A real estate investment trust that owns and operates open-air shopping centers across the U.S., anchored by everyday grocery brands like Publix, Kroger, and Trader Joe's. Founded in 1963 in Jacksonville, Florida, the company took its name from Regency Square, the first enclosed mall it built in the city in 1967. A family-run business for decades, it now ranks among the country's largest grocery-anchored landlords.
Same-property NOI growth decelerated to 4.1% in H1 2026 from 5.3% in FY 2025 as the portfolio nears full occupancy.
The core portfolio's growth engine is slowing. rose 8.5% to $289.3 million in the second quarter and climbed 17.3% to $128.5 million, but growth decelerated to 4.1% for the first half as the portfolio leased rate held at 96.1% and further occupancy gains became harder to achieve. The company is now leaning on development completions and a new $450 million debt issuance to sustain momentum, while a new geopolitical risk factor warns that the U.S.-Israel-Iran conflict could pressure tenant costs and project returns.
Key takeaways
growth decelerated to 4.1% in the first half of 2026, down from 5.3% for all of 2025, as the portfolio leased rate held at 96.1% and further occupancy-driven gains became limited.
Total lease income rose $65.2 million in the first half, driven by $42.5 million in higher base rent from same properties, acquisitions, and development completions, plus $23.8 million in higher .
attributable to common shareholders rose 17.3% to $128.5 million in the second quarter, helped by a $7.5 million gain on real estate sales and a $10.3 million increase in equity income from partnerships.
Section summaries
Management's Discussion and Analysis
Same property NOI grew 4.1% in H1 2026 driven by base rent and recoveries; net income rose to $237.5M on gains and higher lease income.
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increased 4.1% for the six months ended June 30, 2026, primarily from higher base rent and tenant recoveries due to occupancy gains, contractual rent steps, and positive rent spreads.
, net increased $7.5 million in the first half, mainly from higher interest on new public debt issued at higher rates, partially offset by lower line of credit balances.
Development and redevelopment costs in process rose to $679.7 million, with $62.6 million in projects completed during the first half at an average of 9.6%.
A new risk factor discloses that a military conflict involving the U.S., Israel, and Iran has commenced, which could cause sustained energy-price volatility, higher property operating costs, and reduced tenant financial health.
What changed
The deceleration flagged in Q1 2026 continued: growth slowed to 4.1% in H1 2026 from 5.3% in FY 2025, confirming that occupancy-driven gains are becoming harder to achieve with the portfolio at 96.1% leased.
The $1.0 billion in debt maturing over the next 12 months flagged in Q1 2026 was partially addressed with a $450 million 4.50% senior unsecured notes issuance due 2033, with $933.2 million still maturing in the next 12 months as of June 30, 2026.
The new geopolitical risk factor from Q1 2026 regarding the U.S.-Israel-Iran conflict was carried forward and remains a material concern, with management now explicitly warning it could threaten the feasibility, timing, and returns of development and redevelopment projects.
Development spending continued to accelerate, with in-process costs rising to $679.7 million from $597.4 million at year-end 2025, while the average on completed projects dipped to 9.6% in H1 2026 from 10.1% in FY 2025.
What to watch
Whether growth stabilizes near 4.1% or decelerates further now that the portfolio is 96.1% leased and the first sustained slowdown in over two years has materialized.
The interest rate and terms on refinancing the remaining $933.2 million in debt maturing over the next 12 months, and whether the $450 million 4.50% notes issuance sets a ceiling or floor for future borrowing costs.
Any signs of tenant distress, leasing slowdown, or construction-cost overruns tied to energy-price volatility and inflation from the U.S.-Israel-Iran conflict, as highlighted in the new risk factor.
The pace of spending on the $679.7 million in-process development and redevelopment pipeline and whether completed projects continue to achieve stabilized yields near the 9.6% reported in H1 2026.
Total lease income rose $65.2 million in H1 2026, with base rent up $42.5 million from same properties, acquisitions, and development completions, and recoveries up $23.8 million on higher expenses and occupancy.
attributable to common shareholders was $237.5 million for H1 2026, up from $208.8 million, helped by a $7.5 million gain on real estate sales and a $10.3 million increase in equity income from partnerships.
, net increased $7.5 million in H1 2026, mainly due to higher interest on notes payable from new public debt at higher rates, partially offset by lower line of credit balances.
The company has $933.2 million in debt maturing in the next 12 months and estimates ~$1.4 billion in capital needs, which it expects to meet through , its $1.46 billion line of credit, and refinancings.
Development and redevelopment costs in process totaled $679.7 million at quarter-end, with $62.6 million in projects completed during H1 2026 at an average of 9.6%.
Quantitative and Qualitative Disclosures About Market Risk
Interest rate risk is the primary market exposure; the company uses fixed-rate debt and swaps to limit impact, with no material sensitivity as of June 30, 2026.
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The company's main market risk is interest rate risk, with no mention of foreign currency, commodity, or equity price exposures in this section.
A $30.0 million variable-rate line of credit was effectively fixed through an , so a hypothetical 100 rate increase would not materially impact earnings or cash flows.
The line of credit's rate is based on Adjusted plus a 0.685% margin (4.405% as of June 30, 2026), and the margin can increase if credit ratings are downgraded or /sustainability targets are missed.
The company manages interest rate risk primarily by borrowing at fixed rates and may use derivatives like swaps, caps, or treasury locks, never for speculation.
Total debt was $4.78 billion as of June 30, 2026, with $4.93 billion in fixed-rate principal and $30.0 million in variable-rate principal.
The company believes it can refinance maturing debt using its or unencumbered properties, but capital market volatility and rate changes create uncertainty.
See Note 13 — Commitments and Contingencies in the Notes for discussion regarding material legal proceedings and contingencies. Except as set forth in such discussion, there have been no material developments in legal proceedings as reported in Item 3. "Legal Proceedings" of our…
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See Note 13 — Commitments and Contingencies in the Notes for discussion regarding material legal proceedings and contingencies. Except as set forth in such discussion, there have been no material developments in legal proceedings as reported in Item 3. "Legal Proceedings" of our 2025 Form 10-K.
A new U.S.-Israel-Iran military conflict has intensified energy and inflation risks that could materially harm tenant health and property operations.
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A significant military conflict involving the U.S., Israel, and Iran has commenced since the 2025 Annual Report, exacerbating previously disclosed Middle East geopolitical risks.
The conflict may cause sustained energy price volatility, which could increase property operating costs and reduce our ability to fully recover those costs from tenants.
Higher energy costs and broader inflation could impair tenant sales and financial condition, reducing demand for space and tenants' ability to meet lease obligations.
Inflation and elevated energy prices may raise construction and materials costs, threatening the feasibility, timing, and returns of development and redevelopment projects.
The uncertain duration of the Iran-based conflict could materially affect the company's business, financial condition, and results of operations if it persists.