More than half of US equity real estate investment trusts reported funds from operations for the second quarter that exceeded sell-side analyst expectations, according to an analysis by S&P Global Market Intelligence.
Financial results were analyzed for 115 US REITs, 71 of which, or 61.7%, reported funds from operations (FFO) per share higher than consensus estimates for the quarter. Meanwhile, 25 REITs in this analysis reported FFO per share short of analyst estimates, and the remaining 19 reported FFO per share in line with expectations.
The analysis covered US equity REITs that trade on the Nasdaq, NYSE or NYSE American, with market capitalizations of more than $200 million and had three or more FFO-per-share estimates for the three months ended June 30.
Datacenter REITs top analyst estimates
Both datacenter REITs in the analysis reported FFO per share higher than their respective consensus estimates for the second quarter. Digital Realty Trust Inc. reported FFO of $1.68 per share for the quarter, 2 cents higher than its consensus estimate of $1.66 per share. Equinix Inc. reported FFO of $5.28 per share, also 2 cents higher than its consensus estimate of $5.26 per share.
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Additionally, eight of the 10 analyzed industrial REITs topped their respective FFO-per-share estimates for the quarter, while the other two reported results that were in line with estimates.
Twelve office REITs, or three-fourths of the sector, also surpassed their consensus FFO-per-share estimates for the quarter. Within the office sector, Empire State Realty Trust Inc. reported the largest beat, at 18.2%, followed by Vornado Realty Trust at 15.6%.
On the other hand, half of the self-storage REITs reported FFO per share short of their consensus estimates for the second quarter. Extra Space Storage Inc.'s FFO of $2.06 per share fell short of its consensus estimate of $2.15 per share, while National Storage Affiliates Trust missed its consensus estimate by 2.9%.
Biggest beats
Multifamily REIT Veris Residential Inc. reported the largest relative beat for the second quarter, reporting core FFO per share of 16 cents per share, 77.8% higher than its consensus estimate of 9 cents per share and an increase of 1 cent per share compared to the first quarter. Veris Residential's core FFO per share for the second quarter included a 2-cent-per-share adjustment related to real estate taxes and an almost 3-cent-per-share adjustment related to an annual early tax credit.
Healthcare REIT Medical Properties Trust Inc. followed next, topping its consensus FFO-per-share estimate for the second quarter by 29.7%, while JBG Smith Properties, a diversified REIT, beat its earnings estimate by 20.0%.
Largest misses
On the other hand, Whitestone REIT reported FFO per share of 21 cents per share, 16.0% shorter than its consensus estimate of 25 cents per share. The shopping center REIT's FFO per share for the second quarter was negatively impacted by litigation expenses equating to approximately 3 cents per share related to legal issues with the firm's joint venture partner Pillarstone Capital REIT.
Casino REIT Gaming & Leisure Properties Inc. followed next, reporting FFO per share for the second quarter of 83 cents per share, 8.8% lower than its consensus estimate of 91 cents per share, while Host Hotels & Resorts Inc. placed third, missing its FFO-per-share estimate by 5.4%.
