News Column

Select Income REIT Announces Second Quarter Results

August 16, 2014



By a News Reporter-Staff News Editor at Investment Weekly News -- Select Income REIT (NYSE: SIR) announced financial results for the quarter and six months ended June 30, 2014.

David Blackman, President and Chief Operating Officer of SIR, made the following statement: "Select Income REIT generated solid results across the board in the second quarter, reporting increased occupancy, while also maintaining its track record of strong double digit leasing/rent reset increases in Hawaii. Additionally, we acquired two mainland properties and better positioned the company for continued growth by substantially lowering leverage through our May 2014 equity offering." Results for the Quarter Ended June 30, 2014: Normalized funds from operations, or Normalized FFO, for the quarter ended June 30, 2014 were $39.2 million, or $0.72 per share, compared to Normalized FFO for the quarter ended June 30, 2013 of $30.4 million, or $0.77 per share. Net income was $30.2 million, or $0.56 per share, for the quarter ended June 30, 2014, compared to $22.8 million, or $0.58 per share, for the same quarter last year. The decline in Normalized FFO per share and net income per share for the quarter ended June 30, 2014 primarily resulted from the increase in SIR's weighted average number of common shares outstanding from 39.3 million for the quarter ended June 30, 2013 to 54.2 million for the quarter ended June 30, 2014, which was partially offset by increases in Normalized FFO and net income from recent acquisitions and positive leasing/rent resets at SIR's Hawaii properties.

A reconciliation of net income determined in accordance with U.S. generally accepted accounting principles, or GAAP, to FFO, and Normalized FFO and of NOI to net income determined in accordance with GAAP for the quarters ended June 30, 2014 and 2013 appears later in this press release. Results for the Six Months Ended June 30, 2014: Normalized funds from operations, or Normalized FFO, for the six months ended June 30, 2014 were $75.6 million, or $1.45 per share, compared to Normalized FFO for the six months ended June 30, 2013 of $60.5 million, or $1.54 per share. Net income was $55.3 million, or $1.06 per share, for the six months ended June 30, 2014, compared to $45.4 million, or $1.16 per share, for the six months ended June 30, 2013. The decline in Normalized FFO per share and net income per share for the six months ended June 30, 2014 primarily resulted from the increase in SIR's weighted average number of common shares outstanding from 39.3 million for the six months ended June 30, 2013 to 52.0 million for the six months ended June 30, 2014, which was partially offset by an increase in Normalized FFO and net income from recent acquisitions and positive leasing/rent resets at SIR's Hawaii properties.

A reconciliation of net income determined in accordance with GAAP to FFO, and Normalized FFO and of NOI to net income determined in accordance with GAAP for the six months ended June 30, 2014 and 2013 appears later in this press release. Occupancy and Leasing Results: SIR entered into new leases for approximately 91,000 square feet and lease renewals for approximately 148,000 square feet during the quarter ended June 30, 2014, which resulted in combined weighted average rental rates that were approximately 21.0% higher than prior rents for the same space. The weighted average lease term for leases entered into during the second quarter of 2014 was 7.0 years. Commitments for tenant improvements, leasing commission costs and concessions for leases entered into during the quarter ended June 30, 2014 totaled approximately $647,000, or approximately $0.39 per square foot per year of the weighted average lease term. All leasing activity during the quarter ended June 30, 2014 occurred at SIR's Hawaii properties.

During the quarter ended June 30, 2014, SIR also completed 11 rent resets at properties located in Hawaii for approximately 721,000 square feet of land at combined weighted average reset rates that were approximately 30.9% higher than prior rates.

Keywords for this news article include: Finance, Select Income REIT.

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Source: Investment Weekly News


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