USAA Acquires Interest in Regency Retail, Including Atlanta Assets

Affiliates of USAA Real Estate Company have acquired a partial interest in the Regency Retail Portfolio, which consists of eight grocery-anchored retail assets comprising 813,193 square feet. Transaction details have not been disclosed.

The portfolio, currently 94-percent leased by approximately 153 tenants, holds properties in major markets across the country including Los Angeles and the San Francisco Bay Area, Houston and Dallas/Ft. Worth, Orlando, Atlanta and Raleigh/Durham, North Carolina. Its top lessees provide over half of the portfolio's in-place rent, including The Kroger Company/Ralphs, Safeway, Inc., Publix Super Markets, the United States Postal Service, Longs Drugs (CVS/Pharmacy), Hallmark Gold Crown Stores and Subway Restaurants.

According to its most recent 10-K, Regency has nearly 2.7 million square feet in the Atlanta market.

"The grocery-anchored portfolio, with long term leases in strong market locations will produce excellent cashflow and strong yields," says Pat Duncan, Chairman and CEO of USAA Real Estate Company.

USAA Real Estate Company affiliates have acquired an 80-percent interest of the portfolio, with Regency Centers Corporation - a public REIT and national developer, owner and operator of 440 grocery-anchored and community shopping centers and 21 regional offices - retaining 20 percent ownership.

"Regency is excited to partner with USAA on this quality grocery-anchored portfolio located in top markets across the country. These eight centers have been in the Regency portfolio for a number of years, have a strong operating history and are representative of the assets Regency and USAA will look to acquire in our new partnership," says Hap Stein, Chairman and CEO of Regency Centers.

Grocery anchors will provide 42 percent of the Portfolio's in-place rental revenue, with 66 percent of rent generated from these anchors as well as junior anchors and other nationally recognized tenants.