Elme munities(US:ELME)2020-10-30 23:37Financial Data and Key Metrics Changes - The company reported core FFO of $0.36 per diluted share for the third quarter of 2020, with same-store NOI declining 4.9% on a GAAP basis and 3.6% year-to-date [43][44] - Overall multifamily same-store NOI decreased by 3.8% year-over-year on both GAAP and cash basis [44] - The company maintained a strong liquidity position with approximately $520 million available, following the execution of a $350 million green bond [42] Business Line Data and Key Metrics Changes - Multifamily collections were strong, with 99% of cash in contractual rents collected during the third quarter, outperforming national averages [33][34] - Office collections improved to 97% of cash rents collected during the third quarter, with 88% for retail tenants [36][38] - The suburban multifamily portfolio continued to outperform, with gross lease rates increasing by 1.1% during the third quarter [45] Market Data and Key Metrics Changes - The Washington Metro region showed resilience, with no office-using sector losing more than 4% of the total workforce year-over-year [11] - The tech sector leasing activity in Northern Virginia is expected to increase, with over 1.5 million square feet of active requirements in the pipeline [19] - The company’s multifamily units are primarily affordable, with over 75% of units affordable to renters earning $75,000 or less [15][16] Company Strategy and Development Direction - The company is focused on long-term strategic growth plans and has reshaped its portfolio ahead of the downturn [7][19] - The suburban expansion through the Assembly portfolio acquisition is performing well, capitalizing on the demand for spacious living [20] - The company aims to achieve BREEAM certification for the Assembly portfolio and LEED Silver certification for Trove, emphasizing sustainability [40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the portfolio and the ability to absorb near-term impacts while preserving long-term growth opportunities [9][27] - The company withdrew its previously issued 2020 outlook due to the volatile macro environment but reinstated guidance with core FFO per share expected to range from $1.44 to $1.46 [55][58] - Management noted that the duration and extent of economic disruption in 2021 remains uncertain, but they expect growth to resume sequentially in 2021 [57][58] Other Important Information - The company has implemented enhanced cleaning protocols and safety measures in its commercial properties to prepare for reentry [8] - The company was recognized for its robust ESG program, receiving an award for the Best Corporate Responsibility Program in DC and Maryland [29][30] Q&A Session Summary Question: Is there an increase in transactional volume in the investment sales market? - Management noted that suburban multifamily markets are seeing increased activity, while downtown D.C. is hindered by TOPA regulations [76][77] Question: Are there more core deals or value-add deals on the market? - Management indicated that Northern Virginia is seeing more value-add deals due to the resiliency of the job market, while D.C. is less active [84][85] Question: What is the outlook for smaller tenants in terms of space utilization? - Smaller tenants are returning to the office, while larger tenants are more cautious and considering longer-term deals [93][94] Question: What is the company's stance on potential asset dispositions? - Management remains open to monetizing assets if compelling offers arise, but is currently focused on maintaining cash flow [102][103]