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PS Business Parks (PSB) Tops Q3 FFO & Revenue Estimates
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PS Business Parks, Inc. reported third-quarter 2018 core funds from operations (FFO) of $1.64 per share, beating the Zacks Consensus Estimate of $1.60. The figure also came in 6.5% higher than $1.54 recorded in the prior-year quarter.
Results highlight improvement in Same-Park net operating income (NOI) backed by growth in rental rates and occupancy, as well as improved NOI from non-Same-Park and multi-family assets. However, NOI reduction due to asset sold earlier partly offset the positives.
Rental income came in at around $103.8 million, marking 3.3% growth from the year-ago tally. The reported figure also exceeded the Zacks Consensus Estimate of $100 million.
Quarter in Detail
Same-Park rental income was up 2.2% year over year to $98.2 million, while Same-Park NOI climbed 3.8% year over year to $69.4 million, driven by improving rental rates and occupancy level.
Same-Park annualized rental income per occupied-square-foot inched up 1.2% to $15.36, while weighted average square-foot occupancy was 95.0%, up 90 basis points year over year.
Liquidity
PS Business Parks exited third-quarter 2018 with cash and cash equivalents of $8.7 million, down from $114.9 million reported at the end of the previous year.
Portfolio Update
As of Sep 30, 2018, the company had two multi-tenant office buildings, aggregating 107,000 square feet in Orange County, CA, as held for sale. The company expects to close this sale during fourth-quarter 2018.
Dividend Update
On Oct 23, the company announced a quarterly dividend of $1.05 per share. The dividend is payable on Dec 27, to shareholders of record as of Dec 12, 2018.
Conclusion
We are encouraged with the decent FFO per share performance of PS Business Parks in the third quarter. Nonetheless, supply is rising in certain submarkets and this could partly impede the company’s growth momentum. Stiff competition from other office and industrial asset owners in the market curtails its ability to attract and retain tenants at higher rents. Further, dilutive impact on earnings from dispositions of assets cannot be avoided in the near run. Lastly, rate hike adds to its woes.
PS Business Parks currently carries a Zacks Rank #4 (Sell).
We now look forward to the earnings releases of other REITs like Kimco Realty Corporation (KIM - Free Report) , Simon Property Group, Inc. (SPG - Free Report) and Iron Mountain Incorporated (IRM - Free Report) which are slated to report their quarterly numbers on Oct 25.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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PS Business Parks (PSB) Tops Q3 FFO & Revenue Estimates
PS Business Parks, Inc. reported third-quarter 2018 core funds from operations (FFO) of $1.64 per share, beating the Zacks Consensus Estimate of $1.60. The figure also came in 6.5% higher than $1.54 recorded in the prior-year quarter.
Results highlight improvement in Same-Park net operating income (NOI) backed by growth in rental rates and occupancy, as well as improved NOI from non-Same-Park and multi-family assets. However, NOI reduction due to asset sold earlier partly offset the positives.
Rental income came in at around $103.8 million, marking 3.3% growth from the year-ago tally. The reported figure also exceeded the Zacks Consensus Estimate of $100 million.
Quarter in Detail
Same-Park rental income was up 2.2% year over year to $98.2 million, while Same-Park NOI climbed 3.8% year over year to $69.4 million, driven by improving rental rates and occupancy level.
Same-Park annualized rental income per occupied-square-foot inched up 1.2% to $15.36, while weighted average square-foot occupancy was 95.0%, up 90 basis points year over year.
Liquidity
PS Business Parks exited third-quarter 2018 with cash and cash equivalents of $8.7 million, down from $114.9 million reported at the end of the previous year.
Portfolio Update
As of Sep 30, 2018, the company had two multi-tenant office buildings, aggregating 107,000 square feet in Orange County, CA, as held for sale. The company expects to close this sale during fourth-quarter 2018.
Dividend Update
On Oct 23, the company announced a quarterly dividend of $1.05 per share. The dividend is payable on Dec 27, to shareholders of record as of Dec 12, 2018.
Conclusion
We are encouraged with the decent FFO per share performance of PS Business Parks in the third quarter. Nonetheless, supply is rising in certain submarkets and this could partly impede the company’s growth momentum. Stiff competition from other office and industrial asset owners in the market curtails its ability to attract and retain tenants at higher rents. Further, dilutive impact on earnings from dispositions of assets cannot be avoided in the near run. Lastly, rate hike adds to its woes.
PS Business Parks currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PS Business Parks, Inc. Price, Consensus and EPS Surprise
PS Business Parks, Inc. Price, Consensus and EPS Surprise | PS Business Parks, Inc. Quote
We now look forward to the earnings releases of other REITs like Kimco Realty Corporation (KIM - Free Report) , Simon Property Group, Inc. (SPG - Free Report) and Iron Mountain Incorporated (IRM - Free Report) which are slated to report their quarterly numbers on Oct 25.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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