Griffin Capital Essential Asset REIT Reports First Quarter 2021 Results, 100% Rent Collections
Griffin Capital Essential Asset REIT Inc., a publicly registered non-traded real estate investment trust, has reported its results for the quarter ended March 31, 2021.
Griffin Capital Essential Asset REIT Inc., a publicly registered non-traded real estate investment trust, has reported its results for the quarter ended March 31, 2021. The company also reported that it collected 100 percent of contractual rent due in the first quarter and April 2021.
“As the COVID-19 pandemic continues to subside, we are seeing a gradual return to physical workplaces and an increase in prospective tenant interest,” said Michael Escalante, chief executive officer. “Our industrial assets are experiencing strong demand and the geographic orientation of our office portfolio in growing MSAs is particularly advantageous given COVID-driven population migration out of urban centers.”
On March 1, 2021, Griffin Capital Essential Asset REIT completed its acquisition of Cole Office & Industrial REIT in a stock-for-stock merger transaction valued at approximately $1.3 billion.
Total revenue was approximately $101.4 million for the quarter ended March 31, 2021, an increase of $5.7 million compared to the same quarter last year. The company said that the increase was primarily due to $7.7 million of rental income in connection with the Cole REIT acquisition, offset by approximately $2.2 million from two dispositions during 2020.
Net loss attributable to common stockholders was approximately $(4.8) million, or $(0.02) per basic and diluted share, for the quarter ended March 31, 2021, compared to approximately $0.7 million, or zero cents per basic and diluted share, for the quarter ended March 31, 2020, respectively. The company said the loss was primarily due to a $4.2 million impairment provision recognized during the quarter.
Adjusted funds from operations was approximately $45.9 million, an increase of $4.6 million compared to the same period in 2020. AFFO per share was $0.16 for the quarter ended March 31, 2021 and 2020. The company said that, consistent with total revenue, the increase was primarily due to the acquisition of the Cole REIT and was also accretive to its AFFO per share for the quarter with only having one month of operations.
Funds from operations totaled $43.3 million for the first quarter of 2021, or $0.15 per share, compared to $44 million, or $0.17 per share, for the same period last year.
Total distributions were $25.1 million (including $7.2 million of shares via the distribution reinvestment plan).
Adjusted EBITDA was approximately $67.2 million for the quarter ended March 31, 2021, compared to approximately $63.5 million for the quarter ended March 31, 2020. Adjusted EBITDA, pro forma, to include a full quarter of activity for the Cole REIT merger was approximately $79 million for the first quarter of 2021.
Compared to the previous quarter, net debt increased from $2.1 billion to $2.5 billion. Net debt (pro rata share) also increased from $2.1 billion to $2.5 billion as a result of the Cole Office & Industrial REIT acquisition. The ratio of debt, net less cash and cash equivalents, to total real estate, was 43.5 percent.
As of March 31, 2021, the REIT’s weighted average loan maturity was 4.5 years with 70 percent of the loan balance having a fixed interest rate, including the effect of interest rate swaps.
Griffin Capital Essential Asset REIT published an updated net asset value per share of $9.05 as of March 31, 2021, a 4.5 percent annualized increase compared to the previous quarterly NAV of $8.95 per share as of December 31, 2020.
The company noted that the change was primarily due to an increase in interest rates during the first quarter and operating cash flows in excess of distributions. Rising interest rates had a positive impact on NAV, as they caused a $17 million decrease in the unrealized loss on its interest rate swap valuations and a $2.5 million decrease in the mark-to-market valuation of its secured debt. Operating cash flows were approximately $18.5 million more than distributions paid in the first quarter which also had a positive effect on the company’s NAV.
As of March 31, 2021, the portfolio had a weighted average remaining lease term of approximately 6.8 years with approximately 2.1 percent average annual rent growth for the remainder of the existing term for all leases combined. The portfolio was 90.2 percent leased and 90.1 percent occupied.
Griffin Capital Essential Asset REIT’s $5.9 billion portfolio consists of 123 office and industrial properties (136 buildings) totaling 30.7 million in rentable square feet and located in 26 states.
