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SITE Centers (SITC) Q2 OFFO & Revenues Beat, '22 View Up
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SITE Centers Corp. (SITC - Free Report) reported second-quarter 2022 operating funds from operations (OFFO) per share of 31 cents, beating the Zacks Consensus Estimate of 28 cents. The figure was in line with the prior-year quarter’s FFO per share.
Shares of SITC gained 3.63% since the release of second-quarter results on Jul 28.
Results were aided by strong top-line growth and an improvement in annualized base rent.
SITE Centers generated revenues of $137.1 million in the reported quarter, outpacing the Zacks Consensus Estimate of $130.2 million. Moreover, the top line improved 8.2% year over year.
According to David R. Lukes, president and chief executive officer, “SITE Centers had an extremely productive second quarter with the highest quarterly new leasing volume since the first quarter of 2017 and significant capital recycling as we continue to invest in our Convenience thesis.”
Quarter in Detail
The same-store NOI declined 2.4% on a pro-rata basis in the second quarter, inclusive of redevelopment, from the prior-year quarter. Nonetheless, SITC reported a leased rate of 94.4% as of Jun 30, 2022, which compared favorably with the prior-year quarter’s 91.8%, on a pro-rata basis.
The annualized base rent per occupied square foot was $18.86 on a pro-rata basis as of Jun 30, 2022, compared with $18.39 in the year-ago quarter.
SITE Centers, on a pro-rata basis, generated new and renewal leasing spreads of 31.6% and 4.8%, respectively, in the second quarter. On a year-over-year pro-rata basis, the company’s new leasing spreads totaled 20%, while renewal leasing spreads were 4.2%.
Portfolio Activity
In the second quarter, SITC acquired seven shopping centers for a total price of $165.2 million. This included La Fiesta Square and Lafayette Mercantile in San Francisco, CA, Fairfax Marketplace, Fairfax Pointe and Boulevard Marketplace in Washington, DC, Shops at Tanglewood in Houston, TX and Shoppes of Crabapple in Atlanta, GA.
Site Centers disposed of 14 shopping centers and one parcel at a wholly-owned shopping center for $268.1 million ($94.6 million at share). This was inclusive of the company’s 20% interest in the SAU Joint Venture based on a gross asset value of $155.7 million (at 100%) and 50% interest in Lennox Town Center based on a gross asset value of $77.0 million (at 100%).
Balance Sheet
SITE Centers ended the second quarter with $38.5 million of cash, up from $17.2 million as of Mar 31, 2022.
In June 2022, SITC sold 201,800 common shares under the at-the-market (ATM) program at $16.03 per share before issuance costs. This generated gross proceeds of $3.2 million.
Further, it amended and restated its $950 million revolving credit facility with a fully extended maturity date of June 2027 during the reported quarter. Alongside this, SITC upsized its unsecured term loan facility to $200 million from $100 million with the additional proceeds drawn in the second quarter and extended the maturity to June 2027.
Raised 2022 Outlook
SITE Centers raised its guidance for 2022.
It expects 2022 OFFO per share in the range of $1.13-$1.16, up from the prior guidance of $1.10-$1.15. The Zacks Consensus Estimate for the same is pegged at $1.14.
Growth in same-store NOI (adjusted for 2021 uncollectible revenue impact) is expected to be in the band of 3.50-4.75%, revised upward from 3.00-4.50%.
Kimco Realty Corp.’s (KIM - Free Report) second-quarter 2022 FFO per diluted share came in at 40 cents, surpassing the Zacks Consensus Estimate of 38 cents. The figure grew 17.6% from the year-ago quarter’s 34 cents.
Results reflect year-over-year growth in the top line. The rise in occupancy levels and rental rate growth aided KIM’s performance. It raised 2022 FFO outlook.
Boston Properties Inc.’s (BXP - Free Report) second-quarter 2022 FFO per share of $1.94 beat the Zacks Consensus Estimate of $1.85. The figure also compared favorably with the year-ago quarter’s $1.72.
BXP’s quarterly results reflect growth in the bottom line. Also, it experienced strong leasing activity during the quarter.
AvalonBay Communities, Inc.’s (AVB - Free Report) second-quarter 2022 core FFO per share of $2.43 surpassed the Zacks Consensus Estimate of $2.35. The figure increased 22.7% on a year-over-year basis.
AVB’s second-quarter results reflect a year-over-year increase in same-store residential rental revenues driven by strong, effective lease rate growth and higher rent relief.
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) Q2 OFFO & Revenues Beat, '22 View Up
SITE Centers Corp. (SITC - Free Report) reported second-quarter 2022 operating funds from operations (OFFO) per share of 31 cents, beating the Zacks Consensus Estimate of 28 cents. The figure was in line with the prior-year quarter’s FFO per share.
Shares of SITC gained 3.63% since the release of second-quarter results on Jul 28.
Results were aided by strong top-line growth and an improvement in annualized base rent.
SITE Centers generated revenues of $137.1 million in the reported quarter, outpacing the Zacks Consensus Estimate of $130.2 million. Moreover, the top line improved 8.2% year over year.
According to David R. Lukes, president and chief executive officer, “SITE Centers had an extremely productive second quarter with the highest quarterly new leasing volume since the first quarter of 2017 and significant capital recycling as we continue to invest in our Convenience thesis.”
Quarter in Detail
The same-store NOI declined 2.4% on a pro-rata basis in the second quarter, inclusive of redevelopment, from the prior-year quarter. Nonetheless, SITC reported a leased rate of 94.4% as of Jun 30, 2022, which compared favorably with the prior-year quarter’s 91.8%, on a pro-rata basis.
The annualized base rent per occupied square foot was $18.86 on a pro-rata basis as of Jun 30, 2022, compared with $18.39 in the year-ago quarter.
SITE Centers, on a pro-rata basis, generated new and renewal leasing spreads of 31.6% and 4.8%, respectively, in the second quarter. On a year-over-year pro-rata basis, the company’s new leasing spreads totaled 20%, while renewal leasing spreads were 4.2%.
Portfolio Activity
In the second quarter, SITC acquired seven shopping centers for a total price of $165.2 million. This included La Fiesta Square and Lafayette Mercantile in San Francisco, CA, Fairfax Marketplace, Fairfax Pointe and Boulevard Marketplace in Washington, DC, Shops at Tanglewood in Houston, TX and Shoppes of Crabapple in Atlanta, GA.
Site Centers disposed of 14 shopping centers and one parcel at a wholly-owned shopping center for $268.1 million ($94.6 million at share). This was inclusive of the company’s 20% interest in the SAU Joint Venture based on a gross asset value of $155.7 million (at 100%) and 50% interest in Lennox Town Center based on a gross asset value of $77.0 million (at 100%).
Balance Sheet
SITE Centers ended the second quarter with $38.5 million of cash, up from $17.2 million as of Mar 31, 2022.
In June 2022, SITC sold 201,800 common shares under the at-the-market (ATM) program at $16.03 per share before issuance costs. This generated gross proceeds of $3.2 million.
Further, it amended and restated its $950 million revolving credit facility with a fully extended maturity date of June 2027 during the reported quarter. Alongside this, SITC upsized its unsecured term loan facility to $200 million from $100 million with the additional proceeds drawn in the second quarter and extended the maturity to June 2027.
Raised 2022 Outlook
SITE Centers raised its guidance for 2022.
It expects 2022 OFFO per share in the range of $1.13-$1.16, up from the prior guidance of $1.10-$1.15. The Zacks Consensus Estimate for the same is pegged at $1.14.
Growth in same-store NOI (adjusted for 2021 uncollectible revenue impact) is expected to be in the band of 3.50-4.75%, revised upward from 3.00-4.50%.
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
Kimco Realty Corp.’s (KIM - Free Report) second-quarter 2022 FFO per diluted share came in at 40 cents, surpassing the Zacks Consensus Estimate of 38 cents. The figure grew 17.6% from the year-ago quarter’s 34 cents.
Results reflect year-over-year growth in the top line. The rise in occupancy levels and rental rate growth aided KIM’s performance. It raised 2022 FFO outlook.
Boston Properties Inc.’s (BXP - Free Report) second-quarter 2022 FFO per share of $1.94 beat the Zacks Consensus Estimate of $1.85. The figure also compared favorably with the year-ago quarter’s $1.72.
BXP’s quarterly results reflect growth in the bottom line. Also, it experienced strong leasing activity during the quarter.
AvalonBay Communities, Inc.’s (AVB - Free Report) second-quarter 2022 core FFO per share of $2.43 surpassed the Zacks Consensus Estimate of $2.35. The figure increased 22.7% on a year-over-year basis.
AVB’s second-quarter results reflect a year-over-year increase in same-store residential rental revenues driven by strong, effective lease rate growth and higher rent relief.
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.