Elme munities(ELME) - 2023 Q1 - Quarterly Report

Financial Performance - For the three months ended March 31, 2023, the net loss was $3.643 million, a decrease of 52.8% compared to a net loss of $7.724 million in the same period of 2022[82]. - Net Operating Income (NOI) for the 2023 Quarter was $36.288 million, an increase of 18.4% from $30.652 million in the 2022 Quarter[82]. - NAREIT Funds From Operations (FFO) for the 2023 Quarter was $17.893 million, reflecting a 23.6% increase from $14.476 million in the 2022 Quarter[82]. - Total net operating income (NOI) increased by $5.636 million or 18.4%, reaching $36.288 million for the 2023 Quarter compared to $30.652 million in 2022[94]. - Residential revenue from the same-store portfolio rose by $3.772 million or 9.0%, totaling $45.786 million for the 2023 Quarter[97]. - The company reported a NAREIT FFO of $17.9 million for the three months ended March 31, 2023, up from $14.5 million in the same period of 2022[130]. Occupancy and Revenue - As of March 31, 2023, the average occupancy for residential same-store properties was 95.5%, slightly down from 95.6% as of March 31, 2022[85]. - Average occupancy for residential properties was 95.5% for the 2023 Quarter, a slight decrease of 0.1% compared to 95.6% in 2022[99]. - The higher NOI was primarily driven by acquisitions contributing $2.6 million and an increase in same-store NOI of $2.9 million due to higher rental rates[85]. - Acquisitions contributed an increase of $3.882 million in revenue, with notable contributions from Marietta Crossing ($1.9 million) and Alder Park ($1.2 million)[98]. Expenses and Costs - Transformation costs recognized in the 2023 Quarter were $2.9 million, with an expectation of incurring an additional $5.0 - $6.0 million in 2023[81]. - The higher interest expense for the 2023 Quarter was $1.2 million, reflecting increased borrowing costs[84]. - Residential real estate expenses as a percentage of residential revenue decreased to 35.6% in the 2023 Quarter from 36.7% in 2022[100]. - Interest expense increased by $1.181 million or 20.9%, totaling $6.831 million for the 2023 Quarter, primarily due to new debt[106]. Debt and Liquidity - The company entered into a $125.0 million unsecured term loan with a two-year term, using proceeds to prepay a $100.0 million term loan[87]. - There are no debt maturities scheduled until the first quarter of 2025, indicating a stable capital structure[88]. - Scheduled debt principal payments total $556.761 million, with $521.761 million in unsecured debt and $35 million in revolving credit due[115]. - The weighted average maturity for the company's debt is 5.9 years, with potential cash flow insufficiencies to repay maturing debt if refinancing is not possible[116]. - The company reported a total liquidity position of $666.3 million as of April 25, 2023, including $12.3 million in cash and cash equivalents[109]. - As of March 31, 2023, the company was in compliance with all covenants related to its Revolving Credit Facility, 2023 Term Loan, and unsecured notes[120]. Shareholder Information - The company has authorized the issuance of up to 150.0 million common shares, with 87.7 million shares outstanding as of March 31, 2023[121]. - The company has a dividend reinvestment program, with net proceeds of $248,000 from the issuance of common shares during the three months ended March 31, 2023[123]. Cash Flow - Net cash provided by operating activities increased by 88.3% to $16.3 million for the three months ended March 31, 2023, compared to $8.7 million in the same period of 2022[125]. - Cash flows from investing activities decreased by 94.9% to $(5.8) million for the three months ended March 31, 2023, compared to $(114.5) million in the same period of 2022[125]. Off-Balance Sheet and Risk Management - The company has no off-balance sheet arrangements as of March 31, 2023, that could materially affect its financial condition[127]. - The company entered into interest rate swap arrangements to mitigate exposure to interest rate fluctuations, with a total notional amount of $225.0 million as of March 31, 2023[136].