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Mar 31, 2023
Elme Communities Q1 2023 Earnings Report
Reported strong first quarter results driven by rental rate growth and full deployment of commercial sale proceeds.
Key Takeaways
Elme Communities reported a net loss of $3.6 million, but Core FFO was $21.5 million, up 20% from the prior year period. Same-store multifamily NOI increased by 10.7% compared to the prior year period. The company is tightening its 2023 Core FFO guidance to $0.96 to $1.02 per fully diluted share.
Net loss was $3.6 million, or $0.04 per diluted share
Core FFO was $21.5 million, or $0.24 per diluted share, up 20% from the prior year period
Net Operating Income (NOI) was $36.3 million up 18% from the prior year period
Same-store multifamily NOI increased by 10.7% compared to the prior year period
Forward Guidance
Management is tightening the range of its 2023 Core FFO guidance to $0.96 to $1.02 per fully diluted share.
Positive Outlook
- Same-store multifamily NOI growth is now expected to range from 9.0% to 10.5%
- Non-same-store multifamily NOI is now expected to range from $12.75 million to $13.5 million
- Other same-store NOI, which consists solely of Watergate 600, is now expected to range from $12.5 million to $13.25 million due to higher-than-expected operating expenses
- G&A, net of core adjustments, is now expected to range from $25.25 million to $26.25 million, reflecting a $0.6 million decline compared to our prior guidance range driven by our focus on cost saving initiatives and higher allocation of internal time to transition activities including community-level training, expansion of our resident experience technology offerings, and community recruiting efforts
- Interest expense is now expected to range from $28.5 million to $29.25 million, which represents a $0.6 million decline at the midpoint as it incorporates our term loan swap execution, which fixes our term loan interest rate to 4.73% for the second half of 2023
Challenges Ahead
- Transformation costs are now expected to range from $5.0 to $6.0 million due to higher allocation of internal time to transformation activities, higher transition expenses, and higher consulting and marketing expenses related to our rebranding
Historical Earnings Impact
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Avg. Return Before/After Earnings
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