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Taubman Centers Inc. reported first-quarter 2020 funds from operations (FFO) per share of 88 cents, missing the Zacks Consensus Estimate of 91 cents. The figure also compares unfavorably with the year-ago quarter’s reported tally of 95 cents.
Decline in comparable-center NOI and rise in interest expense, along with lower ending occupancy in comparable centers, hurt results.
However, adjusted revenues, including rental revenues and overage rents for consolidated businesses, came in at $147.4 million, surpassing the Zacks Consensus Estimate of $145.9 million. Nonetheless, the reported figure slid about 8% year over year.
Quarter in Detail
Pro Rata Comparable Center NOI (excluding lease cancellation income and using constant foreign exchange rates) edged down 1.5% year over year.
Comparable tenant sales per square foot decreased 11.6%, year over year. Trailing 12-month sales per square foot of $955 was up 2% as compared with the same period ended Mar 31, 2019. Also, average rent per square foot for the quarter was $62.12, marking a 2.3% decrease from the year-ago period’s $63.41.
As of Mar 31, 2020, leased space in comparable centers was 94.6%, down 0.9% from Mar 31, 2019. Additionally, ending occupancy in comparable centers of 91.9% was down 1.1%, year over year, at the end of the reported quarter.
Notably, in February, Taubman Centers closed the sale of Taubman Asia’s 50% stake in CityOn.Xi’an to real estate funds managed by The Blackstone Group Inc., for $91 million. Subsequent to the sale, Taubman now owns a 25% interest in the property. The company received net proceeds of about $48 million, which was used to pay its debt.
Liquidity
Taubman Centers exited first-quarter 2020 with cash and cash equivalents of $395.1 million, up from the $102.8 million reported at the end of December 2019.
This March, the company raised $350 million on its $1.1-billion primary unsecured revolving line of credit, resulting in a total of $970 million outstanding as of Mar 31, 2020. This facility has a maturity date of February 2024, having two six-month extension options, and has a current interest rate of LIBOR plus 1.375 percent.
Also, the company closed a one-year extension of its $65-million secured revolving line of credit. This revolving line of credit had a maturity date of Apr 25, 2020. The facility continues to bear interest at a rate of LIBOR plus 1.4 percent and all other key terms remain unchanged. As of May 5, there had not been any borrowings on this line of credit.
The company will not host its first-quarter 2020 conference call due to the pending transaction with Simon Property Group.
We now look forward to the earnings releases of other REITs like Ventas, Inc. (VTR - Free Report) , Kimco Realty Corp. (KIM - Free Report) and Simon Property Group, Inc. (SPG - Free Report) . All three companies are scheduled to release quarterly numbers on May 7.
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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Taubman Centers (TCO) Q1 FFO Misses, Revenues Beat Estimates
Taubman Centers Inc. reported first-quarter 2020 funds from operations (FFO) per share of 88 cents, missing the Zacks Consensus Estimate of 91 cents. The figure also compares unfavorably with the year-ago quarter’s reported tally of 95 cents.
Decline in comparable-center NOI and rise in interest expense, along with lower ending occupancy in comparable centers, hurt results.
However, adjusted revenues, including rental revenues and overage rents for consolidated businesses, came in at $147.4 million, surpassing the Zacks Consensus Estimate of $145.9 million. Nonetheless, the reported figure slid about 8% year over year.
Quarter in Detail
Pro Rata Comparable Center NOI (excluding lease cancellation income and using constant foreign exchange rates) edged down 1.5% year over year.
Comparable tenant sales per square foot decreased 11.6%, year over year. Trailing 12-month sales per square foot of $955 was up 2% as compared with the same period ended Mar 31, 2019. Also, average rent per square foot for the quarter was $62.12, marking a 2.3% decrease from the year-ago period’s $63.41.
As of Mar 31, 2020, leased space in comparable centers was 94.6%, down 0.9% from Mar 31, 2019. Additionally, ending occupancy in comparable centers of 91.9% was down 1.1%, year over year, at the end of the reported quarter.
Notably, in February, Taubman Centers closed the sale of Taubman Asia’s 50% stake in CityOn.Xi’an to real estate funds managed by The Blackstone Group Inc., for $91 million. Subsequent to the sale, Taubman now owns a 25% interest in the property. The company received net proceeds of about $48 million, which was used to pay its debt.
Liquidity
Taubman Centers exited first-quarter 2020 with cash and cash equivalents of $395.1 million, up from the $102.8 million reported at the end of December 2019.
This March, the company raised $350 million on its $1.1-billion primary unsecured revolving line of credit, resulting in a total of $970 million outstanding as of Mar 31, 2020. This facility has a maturity date of February 2024, having two six-month extension options, and has a current interest rate of LIBOR plus 1.375 percent.
Also, the company closed a one-year extension of its $65-million secured revolving line of credit. This revolving line of credit had a maturity date of Apr 25, 2020. The facility continues to bear interest at a rate of LIBOR plus 1.4 percent and all other key terms remain unchanged. As of May 5, there had not been any borrowings on this line of credit.
The company will not host its first-quarter 2020 conference call due to the pending transaction with Simon Property Group.
Taubman Centers carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Taubman Centers, Inc. Price, Consensus and EPS Surprise
Taubman Centers, Inc. price-consensus-eps-surprise-chart | Taubman Centers, Inc. Quote
We now look forward to the earnings releases of other REITs like Ventas, Inc. (VTR - Free Report) , Kimco Realty Corp. (KIM - Free Report) and Simon Property Group, Inc. (SPG - Free Report) . All three companies are scheduled to release quarterly numbers on May 7.
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 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>