generating meaningful NAV creation in addition to earnings accretion. At the same time, we are still active in the acquisition market, but because development is our primary external growth driver, we have the ability to remain selective and patient in what continues to be, even today, a highly competitive transaction environment.

That discipline is supported by our sector-leading balance sheet. Our A ratings from S&P and Moody's, growing free cash flow, and nearly full availability on our $1.5 billion credit facility provide us with significant financial flexibility. That strength gives us efficient access to low-cost capital and the ability to fund our investment pipeline without relying on equity or dispositions, and still retaining capacity to pursue additional opportunities as they arise. In summary, I am really excited and energized by Regency's position and the opportunities ahead of us. High-quality real estate in compelling suburban trade areas, a differentiated national development platform, a sector-leading balance sheet, and the best team in the business really do collectively set Regency apart. With that, we are happy to take questions.

We are generating approximately $190 million of free cash flow, and with the growth in EBITDA and with our low leverage of the existing balance sheet, the answer would be yes, without significantly impacting that. With remaining leverage neutral, we get to $400 million.

We have the ability to do even more. Today, while our starts are $400 million, the development spend is still a little bit less than that. We still have capacity to execute on opportunities as they arise.

Development costs, construction costs. Construction costs have generally remained relatively stable since the big increases that we saw during the COVID years.

While there is different line items that are moving maybe in different directions, the overall cost is just natural increases. Fuel prices are certainly driving increased line item costs. At the same time, it is being offset by other.