Post Earnings Coverage as Invitation Homes Reported Robust Results; Revenue Gained 6.3% and AFFO Surged 30%
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Upcoming AWS Coverage on Brookfield Property Partners Post-Earnings Results
LONDON, UK / ACCESSWIRE / May 31, 2017 / Active Wall St. announces its post-earnings coverage on Invitation Homes Inc. (NYSE: INVH). The Company released its first quarter fiscal 2017 financial results on May 11, 2017. The REIT surpassed revenue estimates. Register with us now for your free membership at:
One of Invitation Homes' competitors within the Real Estate Development space, Brookfield Property Partners L.P. (NYSE: BPY), announced on May 05, 2017, its financial results for Q1 2017 which ended on March 31, 2017. AWS will be initiating a research report on Brookfield Property Partners in the coming days.
Today, AWS is promoting its earnings coverage on INVH; touching on BPY. Get our free coverage by signing up to:
For the quarter ended March 31, 2017, Invitation Homes' total revenues increased 6.3% to $238.75 million compared to revenue of $224.50 million in Q1 2016. Revenue growth was driven by an increase in average rental rate per home and higher occupancy. The Company's revenue numbers surpassed analysts' consensus of $238.10 million.
Invitation Homes' net loss for Q1 2017 was $42.4 million, an increase of $32.4 million compared to net loss of 9.98 million the prior year's corresponding quarter. The increase in net loss was primarily due to a $40.0 million increase in share-based compensation related to the Company's initial public offering (IPO) and $7.6 million of other non-recurring general and administrative cost associated with the IPO. Exclusive of these two items, results improved by $15.3 million from the prior year, primarily due to higher revenues.
For Q1 2017, Invitation Homes' Core FFO increased 21.6% to $78.20 million compared to $64.30 million in Q1 206, primarily due to an increase in NOI, driven by higher revenues. Lower interest expense, net of non-cash interest, also contributed to the increase in Core FFO. The Company's AFFO for the reported quarter surged 30.4% to $68.97 million compared to $52.89 million in the prior year's same quarter, primarily driven by the increase in Core FFO, as well as a 19.1% decline in recurring CapEx.
Operating Results
During Q1 2017, Invitation Homes' Same Store revenue growth of 4.7% was driven by a 4.5% increase in average monthly rent and a 22.3% increase in other property income, partially offset by a 0.6% decline in average occupancy to 95.8%. The Company's Same Store expenses increased 3.0% on a y-o-y basis, driven primarily by 7.1% higher property taxes. Personnel, leasing & marketing, and insurance costs were lower on a y-o-y basis by 15.9%, 17.3%, and 10.7%, respectively.
During Q1 2017, for Invitation Homes' Same Store portfolio of 43,224 homes, Same Store NOI increased 5.7% on a y-o-y basis on Same Store revenue growth of 4.7% and Same Store expense growth of 3.0%. As a result, Core NOI margin increased to 64.3% in the reported quarter compared to 63.4% in the year ago same period.
Investment Management Activity
In Q1 2017, Invitation Homes acquired 121 homes for $31.2 million, including estimated renovation cost, and sold 501 homes for gross proceeds of $77.7 million, resulting in total portfolio home count at March 31, 2017, of 47,918 homes. The Company's dispositions in the reported quarter resulted in a gain on sale, net of tax of approximately $14.3 million.
Balance Sheet and Capital Markets Activity
At March 31, 2017, Invitation Homes had $1.19 billion in availability through a combination of unrestricted cash and undrawn capacity on its credit facility. The Company's total indebtedness at March 31, 2017, was $5.73 billion, consisting of $4.23 billion of secured debt and $1.50 billion of unsecured debt.
During the reported quarter, Invitation Homes completed an initial public offering of 88,550,000 shares of its common stock at a price of $20.00 per share, resulting in net proceeds of $1.67 billion after deducting underwriting discounts and offering expenses payable by the Company. In addition, Invitation Homes entered into a $1,500 million Term Loan Facility with a five-year term and a $1.00 billion revolving credit facility. With proceeds from the initial public offering and the Term Loan Facility, and cash on hand, the Company repaid $3.34 billion of debt.
Furthermore, Invitation Homes entered into three interest rate swap agreements during Q1 2017 with a combined notional amount of $2.02 billion. Together with two interest rate swap agreements entered into during Q4 2016, the aggregate amount of debt the Company has swapped from floating rate to fixed rate was $3.52 billion.
Stock Performance
At the closing bell, on Tuesday, May 30, 2017, Invitation Homes' stock was slightly up 0.75%, ending the trading session at $21.36. A total volume of 1.47 million shares were traded at the end of the day, which was higher than the 3-month average volume of 1.24 million shares. The stock gained 6.80% since the start of the year. The stock has a dividend yield of 1.12% and currently has a market cap of $6.63 billion.
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