Regency Buys Stake in Fairfield Portfolio - Analyst Blog

In line with its strategy of acquiring premium properties across high-income and high-barrier U.S. markets, Regency Centers Corporation REG completed the buyout of 80% stake in a shopping center portfolio in Fairfield, CT for $150 million.

This retail real estate investment trust (REIT) acquired the majority stake of this portfolio through a joint venture with Kleban Properties, a regional developer and manager of commercial real estate assets.

The mixed-use shopping center portfolio comprises three properties – The Brick Walk, Fairfield Center and Black Rock Shopping Center – positioned in prosperous areas in Fairfield. The assets totaling about 315,000 square feet are 100% leased. These properties boast a tenant base of numerous industry leading companies such as Wells Fargo & Co. WFC, The Gap, Inc. GPS and L Brands, Inc. LB. This acquisition bodes well for its long-term growth given the location of assets and tenant roster.

Lately, the company has been active in adding high quality assets in its portfolio. Earlier this month, Regency disclosed the buyout of a neighborhood shopping center — Shops at Mira Vista — in Austin, Texas.

We believe that these efforts will efficiently expand Regency's portfolio in infill locations with high occupancy levels and strong tenant sales and offer the company a considerable upside potential going forward.

Regency is slated to report the first-quarter 2014 results on May 7, after the closing bell. The Zacks Consensus Estimate for the quarter is currently pegged at 65 cents. The company has reported an average earnings surprise of 3.56% in the trailing four quarters of 2013.

Regency currently carries a Zacks Rank #3 (Hold).