Jim Thompson
Executive Vice President, Chief Operating Officer at Regency Centers
Thanks, Lisa, and good morning, everyone. We remain encouraged by continued improvement in operating trends in our portfolio, including increased foot traffic, higher rent collections and strengthening leasing activity. We took another big step in our recovery during the second quarter as many more operating restrictions were lifted, providing a necessary catalyst to convert many more of our tenants back to rent paying status. While the progress and results are very rewarding, we realize it's not all clear sailing.
We continue to monitor the implication of rising COVID case levels and implementation of mask and vaccine mandates in certain geographies around the country. But in contrast to earlier periods of the pandemic, vaccines are now widely available. Consumers are resuming more normal behaviors, shopping at stores, eating at restaurants and working out at fitness clubs. As of mid-July, nearly all of our 22 markets are now at or above 100% of 2019 foot traffic levels. And after nearly 1.5 years of operating in this environment, many of our tenants have learned to roll with the punches, demonstrating resiliency and creativity in adapting to an evolving normal.
Moving to rent collections. We again saw improvement in all regions with Q2 and July collections both at 96% at this point. Our unresolved rent bucket continues to shrink. As tenants have been able to get back to fully operating, our teams have been successfully working to get them rent paying again. Our leased and commenced occupancy rates ticked up this quarter, reflecting reduced move-outs but also strong leasing activity, which I'll touch on. But more importantly, our net effective rent paying occupancy, which we discussed previously, is up over 150 basis points sequentially to north of 88%.
We continue to believe this is the best indicator of our recovery progress. We also had another strong leasing quarter, exceeding 2019 levels on both new and renewal leasing as our teams are working tirelessly to get vacant space backfilled to accommodate the demand we are seeing. We are pleased to see great activity across all regions, including the harder hit states out west.
Our leasing pipelines look healthy for the remainder of the year, with active interest from tenants in categories such as grocery, medical, restaurants, fitness, pet-related uses, off-price, health and wellness and some traditional mall retailers like home, athletic, eyewear and cosmetics. Although activity is strong, we are seeing some impact from rising material costs, labor shortages and permitting backlogs at local municipalities, all contributing to continued pressure on rent commencement timing.
Our tenants are also experiencing inflationary cost pressures and staffing shortages in the normal course of operating their businesses. But we're hearing when we speak with our tenants that they are generally able to pass on many of these higher costs to consumers, especially in the trade areas that we operate in, reflected in strong sales among many of our grocery and restaurant tenants. We saw improvement in rent growth in the second quarter as well as we are making fewer short-term pandemic-related concessions to bridge our tenants. We continue to push embedded rent steps to maximize revenue and cash NOI growth over the life of the lease.
And our GAAP rent spreads are back above 10% and closer to our 15% historical average levels. As our leasing activities ramp back up, we also remain focused on maintaining a prudent level of capex spend. Our positive momentum in leasing activity also extends to our end process, ground-up development and redevelopment projects. At our crossing Clarendon redevelopment in Arlington, Virginia, we're very excited to announce that we just signed a new lease with Life Time.
This premier health and wellness club with a co-working component will take over 100,000 square feet of the four-story Loft building, reducing lease-up risk by bringing the project to over 90% leased from 3% a quarter ago and providing an earlier-than-expected rent commencement date. At the Abbot in Cambridge, Massachusetts, we have four signed leases and we've seen significant increase in office market tours now that restrictions have lifted, employees are returning to offices in Boston and students are returning to Harvard.
As mentioned on our last call, in the second quarter, we started Phase one of our mixed-use Westbard project in Bethesda, Maryland. The first phase of this project will include a new giant-anchored 120,000 square foot podium-style retail building with structured parking and about 100 senior living units being developed in partnership with a best-in-class senior housing developer operator. Regency's net project cost for this phase will be about $37 million, net of land sale proceeds. We are seeing some modest impacts from higher construction material and labor costs, but our underwriting had cost escalations built in for that. And thus far, the impacts to our rejections have been minimal. In summary, we have a lot of good things happening.
We're very encouraged by the trends we're seeing and the progress we've made, due in large part to the hard work of our management, leasing and development teams in the field. Mike?
