SITE Centers Corp. (SITC - Free Report) posted second-quarter 2019 operating funds from operations (OFFO) per share of 31 cents, surpassing the Zacks Consensus Estimate of 28 cents.
Results reflect growth in same-store net operating income (NOI). The company, on a pro-rata basis, generated new and renewal leasing spreads of 7.1% and 5.1%, respectively, in the second quarter.
However, the operating FFO per share figure compares unfavorably with the prior-year quarter’s reported tally of 49 cents. This year-over-year decline reflects the dilutive impact of the company’s RVI spin-off, partially offset by lower interest expense and higher fee income.
The company generated revenues of $113.5 million in the quarter, beating the Zacks Consensus Estimate of $110.7 million. The top-line figure, however, came in lower than the $204.3 million recorded in the comparable period last year.
Quarter in Detail
Same-store NOI growth for the total portfolio on a pro-rata basis was 5.7% in the second quarter. SITE Centers reported a leased rate of 93.9% as of Jun 30, 2019, compared with 93.1% in the prior-year period, on a pro-rata basis.
Annualized base rent per occupied square-foot for the total portfolio was $17.98 on a pro-rata basis as of Jun 30, 2019, up from $17.36 recorded a year ago.
SITE Centers sold two shopping centers for $37.8 million ($7.3 million at the company’s share) during the reported quarter. This included $1.2 million from the repayment of SITC Centers’ preferred equity investment in two joint ventures with Blackstone.
Finally, SITE Centers exited the June-end quarter with $9.4 million in cash compared with approximately $11.1 million as of Dec 31, 2018.
Outlook
The company updated its operating FFO per share outlook to $1.18-$1.22 from the prior estimate of $1.14-$1.19. The Zacks Consensus Estimate for the same is pegged at $1.18. Furthermore, the guidance for same-store net operating income has been revised to 1.25-3.25% compared to the previous projection of 1.25-2%.
Bottom Line
Strong leasing momentum and decent rent growth buoyed SITC Centers’ quarterly performance. Further, the company remains on-track to meet its five-year business plan targets to invest $75 million annually on property acquisitions through capital recycling and another $100 million on redevelopment opportunities.
Nonetheless, the dilutive impact of the Retail Value Inc. spin-off keeps impeding the company’s bottom-line growth.
SITE CENTERS CORP. Price, Consensus and EPS Surprise
Performance of Other REITs
Taubman Centers Inc. reported second-quarter adjusted FFO per share of 94 cents, beating the Zacks Consensus Estimate of 83 cents. The figure also compared favorably with the year-ago quarter’s reported tally of 87 cents.
Kimco Realty Corp.’s (KIM - Free Report) second-quarter 2019 FFO as adjusted came in at 36 cents per share, in line with the Zacks Consensus Estimate. The reported tally came in a penny less than the year-earlier quarter’s FFO as adjusted of 37 cents per share.
PS Business Parks, Inc. posted second-quarter 2019 FFO of $1.75 per share, which outpaced the Zacks Consensus Estimate of $1.68. The figure also came in 10.1% higher than the prior-year quarter’s $1.59.
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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SITE Centers Corp. (SITC - Free Report) posted second-quarter 2019 operating funds from operations (OFFO) per share of 31 cents, surpassing the Zacks Consensus Estimate of 28 cents.
Results reflect growth in same-store net operating income (NOI). The company, on a pro-rata basis, generated new and renewal leasing spreads of 7.1% and 5.1%, respectively, in the second quarter.
However, the operating FFO per share figure compares unfavorably with the prior-year quarter’s reported tally of 49 cents. This year-over-year decline reflects the dilutive impact of the company’s RVI spin-off, partially offset by lower interest expense and higher fee income.
The company generated revenues of $113.5 million in the quarter, beating the Zacks Consensus Estimate of $110.7 million. The top-line figure, however, came in lower than the $204.3 million recorded in the comparable period last year.
Quarter in Detail
Same-store NOI growth for the total portfolio on a pro-rata basis was 5.7% in the second quarter. SITE Centers reported a leased rate of 93.9% as of Jun 30, 2019, compared with 93.1% in the prior-year period, on a pro-rata basis.
Annualized base rent per occupied square-foot for the total portfolio was $17.98 on a pro-rata basis as of Jun 30, 2019, up from $17.36 recorded a year ago.
SITE Centers sold two shopping centers for $37.8 million ($7.3 million at the company’s share) during the reported quarter. This included $1.2 million from the repayment of SITC Centers’ preferred equity investment in two joint ventures with Blackstone.
Finally, SITE Centers exited the June-end quarter with $9.4 million in cash compared with approximately $11.1 million as of Dec 31, 2018.
Outlook
The company updated its operating FFO per share outlook to $1.18-$1.22 from the prior estimate of $1.14-$1.19. The Zacks Consensus Estimate for the same is pegged at $1.18. Furthermore, the guidance for same-store net operating income has been revised to 1.25-3.25% compared to the previous projection of 1.25-2%.
Bottom Line
Strong leasing momentum and decent rent growth buoyed SITC Centers’ quarterly performance. Further, the company remains on-track to meet its five-year business plan targets to invest $75 million annually on property acquisitions through capital recycling and another $100 million on redevelopment opportunities.
Nonetheless, the dilutive impact of the Retail Value Inc. spin-off keeps impeding the company’s bottom-line growth.
SITE CENTERS CORP. Price, Consensus and EPS Surprise
Performance of Other REITs
Taubman Centers Inc. reported second-quarter adjusted FFO per share of 94 cents, beating the Zacks Consensus Estimate of 83 cents. The figure also compared favorably with the year-ago quarter’s reported tally of 87 cents.
Kimco Realty Corp.’s (KIM - Free Report) second-quarter 2019 FFO as adjusted came in at 36 cents per share, in line with the Zacks Consensus Estimate. The reported tally came in a penny less than the year-earlier quarter’s FFO as adjusted of 37 cents per share.
PS Business Parks, Inc. posted second-quarter 2019 FFO of $1.75 per share, which outpaced the Zacks Consensus Estimate of $1.68. The figure also came in 10.1% higher than the prior-year quarter’s $1.59.
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.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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