Key Highlights

  • Consensus EPS of 0.03 compares with diluted EPS of 0.02 for the second quarter, against 1.23 last year.
  • Core FFO guidance of USD 1.92 to 1.96 was reaffirmed, and NAREIT FFO guidance is USD 2.01 to 2.07.
  • Management guides full-year same-property NOI growth of 3.25% to 4.25% and net investment of approximately USD 300 million.
  • Leased occupancy was 96.2%, down 20 basis points sequentially, after the vacancy of a former anchor tenant.

InvenTrust Properties (NYSE:IVT) reports third-quarter results on Tuesday, Oct. 27, after the market closes. Consensus stands at EPS of 0.03 on revenue of USD 84.18 million, and the company has a market capitalization of USD 2.35 billion.

InvenTrust Properties owns multitenant retail properties, with a focus on Sun Belt markets. In the second quarter, it reported revenues of USD 82,830 thousand against USD 73,551 thousand and net income of USD 1,369 thousand against USD 95,942 thousand.

Estimates Against Company Guidance

The revenue estimate of USD 84.18 million is above the USD 82,830 thousand reported for the second quarter. The EPS estimate of 0.03 is above the diluted EPS of 0.02 reported, which compared with 1.23 a year earlier.

Management reported NAREIT FFO of USD 39.8 million, or USD 0.50 per diluted share, and Core FFO of USD 0.48 per diluted share. Full-year guidance is USD 2.01 to USD 2.07 for NAREIT FFO, raised on noncash revenue from recent acquisitions, and USD 1.92 to USD 1.96 for Core FFO, which was reaffirmed.

What Management Guided and What It Left Open

Management guided same-property NOI growth to a range of 3.25% to 4.25% for the year and net investment to approximately USD 300 million, citing an active pipeline in core and emerging Sun Belt markets. It described same-property NOI growth as partially offset by a 50 basis point temporary occupancy impact from the former anchor vacancy.

Management said that on a quarterly cadence it expects same-property NOI growth to be somewhat uneven for the rest of the year, noting operating expense timing in the third quarter. It did not give a quarterly figure for that unevenness.

Management also said the 21% restaurant exposure carries the highest tenant turnover among categories.

Changes in the Latest Results

Net income was USD 1,369 thousand against USD 95,942 thousand, and the prior-year period included a USD 90.9 million gain on the sale of investment properties. Operating expenses were USD 70,162 thousand against USD 61,114 thousand.

Same-property NOI was USD 48.5 million, up 4.1%. Blended comparable lease spreads were 8.5%, with new leases at 18.7% and renewals at 7.9%, and annualized base rent was USD 20.94 per square foot. Small shop occupancy was 93.2% and anchor occupancy was 98.1%.

Acquisitions totaled USD 290 million across six properties and one outparcel year-to-date, including USD 132.6 million in the second quarter. A USD 250 million private placement of senior notes was completed in June, and total liquidity was USD 489.3 million.

Net debt-to-adjusted EBITDA was 5.3x, and the quarterly dividend was USD 0.25 per share, which management described as a 5% increase over last year.

NOI was USD 57,544 thousand against USD 49,900 thousand. Interest expense, net, was USD 11,328 thousand against USD 8,346 thousand, and general and administrative expense was USD 8,942 thousand against USD 8,706 thousand.

Total assets were USD 3,034,455 thousand against USD 2,788,647 thousand at the prior year-end, and debt, net, was USD 1,094,796 thousand against USD 825,881 thousand. The weighted average interest rate was 4.36%, with a weighted average term to maturity of 4.3 years.

Figures to Follow in the Release

NAREIT FFO and Core FFO per share against the 2.01 to 2.07 and 1.92 to 1.96 guidance ranges are the first comparisons. Other markers are leased occupancy against 96.2%, lease spreads and same-property NOI growth.