Griffin Realty Trust Provides Update on Strategic Review, NAV, and Financial Performance
Griffin Realty Trust Inc., a publicly registered non-traded real estate investment trust formerly known as Griffin Capital Essential Asset REIT, has reported its financial results for the quarter and full year ended December 31, 2021.
Griffin Realty Trust Inc., a publicly registered non-traded real estate investment trust formerly known as Griffin Capital Essential Asset REIT, has reported its financial results for the quarter and full year ended December 31, 2021. The company also provided an update on retaining financial advisors to assist in its ongoing strategic review process, as well as a timeline for publishing its net asset value per share and partially reinstating its share redemption program.
Griffin Realty Trust’s board and management team are undertaking a strategic review process to evaluate potential alternatives and has retained Goldman Sachs & Co. LLC, Eastdil Secured Advisors LLC, and BofA Securities as financial advisors to assist in the process.
In addition, the company plans to resume publishing its net asset value per share no later than June 30, 2022. After publishing an updated NAV, it intends to partially reinstate the share redemption program for redemptions related to a stockholder’s death or qualifying disability. The company previously suspended publishing its NAV and effecting redemptions on October 1, 2021, “in light of certain strategic initiatives it has been pursuing.”
Results for the Quarter Ended December 31, 2021
Total revenue grew 23.7 percent to approximately $119.1 million for the quarter ended December 31, 2021, an increase of $22.8 million compared to the same quarter last year. The company said that the growth was primarily attributed to $23.1 million of rental income in connection with the March 2021 acquisition of Cole Office & Industrial REIT.
Net income (loss) attributable to common stockholders was approximately $1.0 million, or zero per basic and diluted share, for the quarter ended December 31, 2021, compared to a net loss attributable to common stockholders of approximately $(8.4) million, or $(0.04) per basic and diluted share, for the quarter ended December 31, 2020.
Adjusted funds from operations totaled approximately $59.4 million and $37.2 million, or $0.17 and $0.14 per basic and diluted share, for the fourth quarter 2021 and 2020, respectively. Consistent with total revenue, the increase was primarily due to the Cole Office & Industrial REIT merger and was also accretive to the AFFO per share by $0.01, the company said.
Adjusted EBITDA was approximately $81.7 million for the fourth quarter 2021. This resulted in fixed charge and interest coverage ratios of 3.1x and 4.0x, respectively, for the quarter.
The company signed four new leases totaling approximately 330,500 square feet.
Results for the Year Ended December 31, 2021
Total revenue was approximately $459.9 million for 2021, an increase of $62.4 million compared to the prior year. The increase was primarily a result of the Cole Office & Industrial REIT merger.
Net income attributable to common stockholders was approximately $1.6 million, or zero per basic and diluted share, for 2021, compared to net loss of approximately $(13.0) million, or $(0.06) per basic and diluted share, in 2020.
Adjusted funds from operations totaled approximately $215.8 million, or $0.63 per basic and diluted share, for the year ended December 31, 2021, an increase of $47.6 million compared to the same period in 2020.
Adjusted EBITDA was approximately $303.6 million for the year ended December 31, 2021. This resulted in fixed charge and interest coverage ratios of 3.0x and 3.8x, respectively.
The REIT signed six lease renewals for 1.1 million square feet and 11 new leases for 0.5 million square feet, resulting in 1.6 million square feet of leases signed during 2021.
The REIT completed three dispositions during the year for total proceeds of $23.8 million, less closing costs.
Net debt was approximately $2.4 billion. Net debt to normalized EBITDAre and net debt plus preferred to normalized EBITDAre were 7.4x and 7.8x, respectively. The ratio of debt, net, less cash and cash equivalents, to total real estate was 42.6 percent.
As of December 31, 2021, the company’s weighted average loan maturity was 3.7 years with 70 percent of the loan balance having a fixed interest rate, including the effect of interest rate swaps. Approximately 40 percent of the company’s consolidated debt was secured and approximately 60 percent was unsecured.
As of December 31, 2021, the REIT’s portfolio had enterprise value of approximately $5.7 billion. The weighted average remaining lease term was approximately 6.3 years with approximately 2.0 percent average annual contractual rent growth for the remainder of the existing term. The portfolio was 94.5 percent leased, and the economic occupancy was 93.8 percent. Economic occupancy for the industrial and office portfolio was 100 percent and 90 percent, respectively.
“We have successfully maintained strong occupancy and collected approximately 100 percent of contractual rent over the last two years, despite the continuing challenges posed by COVID and other macro-economic trends…,” said Michael J. Escalante, chief executive officer. “With a strong financial foundation in place, we are continuing to invest accretively in our current portfolio by modernizing properties and improving amenities, renewing tenants and pursuing new tenants where the associated economics add value.”
“As we move forward, our asset management team is keenly focused on proactively addressing the upcoming lease expirations over the next few years,” he added. “The board and management team are intent on maximizing the value of our real estate assets while realizing as much liquidity as feasible given current market conditions. We continue to actively evaluate all opportunities and, with the assistance of leading financial advisors, pursue certain selective alternatives as part of our ongoing strategic review process.”
Griffin Realty Trust owns and operates a portfolio of corporate office and industrial properties that are primarily net leased to single tenants that the company has determined to be creditworthy. The portfolio, as of December 31, 2021, consisted of 121 office and industrial properties (144 buildings), totaling 29.2 million in rentable square feet, located in 26 states, representing a total enterprise value of approximately $5.7 billion.
