"We're excited," Leonard tells GSR, explaining that the site is not only in a high-growth residential area, but also one undersupplied for retail. A national general merchandiser and a home improvement superstore have already signed on for the property, he says, and upwards of 400,000-sf is being actively entertained by prospective tenants. "The response has been very favorable," reports Leonard, adding that the completed deals will be unveiled shortly in a formal announcement.
Based in Jacksonville, FL, Regency is not masking its interest in Las Vegas, with the grocery anchored retail REIT making inroads through both acquisitions and development. In January, Regency bought Centennial Crossroads for $23 million. The fully leased property is anchored by a Von's and Target Greatland. Regency paid a 6.2% cap rate for that property just a few months after completion of a new center in the Las Vegas suburb of Henderson. That complex, the Anthem Highlands Shopping Center, has an Albertsons supermarket, CVS Pharmacy and Bank of America.
"Vegas is a hot market for us," says Leonard, speaking from there via phone while attending this week's International Council of Shopping Centers spring convention. Although conventioneers and tourists might not frequent neighborhood shopping centers, Leonard says Regency anticipates substantial demand from those who continue to flock to the city to live. Unemployment is extremely low, he says, and the economy is resilient due to its 24-hour structure and healthy industries, such as technology and the hospitality sector.
The Las Vegas Valley had an average population growth rate of 5.6% annually between 1990 and 2006, according to the US Census, with full-time residents increasing from 764,000 to 1.84 million in that time.
"We're very bullish on the future here," says Leonard, adding that Regency is further comforted by set limits to development. Las Vegas will be essentially built out during the next two decades, says Leonard. "We wish we'd gotten here 10 years ago," he says, but Regency is not dwelling on missed opportunities. The REIT is actively pursuing two fresh development plans in the region, says Leonard. One is a power center and the other a community style project.
Established as a REIT in 1993, Regency has been on an aggressive development program throughout the decade. "It has pretty much been the growth vehicle of the company," says Leonard, whose organization has also been building in Arizona and California. Regency favors prime markets, and recently raised $564 million for a new fund that will acquire $1.4 billion of retail properties, mostly those to be built by the REIT itself during the next three years. Regency will have a 20% ownership stake in that fund.
As Leonard indicated, Regency has reached its lofty position through the development process since 2000, building 173 shopping centers representing a total value of $2.7 billion. In reporting first quarter 2007 figures earlier this month, Regency estimated it currently has 51 projects in varying stages of construction, with two projects representing $35 million in costs launched during the quarter. The aggregate development pipeline has a total net investment at completion of $1.1 billion.
Trading on the New York Stock Exchange under the REG symbol, Regency is the leading national developer, operator and owner of grocery-anchored and community shopping centers. It currently controls 406 retail properties totaling 53.5 million sf.
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