SITE Centers' (SITC) Q2 OFFO Beats, Revenues Miss Estimates

SITE Centers Corp.’s SITC second-quarter 2020 operating funds from operations (OFFO) per share of 21 cents surpassed the Zacks Consensus Estimate of 20 cents. However, the reported figure plunged 32.3% year over year.

The company generated revenues of $98.3 million during the reported quarter, missing the Zacks Consensus Estimate of $99.8 million. Also, the top line came in lower than the $113.5 million recorded in the prior year.

The quarterly results reflect healthy leasing activity and annualized base rent. Management noted that the company has no material near-term maturities and capital commitments. However, SITE Centers has scrapped its dividend payments for the third quarter in light of the coronavirus pandemic. Though the company has not made any decisions with respect to its dividend policy beyond the third quarter of 2020, it intends to maintain compliance with REIT taxable income distribution requirements.

Quarter in Detail

As of Jul 24, 2020, SITE Centers collected about 71% of its rental receipts for July and 64% for the second quarter. The company entered into deferral agreements with tenants representing 10% of July rents and 17% of second-quarter rents in the second quarter.

Same-store net operating income (NOI) decline on a pro-rata basis was 19.1% in the second quarter, excluding redevelopment. The company reported a leased rate of 92.4% as of Jun 30, 2020, marking a contraction of 150 basis points from the prior-year quarter’s end, on a pro-rata basis.

Annual base rent per occupied square foot was $18.51 on a pro-rata basis as of Jun 30, 2020, up 2.9% from $17.98 as of Jun 30, 2019. The company, on a pro-rata basis, generated new and renewal leasing spreads of 23.1% and 6.6%, respectively, in the June-end quarter.

Portfolio Activity

On Jul 14, the company entered into agreements to terminate the BRE DDR III and BRE DDR IV joint ventures with Blackstone and its affiliates.

Balance Sheet

SITE Centers exited the June-end quarter with $128.5 million in cash, down from $514.3 million as of Mar 31, 2020. As of Jun 30, 2020, the company had total liquidity of $813 million.

SITE Centers carries a Zacks Rank #4 (Sell), at present.

SITE CENTERS CORP. Price and EPS Surprise

SITE CENTERS CORP. Price and EPS Surprise

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

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We, now, look forward to the earnings releases of other REITs like CBRE Group CBRE, Mack-Cali Realty Corporation CLI and Vornado Realty Trust VNO. While CBRE Group is slated to announce quarterly numbers on Jul 31, Mack-Cali Realty Corporation and Vornado Realty Trust will report on Aug 3.

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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