Fitch Ratings Affirms Regency Centers; Rating Outlook Negative.

Business Editors

NEW YORK--(BUSINESS WIRE)--June 18, 2003

Fitch Ratings has affirmed and removed from Rating Watch Positive Regency Centers Corporation's (NYSE:REG) 'BBB+' senior unsecured notes and 'BBB' preferred stock. The Rating Outlook is Negative. Approximately $1.4 billion of securities are affected by Fitch's actions. The ratings were removed from Rating Watch Positive, which was assigned in February 2002 when the consolidation of REG's operations into GE Capital and the implied credit support of GE Capital (GE) appeared likely. Nevertheless, on June 12, GE announced that substantially all of its shares would be sold, eliminating the prospect of a merger. The Rating Outlook reflects the decline in debt protection measures afforded by REG's core portfolio.

Fitch's Negative Rating Outlook incorporates REG's gradual increase in leverage to 44.3% of debt to undepreciated book capital from 37.6% in 1999 and lower debt protection measures, defined as Earnings Before Interest Depreciation and Amortization (EBITDA) to Interest Expense, of 3.3 times (x) times from 3.5x are the result of REG's development strategy, which the company materially broadened in 2000.

The current in-process development pipeline of approximately $545 million, or 17% of REG's undepreciated book capital, although lower than in recent years, bears significant leasing and financing risks, particularly in the current retail environment. On a pro-forma basis, the proposed debt financed $150 million share repurchase results in higher debt leverage to undepreciated book capital in the low 50%-range, and could potentially result in additional downward rating pressure. Intermediate-term liquidity is also a focus, as REG's $600 million unsecured bank credit facility, which matures in December 2004 and carries a one year extension option, and a $200 million unsecured debt maturity will likely be refinanced at higher leverage levels.

Positively, the continued strength of REG's core portfolio, which is currently 95.1% occupied, provides stable core cash flow from high quality grocer-anchored centers. The core portfolio, which is 82% unencumbered, produces strong unencumbered net operating income (NOI) to unsecured debt service of approximately 3.3x. Additionally, the quality of REG's grocery-anchored tenants, and the success of the company's preferred customer initiative, which has demonstrated a higher ratio of credit tenants and lease renewals in the portfolio's side shops, are also positive factors. Fitch also acknowledges the quality of REG's underwriting standards, its high ratio of preleasing (typically in the 70% range), and its focus on regionally dominant grocery anchored centers. REG's strategic formation of two joint ventures, into which approximately one third of the development pipeline is sold, provides additional asset liquidity upon stabilization. The quality of REG's portfolio, strong institutional investor demand for its asset type, execution of its development organization, and its access to multiple forms of capital have all been important rating considerations.

Regency is a Jacksonville-based, $3.8 billion (market capitalization) equity real estate investment trust (REIT) specializing in the ownership, management and development of grocery-anchored community shopping centers. As of March 31, 2003, REG's consolidated portfolio consisted of 261 properties, including 31 in development. REG currently operates in 24 states with primary market concentrations in Florida, California, Texas and Georgia.