Real estate investment trusts are forecast to see a slight year-over-year increase in funds from operations per share for the first quarter but a decline compared to the prior quarter, according to a consensus of analyst estimates compiled by S&P Global Market Intelligence.
The analysis includes US equity REITs above $200 million market capitalization as of April 14 with at least three earnings estimates for the fiscal quarter ended March 31.
FFO per share
Overall, US REITs are expected to report a median year-over-year growth of 0.5% in funds from operations (FFO) per share in their upcoming first-quarter earnings, according to the consensus of analysts.
On a quarterly basis, FFO per share is forecast to drop 3.5% on a median basis compared to the fourth quarter of 2022.
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Hotel REITs are predicted to report the highest median annual growth in FFO per share, at 36.6%, but estimates sit 25.4% below fourth-quarter 2022 levels. Earnings for hotel REITs consistently improved in 2021 and the first half of 2022 from their pandemic lows. However, same-store occupancy dipped a bit in the third and fourth quarters of 2022.
The self-storage and residential sectors follow with estimated FFO-per-share year-over-year increases of 9.4% and 8.6%, respectively.
On the bottom end, office and regional mall REITs are predicted to report the largest drops in FFO per share for the first quarter, down 9.4% and 7.3% year over year, respectively.
Adjusted FFO per share
Estimates for adjusted funds from operations (AFFO) per share follow a trend similar to FFO, up a slight 0.3% year over year for US REITs, on a median basis.
The hotel, self-storage and residential sectors are at the top of the list with the largest estimated year-over-year increases in AFFO per share.
However, office REITs are expected to report a median 14.2% year-over-year drop in AFFO per share.
EBITDA
Consensus EBITDA estimates show year-over-year growth across all REIT property segments.
Hotel and industrial REITs are forecast to report the highest year-over-year increase in EBITDA for the first quarter of 2023.
