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Sep 30, 2020
OPI Q3 2020 Earnings Report
Announced third quarter results, reporting a net loss of $3.8 million and normalized FFO of $62.6 million.
Key Takeaways
Office Properties Income Trust (OPI) reported strong financial and operating results for Q3 2020, with Normalized FFO beating guidance and CAD increasing by more than 15% year over year. The company entered 595,000 square feet of new and renewal leases, resulting in a 31% roll up in rents. OPI also improved its liquidity by raising more than $250 million from a senior note offering and repaid all amounts outstanding on its $750 million credit facility.
Net loss for the quarter was $3.8 million, or $0.08 per diluted share.
Normalized FFO was $62.6 million, or $1.30 per diluted share.
CAD increased 15.4% year over year.
Same Property Cash Basis NOI increased 1.7%.
Forward Guidance
Overall new leasing volume for 2020 has slowed and may continue to slow or remain at a similar level of activity. OPI remains focused on proactive dialogue with its existing tenants and overall tenant retention.
Positive Outlook
- OPI remains focused on proactive dialogue with its existing tenants.
- OPI is focused on overall tenant retention.
- High percentage of annualized rental income paid by investment grade tenants.
- Diversity of tenant base, both geographically and by industry.
- Strong rent collections.
Challenges Ahead
- New leasing volume for 2020 has slowed.
- Leasing volume may continue to slow or remain at a similar level of activity.
- COVID-19 pandemic may continue to negatively impact tenants.
- Tenants may seek relief from their rent obligations.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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