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SITE Centers (SITC) Q1 OFFO & Revenues Beat, NOI Rises Y/Y
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SITE Centers Corp. (SITC - Free Report) reported first-quarter 2022 operating funds from operations (OFFO) per share of 29 cents, beating the Zacks Consensus Estimate of 27 cents. The figure marginally exceeded the prior year’s quarter’s 28 cents.
Results were aided by strong property acquisitions and an improvement in same-store net operating income (NOI) due to revenue growth on a pro-rata basis.
SITE Centers generated revenues of $131.1 million in the reported quarter, outpacing the Zacks Consensus Estimate of $126.3 million. Additionally, the top line improved 9.2% year over year.
According to David R. Lukes, president and chief executive officer, “SITE Centers had an excellent start to the year with another quarter of record new leasing activity as compared to the last 5 years and the deployment of the remaining proceeds from the $190 million of preferred dividends paid to SITE Centers by Retail Value Inc.”
Quarter in Detail
The same-store NOI improved 2.9% on a pro-rata basis in the first quarter, inclusive of redevelopment, from the year ago’s quarter. SITC reported a leased rate of 93.2% as of Mar 31, 2022, compared with the prior-year quarter’s 91.4% on a pro-rata basis.
The annualized base rent per occupied square foot was $18.55 on a pro-rata basis as of Mar 31, 2022, compared with $18.39 at the end of March 2021.
SITE Centers, on a pro-rata basis, generated new and renewal leasing spreads of 15.4% and 5.6%, respectively, in the first quarter. On a year-over-year pro-rata basis, the company’s new leasing spreads totaled 13.3%, while renewal leasing spreads were 4.3%.
Portfolio Activity
In the first quarter, SITC took possession of three shopping centers (including through the acquisition of partner’s interest) for a total price of $140.1 million.
In April 2022, the company added to its portfolio Shoppes of Crabapple (Alpharetta, Georgia) for an aggregate purchase price of $4.4 million.
Site Centers also closed on the previously announced disposition of the company’s 20% interest in the SAU Joint Venture to its partner, the State of Utah, for a gross asset value of $155.7 million in April 2022.
Balance Sheet
SITE Centers ended the first quarter with $17.2 million of cash, down from $41.8 million as of Dec 31, 2021.
In March 2022, the company settled 2.2 million common shares, previously offered and sold on a forward basis in 2021 under the ATM program, for a gross sale of $35.1million. It also repaid $34.3 million of consolidated mortgage debt, which was scheduled to mature in September 2022.
Outlook
SITE Centers provided updated guidance for 2022. It now expects OFFO per share in the range of $1.10-$1.15, up from the prior guidance of $1.08-$1.13. The Zacks Consensus Estimate for the same is pegged at $1.12.
Growth in same-store NOI (adjusted for 2021 uncollectible revenue impact) is expected to be in the band of 3.00-4.50%, revised upward from 2.25-4.25%.
SL Green Realty (SLG - Free Report) reported first quarter 2022 FFO per share of $1.65, beating the Zacks Consensus Estimate by a cent. However, the reported FFO per share compared unfavorably with the year-ago quarter’s $1.73.
SLG first-quarter performance was driven by a better-than-expected top line and healthy leasing activity.
Crown Castle International Corp.’s (CCI - Free Report) first-quarter 2022 adjusted funds from operations (AFFO) per share of $1.87 surpassed the Zacks Consensus Estimate of $1.80. Net revenues of $1.74 billion exceeded the Zacks Consensus Estimate of $1.70 billion.
Growth in site-rental revenues due to elevated tower space demand aided the top-line performance. CCI also raised the outlook for site-rental revenues and adjusted EBITDA for 2022.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported first-quarter 2022 adjusted FFO per share of $2.05, surpassing the Zacks Consensus Estimate of $2.00. The reported FFO per share also compared favorably with the year-ago quarter’s $1.91.
Alexandria witnessed continued healthy leasing activity and rental rate growth during the quarter.
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 (SITC) Q1 OFFO & Revenues Beat, NOI Rises Y/Y
SITE Centers Corp. (SITC - Free Report) reported first-quarter 2022 operating funds from operations (OFFO) per share of 29 cents, beating the Zacks Consensus Estimate of 27 cents. The figure marginally exceeded the prior year’s quarter’s 28 cents.
Results were aided by strong property acquisitions and an improvement in same-store net operating income (NOI) due to revenue growth on a pro-rata basis.
SITE Centers generated revenues of $131.1 million in the reported quarter, outpacing the Zacks Consensus Estimate of $126.3 million. Additionally, the top line improved 9.2% year over year.
According to David R. Lukes, president and chief executive officer, “SITE Centers had an excellent start to the year with another quarter of record new leasing activity as compared to the last 5 years and the deployment of the remaining proceeds from the $190 million of preferred dividends paid to SITE Centers by Retail Value Inc.”
Quarter in Detail
The same-store NOI improved 2.9% on a pro-rata basis in the first quarter, inclusive of redevelopment, from the year ago’s quarter. SITC reported a leased rate of 93.2% as of Mar 31, 2022, compared with the prior-year quarter’s 91.4% on a pro-rata basis.
The annualized base rent per occupied square foot was $18.55 on a pro-rata basis as of Mar 31, 2022, compared with $18.39 at the end of March 2021.
SITE Centers, on a pro-rata basis, generated new and renewal leasing spreads of 15.4% and 5.6%, respectively, in the first quarter. On a year-over-year pro-rata basis, the company’s new leasing spreads totaled 13.3%, while renewal leasing spreads were 4.3%.
Portfolio Activity
In the first quarter, SITC took possession of three shopping centers (including through the acquisition of partner’s interest) for a total price of $140.1 million.
In April 2022, the company added to its portfolio Shoppes of Crabapple (Alpharetta, Georgia) for an aggregate purchase price of $4.4 million.
Site Centers also closed on the previously announced disposition of the company’s 20% interest in the SAU Joint Venture to its partner, the State of Utah, for a gross asset value of $155.7 million in April 2022.
Balance Sheet
SITE Centers ended the first quarter with $17.2 million of cash, down from $41.8 million as of Dec 31, 2021.
In March 2022, the company settled 2.2 million common shares, previously offered and sold on a forward basis in 2021 under the ATM program, for a gross sale of $35.1million. It also repaid $34.3 million of consolidated mortgage debt, which was scheduled to mature in September 2022.
Outlook
SITE Centers provided updated guidance for 2022. It now expects OFFO per share in the range of $1.10-$1.15, up from the prior guidance of $1.08-$1.13. The Zacks Consensus Estimate for the same is pegged at $1.12.
Growth in same-store NOI (adjusted for 2021 uncollectible revenue impact) is expected to be in the band of 3.00-4.50%, revised upward from 2.25-4.25%.
SITE Centers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SITE CENTERS CORP. Price, Consensus and EPS Surprise
SITE CENTERS CORP. price-consensus-eps-surprise-chart | SITE CENTERS CORP. Quote
Performance of Other REITs
SL Green Realty (SLG - Free Report) reported first quarter 2022 FFO per share of $1.65, beating the Zacks Consensus Estimate by a cent. However, the reported FFO per share compared unfavorably with the year-ago quarter’s $1.73.
SLG first-quarter performance was driven by a better-than-expected top line and healthy leasing activity.
Crown Castle International Corp.’s (CCI - Free Report) first-quarter 2022 adjusted funds from operations (AFFO) per share of $1.87 surpassed the Zacks Consensus Estimate of $1.80. Net revenues of $1.74 billion exceeded the Zacks Consensus Estimate of $1.70 billion.
Growth in site-rental revenues due to elevated tower space demand aided the top-line performance. CCI also raised the outlook for site-rental revenues and adjusted EBITDA for 2022.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported first-quarter 2022 adjusted FFO per share of $2.05, surpassing the Zacks Consensus Estimate of $2.00. The reported FFO per share also compared favorably with the year-ago quarter’s $1.91.
Alexandria witnessed continued healthy leasing activity and rental rate growth during the quarter.
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.