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Realty Income (O) Beats Q3 AFFO, Ups Acquisition Guidance
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Realty Income Corporation’s (O - Free Report) third-quarter 2023 adjusted funds from operations (AFFO) per share of $1.02 beat the Zacks Consensus Estimate of $1.00. The reported figure also compared favorably with the prior-year quarter’s 98 cents.
Results display year-over-year growth in the top line. The retail REIT also raised its 2023 AFFO per share guidance and increased the 2023 acquisition volume projection to approximately $9 billion.
Total revenues were $1.04 billion, which aligns with the Zacks Consensus Estimate. The top line rose 24.1% year over year.
On Oct 29, 2023, Realty Income entered into a definitive merger agreement to acquire Spirit Realty Capital, Inc. (“Spirit”) in an all-stock transaction. The closing of the deal, subject to the satisfaction of customary conditions and approval of Spirit’s shareholders, is expected in the first quarter of 2024.
Quarter in Detail
In the third quarter, same-store rental revenues of $716 million from 10,577 properties under lease witnessed a rise of 2.2% from the prior-year period.
The portfolio occupancy of 98.8% as of Sep 30, 2023, declined 20 basis points (bps) sequentially and 10 bps year over year. In the reported quarter, the company achieved a rent recapture rate of 106.9% on re-leasing activity.
In the reported quarter, O invested $2 billion in 289 properties and properties under development or expansion.
Balance Sheet
Realty Income exited third-quarter 2023 with $4.5 billion of liquidity. This comprised cash and cash equivalents of $344.1 million and $3.4 billion of availability under its revolving credit facility after deducting $376.8 million in commercial paper borrowings.
Net debt to annualized pro-forma adjusted EBITDAre was 5.2X.
In the third quarter, the company raised $885.9 million from the sale of its common stock at a weighted average price of $58.58 per share, mainly through its At-The-Market program.
2023 Guidance
Realty Income revised its outlook for 2023.
Management projects 2023 AFFO per share of $3.98-$4.01. The Zacks Consensus Estimate is pegged at $4.01.
Full-year projections assume same-store rent growth of approximately 1.5% and occupancy of more than 98%. O expects a full-year acquisition volume of approximately $9 billion.
Realty Income Corporation Price, Consensus and EPS Surprise
Regency Centers Corporation’s (REG - Free Report) third-quarter 2023 NAREIT funds from operations (FFO) per share of $1.02 surpassed both the Zacks Consensus Estimate and the prior-year quarter’s figure of $1.01.
REG’s total revenues of $330.6 million increased 8.8% from the year-ago period. However, the figure narrowly missed the Zacks Consensus Estimate of $331.7 million.
Kimco Realty Corp. (KIM - Free Report) reported third-quarter 2023 FFO per share of 40 cents, which surpassed the Zacks Consensus Estimate of 39 cents. The figure was only a cent lower than the year-ago quarter’s tally.
Results reflect better-than-anticipated revenues, aided by rental rate growth and healthy occupancy levels. KIM raised its 2023 FFO per share outlook and announced a hike in its quarterly dividend.
Simon Property Group, Inc. (SPG - Free Report) reported third-quarter 2023 FFO per share of $3.20, which surpassed the Zacks Consensus Estimate of $2.98. Also, the figure increased 9.2% year over year.
Results of SPG reflect better-than-anticipated revenues on healthy leasing activity and a rise in the base rent per square foot and occupancy levels. However, higher property operating expenses and interest expenses partly offset the upsides. However, this retail behemoth raised its 2023 FFO per share outlook.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.
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Realty Income (O) Beats Q3 AFFO, Ups Acquisition Guidance
Realty Income Corporation’s (O - Free Report) third-quarter 2023 adjusted funds from operations (AFFO) per share of $1.02 beat the Zacks Consensus Estimate of $1.00. The reported figure also compared favorably with the prior-year quarter’s 98 cents.
Results display year-over-year growth in the top line. The retail REIT also raised its 2023 AFFO per share guidance and increased the 2023 acquisition volume projection to approximately $9 billion.
Total revenues were $1.04 billion, which aligns with the Zacks Consensus Estimate. The top line rose 24.1% year over year.
On Oct 29, 2023, Realty Income entered into a definitive merger agreement to acquire Spirit Realty Capital, Inc. (“Spirit”) in an all-stock transaction. The closing of the deal, subject to the satisfaction of customary conditions and approval of Spirit’s shareholders, is expected in the first quarter of 2024.
Quarter in Detail
In the third quarter, same-store rental revenues of $716 million from 10,577 properties under lease witnessed a rise of 2.2% from the prior-year period.
The portfolio occupancy of 98.8% as of Sep 30, 2023, declined 20 basis points (bps) sequentially and 10 bps year over year. In the reported quarter, the company achieved a rent recapture rate of 106.9% on re-leasing activity.
In the reported quarter, O invested $2 billion in 289 properties and properties under development or expansion.
Balance Sheet
Realty Income exited third-quarter 2023 with $4.5 billion of liquidity. This comprised cash and cash equivalents of $344.1 million and $3.4 billion of availability under its revolving credit facility after deducting $376.8 million in commercial paper borrowings.
Net debt to annualized pro-forma adjusted EBITDAre was 5.2X.
In the third quarter, the company raised $885.9 million from the sale of its common stock at a weighted average price of $58.58 per share, mainly through its At-The-Market program.
2023 Guidance
Realty Income revised its outlook for 2023.
Management projects 2023 AFFO per share of $3.98-$4.01. The Zacks Consensus Estimate is pegged at $4.01.
Full-year projections assume same-store rent growth of approximately 1.5% and occupancy of more than 98%. O expects a full-year acquisition volume of approximately $9 billion.
Realty Income Corporation Price, Consensus and EPS Surprise
Realty Income Corporation price-consensus-eps-surprise-chart | Realty Income Corporation Quote
Zacks Rank
Realty Income currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Retail REITs
Regency Centers Corporation’s (REG - Free Report) third-quarter 2023 NAREIT funds from operations (FFO) per share of $1.02 surpassed both the Zacks Consensus Estimate and the prior-year quarter’s figure of $1.01.
REG’s total revenues of $330.6 million increased 8.8% from the year-ago period. However, the figure narrowly missed the Zacks Consensus Estimate of $331.7 million.
Kimco Realty Corp. (KIM - Free Report) reported third-quarter 2023 FFO per share of 40 cents, which surpassed the Zacks Consensus Estimate of 39 cents. The figure was only a cent lower than the year-ago quarter’s tally.
Results reflect better-than-anticipated revenues, aided by rental rate growth and healthy occupancy levels. KIM raised its 2023 FFO per share outlook and announced a hike in its quarterly dividend.
Simon Property Group, Inc. (SPG - Free Report) reported third-quarter 2023 FFO per share of $3.20, which surpassed the Zacks Consensus Estimate of $2.98. Also, the figure increased 9.2% year over year.
Results of SPG reflect better-than-anticipated revenues on healthy leasing activity and a rise in the base rent per square foot and occupancy levels. However, higher property operating expenses and interest expenses partly offset the upsides. However, this retail behemoth raised its 2023 FFO per share outlook.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.