Elme Communities (ELME, Financial), a multifamily REIT with communities in the Washington DC and Atlanta metro areas, announced its financial and operating results for the quarter ended September 30, 2023, on October 26, 2023. The company reported a net loss of $43.6 million, which includes a $41.9 million non-cash impairment charge. Despite the net loss, the company's NAREIT FFO was $20.1 million, and Core FFO was $21.4 million, up over 4% from the prior year period, primarily driven by rental rate growth.
Financial Performance
Elme Communities (ELME, Financial) reported a net loss of $43.6 million, or $0.50 per diluted share, which includes a $41.9 million non-cash impairment charge. Despite the net loss, the company's NAREIT FFO was $20.1 million, or $0.23 per diluted share. Core FFO was $21.4 million, or $0.24 per diluted share, up over 4% from the prior year period, primarily driven by rental rate growth. Net Operating Income (NOI) was $36.9 million, up over 5% from the prior year period, also primarily driven by rental rate growth.
Operational Highlights
Same-store multifamily NOI increased by 7.3% compared to the prior year period. Effective blended Lease Rate Growth was 3.0% during the quarter for the Same-store Portfolio, comprised of effective new Lease Rate Growth of 0.1% and effective renewal Lease Rate Growth of 5.1%. Average Effective Monthly Rent per home increased 4.9% compared to the prior year period for the Same-store Portfolio. Same-store Retention was 61% while achieving strong renewal lease rate growth. Same-store multifamily Average Occupancy was 95.6% during the quarter, up 0.2% compared to the prior year period. Same-store multifamily Ending Occupancy was 95.7% as of September 30, 2023, up 0.4% compared to the prior year period.
Acquisitions and Liquidity Position
The company completed the acquisition of Elme Druid Hills in Atlanta, GA for $108.0 million on September 29, 2023. Available liquidity was approximately $560 million as of September 30, 2023, consisting of availability under the Company's revolving credit facility and cash on hand. The Company has no debt maturities until 2025 and no secured debt.
Outlook
Management is tightening the range of its 2023 Core FFO guidance and maintaining its midpoint at $0.98 per fully diluted share. Core FFO for 2023 is now expected to range from $0.97 to $0.99 per fully diluted share. Same-store multifamily NOI growth is expected to range from 8.0% to 9.0%.
Explore the complete 8-K earnings release (here) from Elme Communities for further details.
