A month has gone by since the last earnings report for PS Business Parks . Shares have added about 2.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is PS Business Parks due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
PS Business Parks Q4 FFO Beats Estimates
PS Business Parks reported fourth-quarter 2020 core FFO per share of $1.66, surpassing the Zacks Consensus Estimate of $1.64. Moreover, the reported figure increased from the $1.65 reported in the year-ago quarter.
Rental income came in at $105.1 million, beating the Zacks Consensus Estimate of $101.1 million. However, the figure edged down 1% from the year-ago quarter’s $106.2 million.
Results highlight increased cash rental income from the occupied portion of its same-park portfolio, though lower weighted average occupancy in the quarter played spoilsport.
Moreover, the company reported decent rent collections for the fourth quarter, collecting about 98% of total rent, comprising 98%, 98% and 99% collection for industrial, flex and office assets, respectively.
In addition, 2% of the quarter’s total rent remained outstanding. Also, during the same period, the company granted $0.2 million of deferred rent and less than $0.1 million of rent abatement. Further, as of Feb 19, 2021, the company had open rent relief requests from roughly 1% of customers.
Quarter in Detail
During the fourth quarter, PS Business Parks executed leases on 1.9 million square feet, compared with the prior-year quarter’s 2.1 million. Weighted average cash rental rate growth on leases executed during the reported quarter was 5.3%, while average net effective rent growth was 14.9% for the same period.
Average lease term of the leases executed during the quarter was 3.3 years, with associated average transaction costs (tenant improvements and leasing commissions) of $2.92 per square foot. This compares to average lease term and transaction costs on leases executed in the prior-year period of 4.8 years and $4.08 per square foot, respectively.
Same-park rental income edged down 0.9% year over year to $96.6 million, while same-park NOI slid 3% to $68 million. However, same-park revenue per occupied-square-foot inched up 1.7% year on year to $16.37.
Same-park cash NOI declined 0.5% year on year to $69.2 million, reflecting lower weighted average occupancy in the fourth quarter, which declined to 92% from 94.4% in the year-ago period. This was mostly negated by increased cash rental income from the occupied part of its same-park portfolio with cash rental income per occupied square foot increasing 3.6% year on year to $16.57.
Portfolio Activity
In October 2020, PS Business Parks completed the acquisition of Pickett Industrial Park in Alexandria, VA. The infill multi-tenant industrial park spans across an area of 246,000 square feet and was acquired for $46.3 million. The company also completed the development of its 83,000-square-foot multi-tenant industrial property at the Freeport Business Park neighboring the Dallas/Fort Worth International Airport in Dallas, TX, for a total development cost of $8.1 million, exclusive of land value.
Furthermore, management noted that the construction of Brentford at The Mile is continuing on schedule and in line with the prior development cost estimate of $110-$115 million, exclusive of land value.
Liquidity
PS Business Parks exited 2020 with cash and cash equivalents of $69.1 million, up from the $62.8 million reported at the end of 2019.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
Image: Bigstock
Why Is PS Business Parks (PSB) Up 2.5% Since Last Earnings Report?
A month has gone by since the last earnings report for PS Business Parks . Shares have added about 2.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is PS Business Parks due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
PS Business Parks Q4 FFO Beats Estimates
PS Business Parks reported fourth-quarter 2020 core FFO per share of $1.66, surpassing the Zacks Consensus Estimate of $1.64. Moreover, the reported figure increased from the $1.65 reported in the year-ago quarter.
Rental income came in at $105.1 million, beating the Zacks Consensus Estimate of $101.1 million. However, the figure edged down 1% from the year-ago quarter’s $106.2 million.
Results highlight increased cash rental income from the occupied portion of its same-park portfolio, though lower weighted average occupancy in the quarter played spoilsport.
Moreover, the company reported decent rent collections for the fourth quarter, collecting about 98% of total rent, comprising 98%, 98% and 99% collection for industrial, flex and office assets, respectively.
In addition, 2% of the quarter’s total rent remained outstanding. Also, during the same period, the company granted $0.2 million of deferred rent and less than $0.1 million of rent abatement. Further, as of Feb 19, 2021, the company had open rent relief requests from roughly 1% of customers.
Quarter in Detail
During the fourth quarter, PS Business Parks executed leases on 1.9 million square feet, compared with the prior-year quarter’s 2.1 million. Weighted average cash rental rate growth on leases executed during the reported quarter was 5.3%, while average net effective rent growth was 14.9% for the same period.
Average lease term of the leases executed during the quarter was 3.3 years, with associated average transaction costs (tenant improvements and leasing commissions) of $2.92 per square foot. This compares to average lease term and transaction costs on leases executed in the prior-year period of 4.8 years and $4.08 per square foot, respectively.
Same-park rental income edged down 0.9% year over year to $96.6 million, while same-park NOI slid 3% to $68 million. However, same-park revenue per occupied-square-foot inched up 1.7% year on year to $16.37.
Same-park cash NOI declined 0.5% year on year to $69.2 million, reflecting lower weighted average occupancy in the fourth quarter, which declined to 92% from 94.4% in the year-ago period. This was mostly negated by increased cash rental income from the occupied part of its same-park portfolio with cash rental income per occupied square foot increasing 3.6% year on year to $16.57.
Portfolio Activity
In October 2020, PS Business Parks completed the acquisition of Pickett Industrial Park in Alexandria, VA. The infill multi-tenant industrial park spans across an area of 246,000 square feet and was acquired for $46.3 million. The company also completed the development of its 83,000-square-foot multi-tenant industrial property at the Freeport Business Park neighboring the Dallas/Fort Worth International Airport in Dallas, TX, for a total development cost of $8.1 million, exclusive of land value.
Furthermore, management noted that the construction of Brentford at The Mile is continuing on schedule and in line with the prior development cost estimate of $110-$115 million, exclusive of land value.
Liquidity
PS Business Parks exited 2020 with cash and cash equivalents of $69.1 million, up from the $62.8 million reported at the end of 2019.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.