Regency Centers has closed a $500-million equity fund deal, to help allay shareholders concerns that the Florida-based retail REIT is overextended. The fund, known as Regency Retail Partners LP, mitigates investors' risks associated with the more than one billion dollars' worth of projects Regency has in progress.
The multipartner fund, which includes GIC [government of Singapore], Ohio Teacher's Retirement System, MetLife Insurance Company, and three foreign life insurance companies, will be 60 percent levered, giving Regency $1.4 billion in funds for development. “This takes out the risk, because the Fund must take a property if it meets the Fund's criteria,” says Tiffany McAneny, manager of communications. She says assets will be sold to the Fund with the proceeds reinvested in development.
A portion of the Fund can be used to purchase non-Regency properties, but the agreement caps third-party acquisitions at $300 million, says McAneny, pointing out that Regency has already identified $900 million in projects that meet the Fund's criteria.
Over the past couple of years, Regency has been ramping up its development program and expanding into new markets; opening offices in the Washington, D.C., Chicago and Boston areas.
Regency's strategy is to penetrate new markets through acquisitions to establish a presence and expand further with new developments, according to McAneny. The company has projects in the pipeline totaling $2 billion.