Washington Real Estate Investment Trust : Earnings Release and Supplemental Information FY 2021
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CONTACT: |
1775 Eye Street, NW, Suite 1000 |
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Amy Hopkins |
Washington, DC 20006 |
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Vice President, Investor Relations |
Tel 202-774-3198 |
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E-Mail: [email protected] |
Fax 301-984-9610 |
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www.washreit.com |
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February 17, 2022 |
WashREIT Announces Fourth Quarter and Full Year 2021 Results
Washington Real Estate Investment Trust (“WashREIT” or the “Company”) (NYSE: WRE), a multifamily REIT with properties in the Washington metro area and the Southeast, reported financial and operating results today for the quarter and year ended December 31, 2021:
Full-Year 2021 Financial and Operational Results
- Net income was $16.4 million, or $0.19 per diluted share
- NAREIT FFO was $65.5 million, or $0.77 per diluted share
- Core FFO was $1.06 per diluted share
- Net Operating Income (NOI) was $108.4 million
- Same-storeMultifamily NOI decreased by 1.8% for the year and 0.9% on a cash basis for the year
- Same-storeOther NOI increased by 0.6% for the year
Fourth Quarter 2021 Financial and Operational Results
- Net loss was $6.8 million, or $0.08 per diluted share
- NAREIT FFO was $13.3 million, or $0.16 per diluted share
- Core FFO was $0.17 per diluted share
- NOI was $29.1 million
- Same-storeMultifamily NOI increased by 4.2% year-over-year and 8.0% on a cash basis
- Effective new Lease Rate Growth was 8.7%, effective renewal Lease Rate Growth was 8.2%, and effective blended Lease Rate Growth was 8.4% during the quarter for our same-store portfolio
- Retention increased to 72% compared to 51% in the fourth quarter of 2020 driven by a reduction in move- outs related to home purchases and transfers within our apartment communities
- Same-storeAverage Occupancy increased 1.9% from the fourth quarter of 2020 to 95.9%, and same-store Ending Occupancy increased 1.7% from the fourth quarter of 2020 to 96.0%
- Trove stabilized during the fourth quarter and ended the year with occupancy of 94.5%. Trove is expected to add approximately $7.0 million of NOI in 2022 and $8.0 million in 2023
YTD Highlights
- Atlanta acquisitions are performing very well and are contributing NOI growth that is above our initial expectations
- Same-storeportfolio is off to a strong start in 2022 with increasing lease rate momentum supported by strong retention and occupancy
- New lease executions increased approximately 10.7% for our same-store communities and 22.4% for our Atlanta communities on an effective average year-to-date basis
- Renewal lease executions increased 9.7% for our same-store communities and 13.7% for our Atlanta communities on an effective average year-to-date basis
Washington Real Estate Investment Trust
Transformation Update
- Completed the acquisitions of 860 South and 900 Dwell, two adjacent garden style apartment communities in Stockbridge, GA, for a total of $106 million on November 19, 2021. We believe that significant economies of scale can be achieved from operating and managing these properties together, and we are focused on unlocking that value. We will refer to these properties collectively as Assembly Eagles Landing.
- Completed the acquisition of Carlyle of Sandy Springs, a garden style community located in Sandy Springs, GA, for $106 million on February 1, 2022.
Liquidity Position
- Available liquidity was approximately $930 million as of December 31st, consisting of the entire capacity under the Company’s $700 million revolving credit facility and cash on hand
- The Company has no secured debt and no scheduled debt maturities until July 2023
- During the fourth quarter, issued 1,611,618 common shares through the Company’s At-the-Market (ATM) program at an average share price of $25.49 for gross proceeds of $41.1 million. Subsequent to year end, the Company issued another 1,032,286 common shares through the ATM program at an average share price of $26.27 for gross proceeds of $27.1 million, for a combined total of 2,643,904 common shares for gross proceeds of approximately $68.2 million.
“Our 2021 results reflect our transformation into multifamily, which is the asset class we identified as having the best long term growth prospects,” said Paul T. McDermott, President and CEO. “We continue to make progress on our geographic expansion and have deployed approximately 60% of our commercial sale net proceeds and are in process on multiple opportunities that would improve our NOI growth trajectory. We expect to deploy the remainder of the net sale proceeds from our commercial portfolio sales by early in the second quarter of 2022. We believe we will continue to execute on opportunities that fit our portfolio strategies and to create increasing long-term value for our shareholders.”
Fourth Quarter Operating Results
- Multifamily Same-store NOI – Same-store NOI increased 4.2% compared to the corresponding prior year period and 8.0% on a cash basis, which includes the impact of cash concessions. Average occupancy for the quarter increased 1.9% from the prior year period to 95.9%.
- Other Same-store NOI – The Other same-store portfolio is comprised of one asset, Watergate 600. Same- store NOI increased by 7.7% compared to the corresponding prior year period due to higher rental and parking income partially offset by higher operating expenses. Watergate 600 was 91.3% occupied and 92.4% leased at year end.
“Our portfolio is performing historically well and certainly outperforming our normal seasonal patterns,” said Steve Riffee, Executive Vice President and CFO. “Effective lease rates have continued to grow through the winter months further boosted by concessions burning off and a very limited amount of new concessions being issued, occupancy that is historically strong as we head into the spring and summer leasing seasons, and very strong renewal demand. The trends that we are seeing keep us confident that we should have strong NOI growth throughout 2022 into 2023.”
Washington Real Estate Investment Trust
2022 Guidance
Core FFO for 2022 is expected to range from $0.87 to $0.93 per fully diluted share. The following assumptions are included in the Core FFO guidance for 2022 as set forth below:
Full Year Outlook on Key Assumptions and Metrics
- Same-storemultifamily NOI growth is expected to range between 7.75% to 9.75%
- Same-storemultifamily and Trove NOI, which was fully delivered and invested by the start of 2021, is expected to grow between 11.5% and 13.5%
- Non same-store multifamily NOI is expected to range from $17.75 million to $18.5 million in 2022 including Trove, which is expected to contribute approximately $7.0 million of NOI
- Other same-store NOI, which consists solely of Watergate 600, is expected to range from $13.0 million to $13.75 million
- The acquisition of Carlyle of Sandy Springs closed on February 1, 2022 for $106 million
- Approximately $270 million to $290 million of additional multifamily acquisitions are expected to be completed in the Southeastern markets of Atlanta, and/or Charlotte, Raleigh/Durham in the first half of the year
- Core AFFO payout ratio is expected to be in the mid-70% range
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Full Year 2022 |
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Core FFO per diluted share |
$0.87 – $0.93 |
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Net Operating Income |
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Same-store multifamily NOI growth |
7.75% – 9.75% |
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Same-store multifamily and Trove NOI growth |
11.5% – 13.5% |
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Non-same-store NOI (a) |
$17.75 million – $18.5 million |
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Non-residential NOI (b) |
~$0.75 million |
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Other same-store NOI (c) |
$13.0 million – $13.75 million |
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Transactions |
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Acquisitions (d) |
$270 million – $290 million |
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Expenses |
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Property Management Expenses |
$7.5 million – $8.0 million |
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G&A |
$25.5 million – $26.5 million |
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Interest expense |
$24.75 million – $25.75 million |
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Transformation costs |
$11.0 million – $13.0 million |
- Includes Trove, The Oxford, Assembly Eagles Landing, and Carlyle of Sandy Springs
- Includes revenues and expenses from retail operations at multifamily properties
- Other NOI consists of Watergate 600
- Anticipated completion in first half of 2022, assumes full deployment of remaining commercial sale net proceeds plus levered ATM proceeds
WashREIT’s Core FFO guidance and outlook are based on a number of factors, many of which are outside the Company’s control and all of which are subject to change. WashREIT may change the guidance provided during the year as actual and anticipated results vary from these assumptions, but WashREIT undertakes no obligation to do so.
Washington Real Estate Investment Trust
2022 Guidance Reconciliation Table
A reconciliation of projected net loss per diluted share to projected Core FFO per diluted share for the full year ending December 31, 2022 is as follows:
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Low |
High |
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Net loss per diluted share |
$(0.27) |
$(0.23) |
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Real estate depreciation and amortization |
1.01 |
1.01 |
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NAREIT FFO per diluted share |
0.74 |
0.78 |
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Core adjustments |
0.13 |
0.15 |
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Core FFO per diluted share |
$0.87 |
$0.93 |
Dividends
On January 5, 2022, WashREIT paid a quarterly dividend of $0.17 per share.
WashREIT announced today that its Board of Trustees has declared a quarterly dividend of $0.17 per share to be paid on April 5, 2022 to shareholders of record on March 23, 2022.
Conference Call Information
The Fourth Quarter 2021 Earnings Call is scheduled for Friday, February 18, 2022 at 11:00 A.M. Eastern Time. Conference Call access information is as follows:
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USA Toll Free Number: |
1-888-506-0062 |
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International Toll Number: |
1-973-528-0011 |
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Conference ID: |
484083 |
The instant replay of the Earnings Call will be available until Friday, March 4, 2022. Instant replay access information is as follows:
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USA Toll Free Number: |
1-877-481-4010 |
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International Toll Number: |
1-919-882-2331 |
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Conference ID: |
44242 |
The live on-demand webcast of the Conference Call will be available on the Investor section of WashREIT’s website at www.washreit.com. Online playback of the webcast will be available following the Conference Call.
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Disclaimer
Washington Real Estate Investment Trust published this content on 17 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 February 2022 21:44:32 UTC.
Publicnow 2022
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Technical analysis trends WASHINGTON REAL ESTATE INVESTMENT TRUST
| Short Term | Mid-Term | Long Term | |
| Trends | Bearish | Bearish | Neutral |
Income Statement Evolution
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Sell
Buy |
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| Mean consensus | HOLD |
| Number of Analysts | 5 |
| Last Close Price | 24,42 $ |
| Average target price | 25,25 $ |
| Spread / Average Target | 3,40% |
