Latest news with #AFFO
Yahoo
29-05-2025
- Business
- Yahoo
Oppenheimer Analyst Lists Digital Realty Trust (NYSE:DLR) as Major Beneficiary of AI Megatrend
Oppenheimer recently initiated coverage of Digital Realty Trust, Inc. (NYSE:DLR) with an Outperform rating and $200 price target. Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation, and interconnection solutions. In an investor note, the advisory noted that Digital Realty was one of the largest and now most diversified datacenter operators with over 300 locations and capacity of 2.8GW, 5% of the global total. In Oppenheimer's opinion, Digital Realty was well positioned as a major beneficiary of AI and cloud megatrends with strong demand driving improved volumes and pricing. High demand datacenter clusters like Northern Virginia were operating at virtually 100% utilization, and the advisory also pointed out that the stock was trading below its five-year revenue multiple and in line on AFFO, despite the accelerating growth. A close-up view of a technician installing a server in the data center facility, representing the reliable services provided by the company. The firm recently launched its first US Hyperscale Data Center Fund, targeting $2.5 billion in equity commitments to support approximately $10 billion of hyperscale investments. The fund includes five operating assets and four development land sites, with $1.7 billion raised in the first closing. While we acknowledge the potential of DLR, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than DLR and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: 33 Most Important AI Companies You Should Pay Attention To and 30 Best AI Stocks to Buy According to Billionaires Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16-05-2025
- Business
- Yahoo
PRO Real Estate Investment Trust (TSX:PRV. ...
Property Revenue: $25.7 million for Q1, slightly higher year over year. Net Operating Income (NOI): $14.9 million, stable compared to last year. Same Property NOI: $14.1 million, up 5% year over year. Net Cash Flows from Operating Activities: $7.4 million, compared to $9.7 million last year. Funds From Operations (FFO): $7.9 million, slightly higher year over year. Basic AFFO Payout Ratio: 93.8% in Q1, compared to 91.6% last year. Total Debt: $495 million, a $1.4 million reduction from last year. Total Debt to Total Assets: Improved to 49.3% from 50.0% at December 31, 2024. Weighted Average Capitalization Rate: Approximately 6.7% as of March 31, 2025. Portfolio Occupancy: Stable at 97.7%, including committed space. Weighted Average In-Place Rent for Industrial Portfolio: $9.92 per square foot, nearly 5% increase year over year. Distribution: Maintained at $3.75 per unit for Q1 2025. Warning! GuruFocus has detected 6 Warning Signs with TSX: Release Date: May 15, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. PRO Real Estate Investment Trust (TSX: reported a stable net operating income despite owning eight fewer properties compared to the previous year. The acquisition of six industrial properties in Winnipeg is expected to be accretive to AFFO per unit and strengthens their presence in the region. Same property NOI increased by 5%, driven by strong performance in the industrial portfolio. The company achieved robust leasing spreads, renewing 53.3% of 2025 GLA at an average spread of 34.1%. Debt management improved, with total debt to total assets reduced to 49.3% from 50.0% at the end of 2024. Net cash flows from operating activities decreased to $7.4 million from $9.7 million in the same quarter last year. The basic AFFO payout ratio increased to 93.8% from 91.6% last year, indicating higher costs relative to income. There is a potential risk with a single tenant not renewing a lease for a 176,000 square foot property in Quebec, which could impact Q4 results. The weighted average interest rate on maturing mortgages is relatively low, posing a refinancing challenge in the current higher interest rate environment. The acquisition strategy involves complex transactions, which may not always align with stock price expectations, posing a risk of overpaying for assets. Q: Gordy, regarding the strategic opportunity with Parkit, how does PROREIT plan to leverage this relationship? Does it involve acquiring more of their industrial properties? A: Gordon Lawlor, President and CEO, explained that Parkit has a significant portfolio of industrial properties in key areas like Winnipeg and Ottawa. The relationship is seen as an opportunity to manage stabilized assets and potentially collaborate on future deals, but specifics are still being developed. Q: Alison, with the upcoming debt maturities, how is PROREIT planning to handle refinancing, especially given the low existing rates? A: Alison Schafer, CFO, stated that the maturities are spread throughout 2026, with strong-performing industrial assets backing them. The company anticipates no issues in refinancing and expects potential for up-financing, with current market rates being favorable. Q: Mark, how does the accretion from the market transaction compare to the growth from future leases? A: Gordon Lawlor noted that the transaction is accretive on an AFFO per unit basis and has significant under-market rent potential, making it beneficial in the first few years and aligning with their growth strategy. Q: Brad, regarding the Parkit relationship, do you foresee opportunities to manage some of their assets and increase fee income? A: Gordon Lawlor mentioned that while formal management agreements haven't been discussed, the relationship opens up potential opportunities for collaboration and mutual benefit, especially in overlapping markets. Q: Zachary, what is the current vendor appetite for units in the acquisition pipeline, and is this a one-off strategy? A: Gordon Lawlor indicated that while there are tax synergies for sellers, these transactions are complex. The recent deal has sparked interest, but achieving a satisfactory price for both stock and assets remains challenging. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
06-05-2025
- Business
- Yahoo
Realty Income Corp (O) Q1 2025 Earnings Call Highlights: Strong European Investments and Steady ...
AFFO per Share: $1.06, representing a year-over-year growth of 2.9%. Total Operational Returns: 8.9% for the quarter. Investment Volume: $1.4 billion at a 7.5% weighted average initial cash yield. US Investments: $479 million at an 8.3% weighted average initial cash yield. European Investments: $893 million at a 7% average initial cash yield. Portfolio Occupancy: 98.5%, approximately 20 basis points below the prior quarter. Rent Recapture Rate: 103.9% across 194 leases. Properties Sold: 55 properties for total net proceeds of $93 million. Net Debt to Annualized Pro Forma Adjusted EBITDA: 5.4x. Fixed Charge Coverage Ratio: 4.7x. Variable Rate Debt Exposure: Just over 6% of outstanding debt principal. 2025 AFFO per Share Outlook: $4.22 to $4.28. 2025 Investment Deployment Target: Approximately $4 billion. Warning! GuruFocus has detected 7 Warning Signs with O. Release Date: May 05, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Realty Income Corp (NYSE:O) reported a year-over-year growth of 2.9% in AFFO per share, reaching $1.06. The company achieved a total operational return of 8.9% for the quarter, supported by a 6% dividend yield. Realty Income Corp (NYSE:O) invested $1.4 billion at a 7.5% weighted average initial cash yield, with significant investments in Europe. The company maintained a high portfolio occupancy rate of 98.5%, slightly above the historical median. Realty Income Corp (NYSE:O) successfully closed a $600 million 10-year unsecured bond offering and expanded its multicurrency unsecured credit facility to $5.38 billion. Portfolio occupancy decreased by approximately 20 basis points from the prior quarter. The company anticipates a potential rent loss of 75 basis points for 2025, primarily from properties acquired through prior M&A transactions. Realty Income Corp (NYSE:O) faces challenges in finding suitable risk-adjusted investment opportunities in the US compared to Europe. The company is cautious about increasing its investment guidance due to ongoing market uncertainties. Realty Income Corp (NYSE:O) experienced a slight decrease in rent recapture rate due to specific asset types, such as theaters. Q: Can you discuss the investment activity in Europe during the first quarter and how it compares to opportunities in the US? A: Sumit Roy, President and CEO, explained that 65% of the total investment volume came from Europe, focusing on retail parks in the UK and Ireland. These investments were compelling due to below-market rents and acquisition costs well below replacement costs. In contrast, while there were opportunities in the US, the credit risks associated with higher-yielding investments were not as favorable. Q: The rent recapture rate was 103.9%, but there was a slight decrease in re-leasing to the same tenants. Can you explain this? A: Sumit Roy noted that the decrease was a one-off situation, primarily due to three theater assets that affected the overall rate. However, the majority of renewals were still favorable, with a recapture rate of 99.7%. Q: You're 35% of the way to your annual investment guidance after Q1. Why is the guidance unchanged? A: Sumit Roy stated that the unchanged guidance reflects caution due to economic uncertainty. While the first quarter was strong, the company is being deliberate and focused on ensuring appropriate use of equity and maintaining discipline in capital allocation. Q: How is the U.S. Core Plus Fund progressing amid economic volatility? A: Sumit Roy expressed optimism about the fund's progress, noting that Realty Income's unique position and reputation are attracting interest from institutional investors, even in a challenging environment. The fund is seen as a strategic opportunity to broaden capital sources. Q: Can you provide more details on the retail parks in Europe and their potential? A: Sumit Roy highlighted that retail parks were acquired with below-market rents and have seen significant cap rate compression since initial investments. The strategy involves repositioning these assets with new retailers, which could lead to substantial value uplift and rent increases. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Cision Canada
05-05-2025
- Business
- Cision Canada
BTB delivers strong Q1 2025 revenue growth of 5.4% Français
MONTRÉAL , May 5, 2025 /CNW/ - BTB Real Estate Investment Trust (TSX: (" BTB", the " REIT" or the " Trust") announced today its financial results for the first quarter of 2025 ended March 31, 2025 (the " First Quarter"). "The first quarter of 2025 was marked by prudent financial management as we sail through uncertain economic times. Our strategic decisions show strong and consistent results, keeping us aligned with our commitment to operational excellence, strategic growth and financial prudence." says Michel Léonard, President and CEO of BTB. "Our operating results this quarter reflect the strength of our leasing and operational efforts. Our net operating income rose by 8.0% compared to the same period last year, totaling $19.8 M. This increase reflects the impact of operational improvements, higher rent achieved in lease renewals, organic increases in rent for in-place leases and an indemnity payment of $1.0 M received from a tenant who cancelled part of its lease prior to its expiration, which space has already been leased by the Trust. Based on those results, our FFO adjusted rose to 11.1¢ per unit, increasing by 8.8% compared to Q1 2024. Additionally, our rental revenue increased by 5.4% to stand at $34.4 M, with an average rent renewal rate increase of 5.1% during the quarter. Our occupancy rate dipped slightly to 92.5% but remained stable despite a previously announced tenant bankruptcy." SUMMARY OF SIGNIFICANT ITEMS AS AT MARCH 31st, 2025 Total number of properties: 75 Total leasable area: 6.1 million square feet Total asset value: $1.3 billion Market capitalization: $300 million (unit trading price of $3.40 as at March 31, 2025) OPERATIONAL HIGHLIGHTS Periods ended March 31 Qua rter 2025 2024 Occupancy – committed (%) 92.5 % 94.5 % Signed new leases (in 56,628 58,062 Renewed leases at term (in 77,504 91,791 Renewal rate (%) 54.6 % 67.7 % Early lease renewals (in 4,372 3,747 Average lease renewal rate 5.1 % 8.4 % BTB completed a total of 81,876 square feet of lease renewals and 56,628 square feet of new leases for the quarter. The occupancy rate stood at 92.5%, representing a 20 basis points decrease compared to the prior quarter, and a 200 basis points decrease compared to the same period in 2024. The increase in the average renewal rate for the quarter was 5.1%. FINANCIAL RESULTS HIGHLIGHTS Periods ended March 31 Qua rter (in thousands of dollars, except for ratios and per unit data) 2025 2024 $ $ Rental revenue 34,411 32,636 Net operating income (NOI) 19,821 18,360 Net income and comprehensive income 7,608 7,153 Adjusted EBITDA (1) 18,235 17,036 Same-property NOI (1) 19,450 18,121 FFO Adjusted (1) 9,880 8,925 FFO adjusted payout ratio 67.4 % 73.5 % AFFO Adjusted (1) 9,167 7,819 AFFO adjusted payout ratio 72.7 % 83.9 % FINANCIAL RESULTS PER UNIT Net income and comprehensive income 8.6¢ 8.2¢ Distributions 7.5¢ 7.5¢ FFO Adjusted (1) 11.1¢ 10.2¢ AFFO Adjusted (1) 10.3¢ 8.9¢ __________________________________________ (1) Non-IFRS financial measure. See Appendix 1. The referred non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and these measures cannot be compared to similar measures used by other issuers. Rental revenue: Stood at $34.4 million for the quarter, which represents an increase of 5.4% compared to the same quarter of 2024. Net operating income (NOI): Totalled $19.8 million for the quarter, which represents an increase of 8.0% compared to the same quarter of 2024. The increase is driven by : (1) a partial lease cancellation payment of $1.0 million from a tenant in the suburban office segment which space has already been leased by the Trust; (2) operating improvements, higher rent renewal rates, and increases in rental spreads for in-place leases ($0.3 million); and (3) the new Winners/HomeSense lease which begun in February 25, 2025 ($0.1 million). Net income and comprehensive income: Totalled $7.6 million, which represents an increase of 6.4% or $0.5 million. The result for the quarter is affected by: (1) an increase in NOI of $1.5 million; and (2) a $0.5 million decrease in administrative expenses which are partly offset by (3) a $0.6 million increase in net financial expenses before fair value adjustments; and (4) a $1.1 million non-cash loss in the net adjustment of the fair value of derivative financial instruments. Same-property NOI (1): For the quarter, the same-property NOI increased by 7.3% compared to the same period in 2024. FFO adjusted per unit (1): Was 11.1¢ per unit for the quarter compared to 10.2¢ per unit for the same period in 2024, representing an increase of 0.9¢ per unit or 8.8%. The increase is explained by the previously outlined increase in NOI, decrease in administrative expenses and increase in net financial expenses before fair value adjustments. FFO adjusted per unit is negatively impacted by an increase in weighted average number of units outstanding of 1.3 million units compared to the same period in 2024. To nullify this dilution, the Trust suspended the distribution reinvestment plan ("DRIP") on February 24, 2025. FFO adjusted payout ratio (1): Was 67.4% for the quarter compared to 73.5% for the same period in 2024, a decrease of 6.1%. AFFO adjusted per unit (1): Was 10.3¢ per unit for the quarter compared to 8.9¢ per unit for the same period in 2024, representing an increase of 1.4¢ per unit or 15.7%, in line with the increase of FFO adjusted. AFFO adjusted payout ratio (1): Was 72.7% for the current quarter compared to 83.9% for the same period in 2024, a decrease of 11.2%. ________________________________ (1) Non-IFRS financial measure. See Appendix 1. The referred non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and these measures cannot be compared to similar measures used by other issuers. BALANCE SHEET AND LIQUIDITY HIGHLIGHTS Periods ended March 31 Quarters (in thousands of dollars, except for ratios and per unit data) 2025 2024 $ $ Total assets 1,264,459 1,229,194 Total debt ratio (1) 57.7 % 58.3 % Mortgage debt ratio (2) 52.1 % 51.3 % Weighted average interest rate on mortgage debt 4.35 % 4.40 % Market capitalization 299,979 275,102 NAV per unit (1) 5.58 5.47 Debt metrics: BTB ended the quarter with a total debt ratio (1) of 57.7%, recording a decrease of 20 basis points compared to December 31, 2024. The Trust ended the quarter with a mortgage debt ratio (1) of 52.1%, a decrease of 70 basis points compared to December 31, 2024. Liquidity position: The Trust held $5.5 million of cash at the end of the quarter and $25.2 million is available under its credit facilities. (3) Debentures: On January 23, 2025, the Trust issued Series I convertible, unsecured, subordinated debentures bearing 7.25% interest payable semi-annually and maturing on February 28, 2030, in the amount of $40.25 million. The Serie I debentures are convertible at the holder's option at any time before February 28, 2030, at a conversion price of $4.10 per unit. On February 24, 2025, the Trust fully redeemed and paid at maturity the Series H convertible debentures at their nominal value of $19.9 million. Distribution reinvestment plan ("DRIP"): On February 24, 2025, the Trust suspended the distribution reinvestment plan ("DRIP"). Until further notice, unitholders who were enrolled in the DRIP will automatically receive distribution payments in the form of cash. Computershare Trust Company of Canada, as administrator of the DRIP, has already or will forward a notice and related documentation to all current DRIP participants. ___________________________________________________ (1) Non-IFRS financial measure. See Appendix 1. The referred non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and these measures cannot be compared to similar measures used by other issuers. (2) This is a non-IFRS financial measure. The mortgage debt ratio is calculated by dividing the mortgage loans outstanding by the total gross value of the assets of the Trust less cash and cash equivalents. (3) Credit facilities is a term used that reconciles with the bank loans as presented and defined in the Trust's consolidated financial statements and accompanying notes. QUARTERLY CALL INFORMATION Management will hold a conference call on Tuesday, May 6 th, 2025, at 9 am, Eastern Time, to present BTB's financial results and performance for the first quarter of 2025. The media and all interested parties may attend the call-in listening mode only. Conference call operators will coordinate the question-and-answer period (from analysts only) and will instruct participants regarding the procedures during the call. The audio recording of the conference call will be available via playback until May 13th, 2025, by dialing: 1-289-819-1450 (local) or, 1-888-660-6345 (toll free) and by entering the following access code: 68817 # ABOUT BTB BTB is a real estate investment trust listed on the Toronto Stock Exchange. BTB REIT invests in industrial, suburban office and necessity-based retail properties across Canada for the benefit of their investors. As of today, BTB owns and manages 75 properties, representing a total leasable area of approximately 6.1 million square feet. People and their stories are at the heart of our success. For more detailed information, visit BTB's website at FORWARD-LOOKING STATEMENTS This press release may contain forward-looking statements with respect to BTB. These statements generally can be identified by the use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intend", "believe" or "continue" or the negative thereof or similar variations. The actual results and performance of BTB could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulation, and the factors described from time to time in the documents filed by BTB with the securities regulators in Canada. The cautionary statements qualify all forward-looking statements attributable to BTB and persons acting on their behalf. Unless otherwise stated or required by applicable law, all forward-looking statements speak only as of the date of this press release. APPENDIX 1: RECONCILIATION OF NON-IFRS MEASURES Non-IFRS Financial Measures Certain terms used in this press release are listed and defined in the table hereafter, including any per unit information if applicable, are not measures recognized by International Financial Reporting Standards ("IFRS") and do not have standardized meanings prescribed by IFRS. Such measures may differ from similar computations as reported by similar entities and, accordingly, may not be comparable to similar measures. Explanations on how these non-IFRS financial measures provide useful information to investors and additional purposes, if any, for which the Trust uses these non- IFRS financial measures, are also included in the table hereafter. Securities regulations require that non-IFRS financial measures be clearly defined and that they not be assigned greater weight than IFRS measures. The referred non-IFRS financial measures, which are reconciled to the most similar IFRS measure in the table thereafter if applicable, do not have a standardized meaning prescribed by IFRS and these measures cannot be compared to similar measures used by other issuers. NON-IFRS MEASURE DEFINITION Funds from Operations ("FFO") and FFO Adjusted FFO is a non-IFRS financial measure used by most Canadian real estate investment trusts based on a standardized definition established by REALPAC in its January 2022 White Paper ("White Paper"). FFO is defined as net income and comprehensive income less certain adjustments, on a proportionate basis, including: (i) fair value adjustments on investment properties, class B LP units and derivative financial instruments; (ii) amortization of lease incentives; (iii) incremental leasing costs; and (iv) distribution on class B LP units. FFO is reconciled to net income and comprehensive income, which is the most directly comparable IFRS measure. FFO is also reconciled with the cash flows from operating activities, which is an IFRS measure. FFO Adjusted is also a non-IFRS financial measure that starts with FFO and remove the impact of non-recurring items such as transaction cost on acquisitions and dispositions of investment properties and early repayment fees. The Trust believes FFO and FFO Adjusted are key measures of operating performance and allow the investors to compare its historical performance. Adjusted Funds from Operations ("AFFO") and AFFO Adjusted AFFO is a non-IFRS financial measure used by most Canadian real estate investment trusts based on a standardized definition established by REALPAC in its White Paper. AFFO is defined as FFO less: (i) straight- line rental revenue adjustment; (ii) accretion of effective interest; (iii) amortization of other property and equipment; (iv) unit-based compensation expenses; (v) provision for non-recoverable capital expenditures; and (vi) provision for unrecovered rental fees (related to regular leasing expenditures). AFFO is reconciled to net income and comprehensive income, which is the most directly comparable IFRS measure. AFFO is also reconciled with the cash flows from operating activities, which is an IFRS measure. AFFO Adjusted is also a non-IFRS financial measure that starts with AFFO and removes the impact of non-recurring items such as transaction costs on acquisitions and dispositions of investment properties and early repayment fees. The Trust considers AFFO and AFFO Adjusted to be useful measures of recurring economic earnings and relevant in understanding its ability to service its debt, fund capital expenditures and provide distributions to unitholders. NON-IFRS MEASURE DEFINITION FFO and AFFO per unit and FFO adjusted and AFFO adjusted per unit FFO and AFFO per unit and FFO adjusted and AFFO adjusted per unit are non-IFRS financial measures used by most Canadian real estate investment trusts based on a standardized definition established by REALPAC in its White Paper. These ratios are calculated by dividing the FFO, AFFO, FFO adjusted and AFFO adjusted by the Weighted average number of units and Class B LP units outstanding. The Trust believes these metrics to be key measures of operating performances allowing the investors to compare its historical performance in relation to an individual per unit investment in the Trust. FFO and AFFO payout ratios and FFO Adjusted and AFFO Adjusted payout ratios FFO and AFFO payout ratios and FFO Adjusted and AFFO Adjusted payout ratios are non-IFRS financial measures used by most Canadian real estate investment trusts based on a standardized definition established by REALPAC in its White Paper. These payout ratios are calculated by dividing the actual distributions per unit by FFO, AFFO and FFO Adjusted and AFFO Adjusted per unit in each period. The Trust considers these metrics a useful way to evaluate its distribution paying capacity. Total debt ratio Total debt ratio is a non-IFRS financial measure of the Trust financial leverage, which is calculated by taking the total long-term debt less cash divided by total gross value of the assets of the Trust less cash. The Trust considers this metric useful as it indicates its ability to meet its debt obligations and its capacity for future additional acquisitions. Total Mortgage Debt Ratio Mortgage debt ratio is a non-IFRS financial measure of the Trust financial leverage, which is calculated by taking the total mortgage debt less cash divided by total gross value of the assets of the Trust less cash. The Trust considers this metric useful as it indicates its ability to meet its mortgage debt obligations and its capacity for future additional acquisitions. Interest Coverage Ratio Interest coverage ratio is a non-IFRS financial measure which is calculated by taking the Adjusted EBITDA divided by interest expenses net of financial income (interest expenses exclude early repayment fees, accretion of effective interest, distribution on Class B LP units, accretion of non-derivative liability component of convertible debentures and the fair value adjustment on derivative financial instruments and Class B LP units). The Trust considers this metric useful as it indicates its ability to meet its interest cost obligations for a given period. NON-IFRS FINANCIAL MEASURES – QUARTERLY RECONCILIATION Funds from Operations (FFO) (1) The following table provides a reconciliation of net income and comprehensive income established in accordance with IFRS and FFO (1) for the last eight quarters: 2025 2024 2024 2024 2024 2023 2023 2023 Q-1 Q-4 Q-3 Q-2 Q-1 Q-4 Q-3 Q-2 (in thousands of dollars, except for per unit) $ $ $ $ $ $ $ $ Net income and comprehensive income (IFRS) 7,608 18,847 5,470 7,272 7,153 1,734 15,216 10,846 Fair value adjustment on investment properties - (9,975) (283) - (6) 4,480 (6,481) - Fair value adjustment on Class B LP units 28 (174) 335 (21) 160 (42) (159) (775) Amortization of lease incentives 797 966 807 704 690 641 664 750 Fair value adjustment on derivative financial instruments 868 (760) 2,168 379 (325) 2,396 (584) (763) Leasing payroll expenses 466 739 535 433 591 401 359 327 Distributions – Class B LP units 52 52 52 53 52 52 56 42 Unit-based compensation (Unit price remeasurement) 61 (39) 342 63 409 (11) (87) (232) FFO (1) 9,880 9,656 9,426 8,883 8,724 9,651 8,984 10,195 Transaction costs on disposition of investment properties and mortgage early repayment fees - - - 266 201 37 46 - FFO Adjusted (1) 9,880 9,656 9,426 9,149 8,925 9,688 9,030 10,195 FFO per unit (1) (2) (3) 11.1¢ 10.9¢ 10.7¢ 10.1¢ 10.0¢ 11.1¢ 10.3¢ 11.8¢ FFO Adjusted per unit (1) (2) (4) 11.1¢ 10.9¢ 10.7¢ 10.4¢ 10.2¢ 11.1¢ 10.4¢ 11.8¢ FFO payout ratio (1) 67.4 % 68.8 % 70.0 % 74.3 % 75.2 % 67.5 % 72.9 % 63.8 % FFO Adjusted payout ratio (1) 67.4 % 68.8 % 70.3 % 72.2 % 73.5 % 67.2 % 72.5 % 63.8 % (1) This is a non-IFRS financial measure, refer to appendix 1. (2) Including Class B LP units. (3) The FFO per unit ratio is calculated by dividing the FFO (1) by the Trust's unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period). (4) The FFO Adjusted per unit ratio is calculated by dividing the FFO Adjusted (1) by the Trust's unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period). _____________________________________________ 1 This is a non-IFRS financial measure, refer to page 5 and 6. Adjusted Funds from Operations (AFFO) (1) The following table provides a reconciliation of FFO (1) and AFFO (1) for the last eight quarters: 2025 2024 2024 2024 2024 2023 2023 2023 Q-1 Q-4 Q-3 Q-2 Q-1 Q-4 Q-3 Q-2 (in thousands of dollars, except for per unit) $ $ $ $ $ $ $ $ FFO (1) 9,880 9,656 9,426 8,883 8,724 9,651 8,984 10,195 Straight-line rental revenue adjustment (381) (374) (247) (183) (394) (197) (842) (291) Accretion of effective interest 580 402 391 361 308 310 271 278 Amortization of other property and equipment 18 21 17 17 17 20 33 23 Unit-based compensation expenses 133 247 19 (95) (9) 159 184 237 Provision for non-recoverable capital expenditures (1) (688) (654) (650) (644) (653) (639) (626) (634) Provision for unrecovered rental fees (1) (375) (375) (375) (375) (375) (375) (375) (375) AFFO (1) 9,167 8,923 8,581 7,964 7,618 8,929 7,629 9,433 Transaction costs on disposition of investment properties and mortgage early repayment fees - - - 267 201 37 46 - AFFO Adjusted (1) 9,167 8,923 8,581 8,231 7,819 8,966 7,675 9,433 AFFO per unit (1) (2) (3) 10.3¢ 10.1¢ 9.7¢ 9.1¢ 8.7¢ 10.2¢ 8.8¢ 10.9¢ AFFO Adjusted per unit (1) (2) (4) 10.3¢ 10.1¢ 9.7¢ 9.4¢ 8.9¢ 10.3¢ 8.8¢ 10.9¢ AFFO payout ratio (1) 72.7 % 74.5 % 76.8 % 82.9 % 86.2 % 72.9 % 85.8 % 69.0 % AFFO Adjusted payout ratio (1) 72.7 % 74.5 % 77.2 % 80.2 % 83.9 % 72.6 % 85.3 % 69.0 % (1) This is a non-IFRS financial measure, refer to appendix 1. (2) Including Class B LP units. (3) The AFFO per unit ratio is calculated by dividing the AFFO (1) by the Trust's unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period). (4) The AFFO Adjusted per unit ratio is calculated by dividing the AFFO Adjusted (1) by the Trust's unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period). _______________________________________________ 1 This is a non-IFRS financial measure, refer to page 5 and 6. Debt Ratios The following table summarizes the Trust's debt ratios as at March 31, 2025, and 2024 and December 31, 2024: (in thousands of dollars) March 31, 2025 December 31, 2024 March 31, 2024 $ $ $ Cash and cash equivalents (5,450) (2,471) (1,781) Mortgage loans outstanding (1) 661,874 665,607 630,513 Convertible debentures (1) 36,671 19,576 43,277 Credit facilities 34,276 44,298 44,797 Total long-term debt less cash and cash equivalents (2) (3) 727,371 727,010 716,806 Total gross value of the assets of the Trust less cash and cash equivalents (2) (4) 1,260,313 1,254,818 1,228,643 Mortgage debt ratio (excluding convertible debentures and credit facilities) (2) (5) 52.1 % 52.8 % 51.3 % Debt ratio – convertible debentures (2) (6) 2.9 % 1.6 % 3.5 % Debt ratio – credit facilities (2) (7) 2.7 % 3.5 % 3.6 % Total debt ratio (2) 57.7 % 57.9 % 58.3 % (1) Before unamortized financing expenses and fair value assumption adjustments. (2) This is a non-IFRS financial measure, refer to appendix 1 (3) Long-term debt less free cash flow is a non-IFRS financial measure, calculated as total of: (i) fixed rate mortgage loans payable; (ii) floating rate mortgage loans payable; (iii) Series I debenture capital adjusted with non-derivative component less conversion options exercised by holders; and (iv) credit facilities, less cash and cash equivalents. The most directly comparable IFRS measure to net debt is debt. (4) Gross value of the assets of the Trust less cash and cash equivalent ("GVALC") is a non-IFRS financial measure defined as the Trust total assets adding the cumulated amortization property and equipment and removing the cash and cash equivalent. The most directly comparable IFRS measure to GVALC is total assets. (5) Mortgage debt ratio is calculated by dividing the mortgage loans outstanding by the GVALC. (6) Debt ratio – convertible debentures is calculated by dividing the convertible debentures by GVALC. (7) Debt ratio – credit facilities is calculated by dividing the credit facilities by the GVALC. SOURCE BTB Real Estate Investment Trust
Yahoo
01-05-2025
- Business
- Yahoo
W.P. Carey Inc (WPC) Q1 2025 Earnings Call Highlights: Strong Investment Activity and Solid ...
Investment Activity: $450 million closed year-to-date with a 7.4% initial weighted average cap rate; $275 million closed in Q1. Pipeline Visibility: Approximately $570 million of deals for 2025 with a solid near-term pipeline. AFFO Per Share: $1.17 for Q1, a 2.6% increase year over year. AFFO Guidance: Reaffirmed at $4.82 to $4.92 per share. Contractual Same-Store Rent Growth: 2.4% year over year for Q1. Comprehensive Same-Store Growth: 4.5% year over year for Q1. Operating Property NOI: $16.6 million for Q1. Non-Operating Income: $7.9 million for Q1. Debt Metrics: Debt-to-gross assets at 41%; net debt to adjusted EBITDA at 5.8 times. Dividend: $0.89 per share declared for Q1, representing a 2.9% increase over the prior year. Warning! GuruFocus has detected 9 Warning Signs with WPC. Release Date: April 30, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. W.P. Carey Inc (NYSE:WPC) closed approximately $450 million in investments with a strong initial weighted average cap rate of 7.4%, and expects the average yield over the life of the leases to exceed 9%. The company has a solid pipeline of deals, with visibility into approximately $570 million of transactions for 2025, and expects to close several hundred million dollars of investments in the near term. W.P. Carey Inc (NYSE:WPC) has one of the lowest costs of debt in the net lease sector, with a weighted average cost of debt at 3.2%, supported by refinancing efforts and strategic use of euro-denominated debt. The company is making progress on funding investments through non-core asset sales, having sold assets totaling approximately $130 million in the first quarter, with plans to sell more, including a sizable portfolio of self-storage assets. W.P. Carey Inc (NYSE:WPC) reaffirmed its AFFO guidance range of $4.82 to $4.92 per share, with confidence in potentially exceeding the 3.6% growth implied in the guidance due to strong deal momentum and strategic asset sales. Uncertainty surrounding tariffs remains a key theme, although it has not yet directly impacted W.P. Carey Inc (NYSE:WPC)'s business, it poses a potential risk to tenant margins and the broader economy. The company is cautious about the potential slowdown in the overall flow of new deal launches amid the current climate of uncertainty, which could impact future investment volumes. W.P. Carey Inc (NYSE:WPC) is actively managing exposure to tenants facing credit difficulties, such as Hellweg, which continues to face a challenging operating environment, including weak German consumer spending. The company anticipates potential rent loss from tenant credit events, estimating $15 million to $20 million in potential rent loss, reflecting uncertainty in the macro environment. Occupancy slipped slightly from the previous quarter, driven by partial renewals and some vacancies in European warehouses, which the company is actively working to backfill. Q: Could you provide details on the cap rates, retail industrial split, and US-Europe split for the deals in the pipeline? A: Jason Fox, CEO: We are targeting deals with cap rates in the mid-sevens, consistent across the US and Europe. The pipeline is roughly 50-50 between North America and Europe, with a focus on industrial and warehouse properties. Retail is currently light but expected to pick up. Most deals are sale-leasebacks, a typical theme for us. Q: Regarding dispositions funding acquisitions, is it correct that the acquisition cap rate is 100 basis points under? A: Jason Fox, CEO: Yes, that's roughly our current estimate and is built into our guidance model. We hope to achieve better results, but this is a good number based on current visibility. Q: If acquisitions exceed the high end of your outlook, would you consider selling more self-storage operating assets to fund them? A: Jason Fox, CEO: We have flexibility in our disposition range to fund investments up to or beyond the top end of our guidance. We can lean into selling more storage assets if needed and have other capital sources like the Lineage equity stake and construction loans. Q: How do tariffs impact your US and European exposure, and is there a difference in how they affect your portfolio? A: Jason Fox, CEO: Europe is not a headwind; most European tenants operate domestically, selling into local markets rather than exporting to the US. This insulates them from direct tariff impacts. The US portfolio is similarly focused on regional markets, minimizing exposure to international trade dynamics. Q: Has there been any notable addition or removal from your tenant watch list due to tariffs or credit issues? A: Jason Fox, CEO: While tariffs create uncertainty, we haven't seen direct impacts on our portfolio. The watch list has decreased as two major tenants, Do it Best and Hearthside, have been removed. We focus on our credit loss reserve guidance to model credit risk. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
