VEREIT Inc. is pleased with the firm’s operational and capital allocation results for the quarter. Year-to-date acquisitions totaled $221 million.
As described last quarter, the REIT formed an industrial partnership including six REIT outfits, totaling $407.5 million, which closed on May 30th, and contributed $326 million to dispositions. According to CEO Glenn Rufrano, on the firm’s Q2 earnings call, portfolio sales were $430 million, bringing total dispositions to $756 million, including 80% share of the industrial partnership. “And we reduced net debt to normalized EBITDA from 5.9 to 5.7 in the first quarter, and further, to 5.3 times in Q2.”
He noted that leasing for the quarter was very active, with 357,000 square feet leased, and occupancy ending at a healthy 99%. “Same-store rent was up 1%. Year-to-date, we have leased 1.2 million square feet, of which 1.1 million square feet were renewals, and 248,000 square feet early renewals. Leasing activity included 442,000 square feet of retail, 407,000 square feet of office, 269,000 square feet of restaurants, and 85,000 square feet of industrial. For renewal leases, we recaptured approximately 100% of prior rents, and our remaining lease rollover exposure for the year is no 0.9%.”
Commercial real estate transactions in the first quarter were down 9% due to economic uncertainties at the end of 2018, he added. “But the interest rate dropped beginning early this year, the market has responded. And in Q2 and year-to-date, sales of $240 billion are on par with last year. We expect full-year sales to be comparable to the 2018 total of $578 billion.”
He noted that the firm is “taking advantage of a robust market in our asset allocation process. Excluding the industrial partnership, we are increasing our portfolio disposition guidance from $350 million to $500 million, to $500 million to $650 million, and our acquisition range from between $250 million and $500 million to $400 million and $600 million.”