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GOV Has Quiet Quarter, Misses Estimates Due to Interest in SIR, Say Analysts


Government Properties Income Trust recently revealed Q1 numbers and results were mostly in line with analysts’ expectations. The company had a quiet quarter, said RBC Capital Markets LLC. “Outside of the SIR holdings, results were largely in line with expectations.”

According to the analyst firm, FFO missed its estimated numbers by $.04 per share but RBC believes this was largely due to the company’s interest in SIR, which had a tenant bankruptcy in 1Q17.

David Blackman, president and COO of GOV, said that “Government Properties Income Trust continued its solid leasing performance during the first quarter, executing over 360,000 square feet of new and renewal leases for a weighted average lease term in excess of 10 years, a 5.2% increase in rents over previous rents for the same space, and leasing capital and concessions of $0.59 per square foot per lease year.”

Blackman adds that “Year over year, our consolidated occupancy increased 20 basis points to 95.1% as a result of our strong leasing performance.”

According to RBC Capital markets, one thing that stood out this quarter was that leverage was largely unchanged compared to the previous period. “The debt to gross book value was 51.5%, which was in-line with the prior quarter, and up modestly from 48.8% in 1Q16. Management has previously stated it is comfortable with this ratio, says RBC, in the mid-50% range. “We do not expect the company will meaningfully improve leverage in the near term.”