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SITE Centers' (SITC) Q3 OFFO In Line, Revenues Miss Estimates

SITE Centers Corp.’s SITC third-quarter 2020 operating funds from operations (OFFO) per share of 23 cents came in line with the Zacks Consensus Estimate. The reported figure, however, declined 23.3% year over year.

The company generated revenues of $95.9 million during the third quarter, missing the Zacks Consensus Estimate of $102.4 million. Also, the top line came in lower than the $109.7 million recorded in the prior year.

The quarterly results reflect healthy rental receipts and annualized base rent. Management noted that SITE Centers has no material near-term maturities and capital commitments. Nevertheless, a year-over-year decline in same-store net operating income (NOI) on a pro-rata basis impacted results.The company’s shares declined 5.5% following the release most likely due to these concerns.

As of Oct 23, SITE Centers collected about 84% of its rental receipts for the third quarter. As of the same date, the company collected 90% of the total rents for October. Further, the collection of rental receipts for the second quarter improved from 64% (as of Jul 24, 2020) to 70% as of Oct 23, 2020. It entered into deferral agreements with tenants representing 16% of second-quarter rents and 8% of third-quarter rents.

As of the same date, all of the company’s properties were open, while 98% of tenants (at the company’s share and based on ABR) were open for business as compared with 45% as of Apr 5, and 92% as of Jul 24.

Quarter in Detail

Same-store NOI declined 17.8% on a pro-rata basis in the third quarter, excluding redevelopment. The company reported a leased rate of 91.9% as of Sep 30, marking a contraction of 230 basis points (bps) from the prior-year quarter’s end, on a pro-rata basis.

Annualized base rent per occupied square foot was $18.53 on a pro-rata basis as of Sep 30, 2020, up 2.7% from $18.04 as of Sep 30, 2019. The company, on a pro-rata basis, generated new and renewal leasing spreads of 12.9% and 5.5%, respectively, in the September-end quarter.

Portfolio Activity

During the third quarter, the company sold an unconsolidated shopping center and a wholly-owned land parcel for a total price of $2.9 million. The company’s share from the sale was $0.7 million.

Balance Sheet

SITE Centers exited the July-September quarter with $57.2 million in cash, up from 16.1 million as of Dec 31, 2019.

Conclusion

On Oct 15, an affiliate of Blackstone transferred its common equity interest in BRE DDR IV to SITE Centers. Consequently, the company closed the BRE DDR IV transaction. With the closure of this transaction, SITE Centers is now the sole owner of the seven properties and the restricted and unrestricted cash, amounting to $8.9 million previously owned by the BRE DDR IV joint venture.

SITE CENTERS CORP. Price, Consensus and EPS Surprise

SITE CENTERS CORP. Price, Consensus and EPS Surprise

SITE CENTERS CORP. price-consensus-eps-surprise-chart | SITE CENTERS CORP. Quote

SITE Centers carries a Zacks Rank #3 (Hold), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITS

Prologis, Inc. PLD reported third-quarter 2020 core FFOper share of 90 cents, beating the Zacks Consensus Estimate of 88 cents. However, results compare unfavorably with the year-ago figure of 97 cents. Excluding net promote income, core FFO per share came in at 92 cents in the quarter, up from the prior-year period’s 79 cents.

Alexandria Real Estate Equities, Inc. ARE delivered third-quarter FFO as adjusted of $1.83 per share, up 4.6% from the year-ago quarter’s $1.75.  The reported figure camein line with the Zacks Consensus Estimate.

Mack-Cali Realty Corporation CLI is slated to reportearnings results on Nov 4.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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