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11.12.2017 23:40
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IRET Announces Fiscal Second Quarter 2018 Results
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PR Newswire
MINOT, N.D., Dec. 11, 2017
MINOT, N.D., Dec. 11, 2017 /PRNewswire/ -- IRET (NYSE: IRET) announced today its fiscal second quarter 2018 financial and operating results. Net income and Funds from Operations ("FFO") per share for the three and six months ended October 31, 2017, are detailed below. Core FFO adjusts FFO for certain non-routine items, and both FFO and Core FFO are reconciled to net income in the tables accompanying this earnings release.
| | | Three months Ended | | Six Months Ended | | ||||||||
| | | October 31, | | October 31, | | ||||||||
| Per Share | | 2017 | | 2016 | | 2017 | | 2016 | | ||||
| Net Income | | $ | 0.05 | | $ | 0.07 | | $ | (0.06) | | $ | (0.13) | |
| FFO | | $ | 0.07 | | $ | 0.12 | | $ | 0.17 | | $ | 0.24 | |
| Core FFO | | $ | 0.10 | | $ | 0.12 | | $ | 0.20 | | $ | 0.24 | |
| | Quarterly | | Sequential | | YTD | |||
| Multifamily Same-Store Results | 2Q18 vs. 2Q17 | | 2Q18 vs. 1Q18 | | 2Q18 vs. 2Q17 | |||
| Revenues | 3.8 | % | | 1.1 | % | | 3.8 | % |
| Expenses | 16.0 | % | | 5.8 | % | | 15.0 | % |
| Net Operating Income ("NOI") | (5.5) | % | | (2.8) | % | | (4.5) | % |
| Multifamily Same Store Results | 2Q18 | | 1Q18 | | 2Q17 | |||
| Physical Occupancy | 95.2 | % | | 94.4 | % | | 92.4 | % |
| Weighted Average Occupancy | 93.1 | % | | 92.9 | % | | 91.4 | % |
"We experienced strong revenue growth this quarter as we continued to increase occupancy across our portfolio," said Mark O. Decker, Jr., IRET's President and CEO. "We also drove growth in our rental rates thanks to the efforts of our operations team. While expenses are significantly higher than last year, these increases were within our expectations and were offset by a decrease in capital expenditures and an increase in revenue growth. With the pending sale of our medical office portfolio and the announced sale of our other non-core assets, we are nearing the completion of our transformation to a focused multifamily REIT, which will enable us to devote management resources to our core business of developing and growing our multifamily properties."
Second Quarter Fiscal Year 2018 Highlights
- Achieved same store multifamily revenue growth of 3.8% compared to the prior year (3.8% YTD). Improved performance is due primarily to increases in occupancy in the multifamily portfolio and better-than-anticipated rent growth.
- Experienced elevated multifamily same-store expense increases year-over-year and sequentially. The primary drivers of these increases were the previously disclosed change in our capitalization policies and additional costs related to increasing occupancy. Additionally, we experienced higher labor costs and increased real estate taxes, primarily attributable to stabilizing developments and higher levy rates in select markets.
- Closed the previously-announced acquisition of Park Place Apartments, deepening our holdings in the Minneapolis-St. Paul MSA, and, subsequent to quarter end, acquired Dylan Apartments in Denver, CO, our inaugural investment in another top-25 MSA. Both Minneapolis-St. Paul and Denver have healthy and diverse economies and will be key markets in IRET's push to achieve portfolio growth and improve operating efficiency.
- Closed the acquisition of Park Place using capital from our unsecured line of credit in anticipation of pending non-core asset sales. Accordingly, the quarter-end debt balances increased over the first quarter. As dispositions occur during the remainder of the fiscal year, we expect to use a portion of the sales proceeds to pay down debt.
- Sold $105.4 million of commercial and non-core multifamily assets, including $63.4 million during the quarter and $42.0 million subsequent to quarter-end, and used the proceeds to deploy into targeted multifamily acquisitions.
- Announced on November 30, 2017, that we signed an agreement to sell 28 healthcare properties and one office property for $417.5 million. While the transaction is subject to standard contingencies, upon closing, IRET will have substantially completed the transformation first announced in fiscal year 2016 to become a focused multifamily REIT. The sale of these assets will be used to fund future multifamily acquisitions and reduce debt.
- Issued 4,118,460 shares of 6.625% Series C preferred shares for gross proceeds of $103.0 million and redeemed all 4,600,000 shares of 7.95% Series B preferred shares for an aggregate cost, including accrued dividends, of $115.8 million, which will result in a reduction of $2.3 million in annual preferred dividend payments.
- Increased the commitments to our line of credit by $50 million and, subsequent to quarter-end, entered into a $70 million unsecured term loan.
Acquisitions
We added one new property to our portfolio during the quarter:
| | | | | | | | (in millions) | | |
| | | | | Total | | | Total | | % Leased |
| Property Name | | Location | | Units | | | Cost | | as of 10/31/17 Werbung Mehr Nachrichten zur Investors Real Estate Trust SBI Aktie kostenlos abonnieren
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