Retail Properties of America (RPAI) Tops Q1 EPS by 2c, Revenues Beat

Retail Properties of America (NYSE: RPAI) reported Q1 EPS of $0.02, $0.02 better than the analyst estimate of $0.00. Revenue for the quarter came in at $119.38 million versus the consensus estimate of $105.63 million.

"Helped by an accelerating macroeconomic backdrop, our team delivered solid outperformance in the first quarter, with notable fundamental gains for the third consecutive quarter. Leasing activity continues to accelerate with Q1 volumes more than double prior-year levels, 21.3% spreads on new leases, and earlier-than-forecast leasing progress at our One Loudoun expansion," stated Steve Grimes, chief executive officer. "Given our momentum, we are increasing our full-year 2021 Operating FFO guidance."

2021 GUIDANCE

Given ongoing consideration for the current macroeconomic and public health outlook, among other factors and variables, as well as first quarter results, the Company currently expects to generate net income attributable to common shareholders of $0.06 to $0.10 per diluted share in 2021, compared to the prior range of $0.02 to $0.10 per diluted share. The Company is updating its 2021 Operating FFO attributable to common shareholders guidance range to $0.83 to $0.87 per diluted share, up from the prior range of $0.76 to $0.84 per diluted share based, in part, on the following assumptions:

• General and administrative expenses of $41 to $43 million; and
• Acquisitions, property dispositions and capital markets transactions evaluated and executed opportunistically.

Additional factors influencing the 2021 guidance ranges include actual first quarter 2021 results, which included approximately $6 million recorded within lease income, equating to $0.03 per diluted share, primarily consisting of prior period amounts received during the first quarter of 2021 from cash-basis and vacated tenants, as well as expectations for:

• Occupancy;
• Collectibility of lease income amounts deferred from 2020 that are due in 2021;
• Collection of 2021 lease income amounts due from tenants accounted for on the cash basis of accounting, which aggregated 11% of ABR as of March 31, 2021, the population of which is subject to evaluation and adjustment each reporting period, and the impact of any such adjustment could be significant; and
• Variability in non-cash items, including straight-line rent, which is largely dependent on changes to the aforementioned population of cash-basis tenants.

For earnings history and earnings-related data on Retail Properties of America (RPAI) click here.

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