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In response to the coronavirus pandemic, Corporate Office Properties Trust has issued an update on the company’s operations and development projects.
The company noted that all of its buildings are open and operating, while renewal leasing is advancing as expected. Further, the company kept its renewal rate expectation of 70-75% for 2020 unchanged.
Notably, as of Dec 31, 2019, the company derived 88% of its core portfolio annualized rental revenue (ARR) from Defense/IT locations that support the U.S. government and its contractors, majority of whom are associated with national security and defense/IT operations. The rest 12% of the core portfolio ARR comes in from Regional Office properties, including tenants belonging to the financial services, health care & public health sectors. Therefore, these properties are considered to be fully essential and thus, fully operational.
So far, tenant relief requests remain low. As of Apr 14, tenants denoting less than 1% of its core portfolio ARR have requested short-term rent relief related to COVID-19. There have been no requests from the U.S. government tenants or major defense contractors. Requests have mainly been received from food and entertainment tenants who amenitize the company’s office parks.
Development leasing is on track for 1 million square feet in 2020. However, the company noted that it is experiencing modest processing delays, though still advancing. Moreover, the company has so far not witnessed any material delays in delivery of development projects.
With respect to its balance sheet, the company noted that it has ample liquidity and access to equity through additional data-center shell joint ventures. The company’s capital plan for the current year assumes the raising of $70-$90 million of equity. In case, the company raises no equity, which is the worst case scenario, its net debt to in-place adjusted EBITDA will increase by 0.2-0.3x at the end of the year.
Its 2019 adjusted funds from operations (AFFO) less dividends paid amounted to $52 million of liquidity. The company expects an increase in 2020 AFFO less dividends backed by developments that are likely to be placed into service. Further, the company placed a $23-million mortgage loan on three Redstone Gateway developments in March as well as an amended 2015 term loan in early March, thereby expanding the amount by $150 million and lowering the overall rate by 25 basis points. Also, the company noted that its 27.5 cents per share quarterly dividend is well covered by operations.
Therefore, though the coronavirus pandemic has been wreaking havoc all over, Corporate Office Properties Trust, with its sound liquidity position and majority of its portfolio being in locations that support U.S. government agencies and their contractors, is anticipated to sail through these uncertain times.
Plymouth Industrial REIT’s (PLYM - Free Report) Zacks Consensus Estimate for 2020 FFO per share moved up about 1.5% to $2.08 over the past two months. The stock currently holds a Zacks Rank of 2 (Buy).
SBA Communications Corporation’s (SBAC - Free Report) FFO per share estimate of $9.37 for the ongoing year indicates an increase of 10.4% year over year. The stock currently carries a Zacks Rank #2.
Highwoods Properties’ (HIW - Free Report) FFO per share estimate of $3.58 for the current year suggests growth of 7.5% year over year. The stock currently carries a Zacks Rank #2.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Corporate Office Properties Issues Update Amid Coronavirus Crisis
In response to the coronavirus pandemic, Corporate Office Properties Trust has issued an update on the company’s operations and development projects.
The company noted that all of its buildings are open and operating, while renewal leasing is advancing as expected. Further, the company kept its renewal rate expectation of 70-75% for 2020 unchanged.
Notably, as of Dec 31, 2019, the company derived 88% of its core portfolio annualized rental revenue (ARR) from Defense/IT locations that support the U.S. government and its contractors, majority of whom are associated with national security and defense/IT operations. The rest 12% of the core portfolio ARR comes in from Regional Office properties, including tenants belonging to the financial services, health care & public health sectors. Therefore, these properties are considered to be fully essential and thus, fully operational.
So far, tenant relief requests remain low. As of Apr 14, tenants denoting less than 1% of its core portfolio ARR have requested short-term rent relief related to COVID-19. There have been no requests from the U.S. government tenants or major defense contractors. Requests have mainly been received from food and entertainment tenants who amenitize the company’s office parks.
Development leasing is on track for 1 million square feet in 2020. However, the company noted that it is experiencing modest processing delays, though still advancing. Moreover, the company has so far not witnessed any material delays in delivery of development projects.
With respect to its balance sheet, the company noted that it has ample liquidity and access to equity through additional data-center shell joint ventures. The company’s capital plan for the current year assumes the raising of $70-$90 million of equity. In case, the company raises no equity, which is the worst case scenario, its net debt to in-place adjusted EBITDA will increase by 0.2-0.3x at the end of the year.
Its 2019 adjusted funds from operations (AFFO) less dividends paid amounted to $52 million of liquidity. The company expects an increase in 2020 AFFO less dividends backed by developments that are likely to be placed into service. Further, the company placed a $23-million mortgage loan on three Redstone Gateway developments in March as well as an amended 2015 term loan in early March, thereby expanding the amount by $150 million and lowering the overall rate by 25 basis points. Also, the company noted that its 27.5 cents per share quarterly dividend is well covered by operations.
Therefore, though the coronavirus pandemic has been wreaking havoc all over, Corporate Office Properties Trust, with its sound liquidity position and majority of its portfolio being in locations that support U.S. government agencies and their contractors, is anticipated to sail through these uncertain times.
Shares of this Zacks Rank #3 (Hold) company have depreciated 12.2% so far this year, while its industry has declined 14%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Plymouth Industrial REIT’s (PLYM - Free Report) Zacks Consensus Estimate for 2020 FFO per share moved up about 1.5% to $2.08 over the past two months. The stock currently holds a Zacks Rank of 2 (Buy).
SBA Communications Corporation’s (SBAC - Free Report) FFO per share estimate of $9.37 for the ongoing year indicates an increase of 10.4% year over year. The stock currently carries a Zacks Rank #2.
Highwoods Properties’ (HIW - Free Report) FFO per share estimate of $3.58 for the current year suggests growth of 7.5% year over year. The stock currently carries a Zacks Rank #2.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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