Good day, and welcome to the Regency Centers Corporation Third Quarter 2013 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Michael Mas. Please go ahead, sir.

Thank you. Good morning, everyone, and thank everyone for joining us today. On today's call, you will hear from our Chairman and CEO, Hap Stein; our President and COO, Brian Smith; our CFO, Lisa Palmer; and Senior Vice President and Treasurer, Chris Leavitt. Before we start, I'd like to address forward-looking statements that may be discussed on the call. Forward-looking statements involve risks and uncertainty. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements. Please refer to the documents filed by Regency Centers Corporation with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. Hap?

Thanks, Mike. Good morning, everyone, and thank you for joining us on the earnings call. This morning, I'd like to briefly share my assessment on how well Regency's portfolio, balance sheet and development program are now situated and how we have positioned them to grow future shareholder value. To begin with, there's a number -- as you're all aware, there have been a number of recently published research reports, and many of those reports have compared the portfolios in the shopping center sector. And pretty much every one of them have described Regency's portfolio as clearly one of the highest quality portfolios in the shopping center sector. In my view, 4 key attributes of the portfolio stand out. First on average, our grocery anchors generate more than $27.5 million in sales, and this represents a 9% increase in just the last 2 years and equates to more than $530 per square foot. Second, the average household income within 3 miles of our centers is $100,000, which is substantially higher than the peer average. Third, our average base rents in the portfolio are also meaningfully above the peer average. And finally, the percentage leased for small shops, and being able to attract terrific small shops as a good indicator of quality, remains one of the highest in the sector. Continuing on this topic of portfolio quality, since 2010, we've enhanced what was already a darn good portfolio through the sale of more than $800 million of nonstrategic assets and the acquisition of $475 million of first-rate centers with excellent NOI growth prospects. These newly acquired centers are 97% leased, with grocer sales that average more than $800 per square foot. And the demographics are much better with a total purchasing power that is 25% higher than those that were sold. As…

Thank you, Hap. Good morning, everyone. Core FFO per share for the third quarter was $0.65. This was $0.03 above the midpoint of our stated guidance range, primarily as a result of higher-than-expected net operating income from our 2012 acquisitions and in-process developments and also, lower G&A expense. Our 2012 acquisitions are outpacing underwriting, and in-process developments are leasing up faster and rent is commencing sooner. As Hap noted, the year-to-date same-property NOI growth was 4.5%. We now expect full year same-property NOI growth, excluding termination fees, in the range of 3.8% to 4%. With respect to transactions, dispositions continue to be an important source of capital to fund our development program. During the quarter, we closed on the sale of all the assets owned by our closed-end funds. And just after quarter and, we settled our preferred equity interest in the portfolio that we sold to Blackstone in 2012. We have slightly increased the high end of our guidance range for dispositions. And because of the tremendous success we've had converting our development and redevelopment pipeline into real starts, we've tightened the range for development guidance. Also as you will hear from Brian later, due to the increased likelihood that we could close on a few more acquisitions by year end, we've raised the high end of our guidance for acquisitions to $215 million. Because of these results and updated expectations, core FFO is now projected to fall in the range of $2.60 to $2.63 per share. The actions taken that have accelerated the enhancement of the portfolio and strengthening of the balance sheet, as Hap mentioned, will moderate our 2014 earnings growth rate. Early projections indicate that '14 will be a year similar to this year. But I also am proud that what we have accomplished has positioned us to enjoy better and stronger earnings growth in 2015 and beyond. We will discuss this in more detail on our upcoming guidance call on December 17. Brian?

Thank you, Lisa, and good morning, everyone. We're 3 quarters now into what is turning out to be a really strong 2013. Let me start by highlighting some of our operating results. On a same-property basis, the operating portfolio is nearly 95% leased at the close of the quarter, and shop space occupancy stands at roughly 89%, the highest it's been since 2008 and a 130-basis-point improvement over 2012. With this increase in occupancy, aided by strong tenant demand and limited new supply, we continue to gain pricing power. Rent growth returned to double digits this quarter. Average rents for side-shop tenants continue to trend upward and are now 34% above the trough. And not only are the starting rents improving, but we're also seeing more favorable lease terms as a whole, including better rent steps and more aggressive commencement dates. Retailers are acting on this positive sentiment. Many are making significant investments in their current spaces, as well as in new ones. Given the underlying strength of tenant demand, we see no slowdown in the positive momentum in all of the key operating metrics. This heightened activity is evident, not only in the operating portfolio, but also in the strength of our development and redevelopment pipelines. Take our newest projects: Glen Gate, a development slated for start in October, will be 103,000-square-foot infill shopping center, built on the site of a former Avon cosmetics office building in an upscale neighborhood in Chicago. Some of you may remember touring this site at our Investor Day 2 years ago. The 3-mile trade area benefits from a population of 150,000 people, with average household incomes of $100,000. Glen Gate will be anchored by Mariano's, a very successful grocery operator in the market, averaging sales of more than $50 million per store. The…

Thank you, Brian, and thank you, Lisa. This progress in placing the portfolio, balance sheet and development program on very high ground is a testament not only to our focused strategy, but also to the dedicated efforts of our talented team. Most important of all, we are committed to profit from our advantageous position by meaningfully growing NAV, shareholder value and future earnings. We thank you for your time and welcome your questions.

[Operator Instructions] Our first question comes from Michael Bilerman at Citi.

This is Katy McConnell on for Michael. Given occupancy almost reached the high end of guidance in third quarter, do you think the revised range is likely conservative for year end? And how much more upside do you think there could be in the next couple of years?

I'll take the guidance part of the question, and then let Hap or Brian take the upside going forward. We do have a couple of strategic anchor move-outs that we're working on, which if they happen, could impact our occupancy by as much -- up to as much as 40 basis points, which would take us down to the low end of the range. Again, it may or may not happen. Obviously, that -- the impact on NOI is minimal because it's towards the latter part of the year, but the occupancy guidance is a point in time. So that's the range on the downside.

In terms of outperforming, we have been outperforming so far this year. And with the beat raising [ph], I think the same kind of things could happen. One of the things that's going on that continues to be a favorable trend is the lower level of move-outs that we've been experiencing. And those move-outs that we are doing, many of those are done on a strategic basis where we have something better to replace them. Our shop move-outs for this quarter -- well, year-to-date, our shop move-outs are the lowest they've ever been, so I think that's probably one of the areas where you could see some improvement.

Yes. During the next couple of years, as far as that part of your question, we do not see 90% occupancy on the shop space side, and 95% overall occupancy as being a glass or any other kind of ceiling and just would hope to see the next couple of years moving our occupancy above those levels.

We'll take our next question. Michael W. Mueller - JP Morgan Chase & Co, Research Division: I guess, going to the acquisition guidance, and thinking about that, how do you weigh the probability of coming in toward the bottom end versus the upper end of the guidance? And it sounds like if you don't come in at the upper end, is it transactions probably going to slip to 2014? Or it just kind of falls out and doesn't happen?

At this stage, the project -- as Lisa mentioned, the projects are under contract, and we haven't seen anything in due diligence that would scare us, that would prevent a closing. They haven't happened, so there's always a chance. But for right now, we're feeling awfully optimistic that both of those will happen by year end.

I think a bigger risk might be that one might get pushed into 2014. But...

There is that assumption on -- so that could potentially push it, but I think we feel pretty good about it.

We are really excited about both of them, so hopefully, we'll be able to share our thoughts on these with you in the not-too-distant future. [indiscernible] Michael W. Mueller - JP Morgan Chase & Co, Research Division: Okay. And we get a second question, right?

Absolutely. Michael W. Mueller - JP Morgan Chase & Co, Research Division: Looking at sequential leasing in the category, not the small shop, but 10,000 to 19,000 square feet. There is almost a 200 basis point sequential pickup. I was wondering if you can just kind of add a little color on what's going on there.

Yes. We had a lot of leasing in that category. In fact, I think it's one of the strongest quarters we've ever had in terms of anchor leasing, maybe the second strongest quarter ever. So we're 99% leased in that category, and whenever we get an opportunity, they fill up pretty quickly. A couple of those were major redevelopments. An example will be the Woodway Collection that we talked about in the prepared remarks where we replaced an anchor tenant that moved out last quarter with one this year, pulled through to this quarter.

We'll take our next question.

It's Rich Moore at RBC. On the franchise front, the tenants occupy a lot of the small shops, or could, I guess, theoretically occupy some more small shop space. What are you seeing from these national franchise guys? Is that -- and maybe not even franchise, just national small shop tenants. Is that picking up? Is that sort of leveling off? I mean, can you give us a feel for that?

Rich, I have not seen any leveling off whatsoever. It's been strong, the quality of the franchisees has been very strong. Overall, I think small shops there -- I think there's no differentiation between franchisees and the others we're putting in there. They're healthy, very healthy, optimistic. I mentioned they're putting a lot of money back into the space. They're benefiting from the lack of new supply, and our pipelines right now are as full as they've ever been. They're the fullest they've been in 4 quarters. And if anything, we're experiencing more sense of urgency to get the stores open. So I think on all accounts, the small shops are looking good going forward.

Okay, good. And it seems like you guys are always finding another development to do. The talk is always or has been recently for the past, I'd say, 3 or 4 years that there isn't that much development to do and yet you guys seem to add one maybe every quarter. I mean, how would you characterize, I guess, the broader outlook for development at this point?

I think-- I mean, obviously, numbers nationally would support that there's not much development going on, and we hear that same thing. Mostly what you see around the country would be retail and ground-floor residential, mixed use projects. We see a lot of redevelopment, but there hasn't been a lot of true shopping center development going on. We're seeing -- where we are seeing it would be places like Southern California, Houston, Washington, D.C. and North Carolina. But not a lot. And, I guess, I have to say I find this surprising, but at the same time not surprising. Surprising in the sense that we are finding that there's a lot of demand, as I mentioned the leasing is strong. Pipelines, I just mentioned are the fullest they've been in 4 quarters. The anchors, particularly the grocers, are expanding, and there's no supply. And if you're 99% leased in your large anchor spaces, they've got to find new locations. And that would be true of the other portfolios out there too. And development works, as we've mentioned in the prepared remarks, if you look at the past success of the ones that -- we started since 2009, it's almost $400 million, they're almost 93% leased and several of the projects haven't even gone vertical yet. So in that regard, I'm surprised. But I guess, where I'm not surprised is, as we've said all along, it's really difficult, especially if you're focused on the infill nature of the projects. The ones we've started since 2009 have combined purchasing power well over 200,000. And when you're playing in those infill markets, they're hard to find. They're fraught with all kinds of roadblocks, whether it be environmental -- challenges to the entitlements and so forth -- and so the only way really to get through that is not only to have a great team with a lot of experience, but to have them working on them for years. I think what's happening, or elsewhere around the country, is people are just starting up development programs, and it just takes years and years to get those things through the process. And as you know from some of the ones we've started recently, some of those -- most of those have been in the works for years.

We'll take our next question.

Haendel St. Juste, Morgan Stanley. I have a question. I think Lisa, you said earlier that there's 2 assets under contract within that guidance of $150 million of acquisitions between now and year end. Curious if you could give some color on the size or any parameters around yield, IRR, around those contracts.

One small portfolio and one's a single asset. As we indicated, one's in Raleigh, one's in the Northeast, both have exceptional growth, and the returns meet our parameters. And they're consistent with what the guidance we gave, and plus they got great NOI growth and one of them, we think, has even more upside even beyond that.

Fair enough. And one more if I may. You made a couple of acquisitions recently with a JV partner. Just curious, were those assets that made sense to bring in a local partner? And how should we think about JV that's part of your acquisition strategy going forward?

Well, the one that we closed in the fourth quarter, Fellsway, I think that's probably the poster child for the kind of property we want to do. We don't have a presence up there. It's obviously -- well, we don't have a development presence up there. It's extremely high barrier. It's a tough market to develop in. We know -- and this particular partner is very, very experienced. We've worked with him before. He has personally acquired or developed or redeveloped over 25 million square feet. One of the largest leasing companies in the Northeast, where they own, lease or manage over 70 centers and are the exclusive leasing agent for more than 11 million square feet on nearly 60 centers. And they also have a tenant representation arm, where they represent some of the largest, best retailers in New England. So we think, in this case, where we've got a redevelopment we're going to start right out of the ground, somebody who's from there, who went to school within almost a stone's throw is -- and with all the connections they've got on both development and leasing sides made great sense.

And in that case, and probably in future cases, it's going to be access to the opportunity. And I think that's what the joint charter provided in this case. And any future opportunities like this where we have a joint venture partner is probably going to be involved.

I mean, yes. To echo what Hap's talking about, in this particular case, there were several people competing for the project. And this guy, it looked like we were not going to get it. And he had been working with his broker friend on this for years and called him up and basically, I think, shook it free for us. So, yes, it really provided value there.

We'll take our next question.

It's Jay [indiscernible] with Green Street. Just a follow-up on Rich Moore's question on development. I guess, you're obviously going -- being very thoughtful about the process. They're well-funded and preleasing is very good. So maybe from a company-specific standpoint, how do you think about critical mass in your development pipeline? And at what point are there too many balls in the air?

I think the -- I think what we've said is we are very comfortable with the -- remember this year, 20 -- almost 30% of our development starts will be redevelopment starts. So somewhere in the neighborhood of 20% to 30% will be redevelopments. The development and redevelopment starts in the neighborhood of $150 million to $200 million-plus a year is something that we're very comfortable with. We think that's rightsized. We also think that the infill focus and/or being in a planned community is -- and not being a merchant developer, developing that which we want to own long-term, that's a very focused strategy. And we're very -- and as Brian said, it has been extremely successful in the last 4 to 5 years. And that's where your focus is. And I think somewhere in that 200 - maybe a little bit higher, but averaging $200 million a year, is from a new development starts standpoint is -- would kind of be our goal.

Let me just add to that. I mean, the focus here is not so much on size, but on quality. And -- what we have done in the past, where - we are not going to continue to staff up just because a new opportunity comes up. What we've done in the past and we'll continue to do is if there are more opportunities than a given team can handle, we'll either augment it from somewhere else where there's capacity, or we will just take the best opportunity of the ones available.

Okay, great. And then just to follow up on your kind of land bank, there hasn't been any movement there in the last couple of quarters. Should we be expecting an update there? Or where do those stand right now in the process?

Yes. There has actually been a fair amount of movement on that one. We're down to a combination of land held for development and land held for sale. We're down to $61 million. A couple of years ago, we were at $150 million. And in the third quarter, you probably didn't see a lot of movement because we did sell a parcel out in Southern California, about $3.2 million. But that was offset by we moved a parcel of land that was going to be ground leased to Cinco Ranch into the land held for sale. So it reduced the net impact of the sales for the quarter, but that thing will be sold imminently.

That's a significant focus, and as Brian indicated, we've made significant progress and expect that progress to continue into the fourth quarter.

We will move on to our next question.

Luther Kreitz [ph] from Deutsche Bank here. Can you just give a little bit more color on the upside to acquisition guidance? That will be helpful. And I guess, as -- was there a particular circumstance that kind of accelerate the timeline there? And then just from a broader perspective on the acquisition front, given that some of the others are telling us, it's tough out there for buyers in certain pockets. Can you talk about the sourcing environment and the competition that you guys are seeing more longer-term in your acquisition prospects?

Yes. In terms of, I guess, why the guidance went up is particularly the portfolio that Hap was talking about, it's been 3 months since we issued guidance, and a lot happened in that period. And this one is very recent, and it happened faster than the typical acquisition does. Normally, there's a long, drawn out process. In this particular case, we got in a plane, flew up there, and literally, the deal was closed that day. I'm sorry, the agreement was reached that day. So it is very competitive. Everybody's going after the same pool of great properties. And -- but fortunately, I know as of last quarter when we were counting this up, I think we looked back a couple of years. Of the 16 acquisitions we had done, 12 of them were done off-market. So that's what we try to do. We try to find things before they get competitive and really bid up. And we're having a fair amount of success at it, but it is very competitive. And there's a limited pool of the really good high-quality assets with good growth.

And Lisa, you might just review briefly what our philosophy -- our policy is as related to acquisition guidelines going into the year.

Yes. As you think about our -- just our business model, funding for our developments is coming from our dispositions. And to the extent that we either have access to cost-effective assets to the equity markets or are able to accelerate some of our disposition sales, and we can recycle those funds into great acquisition opportunities. So acquisitions are not part of our base model, if you will. And going into the year, the guidance was 0 to $50 million as we had really prefunded. And our dispositions were estimated at that time to be on the high end of $200 million, with development starts of $150 million. So, and as Brian said, we just didn't have any visibility to these 2 transactions the last time we reported.

Okay. Fair enough. And then just relative to the acquisitions that are kind of closing near- to intermediate term. I guess, should we think about those as more of a core property plug-and-play types? Or ones that might need a little additional attention capital-wise?

They're going to be more core -- but I want to say that our -- we're not just investing capital. Unless it's in our view, it's got exceptional NOI and/or upside. And I think all the acquisitions that we've done have those characteristics. It's consistent with our strategy. It's got a sustainable competitive advantage. It's going to be able to generate very nice NOI growth, in a lot of cases have additional upside. And otherwise, it doesn't make -- it's not a good use of capital.

[Operator Instructions] We'll go ahead and take our next question.

While we're waiting, I was asked to clarify something -- Mike Mueller asked about -- asked a question, and I apparently misunderstood it. Mike, you were asking about the increase in the 10,000 to 20,000 square foot bucket and I was talking about the greater than 20,000 square foot bucket, so let me just modify that. Within the 10,000 to 20,000 where we saw such a big increase, it's a really small category that we've got, only 9% of our GLA, fits within the 10,000 to 20,000 square feet. And therefore, basically any leasing is going to move the needle. And we did 3 leases within that category and that's why we got the big jump. So sorry for misunderstanding that.

Caller, please go ahead. Jonathan Pong - Robert W. Baird & Co. Incorporated, Research Division: Jonathan Pong at Baird. Just wanted to dig in a little bit on the disposition outlook. And I guess, you guys have made really great progress in terms of upping the disposition outlook so far this year. Can you talk maybe directionally as to where you see that volume trending for 2014? And how much more runway you actually have there in terms of just looking at your overall portfolio?

As we indicated in our remarks, given the acceleration of our dispositions, the progress that we've made, we think that the portfolio is very well-situated right now. The balance sheet is very well-situated. And we're going to be -- it will be a funding source for developments going forward. And for -- potentially for other investments. And that's the way we're looking at it. And so we'll give you more guidance, but I think that, I guess, it's safe to say that our plans for dispositions in 2014 will be much -- and in the future will be at a much lower level, unless our investment activity is also larger than it's been the last several years. Jonathan Pong - Robert W. Baird & Co. Incorporated, Research Division: Got it. And maybe on the small shop leasing trends, it does sound like there's a bit of an upside just there in terms of the overall industry, 10,000 square feet and below. Is there an opportunity to maybe be a little offensive and create some available space through downsizing or proactive lease terminations?

Yes. First of all, I think there is a lot of upside just in leasing up what we've got. We are at 88.8% and see no reason why we can't get up to 92% or whatever. We are doing -- what you're really asking for is the kind of growth that's going to come from just aggressive asset management. And we're doing all the normal things whether -- the focus on rent growth, a focus on rent steps and occupancy. But some of the other things that fall in the category we talked about would be creating paths, creating additional GLA. And that does fall within our redevelopments. We've got example, this past quarter, how up at Speedway in Boston, we added a Chick-fil-A pad. We're adding a Panera pad at Culpepper. We're adding a Dick's at Culpepper and we're expanding some of our earlier development starts. We're taking and leasing creative space, which the market is allowing us to do now. For example, up at Speedway, we had a 100,000-square-foot store that we have Burlington Coat Factory in. They took the front 65,000 square feet. We leased the back 30,000 square feet, roughly, and that rent will actually triple in 3 years. So we're getting a good -- that's a good example of the rent increases we're getting. We are consolidating space or expanding it. We're upgrading the quality, different uses for space. For example, out of Plaza Hermosa in Southern California, there's a building that's not really part of the shopping center. It's located on a different tier. It's got plenty of parking. It will replace a nightclub with $1 billion hospital, 90-year-old company, and they're paying us almost 3% annual bumps. So -- and we talked about the strategic move-outs, much of our move-out activity now is the result of being able to replace tenants that are -- that we want to get out of there and replace with better people, better economics. And just kind of a couple of proactive things we're doing. Just to give you some examples, there's a national footwear chain that is in our Corvallis Center, and they had a right to terminate the lease, so they went ahead and they exercised it. And we instantly replaced them with a better tenant, another national tenant at much higher rent. And they came back and said, "We were just negotiating." And so I think you're starting to see that kind of leverage showing up on the landlord side that we are going to fully take advantage of.

And just to piggyback on that comment is, although we are doing a lot of creative things and proactive -- taking proactive actions to grow NOI and create value, at the same time, the kind -- and you always want to have less drop space than there is demand. But the kind of centers that we want to own are centers where there is substantial demand from the side-shop space, not only the anchor space. And where we're not afraid, but we're excited about the opportunities that the side-shop space presents.

I think one of the other things that's going to fuel our growth going forward is not all of the markets out there have participated in this run-up and they're starting to show some good activity. I think perfect case in point is Florida, which has lagged, and all of a sudden the leasing activity is very strong there, and we're seeing real good rent growth numbers this past quarter.

It appears there are no further questions at this time. And I apologize, we do have somebody else queue up.

This is Tammy Fique, Wells Fargo. I just wanted to follow up, Lisa, on the lower G&A that you recorded during the quarter. I'm just wondering kind of what contributed to that and if that's the run rate going forward?

Yes. It's a good run rate, and we were just able to realize some savings.

Okay. And then I think you may have touched on this, and maybe it's related to the move-outs, the strategic move-outs. But the occupancy at the end of the third quarter was 94.9%, and the 2013 guidance is 94.5% to 95%. You're already pretty close to the top end of that. Is there anything that we should be thinking about that wouldn't -- that would cause it to drop to the lower end of that range?

I mean, it's really what I've already answered in terms of -- I mean, that takes up, that really accounts for the whole thing. And it's a matter of whether we actually accomplish what we're trying to accomplish before the year end. So again, they're proactive.

They start at the low end of the occupancy -- yes, I mean, the only thing that could happen there, I think about halfway down to the bottom of the low end are a couple of large tenants we know are going to move out. So really, you're talking about, I mean, about 70,000 square feet, could something happen, if 1 anchor surprised us and moved out, that would get you there.

Okay. And then with regard to the Blackstone preferred interest, was that an early termination? Or was that the amount that you expected?

No. It was early. We had expected it to go through the end of the year, but we did receive the undistributed income for the remainder of the year. And I mean, I think they just basically wanted to settle prior to [indiscernible] IPO because some of those properties were included.

We appreciate your interest, and we hope that you have a wonderful Halloween. Thank you very much.

That does conclude today's conference. We thank you for your participation.