Regency Centers Gets AT&T as Lessee - Analyst Blog

Regency Centers Corp. (REG), a leading operator and developer of grocery-anchored and community shopping centers across the U.S., has recently signed a lease agreement with AT&T Inc. (T), a premier global telecommunication services provider. The lessee will occupy the space at Beckett Commons shopping center in West Chester, Ohio.

 

Over the years, West Chester has emerged as the economic center of the Cincinnati-Dayton Metroplex, the regional commerce corridor connecting the two key metropolitan areas. Consequently, West Chester has become an employment epicenter in the region with over 3,000 thriving businesses and over 50,000 employees, in addition to a labor force of more than 1.7 million within a 30-minute commute.

 

AT&T has taken on lease 1,500 square feet of space at Beckett Commons. The shopping center is anchored by leading retailers such as The Kroger Co. (KR), United Parcel Service Inc. (UPS), GNC, and Subway. With the lease, Regency Centers has strengthened its long-term relationship with AT&T.

 

Regency Centers seeks to own assets in high-income in-fill markets that are tenanted by market-dominant grocers, category-leading anchors, specialty retailers and restaurants. The average household income in the markets where the company has a significant presence is over $90,000, nearly 30% higher than the national average. As of June 30, 2010, Regency Centers owned 398 retail properties, including properties held in joint ventures, spanning 53.1 million square feet.

 

The company's dominant anchor tenants are grocery stores, which are comparatively less affected during recession. Consequently, Regency Centers has a relatively steady source of revenue. Our long-term recommendation for the company is Neutral as we anticipate it to perform in line with the broader market. Regency Centers currently has a Zacks #3 Rank, which translates into a short-term ‘Hold' rating.