IRET announced today its financial and operating results for the quarter ended March 31, 2020. The tables below show Net Income (Loss), Funds from Operations (“FFO”), and Core FFO, all on a per share basis, for the three months ended March 31, 2020; Same-Store Revenues, Expenses, and Net Operating Income (“NOI”) over comparable periods; and Same-Store Weighted-Average Occupancy for the three months ended March 31, 2020, December 31, 2019, and March 31, 2019. We have also included certain operating results for the month ended April 30, 2020.
Three Months Ended March 31, |
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Per Share |
2020 |
2019 |
||||||
Net Income (Loss) – diluted |
$ |
(0.67) |
$ |
(0.54) |
||||
FFO – diluted |
$ |
0.66 |
$ |
0.77 |
||||
Core FFO – diluted |
$ |
0.90 |
$ |
0.77 |
Year-Over-Year Comparison |
Sequential Comparison |
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Same-Store Results |
1Q20 vs. 1Q19 |
1Q20 vs. 4Q19 |
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Revenues |
3.9 |
% |
1.6 |
% |
||
Expenses |
4.0 |
% |
5.7 |
% |
||
NOI |
3.8 |
% |
(1.4) |
% |
Three months ended |
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Same-Store Results |
March 31, 2020 |
December 31, 2019 |
March 31, 2019 |
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Weighted Average Occupancy |
95.4 |
% |
94.0 |
% |
95.6 |
% |
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NOI, FFO, and Core FFO are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, refer to “Non-GAAP Financial Measures and Reconciliations” below.
First Quarter 2020 Highlights
Acquisitions and Dispositions
During the first quarter, we acquired Ironwood Apartments, for an aggregate purchase price of $46.3 million, of which $28.6 million was paid in cash and $17.7 million from payoff of a note receivable. We did not have any dispositions during the first quarter of 2020.
Balance Sheet
At the end of the first quarter, we had $193.3 million of total liquidity on our balance sheet, including $167.0 million available under our line of credit.
2020 Financial Outlook
On March 27, 2020, we issued a press release, which was also filed on a Current Report on Form 8-K, indicating that, in light of the impact of the coronavirus (COVID-19) on our business and results of operations, we were withdrawing our 2020 Financial Outlook. We will not be providing a 2020 Financial Outlook at this time.
Operations Update
Our operating results for the month ended April 30, 2020, included the following:
COVID-19 Developments
The effects of the COVID-19 pandemic, including the associated economic disruptions, has had a profound impact on our business since March 2020 as the pandemic spread to many of the communities in which we own properties. Our first priority continues to be the health and well-being of our residents, team members, and the communities we serve. We are working to care for our team members and modify our practices so that we can continue to service our communities while requiring social distancing and remote work arrangements where possible.
In order to minimize the impact of COVID-19 on our team, residents, and communities, we undertook the following measures in March 2020:
COVID-19 will continue to have a significant impact on our business for the foreseeable future. Ongoing social distancing requirements and stay-at-home directives affect the daily lives of our employees and residents and impact our ability to show apartments homes to potential residents, while the ongoing loss of jobs and rising unemployment levels affect the ability of certain our of residents to pay rent on a timely basis. Many experts predict that the outbreak will trigger, or has already triggered, a global recession.
The COVID-19 pandemic could have material and adverse effects on our financial condition, results of operations, and cash flows, including the following effects:
The extent to which the COVID-19 pandemic impacts our operations and those of our residents will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity, and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.
For a more detailed description of the risks and uncertainties affecting our business, see the risk factors presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as updated under Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (which was filed with the SEC on May 11, 2020), and in our subsequent current and periodic reports filed with the Securities and Exchange Commission at www.sec.gov.
Upcoming Events
On May 19, 2020, at 9:00 a.m. CDT, we will be holding our 2020 Annual Meeting of Shareholders, which will be our 50th Annual Meeting. Due to the effects of COVID-19, this will be a virtual-only meeting. To participate in and/or vote at the virtual Annual Meeting, shareholders should pre-register by 11:59 p.m. EDT on May 16, 2020 at http://viewproxy.com/iret/2020. Shareholders must enter the control number found in their proxy materials, either on the Notice of Internet Availability of Proxy Materials, the proxy card, or the voting instruction form. IRET urges shareholders to vote and submit proxies in advance of the Annual Meeting by one of the methods described in the proxy materials for the Annual Meeting. To participate in the Annual Meeting, shareholders will need the event passcode provided to them after they have successfully registered. The Annual Meeting will begin promptly at 9:00 a.m. CDT. We encourage shareholders to access the Annual Meeting prior to the start time. Online access will begin at 8:45 a.m. CDT.
Quarterly Distributions
Effective March 5, 2020, IRET’s Board of Trustees declared a regular quarterly distribution of $0.70 per share/unit, which was paid on April 9, 2020, to common shareholders and unitholders of record on March 31, 2020. IRET has paid cash dividends to common shareholders and unitholders every quarter since its initial dividend payment in 1971.
Effective March 5, 2020, IRET’s Board of Trustees also declared a distribution of $0.4140625 per share on the 6.625% Series C Cumulative Redeemable Preferred Shares , which was paid on March 31, 2020, to holders of record on March 16, 2020. Series C preferred share distributions are cumulative and payable quarterly in arrears at an annual rate of $1.65625 per share.
To maintain our qualification as a REIT, we must pay dividends to our shareholders aggregating annually at least 90% of our REIT taxable income, excluding net capital gains. Under a separate requirement, we must distribute 100% of net capital gains or pay a corporate level tax in lieu thereof. While we have historically satisfied this distribution requirement by making cash distributions to our shareholders, if our cash flow becomes restricted due to the economic disruption caused by COVID-19 or other factors, we may choose to satisfy this requirement by making distributions of other property, including our own common shares as allowed by the REIT rules.
Earnings Call
Live webcast and replay: http://ir.iretapartments.com |
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Live Conference Call |
Conference Call Replay |
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Tuesday, May 12, 2020, at 11:00 AM ET |
Replay available until May 26, 2020 |
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USA Toll Free Number |
1-877-509-9785 |
USA Toll Free Number |
1-877-344-7529 |
|
International Toll Free Number |
1-412-902-4132 |
International Toll Free Number |
1-412-317-0088 |
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Canada Toll Free Number |
1-855-669-9657 |
Canada Toll Free Number |
1-855-669-9658 |
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Conference Number |
10142637 |
Supplemental Information
Supplemental Operating and Financial Data for the quarter ended March 31, 2020 included herein (“Supplemental Information”), is available in the Investors section on IRET’s website at www.iretapartments.com or by calling Investor Relations at 701-837-7104.
About IRET
IRET is a real estate company focused on the ownership, management, acquisition, redevelopment, and development of apartment communities. As of March 31, 2020, we owned interests in 70 apartment communities consisting of 12,135 apartment homes. IRET’s common shares and Series C preferred shares are publicly traded on the New York Stock Exchange (NYSE symbols: “IRET” and “IRET PC,” respectively).
Forward-Looking Statements
Certain statements in this press release and the accompanying Supplemental Operating and Financial Data are based on our current expectations and assumptions, and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial conditions, or plans expressed or implied by the forward-looking statements. Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be achieved. Such risks, uncertainties, and other factors that might cause such differences include, but are not limited to those risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, 2019, in our subsequent quarterly reports on Form 10-Q, including the COVID-19 risk factors set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, and in other public reports. We assume no obligation to update or supplement forward-looking statements that become untrue due to subsequent events.
Investor Relations Contact Information
Emily Miller
Investor Relations
Phone: 701-837-7104
E-mail: IR@iret.com