Regency Centers Acquires Five Shopping Centers in Orange County

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The bustling atmosphere of a shopping center in Orange County, California.

News Summary

Regency Centers Corporation has acquired five shopping centers in Orange County for $357 million. The centers boast a 97% occupancy rate and cater to essential consumer needs, including grocery stores, restaurants, and health services. The acquisition aligns with Regency’s focus on growth and quality, and it is expected to enhance their Core Operating Earnings per share by 2025. This strategic move emphasizes the company’s commitment to expanding its portfolio in key markets with strong economic activity.

Orange County, California – Regency Centers Corporation, a Jacksonville-based real estate investment trust, has completed the acquisition of five shopping centers located in Orange County for a total of $357 million. This acquisition is part of the master-planned community of Rancho Mission Viejo.

The five shopping centers purchased by Regency Centers are known as Bridgepark Plaza, Mercantile West, Mercantile East, Terrace Shops, and Sendero Marketplace. Together, these centers encompass approximately 630,000 square feet and are currently 97% leased. This high occupancy rate reflects the centers’ ability to attract a diverse range of tenants catering to essential consumer needs, including grocery stores, restaurants, and health and wellness services.

Notably, sales at the grocery stores within these shopping centers are nearing an impressive $800 per square foot. This strong performance is further bolstered by the affluent demographic in the area, as the average household income within a three-mile radius of the centers is approximately $200,000. Such economic indicators suggest a solid consumer base supporting the tenants in these shopping centers.

The strategic acquisition aligns with Regency Centers’ capital allocation objectives which focus on earnings accretion, quality, and growth. To facilitate this purchase, the company implemented a multi-faceted funding approach. This included issuing operating partnership (OP) units valued at $72 per unit, assuming $150 million in secured mortgage debt, and utilizing $7 million in cash to pay off a secured loan. The assumed mortgage debt has a weighted average interest rate of 4.2% and carries a maturity term of about 12 years.

This acquisition is expected to have a positive impact on Regency’s Core Operating Earnings per share by 2025, highlighting the anticipated growth potential that this portfolio offers. Regency Centers’ Senior Vice President of Investments in the West Region expressed enthusiasm regarding the acquisition’s strategic fit within the company’s broader objectives.

Financial advisory services for the transaction were provided by BofA Securities, while tax advice was managed by EY for the seller. The legal complexities surrounding the deal were handled by Latham & Watkins for the seller and Paul Hastings for Regency Centers, ensuring comprehensive expertise throughout the transaction process.

As part of its ongoing commitment to transparency, Regency Centers intends to disclose additional details regarding the acquisition in its second quarter 2025 earnings results, which are slated to be released on July 29, 2025.

This acquisition marks a significant step for Regency Centers in expanding its portfolio in a key Californian market known for its robust economic activity and consumer spending potential. As the retail landscape continues to evolve, Regency’s focus on acquiring high-quality retail assets remains central to its long-term growth strategy.