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SITE Centers (SITC) Q1 OFFO Beats, NOI Falls, Shares Down

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Shares of SITE Centers Corp. SITC tanked 1.3% during Apr 22 regular trading session, after the company reported a year-over-year decline in operating funds from operations (OFFO) per share for first-quarter 2021.

In fact, the retail REIT reported first-quarter 2021 OFFO per share of 28 cents, which surpassed the Zacks Consensus Estimate of 23 cents. The reported figure, however, declined 12.5% year over year.

The adverse impacts of the COVID-19 pandemic as well as reduced interest income and joint venture fees, owing to the termination of joint ventures in the previous year, marred results. Nonetheless, first-quarter results include $5 million of net revenues related to prior periods majorly from cash-basis tenants.

The company generated revenues of $119.99 million in the first quarter, outpacing the Zacks Consensus Estimate of $109.82 million. Also, the top line improved 5.18% year over year.

Per management, “we had an excellent start to the year with another robust quarter of leasing, over $200 million of growth capital raised and continued improvements in both rent collection and deferral repayment trends”.

Quarter in Detail

Same-store net operating income declined 2.1% on a pro-rata basis in the first quarter, excluding redevelopment. The company reported a leased rate of 91.4% as of Mar 31 compared with the prior-year quarter’s figure of 92.9% on a pro-rata basis.

Annualized base rent per occupied square foot was $18.39 on a pro-rata basis as of Mar 31, 2021, down from $18.49 as of Mar 31, 2020. The company, on a pro-rata basis, generated new and renewal leasing spreads of 14.9% and -4.2%, respectively, in the March-end quarter.

Portfolio Activity

The company along with its partners disposed of a parcel of undeveloped land in Richmond Hill, Ontario, for net proceeds of $22.1 million at the company’s share, after accounting for customary closing costs and foreign currency translation.

Balance Sheet

SITE Centers exited the first quarter with $190.8 million in cash, up from 69.7 million as of Dec 31, 2020.

Outlook

The company expects 2021 OFFO per share between 94 cents and $1.02 compared with 90 cents to $1 mentioned earlier. The Zacks Consensus Estimate for the same is pegged at 96 cents.

COVID-19 Update

As of Apr 16, all of the company’s properties were open, while 99% of tenants (at the company’s share and based on average base rents) were open for business.

As of the same date, SITE Centers collected about 96% of rents for the first quarter. Rent collection for the previous three quarters also improved.

Rent deferral agreements with tenants, which remained unpaid, represented 1% of first-quarter 2021 rents, 1% of fourth-quarter 2020 rents, 8% of third-quarter 2020 rents and 6% of second-quarter 2020 rents.

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

SITE CENTERS CORP. Price, Consensus and EPS Surprise

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

We now look forward to the earnings releases of other REITs like Digital Realty Trust, Inc. DLR,Cousins Properties CUZ, and CubeSmart CUBE. All three companies are slated to report first-quarter earnings on Apr 29.

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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Cousins Properties Incorporated (CUZ) : Free Stock Analysis Report

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SITE CENTERS CORP. (SITC) : Free Stock Analysis Report

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