Griffin Realty Trust Inc., a publicly registered non-traded real estate investment trust formerly known as Griffin Capital Essential Asset REIT, has reported its results for the quarter of 2021.
Total revenue of approximately $118.8 million for the quarter ended June 30, 2021, an increase of $13.4 million compared to the same quarter last year.
The company said that the increase was primarily attributable to $22.8 million of rental income in connection with the acquisition of Cole Office & Industrial REIT, an unaffiliated non-traded REIT; offset by approximately $8.4 million of lower termination income in the current period.
Net income attributable to common stockholders was approximately $3 million, or $0.01 per basic and diluted share, for the quarter ended June 30, 2021, compared to approximately $3.3 million, or $0.01 per basic and diluted share, for the quarter ended June 30, 2020.
Adjusted funds from operations was approximately $55.3 million, or $0.16 per basic and diluted share, for the quarter ended June 30, 2021. This result represents an increase of $5.3 million and a decrease in AFFO of $0.03 per basic and diluted share as compared to the same period in 2020.
The REIT said that, consistent with total revenue, the changes to AFFO were primarily attributable to the acquisition of Cole Office & Industrial REIT. While the acquisition was accretive to the company’s AFFO by approximately $0.01 per share for the quarter, the decrease was primarily attributable to lower termination income in the current period.
Adjusted EBITDA was approximately $77.4 million for the second quarter of 2021. This resulted in fixed charge and interest coverage ratios of 3.1x and 3.8x, respectively, for the quarter.
Compared to the last quarter, net debt decreased from $2.6 billion to $2.5 billion. The ratio of debt, net less cash and cash equivalents, to total real estate, was 43.4 percent.
“We are seeing increased demand across many of our Sunbelt markets that are experiencing accelerated positive net migration,” said Michael Escalante, chief executive officer. “With leverage of just 41.8% of enterprise value, our balance sheet remains in great shape, and during the second quarter, our strong credit position enabled us to lower the effective interest rate on our $150 million 7-year loan by 35 basis points to 1.50 percent per annum.”
“While we have seen a growing list of companies announce they are intending to return to physical workspaces this Fall, the renewed spread of the Delta variant requires continued vigilance and appropriate caution,” he added. “Notwithstanding any further pandemic related setbacks, we believe our high quality portfolio, primarily leased to Blue Chip tenants, will continue to provide stability to our results, consistent with our experience through the COVID-19 pandemic.”
As of June 30, 2021, the company’s weighted average loan maturity was 4.2 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.
The company signed two new leases totaling 40,400 square feet. This activity includes a new lease at Atlanta Wildwood for approximately 35,000 square feet for a 12-year term and a new three-year lease for approximately 5,600 square feet at Houston Westway II. The company also signed two renewal leases representing 33,500 square feet, including a five-year lease extension with Texas Capital Bank at Houston Westway II and a seven-year lease extension with Global Equipment Company at Parkland Center.
In July 2021, the REIT published an updated estimate of its net asset value as of June 30, 2021. The NAV per share increased by $0.05 to $9.10 per share compared to $9.05 per share as of March 31, 2021, or a 2.2 percent annualized increase.
The change was primarily due to net operating income in excess of distributions during the quarter. Real estate values remained fairly static on a portfolio basis, the company said.
The REIT’s portfolio had an enterprise value of approximately $5.8 billion and was 95 percent leased. The weighted average remaining lease term was approximately 6.6 years with approximately 2.0 percent average annual contractual rent growth for the remainder of the existing term for all leases combined.
The portfolio’s economic occupancy was 94.8 percent. The industrial portfolio was at 100 percent economic occupancy, and office was at 91.7 percent.
The REIT collected 100 percent of contractual rent due in the second quarter and in the month of July.
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 deems creditworthy.
The REIT’s portfolio consists of 121 properties (144 buildings) totaling 29.2 million square feet. Major tenants include Amazon.com, General Electric, and Keurig Dr. Pepper, among others.