U.S. Retail REITs "Gold On The Road: Philadelphia Property Tour" Goldsmith

Research evidence excerpt

U.S. Retail REITs "Gold On The Road: Philadelphia Property Tour" Goldsmith

Residential demand appears strong, with rents at roughly $450 per square foot

and ground-floor retail already 100% leased (Rhone, New Balance, Barry's

Bootcamp). We think increased evidence of KIM translating its apartment

entitlements into a pipeline of value creation opportunities will provide an

incremental driver to its investment case. We believe Suburban Square exemplifies

KIM's strategy of owning high-barrier, first-ring suburban assets with optionality

to densify, creating multiple avenues for NOI growth over time.

REG: Strong fundamentals at grocery-anchored centers and sustained

leasing demand. Regency Centers' portfolio continues to demonstrate strong

trends driven by necessity-based retail and high-income trade areas. At Gateway

Shopping Center and Newtown Square, both located in markets with average

household incomes exceeding $200k, demand remains robust and skewed toward

higher-quality tenants. Gateway, at ~220k square feet, is larger than REG's typical

asset but benefits from long-term tenant stability. Notably, 12 tenants have

remained since 2007, highlighting the stickiness of well-located grocery-anchored

centers. Further, sustained rent growth has been a continued driver. Small shop

rents have increased from the $30/sq ft range pre-COVID to $50-$60/sq ft

currently, reflecting a tight leasing environment. The recent opening of Sephora,

despite proximity (~3 miles) to the King of Prussia mall, illustrates both the depth

of retailer demand and the strength of the beauty category. At Newtown, REG's

ability to recycle space was evident. After regaining a space on April 30, the

company quickly received three proposals (service and fitness uses), reinforcing