U.S. REITs report strong second-quarter leasing

Publish Date: July 31, 2014

Topics: reit

REITs

U.S. retail REITs continued to report second-quarter numbers this week, showing improving occupancy, leasing spreads and cash flow.

Chattanooga, Tenn.–based CBL & Associates Properties said FFO for the second quarter of 2014 was $93 million, up from $90.8 million, for the second quarter of 2013.  Average gross rent per square foot for mall leases increased 11.7 percent over the prior year’s second quarter. Same-center NOI grew 1.9 percent.

Beachwood, Ohio–based DDR reported second-quarter new leasing spreads of 18.8 percent and renewal leasing spreads of 7.5 percent. FFO increased to $101.3 million, from $86.1 million in the second quarter of 2013. Same-center NOI grew 3.2 percent.

North Miami Beach, Fla.’s Equity One said FFO was $41.4 million for the second quarter, compared to $39.7 million in the same period a year ago. Same-center NOI grew 2.6 percent. Average base rents increased to $16.68 per square foot for the second quarter, up 8.7 percent compared to the second quarter of 2013. New leasing spreads were 10.8 percent, while renewal leasing spreads were 4.1 percent.

Chicago’s General Growth Properties said second-quarter FFO increased 11.8 percent to $298 million from $266 million in the prior year period. Same-center NOI increased 5 percent to $537 million from the prior year period. Initial rental rates for executed leases commencing in 2014 on a suite-to-suite basis increased 14.4 percent, or $7.91 per square foot, to $62.93 per square foot when compared to the rental rate for expiring leases.

New Hyde Park, N.Y.–based Kimco Realty reported FFO of $141.2 million for the second quarter of 2014, compared to $141.6 million for the second quarter of 2013. U.S. portfolio rental-rate leasing spreads increased 9.7 percent, with rental rates for new leases up 13.3 percent and renewals/options increasing 8.2 percent. Leasing spreads in Canada and Latin America increased 10.4 percent and 12.3 percent, respectively. U.S. same-center NOI grew 2.5 percent, including a 40 basis point increase from the inclusion of redevelopments.

Philadelphia–based PREIT’s second-quarter FFO grew17.3 percent compared to the same quarter a year ago. Same-center NOI improved by 3.1 percent. Renewal spreads for small-format leases were 4.5 percent during the quarter. Average gross rent at same-store mall properties increased 4.4 percent.

Bloomfield Hills, Mich.–based Taubman Centers said same-center NOI was up 4.5 percent in the second quarter. Excluding the company's assets that are currently held for sale, same-center NOI was up 4.6 percent. Average rent per square foot for the second quarter of 2014 was $51.46, up 3.7 percent from $49.61 in the comparable period last year. Excluding the company's assets that are currently held for sale, average rent per square foot for the quarter was $60.88, up 5.3 percent. Releasing spreads per square foot for the period were 15.4 percent. Excluding the company's assets that are currently held for sale, spreads were 23.1 percent. "A number of categories, like home furnishings, jewelry, and food, continue to be strong," said CEO Robert S. Taubman, in a press release. “Electronics continue to struggle; excluding them, growth in the quarter and for the last twelve months would have been positive.”

Houston’s Weingarten Realty said increased occupancy and fewer tenant bankruptcies helped same-center NOI grow 3.5 percent in the second quarter. During the quarter, only 89 of the firm’s tenants ceased operations, the lowest such total since 2005 and 13 percent lower than the second quarter of 2013. Rental rates on new leases and renewals were up 10.9 percent and 8.9 percent compared to the same quarter last year, respectively. FFO was $65.5 million, compared to $46.1 million for the second quarter of 2013. The company reduced its assumption for acquisitions to a range of $50 million to $100 million.


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