06/18/2012 | by
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Regency Centers Focused on Development
Grocery chains have a lot of competition today, according to Hap Stein, chairman and CEO of Regency Centers (NYSE: REG), which focuses on grocery-anchored shopping centers.

In a video interview with REIT.com at REITWeek 2012: NAREIT's Investor Forum, Stein discussed how grocery stores have changed over the decades as well as his company's strategy for development.

"If you go back to 20 years ago, the traditional supermarket chain controlled about 75 percent of the supermarket dollar. Today it's about half that," said Stein, adding that today's supermarkets are competing with a number of retailers, including warehouse clubs, dollar stores and natural food stores.

He said as a result, Regency Centers makes sure it focuses on the top two grocery operators in a given market. The company is currently active in development and redevelopment, and Stein said the goal is to create dominant shopping centers in target markets.

"We want to have a strong anchor in a location in the target market where the typical average household income is $100,000 or more and there's a population density of 100,000 people within a three-mile radius," he said. "That shopping center is going to attract the best-in-class national, regional and local operators."

In terms of the impact that the general economic uncertainty has had on Regency's business, Stein said the company continues to focus on executing its business plan to try and insulate Regency and its shareholders as much as possible.

"That starts with leasing up the portfolio from 93.5 percent, where we are today, back to our historic level of 95 percent," he said.

Additionally, Stein said the company is disciplined in how it takes on new developments. Since the recession, Regency's new developments have performed exceptionally well, according to Stein.

Stein also emphasized the importance of maintaining a strong balance sheet.

"What the financial crisis showed, if nothing else, is that having a strong balance sheet and access to capital matters," he said.