Three Months Ended March 31, | ||||||||
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 | |||||
Same-Store Results | 1Q20 vs. 1Q19 | 1Q20 vs. 4Q19 | ||||
Revenues | 3.9 | % | 1.6 | % | ||
Expenses | 4.0 | % | 5.7 | % | ||
NOI | 3.8 | % | (1.4 | )% |
Three months ended | |||||||||
Same-Store Results | March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
Weighted Average Occupancy | 95.4 | % | 94.0 | % | 95.6 | % |
• | Our Net Loss was $0.67 per diluted share for the first quarter of 2020, compared to a Net Loss of $0.54 per share for the same quarter in 2019; |
• | Core FFO increased by 16.9%, to $0.90 per diluted share for the first quarter of 2020, compared to $0.77 per diluted share for the first quarter of 2019; |
• | Same-store revenues increased by 3.9% for the first quarter of 2020 compared to the first quarter of 2019; |
• | Same-store NOI increased by 3.8% for the first quarter of 2020 compared to the first quarter of 2019; |
• | Same-store weighted average occupancy increased to 95.4% at March 31, 2020 from 94.0% at December 31, 2019; |
• | We completed the acquisition of Ironwood Apartments, a 182-home apartment community located in New Hope, Minnesota, an inner-ring suburb of Minneapolis, Minnesota; and |
• | We undertook efforts to minimize the impact of COVID-19 on our team, residents, and apartment communities, as described in greater detail under "COVID-19 Developments" below. |
1 |
• | Total rental revenue for same-store communities for the month ended April 30, 2020 was unchanged from the same period of the prior year. |
• | Physical occupancy for same-store communities as of April 30, 2020 was 95.5%, compared to 95.1% as of April 30, 2019 and 94.0% as of December 31, 2019. |
• | Delinquencies as a percentage of total revenue at all communities for the month ended April 30, 2020 was 1.6%, compared to 0% for the month ended April 30, 2019 and 0.2% for the three months ended March 31, 2020. |
• | We entered into 134 rent deferral agreements representing $156,000 in April 2020 rent charges at all communities. Under these agreements, residents experiencing financial hardship due to the effects of the COVID-19 pandemic have committed to payment plans for repayment of deferred amounts on or before October 31, 2020. As of April 30, 2020, approximately $93,000 remained outstanding under the repayment plans. |
• | We enacted social distancing practices for our team and within our communities in order to do our part to stop the spread of COVID-19, including encouraging residents to use electronic or phone communication when contacting our staff; |
• | We closed all common amenity spaces, including on-site fitness centers, community rooms, swimming pools, resident coffee services, and conference facilities, until further notice in an effort to support social distancing and comply with governmental regulations; |
• | We enhanced cleaning and disinfecting protocols at our communities; |
• | We announced that maintenance requests requiring unit entry would be completed for essential or emergency services only; |
• | We closed our offices to the public, and our leasing is being done on-line and through virtual tours; |
• | We extended April 2020 rent deadlines; |
• | We waived all fees associated with credit card payments; |
• | We suspended eviction filings in accordance with government regulations; |
• | We started offering rental deferment payment plans to residents experiencing COVID-19-related financial hardship; and |
• | We began offering flexible lease renewal terms. |
2 |
• | reduced economic activity and rising unemployment could severely impact our residents’ ability to pay rent on a timely basis; and residents may seek lease deferment payment plans or rent reductions, resulting in increases in uncollectible receivables and reductions in rental income, which could reduce NOI and cash flow; |
• | the negative financial impact of the pandemic could impact our future compliance with financial covenants in our credit facility and other debt agreements; |
• | weaker economic conditions could cause us to recognize impairment in value of our tangible or intangible assets; and |
• | we may need to record loss contingencies and increased expenses related to our COVID-19 response. |
3 |
Live webcast and replay: http://ir.iretapartments.com | ||||
Live Conference Call | Conference Call Replay | |||
Tuesday, May 12, 2020, at 11:00 AM ET | Replay available until May 26, 2020 | |||
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 | |
Canada Toll Free Number | 1-855-669-9657 | Canada Toll Free Number | 1-855-669-9658 | |
Conference Number | 10142637 |
4 |
Page | |
Key Financial Data | |
Non-GAAP Financial Measures and Reconciliations | |
Debt and Capital Analysis | |
Portfolio Analysis | |
1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | ||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||
High closing price | $ | 84.68 | $ | 78.91 | $ | 74.67 | $ | 61.28 | $ | 61.50 | ||||||||||
Low closing price | $ | 52.55 | $ | 71.74 | $ | 59.22 | $ | 57.19 | $ | 49.92 | ||||||||||
Average closing price | $ | 71.62 | $ | 74.67 | $ | 66.83 | $ | 59.54 | $ | 58.11 | ||||||||||
Closing price at end of quarter | $ | 55.00 | $ | 72.50 | $ | 74.67 | $ | 58.67 | $ | 59.91 | ||||||||||
Common share distributions – annualized | $ | 2.80 | $ | 2.80 | $ | 2.80 | $ | 2.80 | $ | 2.80 | ||||||||||
Closing dividend yield – annualized | 5.1 | % | 3.9 | % | 3.8 | % | 4.8 | % | 4.7 | % | ||||||||||
Closing common shares outstanding (thousands) | 12,164 | 12,099 | 11,625 | 11,656 | 11,768 | |||||||||||||||
Closing limited partnership units outstanding (thousands) | 1,044 | 1,058 | 1,223 | 1,224 | 1,365 | |||||||||||||||
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units (thousands) | $ | 726,440 | $ | 953,883 | $ | 959,360 | $ | 755,670 | $ | 786,798 |
S-1 |
Three Months Ended | ||||||||||||||||||||
3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | ||||||||||||||||
REVENUE | $ | 44,406 | $ | 45,777 | $ | 47,436 | $ | 46,934 | $ | 45,608 | ||||||||||
EXPENSES | ||||||||||||||||||||
Property operating expenses, excluding real estate taxes | 13,468 | 14,018 | 14,485 | 13,942 | 14,804 | |||||||||||||||
Real estate taxes | 5,465 | 4,835 | 5,425 | 5,574 | 5,232 | |||||||||||||||
Property management expense | 1,554 | 1,634 | 1,553 | 1,445 | 1,554 | |||||||||||||||
Casualty loss | 327 | 205 | 178 | 92 | 641 | |||||||||||||||
Depreciation/amortization | 18,160 | 18,972 | 18,751 | 18,437 | 18,111 | |||||||||||||||
General and administrative expenses | 3,428 | 3,647 | 3,448 | 3,549 | 3,806 | |||||||||||||||
TOTAL EXPENSES | $ | 42,402 | $ | 43,311 | $ | 43,840 | $ | 43,039 | $ | 44,148 | ||||||||||
Operating income (loss) | 2,004 | 2,466 | 3,596 | 3,895 | 1,460 | |||||||||||||||
Interest expense | (6,911 | ) | (7,357 | ) | (7,694 | ) | (7,590 | ) | (7,896 | ) | ||||||||||
Loss on extinguishment of debt | — | (864 | ) | (1,087 | ) | (407 | ) | (2 | ) | |||||||||||
Interest and other income (loss) | (2,777 | ) | 702 | 498 | 468 | 424 | ||||||||||||||
Income (loss) before gain (loss) on sale of real estate and other investments, gain (loss) on litigation settlement, and income (loss) from discontinued operations | (7,684 | ) | (5,053 | ) | (4,687 | ) | (3,634 | ) | (6,014 | ) | ||||||||||
Gain (loss) on sale of real estate and other investments | — | 57,850 | 39,105 | 615 | 54 | |||||||||||||||
Gain (loss) on litigation settlement | — | — | 300 | 6,286 | — | |||||||||||||||
Net income (loss) | $ | (7,684 | ) | $ | 52,797 | $ | 34,718 | $ | 3,267 | $ | (5,960 | ) | ||||||||
Dividends to preferred unitholders | (160 | ) | (160 | ) | (160 | ) | (160 | ) | (57 | ) | ||||||||||
Net (income) loss attributable to noncontrolling interest – Operating Partnership | 692 | (4,202 | ) | (3,145 | ) | (148 | ) | 743 | ||||||||||||
Net (income) loss attributable to noncontrolling interests – consolidated real estate entities | 145 | 223 | 183 | 154 | 576 | |||||||||||||||
Net income (loss) attributable to controlling interests | (7,007 | ) | 48,658 | 31,596 | 3,113 | (4,698 | ) | |||||||||||||
Dividends to preferred shareholders | (1,705 | ) | (1,705 | ) | (1,705 | ) | (1,706 | ) | (1,705 | ) | ||||||||||
Discount on redemption of preferred shares | 273 | — | — | — | — | |||||||||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | (8,439 | ) | $ | 46,953 | $ | 29,891 | $ | 1,407 | $ | (6,403 | ) | ||||||||
Per Share Data - Basic | ||||||||||||||||||||
Net earnings (loss) per common share – basic | $ | (0.69 | ) | $ | 3.95 | $ | 2.57 | $ | 0.11 | $ | (0.54 | ) | ||||||||
Per Share Data - Diluted | ||||||||||||||||||||
Net earnings (loss) per common share – diluted | $ | (0.67 | ) | $ | 3.89 | $ | 2.54 | $ | 0.11 | $ | (0.54 | ) |
S-2 |
3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Real estate investments | ||||||||||||||||||||
Property owned | $ | 1,687,436 | $ | 1,643,078 | $ | 1,720,352 | $ | 1,663,539 | $ | 1,673,158 | ||||||||||
Less accumulated depreciation | (366,307 | ) | (349,122 | ) | (370,492 | ) | (380,321 | ) | (371,672 | ) | ||||||||||
1,321,129 | 1,293,956 | 1,349,860 | 1,283,218 | 1,301,486 | ||||||||||||||||
Unimproved land | 1,376 | 1,376 | 1,376 | 1,746 | 2,252 | |||||||||||||||
Mortgage loans receivable | 16,775 | 16,140 | 10,140 | 10,140 | 10,260 | |||||||||||||||
Total real estate investments | 1,339,280 | 1,311,472 | 1,361,376 | 1,295,104 | 1,313,998 | |||||||||||||||
Cash and cash equivalents | 26,338 | 26,579 | 8,500 | 17,406 | 23,329 | |||||||||||||||
Restricted cash | 2,344 | 19,538 | 3,339 | 4,672 | 4,819 | |||||||||||||||
Other assets | 21,124 | 34,829 | 30,589 | 30,626 | 29,166 | |||||||||||||||
TOTAL ASSETS | $ | 1,389,086 | $ | 1,392,418 | $ | 1,403,804 | $ | 1,347,808 | $ | 1,371,312 | ||||||||||
LIABILITIES, MEZZANINE EQUITY, AND EQUITY | ||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||
Accounts payable and accrued expenses | $ | 52,337 | $ | 47,155 | $ | 40,546 | $ | 44,766 | $ | 40,697 | ||||||||||
Revolving line of credit | 83,000 | 50,079 | 103,143 | 177,939 | 118,677 | |||||||||||||||
Notes payable, net of loan costs | 269,106 | 269,058 | 269,006 | 144,082 | 144,036 | |||||||||||||||
Mortgages payable, net of loan costs | 328,367 | 329,664 | 360,886 | 370,461 | 430,950 | |||||||||||||||
TOTAL LIABILITIES | $ | 732,810 | $ | 695,956 | $ | 773,581 | $ | 737,248 | $ | 734,360 | ||||||||||
SERIES D PREFERRED UNITS | $ | 16,560 | $ | 16,560 | $ | 16,560 | 16,560 | 16,560 | ||||||||||||
EQUITY | ||||||||||||||||||||
Series C Preferred Shares of Beneficial Interest | 96,046 | 99,456 | 99,456 | 99,456 | 99,456 | |||||||||||||||
Common Shares of Beneficial Interest | 912,653 | 917,400 | 886,598 | 888,541 | 895,381 | |||||||||||||||
Accumulated distributions in excess of net income | (407,150 | ) | (390,196 | ) | (428,680 | ) | (450,433 | ) | (443,661 | ) | ||||||||||
Accumulated other comprehensive income (loss) | (17,360 | ) | (7,607 | ) | (9,793 | ) | (7,598 | ) | (3,139 | ) | ||||||||||
Total shareholders’ equity | $ | 584,189 | $ | 619,053 | $ | 547,581 | $ | 529,966 | $ | 548,037 | ||||||||||
Noncontrolling interests – Operating Partnership | 54,777 | 55,284 | 60,169 | 57,902 | 66,060 | |||||||||||||||
Noncontrolling interests – consolidated real estate entities | 750 | 5,565 | 5,913 | 6,132 | 6,295 | |||||||||||||||
Total equity | $ | 639,716 | $ | 679,902 | $ | 613,663 | $ | 594,000 | $ | 620,392 | ||||||||||
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY | $ | 1,389,086 | $ | 1,392,418 | $ | 1,403,804 | $ | 1,347,808 | $ | 1,371,312 |
S-3 |
(in thousands, except percentages) | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2020 | 2019 | $ Change | % Change | |||||||||||
Operating income (loss) | $ | 2,004 | $ | 1,460 | $ | 544 | 37.3 | % | ||||||
Adjustments: | ||||||||||||||
Property management expenses | 1,554 | 1,554 | — | — | ||||||||||
Casualty loss | 327 | 641 | (314 | ) | (49.0 | )% | ||||||||
Depreciation and amortization | 18,160 | 18,111 | 49 | 0.3 | % | |||||||||
General and administrative expenses | 3,428 | 3,806 | (378 | ) | (9.9 | )% | ||||||||
Net operating income | $ | 25,473 | $ | 25,572 | $ | (99 | ) | (0.4 | )% | |||||
Revenue | ||||||||||||||
Same-store | $ | 39,820 | $ | 38,328 | $ | 1,492 | 3.9 | % | ||||||
Non-same-store | 3,511 | 411 | 3,100 | 754.3 | % | |||||||||
Other properties and dispositions | 1,075 | 6,869 | (5,794 | ) | (84.3 | )% | ||||||||
Total | 44,406 | 45,608 | (1,202 | ) | (2.6 | )% | ||||||||
Property operating expenses, including real estate taxes | ||||||||||||||
Same-store | 17,258 | 16,601 | 657 | 4.0 | % | |||||||||
Non-same-store | 1,320 | 169 | 1,151 | 681.1 | % | |||||||||
Other properties and dispositions | 355 | 3,266 | (2,911 | ) | (89.1 | )% | ||||||||
Total | 18,933 | 20,036 | (1,103 | ) | (5.5 | )% | ||||||||
Net operating income | ||||||||||||||
Same-store | 22,562 | 21,727 | 835 | 3.8 | % | |||||||||
Non-same-store | 2,191 | 242 | 1,949 | 805.4 | % | |||||||||
Other properties and dispositions | 720 | 3,603 | (2,883 | ) | (80.0 | )% | ||||||||
Total | $ | 25,473 | $ | 25,572 | $ | (99 | ) | (0.4 | )% |
S-4 |
(in thousands, except percentages) | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
Controllable expenses | ||||||||||||||
On-site compensation(1) | $ | 4,619 | $ | 4,108 | $ | 511 | 12.4 | % | ||||||
Repairs and maintenance | 2,461 | 3,070 | (609 | ) | (19.8 | )% | ||||||||
Utilities | 3,032 | 3,302 | (270 | ) | (8.2 | )% | ||||||||
Administrative and marketing | 895 | 1,022 | (127 | ) | (12.4 | )% | ||||||||
Total | $ | 11,007 | $ | 11,502 | $ | (495 | ) | (4.3 | )% | |||||
Non-controllable expenses | ||||||||||||||
Real estate taxes | $ | 4,909 | $ | 4,285 | $ | 624 | 14.6 | % | ||||||
Insurance | 1,342 | 814 | 528 | 64.9 | % | |||||||||
Total | $ | 6,251 | $ | 5,099 | $ | 1,152 | 22.6 | % | ||||||
Total | $ | 17,258 | $ | 16,601 | $ | 657 | 4.0 | % |
(1) | On-site compensation for administration, leasing, and maintenance personnel. |
• | depreciation and amortization related to real estate; |
• | gains and losses from the sale of certain real estate assets; and |
• | impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. |
S-5 |
(in thousands, except per share amounts) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | ||||||||||||||||
Funds From Operations | ||||||||||||||||||||
Net income (loss) available to common shareholders | $ | (8,439 | ) | $ | 46,953 | $ | 29,891 | $ | 1,407 | $ | (6,403 | ) | ||||||||
Adjustments: | ||||||||||||||||||||
Noncontrolling interests – Operating Partnership | (692 | ) | 4,202 | 3,145 | 148 | (743 | ) | |||||||||||||
Depreciation and amortization | 18,160 | 18,972 | 18,751 | 18,437 | 18,111 | |||||||||||||||
Less depreciation – non real estate | (93 | ) | (88 | ) | (71 | ) | (79 | ) | (85 | ) | ||||||||||
Less depreciation – partially owned entities | (282 | ) | (454 | ) | (452 | ) | (474 | ) | (678 | ) | ||||||||||
Impairment of real estate | — | — | — | — | — | |||||||||||||||
(Gain) loss on sale of real estate | — | (57,850 | ) | (39,105 | ) | (615 | ) | (54 | ) | |||||||||||
FFO applicable to common shares and Units | $ | 8,654 | $ | 11,735 | $ | 12,159 | $ | 18,824 | $ | 10,148 | ||||||||||
Adjustments to Core FFO: | ||||||||||||||||||||
Loss on extinguishment of debt | — | 864 | 1,087 | 407 | 2 | |||||||||||||||
Gain on litigation settlement | — | — | (300 | ) | (6,286 | ) | — | |||||||||||||
(Gain) loss on marketable securities | 3,553 | (113 | ) | |||||||||||||||||
Discount on redemption of preferred shares | (273 | ) | — | — | — | — | ||||||||||||||
Core FFO applicable to common shares and Units | $ | 11,934 | $ | 12,486 | $ | 12,946 | $ | 12,945 | $ | 10,150 | ||||||||||
Funds from operations applicable to common shares and Units | $ | 8,654 | $ | 11,735 | $ | 12,159 | $ | 18,824 | $ | 10,148 | ||||||||||
Dividends to preferred unitholders | 160 | 160 | 160 | 160 | 57 | |||||||||||||||
Funds from operations applicable to common shares and Units - diluted | $ | 8,814 | $ | 11,895 | $ | 12,319 | $ | 18,984 | $ | 10,205 | ||||||||||
Core funds from operations applicable to common shares and Units | $ | 11,934 | $ | 12,486 | $ | 12,946 | $ | 12,945 | $ | 10,150 | ||||||||||
Dividends to preferred unitholders | 160 | 160 | 160 | 160 | 57 | |||||||||||||||
Core funds from operations applicable to common shares and Units - diluted | $ | 12,094 | $ | 12,646 | $ | 13,106 | $ | 13,105 | $ | 10,207 | ||||||||||
Per Share Data | ||||||||||||||||||||
Earnings (loss) per share and Unit - diluted | $ | (0.67 | ) | $ | 3.89 | $ | 2.54 | $ | 0.12 | $ | (0.54 | ) | ||||||||
FFO per share and Unit - diluted | $ | 0.66 | $ | 0.90 | $ | 0.93 | $ | 1.45 | $ | 0.77 | ||||||||||
Core FFO per share and Unit - diluted | $ | 0.90 | $ | 0.96 | $ | 0.99 | $ | 1.00 | $ | 0.77 | ||||||||||
Weighted average shares and Units - diluted | 13,401 | 13,188 | 13,087 | 13,197 | 13,230 |
S-6 |
(in thousands) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | ||||||||||||||||
Adjusted EBITDA | ||||||||||||||||||||
Net income (loss) available to common shareholders | $ | (7,007 | ) | $ | 48,658 | $ | 31,596 | $ | 3,113 | $ | (4,698 | ) | ||||||||
Adjustments: | ||||||||||||||||||||
Dividends to preferred unitholders | 160 | 160 | 160 | 160 | 57 | |||||||||||||||
Noncontrolling interests – Operating Partnership | (692 | ) | 4,202 | 3,145 | 148 | (743 | ) | |||||||||||||
Income (loss) before noncontrolling interests – Operating Partnership | $ | (7,539 | ) | $ | 53,020 | $ | 34,901 | $ | 3,421 | $ | (5,384 | ) | ||||||||
Adjustments: | ||||||||||||||||||||
Interest expense | 6,764 | 7,112 | 7,448 | 7,343 | 7,558 | |||||||||||||||
Loss on extinguishment of debt | — | 864 | 1,087 | 407 | 2 | |||||||||||||||
Depreciation/amortization related to real estate investments | 17,878 | 18,518 | 18,299 | 17,963 | 17,433 | |||||||||||||||
Interest income | (597 | ) | (415 | ) | (402 | ) | (402 | ) | (407 | ) | ||||||||||
(Gain) loss on sale of real estate and other investments | — | (57,850 | ) | (39,105 | ) | (615 | ) | (54 | ) | |||||||||||
Gain on litigation settlement | — | — | (300 | ) | (6,286 | ) | — | |||||||||||||
(Gain) loss on marketable securities | 3,553 | (113 | ) | — | — | — | ||||||||||||||
Adjusted EBITDA | $ | 20,059 | $ | 21,136 | $ | 21,928 | $ | 21,831 | $ | 19,148 |
S-7 |
Future Maturities of Debt | ||||||||||||||||||||||
Secured Fixed Debt | Unsecured Fixed Debt(1) | Unsecured Variable Debt | Total Debt | % of Total Debt | Weighted Average Interest Rate(2) | |||||||||||||||||
2020 (remainder) | $ | 9,470 | $ | — | $ | — | $ | 9,470 | 1.4 | % | 4.85 | % | ||||||||||
2021 | 35,827 | — | — | 35,827 | 5.2 | % | 5.36 | % | ||||||||||||||
2022 | 34,217 | 50,000 | 33,000 | 117,217 | 17.2 | % | 3.63 | % | ||||||||||||||
2023 | 47,929 | — | — | 47,929 | 7.0 | % | 4.02 | % | ||||||||||||||
2024 | — | 70,000 | — | 70,000 | 10.2 | % | 3.63 | % | ||||||||||||||
Thereafter | 202,545 | 200,000 | — | 402,545 | 59.0 | % | 3.89 | % | ||||||||||||||
Total debt | $ | 329,988 | $ | 320,000 | $ | 33,000 | $ | 682,988 | 100.0 | % | 3.92 | % |
(1) | Term loans have variable interest rates that are fixed with interest rate swaps and $50.0 million of our variable interest, line of credit is fixed with an interest rate swap. |
(2) | Weighted average interest rate of debt that matures during the year, including the effect of interest rate swaps on the term loans and line of credit. |
3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | ||||||||||||||||
Debt Balances Outstanding | ||||||||||||||||||||
Secured fixed rate | $ | 329,988 | $ | 331,376 | $ | 362,731 | $ | 371,951 | $ | 432,588 | ||||||||||
Unsecured fixed rate line of credit(1) | 50,000 | 50,000 | 50,000 | 50,000 | — | |||||||||||||||
Secured line of credit(2) | — | — | — | 15,000 | 15,000 | |||||||||||||||
Unsecured variable rate line of credit | 33,000 | 79 | 53,143 | 112,939 | 103,677 | |||||||||||||||
Unsecured term loans | 145,000 | 145,000 | 145,000 | 145,000 | 145,000 | |||||||||||||||
Unsecured senior notes | 125,000 | 125,000 | 125,000 | — | — | |||||||||||||||
Debt total | $ | 682,988 | $ | 651,455 | $ | 735,874 | $ | 694,890 | $ | 696,265 | ||||||||||
Mortgage debt weighted average interest rate | 4.01 | % | 4.02 | % | 4.15 | % | 4.37 | % | 4.54 | % | ||||||||||
Lines of credit rate (rate with swap) | 3.18 | % | 3.52 | % | 3.73 | % | 3.91 | % | 3.89 | % | ||||||||||
Term loan rate (rate with swap) | 4.13 | % | 4.19 | % | 4.14 | % | 4.14 | % | 3.99 | % | ||||||||||
Senior notes rate | 3.78 | % | 3.78 | % | 3.78 | % | — | — |
(1) | A portion of our primary line of credit is fixed through an interest rate swap. |
(2) | Our revolving line of credit consists primarily of unsecured borrowings. A portion of the line was secured in connection with our acquisition of SouthFork Townhomes, under an agreement which allowed us to offer the seller tax protection upon purchase. |
S-8 |
Three Months Ended | ||||||||||||||||||||
3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | ||||||||||||||||
Equity Capitalization | ||||||||||||||||||||
Common shares outstanding | 12,164 | 12,099 | 11,625 | 11,656 | 11,768 | |||||||||||||||
Operating partnership units outstanding | 1,044 | 1,058 | 1,223 | 1,224 | 1,365 | |||||||||||||||
Total common shares and units outstanding | 13,208 | 13,157 | 12,848 | 12,880 | 13,133 | |||||||||||||||
Market price per common share (closing price at end of period) | $ | 55.00 | $ | 72.50 | $ | 74.67 | $ | 58.67 | $ | 59.91 | ||||||||||
Equity capitalization-common shares and units | $ | 726,440 | $ | 953,883 | $ | 959,360 | $ | 755,670 | $ | 786,798 | ||||||||||
Recorded book value of preferred shares | $ | 96,046 | $ | 99,456 | $ | 99,456 | $ | 99,456 | $ | 99,456 | ||||||||||
Total equity capitalization | $ | 822,486 | $ | 1,053,339 | $ | 1,058,816 | $ | 855,126 | $ | 886,254 | ||||||||||
Series D Preferred Units | $ | 16,560 | $ | 16,560 | 16,560 | 16,560 | 16,560 | |||||||||||||
Debt Capitalization | ||||||||||||||||||||
Total debt | $ | 682,988 | $ | 651,455 | $ | 735,874 | $ | 694,889 | $ | 696,265 | ||||||||||
Total capitalization | $ | 1,522,034 | $ | 1,721,354 | $ | 1,811,250 | $ | 1,566,575 | $ | 1,599,079 | ||||||||||
Total debt to total capitalization(1) | 44.9 | % | 37.8 | % | 40.6% | 44.4% | 43.5% |
(1) | Debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet, plus the market value of common shares, operating partnership units, Series C preferred shares, and Series D preferred units outstanding at the end of the period. |
Three Months Ended | ||||||||||||||||||||
3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | ||||||||||||||||
Debt service coverage ratio(1) | 2.42 | x | 2.39 | x | 2.26 | x | 2.24 | x | 1.86 | x | ||||||||||
Adjusted EBITDA/Interest expense plus preferred distributions and principal amortization | 1.97 | x | 1.98 | x | 1.90 | x | 1.88 | x | 1.58 | x | ||||||||||
Net debt/Adjusted EBITDA(3) | 8.18 | x | 7.19 | x | 8.29 | x | 7.76 | x | 8.79 | x | ||||||||||
Net debt and preferred equity/Adjusted EBITDA(3) | 9.59 | x | 8.56 | x | 9.62 | x | 9.09 | x | 10.30 | x | ||||||||||
Distribution Data | ||||||||||||||||||||
Common shares and Units outstanding at record date | 13,208 | 13,157 | 12,848 | 12,914 | 13,135 | |||||||||||||||
Total common distribution declared | $ | 9,245 | $ | 9,210 | $ | 8,994 | $ | 9,039 | $ | 9,195 | ||||||||||
Common distribution per share and Unit | $ | 0.70 | $ | 0.70 | $ | 0.70 | $ | 0.70 | $ | 0.70 | ||||||||||
Payout ratio (Core FFO per share and Unit basis)(2) | 77.8 | % | 72.9 | % | 70.7 | % | 70.0 | % | 90.9 | % |
(1) | Debt service coverage ratio is computed by dividing Adjusted EBITDA by interest expense and principal amortization. |
(2) | Payout ratio (Core FFO per share and unit basis) is the ratio of the current quarterly or annual distribution rate per common share and unit divided by quarterly or annual Core FFO per share and unit. This term is a non-GAAP measure and should not be considered a substitute for operating results determined in accordance with GAAP. |
(3) | Net debt is the total debt balance less cash and cash equivalents and net tax deferred exchange proceeds (included within restricted cash). For the quarterly period presented, adjusted EBITDA is annualized. Net debt and adjusted EBITDA are non-GAAP measures and should not be considered a substitute for operating results determined in accordance with GAAP. Refer to the Adjusted EBITDA definition included within the Non-GAAP Financial Measures and Reconciliations section. |
S-9 |
State | Number of Communities | Number of Units | % of Total Charges | Shelter in Place Order | Halt of Evictions | Late Fees Prohibited | Credit Card Payment Fee Waiver | Bad Debt as % of Total Revenue | ||||
Minnesota | 32 | 5,438 | 49.9% | a | a | x | a | 1.7 | % | |||
Colorado | 3 | 992 | 12.9% | a | a | a | a | 3.2 | % | |||
Nebraska | 6 | 1,370 | 8.7% | x | a | x | a | 1.1 | % | |||
North Dakota | 19 | 3,112 | 20.3% | x | a | x | a | 0.7 | % | |||
South Dakota | 5 | 474 | 3.2% | x | x | x | a | 1.4 | % | |||
Montana | 5 | 749 | 4.9% | a | a | a | a | 3.1 | % | |||
Total | 70 | 12,135 | 100.0 | % | 1.6 | % |
April 2020 | Q1 2020 | April 2019 | |||||
Bad debt as a % of total revenue | 1.6 | % | 0.2 | % | — | ||
Percent of outstanding rent deferrals to total revenue | 0.7 | % | N/A | N/A | |||
Same-Store Communities | |||||||
New lease rates | (2.0 | )% | (4.3 | )% | 4.7 | % | |
Renewal rates | 4.1 | % | 2.9 | % | 7.1 | % | |
Weighted average occupancy | 95.3 | % | 95.4 | % | 94.8 | % | |
Physical occupancy, at end of period | 95.5 | % | 96.1 | % | 95.2 | % |
Liquidity Profile | April 30, 2020 | ||
Unsecured credit facility - committed | $ | 250,000 | |
Balance outstanding | 83,000 | ||
Amount available on line of credit | $ | 167,000 | |
Cash and cash equivalents | 21,404 | ||
Total liquidity | $ | 188,404 | |
Near-Term Funding Obligations | |||
Unfunded construction loan and mezzanine loan commitments - 2020 and 2021 | $ | 36,046 | |
2020 Debt maturities | 9,470 | ||
2021 Debt maturities | 35,827 | ||
Total | $ | 81,343 | |
Ratio of liquidity to near-term funding obligations | 2.3 |
S-10 |
Apartment Homes Included | Revenues | Expenses | NOI | |||||||||||||||||||||||||||||||||
Regions | CY20Q1 | CY19Q1 | % Change | CY20Q1 | CY19Q1 | % Change | CY20Q1 | CY19Q1 | % Change | |||||||||||||||||||||||||||
Minneapolis, MN | 1,987 | $ | 9,112 | $ | 8,781 | 3.8 | % | $ | 3,911 | $ | 3,639 | 7.5 | % | $ | 5,201 | $ | 5,142 | 1.1 | % | |||||||||||||||||
Rochester, MN | 1,711 | 6,539 | 6,225 | 5.0 | % | 2,824 | 2,454 | 15.1 | % | 3,715 | 3,771 | (1.5 | )% | |||||||||||||||||||||||
Denver, CO | 664 | 3,927 | 3,699 | 6.2 | % | 1,258 | 1,222 | 2.9 | % | 2,669 | 2,477 | 7.8 | % | |||||||||||||||||||||||
Grand Forks, ND | 1,555 | 4,337 | 4,141 | 4.7 | % | 2,225 | 2,166 | 2.7 | % | 2,112 | 1,975 | 6.9 | % | |||||||||||||||||||||||
Omaha, NE | 1,370 | 3,814 | 3,754 | 1.6 | % | 1,626 | 1,774 | (8.3 | )% | 2,188 | 1,980 | 10.5 | % | |||||||||||||||||||||||
St. Cloud, MN | 1,190 | 3,611 | 3,474 | 3.9 | % | 1,756 | 1,808 | (2.9 | )% | 1,855 | 1,666 | 11.3 | % | |||||||||||||||||||||||
Bismarck, ND | 845 | 2,735 | 2,664 | 2.7 | % | 1,169 | 1,132 | 3.3 | % | 1,566 | 1,532 | 2.2 | % | |||||||||||||||||||||||
Billings, MT | 749 | 2,179 | 2,105 | 3.5 | % | 826 | 823 | 0.4 | % | 1,353 | 1,282 | 5.5 | % | |||||||||||||||||||||||
Minot, ND | 712 | 2,125 | 2,118 | 0.3 | % | 1,011 | 1,007 | 0.4 | % | 1,114 | 1,111 | 0.3 | % | |||||||||||||||||||||||
Rapid City, SD | 474 | 1,441 | 1,367 | 5.4 | % | 652 | 576 | 13.2 | % | 789 | 791 | (0.3 | )% | |||||||||||||||||||||||
Same-Store Total | 11,257 | $ | 39,820 | $ | 38,328 | 3.9 | % | $ | 17,258 | $ | 16,601 | 4.0 | % | $ | 22,562 | $ | 21,727 | 3.8 | % |
% of NOI Contribution | Weighted Average Occupancy (1) | Weighted Average Monthly Rental Rate (2) | Weighted Average Monthly Revenue per Occupied Home (3) | |||||||||||||||||||||||||||||||
Regions | CY20Q1 | CY19Q1 | Growth | CY20Q1 | CY19Q1 | % Change | CY20Q1 | CY19Q1 | % Change | |||||||||||||||||||||||||
Minneapolis, MN | 23.1 | % | 94.2 | % | 94.9 | % | (0.7 | )% | $ | 1,485 | $ | 1,444 | 2.8 | % | $ | 1,624 | $ | 1,553 | 4.5 | % | ||||||||||||||
Rochester, MN | 16.5 | % | 97.1 | % | 96.5 | % | 0.6 | % | 1,239 | 1,207 | 2.7 | % | 1,312 | 1,257 | 4.4 | % | ||||||||||||||||||
Denver, CO | 11.8 | % | 95.1 | % | 94.4 | % | 0.7 | % | 1,845 | 1,806 | 2.2 | % | 2,072 | 1,968 | 5.5 | % | ||||||||||||||||||
Grand Forks, ND | 9.4 | % | 95.4 | % | 93.8 | % | 1.6 | % | 900 | 903 | (0.3 | )% | 975 | 946 | 3.1 | % | ||||||||||||||||||
Omaha, NE | 9.7 | % | 94.3 | % | 95.3 | % | (1.0 | )% | 893 | 875 | 2.1 | % | 984 | 959 | 2.6 | % | ||||||||||||||||||
St. Cloud, MN | 8.2 | % | 94.9 | % | 95.7 | % | (0.8 | )% | 945 | 939 | 0.6 | % | 1,066 | 1,016 | 4.7 | % | ||||||||||||||||||
Bismarck, ND | 6.9 | % | 96.4 | % | 97.1 | % | (0.7 | )% | 1,044 | 1,030 | 1.4 | % | 1,119 | 1,082 | 3.4 | % | ||||||||||||||||||
Billings, MT | 6.0 | % | 95.8 | % | 96.4 | % | (0.6 | )% | 935 | 905 | 3.3 | % | 1,012 | 972 | 4.1 | % | ||||||||||||||||||
Minot, ND | 4.9 | % | 95.1 | % | 95.8 | % | (0.7 | )% | 990 | 993 | (0.3 | )% | 1,046 | 1,035 | 1.0 | % | ||||||||||||||||||
Rapid City, SD | 3.5 | % | 96.9 | % | 96.9 | % | — | 951 | 931 | 2.1 | % | 1,045 | 991 | 5.4 | % | |||||||||||||||||||
Same-Store Total | 100.0 | % | 95.3 | % | 95.4 | % | (0.1 | )% | $ | 1,135 | $ | 1,115 | 1.8 | % | $ | 1,237 | $ | 1,189 | 4.0 | % |
(1) | Weighted average occupancy is defined as the percentage resulting from dividing actual rental revenue by scheduled rent. |
(2) | Weighted average monthly rental rate is scheduled rental revenue divided by the total number of apartment homes. Scheduled rental revenue represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes. |
(3) | Weighted average monthly revenue per occupied home is defined as total rental revenues divided by the weighted average occupied apartment units for the period. |
S-11 |
Apartment Homes Included | Revenues | Expenses | NOI | |||||||||||||||||||||||||||||||||
Regions | CY20Q1 | CY19Q4 | % Change | CY20Q1 | CY19Q4 | % Change | CY20Q1 | CY19Q4 | % Change | |||||||||||||||||||||||||||
Minneapolis, MN | 1,987 | $ | 9,112 | $ | 8,866 | 2.8 | % | $ | 3,911 | $ | 3,908 | 0.1 | % | $ | 5,201 | $ | 4,958 | 4.9 | % | |||||||||||||||||
Rochester, MN | 1,711 | 6,539 | 6,385 | 2.4 | % | 2,824 | 2,571 | 9.8 | % | 3,715 | 3,814 | (2.6 | )% | |||||||||||||||||||||||
Denver, CO | 664 | 3,927 | 3,820 | 2.8 | % | 1,258 | 1,134 | 10.9 | % | 2,669 | 2,686 | (0.6 | )% | |||||||||||||||||||||||
Grand Forks, ND | 1,555 | 4,337 | 4,329 | 0.2 | % | 2,225 | 1,980 | 12.4 | % | 2,112 | 2,349 | (10.1 | )% | |||||||||||||||||||||||
Omaha, NE | 1,370 | 3,814 | 3,751 | 1.7 | % | 1,626 | 1,721 | (5.5 | )% | 2,188 | 2,030 | 7.8 | % | |||||||||||||||||||||||
St. Cloud, MN | 1,190 | 3,611 | 3,550 | 1.7 | % | 1,756 | 1,719 | 2.2 | % | 1,855 | 1,831 | 1.3 | % | |||||||||||||||||||||||
Bismarck, ND | 845 | 2,735 | 2,755 | (0.7 | )% | 1,169 | 982 | 19.0 | % | 1,566 | 1,773 | (11.7 | )% | |||||||||||||||||||||||
Billings, MT | 749 | 2,179 | 2,182 | (0.1 | )% | 826 | 816 | 1.2 | % | 1,353 | 1,366 | (1.0 | )% | |||||||||||||||||||||||
Minot, ND | 712 | 2,125 | 2,123 | 0.1 | % | 1,011 | 921 | 9.8 | % | 1,114 | 1,202 | (7.3 | )% | |||||||||||||||||||||||
Rapid City, SD | 474 | 1,441 | 1,440 | 0.1 | % | 652 | 577 | 13.0 | % | 789 | 863 | (8.6 | )% | |||||||||||||||||||||||
Same-Store Total | 11,257 | $ | 39,820 | $ | 39,201 | 1.6 | % | $ | 17,258 | $ | 16,329 | 5.7 | % | $ | 22,562 | $ | 22,872 | (1.4 | )% |
% of NOI Contribution | Weighted Average Occupancy | Weighted Average Monthly Rental Rate | Weighted Average Monthly Revenue per Occupied Home | |||||||||||||||||||||||||||||||
Regions | CY20Q1 | CY19Q4 | Growth | CY20Q1 | CY19Q4 | % Change | CY20Q1 | CY19Q4 | % Change | |||||||||||||||||||||||||
Minneapolis, MN | 23.1 | % | 94.2 | % | 92.0 | % | 2.2 | % | $ | 1,485 | $ | 1,497 | (0.8 | )% | $ | 1,624 | $ | 1,616 | 0.6 | % | ||||||||||||||
Rochester, MN | 16.5 | % | 97.1 | % | 94.5 | % | 2.6 | % | 1,239 | 1,251 | (1.0 | )% | 1,312 | 1,316 | (0.2 | )% | ||||||||||||||||||
Denver, CO | 11.8 | % | 95.1 | % | 93.2 | % | 1.9 | % | 1,845 | 1,846 | (0.1 | )% | 2,072 | 2,057 | 0.9 | % | ||||||||||||||||||
Grand Forks, ND | 9.4 | % | 95.4 | % | 94.8 | % | 0.6 | % | 900 | 903 | (0.3 | )% | 975 | 978 | (0.4 | )% | ||||||||||||||||||
Omaha, NE | 9.7 | % | 94.3 | % | 93.5 | % | 0.8 | % | 893 | 897 | (0.4 | )% | 984 | 977 | 0.9 | % | ||||||||||||||||||
St. Cloud, MN | 8.2 | % | 94.9 | % | 94.0 | % | 0.9 | % | 945 | 950 | (0.5 | )% | 1,066 | 1,058 | 0.8 | % | ||||||||||||||||||
Bismarck, ND | 6.9 | % | 96.4 | % | 96.4 | % | — | 1,044 | 1,045 | (0.1 | )% | 1,119 | 1,127 | (0.7 | )% | |||||||||||||||||||
Billings, MT | 6.0 | % | 95.8 | % | 95.4 | % | 0.4 | % | 935 | 935 | — | 1,012 | 1,017 | (0.5 | )% | |||||||||||||||||||
Minot, ND | 4.9 | % | 95.1 | % | 94.3 | % | 0.8 | % | 990 | 997 | (0.7 | )% | 1,046 | 1,054 | (0.7 | )% | ||||||||||||||||||
Rapid City, SD | 3.5 | % | 96.9 | % | 96.2 | % | 0.7 | % | 951 | 961 | (1.0 | )% | 1,045 | 1,052 | (0.6 | )% | ||||||||||||||||||
Same-Store Total | 100.0 | % | 95.4 | % | 93.9 | % | 1.5 | % | $ | 1,135 | $ | 1,142 | (0.6 | )% | $ | 1,237 | $ | 1,236 | 0.1 | % |
S-12 |
Three Months Ended | ||||||||||||||||||||
3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | ||||||||||||||||
Number of Apartment Homes | ||||||||||||||||||||
Same-Store | 11,257 | 10,402 | 11,785 | 12,848 | 12,848 | |||||||||||||||
Non-Same-Store | 878 | 1,551 | 1,551 | 1,127 | 1,127 | |||||||||||||||
All Communities | 12,135 | 11,953 | 13,336 | 13,975 | 13,975 | |||||||||||||||
Average Scheduled Rent(2) per Apartment Home | ||||||||||||||||||||
Same-Store | $ | 1,135 | $ | 1,085 | $ | 1,062 | $ | 1,028 | $ | 1,013 | ||||||||||
Non-Same-Store | 1,572 | 1,722 | 1,742 | 1,692 | 1,772 | |||||||||||||||
All Communities | $ | 1,163 | $ | 1,168 | $ | 1,123 | $ | 1,081 | $ | 1,064 | ||||||||||
Average Revenue per Occupied Apartment Home(3) | ||||||||||||||||||||
Same-Store | $ | 1,237 | $ | 1,169 | $ | 1,141 | $ | 1,101 | $ | 1,075 | ||||||||||
Non-Same-Store | 1,658 | 1,869 | 1,887 | 1,848 | 1,943 | |||||||||||||||
All Communities | $ | 1,263 | $ | 1,260 | $ | 1,210 | $ | 1,161 | $ | 1,134 | ||||||||||
Weighted Average Occupancy(4) | ||||||||||||||||||||
Same-Store | 95.4 | % | 94.0 | % | 93.3 | % | 94.3 | % | 95.6 | % | ||||||||||
Non-Same-Store | 93.3 | % | 93.0 | % | 94.2 | % | 94.8 | % | 94.9 | % | ||||||||||
All Communities | 95.2 | % | 93.8 | % | 93.4 | % | 94.4 | % | 95.5 | % | ||||||||||
Operating Expenses as a % of Scheduled Rent | ||||||||||||||||||||
Same-Store | 45.0 | % | 43.5 | % | 43.0 | % | 42.8 | % | 45.6 | % | ||||||||||
Non-Same-Store | 37.0 | % | 33.8 | % | 38.1 | % | 37.4 | % | 37.6 | % | ||||||||||
All Communities | 44.3 | % | 41.6 | % | 42.3 | % | 42.2 | % | 44.7 | % | ||||||||||
Capital Expenditures | ||||||||||||||||||||
Total Capital Expenditures per Apartment Home – Same-Store | $ | 151 | $ | 427 | $ | 178 | $ | 192 | $ | 80 |
(1) | Previously reported amounts are not revised for changes in the composition of the same-store properties pool. |
(2) | Scheduled rent represents the value of all apartment homes, with occupied apartment homes valued at contractual rates pursuant to leases and vacant apartment homes valued at estimated market rents. When calculating actual rents for occupied apartment homes and market rents for vacant homes, delinquencies and concessions are not taken into account. Market rates are determined using the currently offered effective rates on new leases at the community and are used as the starting point in determination of the market rates of vacant apartment homes. Average scheduled rent is scheduled rent divided by the total number of apartment homes. |
(3) | Total revenues divided by the weighted average occupied apartment homes for the period. |
(4) | Weighted average occupancy is the percentage resulting from dividing actual rental revenue by scheduled rent. We believe that weighted average occupancy is a meaningful measure of occupancy because it considers the value of each vacant unit at its estimated market rate. Weighted average occupancy may not completely reflect short-term trends in physical occupancy and our calculation of weighted average occupancy may not be comparable to that disclosed by other REITs. |
S-13 |
Three Months Ended | ||||||||
3/31/2020 | 3/31/2019 | |||||||
Total Same-Store Apartment Homes | 11,257 | 11,257 | ||||||
Turnover | $ | 687 | $ | 514 | ||||
Furniture & Equipment | 128 | 54 | ||||||
Building – Interior | 149 | 78 | ||||||
Building – Exterior | 714 | 208 | ||||||
Landscaping & Grounds | 16 | 6 | ||||||
Capital Expenditures | $ | 1,694 | $ | 860 | ||||
Capital Expenditures per Apartment Home | $ | 150 | $ | 76 | ||||
Value Add | $ | 1,562 | $ | 288 | ||||
Total Capital Spend | $ | 3,256 | $ | 1,148 | ||||
Total Capital Spend per Home | $ | 289 | $ | 102 | ||||
All Properties - Weighted Average Homes | 12,014 | 13,884 | ||||||
Capital Expenditures | $ | 1,810 | $ | 1,155 | ||||
CapEx per Home | $ | 151 | $ | 83 | ||||
Value Add | 2,031 | 372 | ||||||
Acquisition Capital | 1,478 | 188 | ||||||
Total Capital Spend | 5,319 | 1,715 | ||||||
Total Capital Spend per Home | $ | 443 | $ | 124 |
S-14 |