Among the 25 largest US equity real estate investment trusts by market capitalization, 11 reported funds from operations per share above their respective consensus per-share estimate while 10 fell short. The remaining four reported funds from operations per share in line with their consensus estimates.
Welltower reports largest earnings beat of group
Healthcare REIT Welltower Inc. reported the largest earnings beat of the group, with normalized funds from operations (FFO) of $1.11 per share, 6.7% higher than its consensus estimate of $1.04 per share. A large contributor to Welltower's performance stemmed from its senior housing operating portfolio, which recorded 23% year-over-year growth in same-store net operating income for the third quarter.
Welltower's normalized FFO per share for the third quarter increased 5.7% over the quarter prior and 20.7% year over year.
Shopping center REIT Kimco Realty Corp. followed, reporting FFO of 43 cents per share, 4.9% above its consensus estimate of 41 cents per share. The 7.5% year-over-year growth was driven by Kimco's acquisition of RPT Realty and by higher minimum rents fueled by quicker rent starts, Kimco CFO Glenn Gary Cohen said on the REIT's third-quarter earnings call. That being said, net operating income growth for the quarter was partially offset by greater pro rata interest expense due to higher debt levels.
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Industrial REIT Prologis Inc., the largest US equity REIT by market capitalization, reported core FFO of $1.43 per share, 3.6% above its consensus estimate of $1.38 per share. Core FFO per share for the third quarter was up 6.7% over the quarter prior and 10.0% year over year.
The other REITs in the analysis that reported FFO per share above their respective consensus estimates were VICI Properties Inc., Extra Space Storage Inc., Healthpeak Properties Inc., Invitation Homes Inc., Mid-America Apartment Communities Inc., Ventas Inc., Essex Property Trust Inc. and AvalonBay Communities Inc.
On the other hand, communications REIT American Tower Corp. reported Nareit FFO of $857.4 million, or roughly $1.83 per share, 25.3% below its consensus estimate of $2.45 per share. American Tower's FFO was negatively impacted by a $337.4 million loss on foreign currency exchange rate fluctuations during the quarter. That being said, American Tower reported adjusted FFO of $2.64, a calculation that further adjusts for noncash expenses, up 2.6% year over year.
American Tower completed the sale of its operations in India on Sept. 12. During the third quarter, the communications REIT also entered into agreements to sell its ownership in its subsidiaries in Australia and New Zealand for total aggregate consideration of approximately $78.2 million.
Industrial REIT Lineage Inc. reported core FFO of $35 million for the third quarter, or roughly 15 cents per share, much lower than the REIT's consensus estimate of 65 cents per share. However, adjusted FFO for the REIT came in at $208 million, or 90 cents per share, a 20% increase year over year on a per-share basis.
Other REITs on the list that reported FFO per share short of analyst estimates included Sun Communities Inc., Realty Income Corp., Simon Property Group Inc., SBA Communications Corp., Iron Mountain Inc., Equinix Inc., Public Storage and Crown Castle Inc.
Four REITs in the analysis — Digital Realty Trust Inc., Equity Residential, Alexandria Real Estate Equities Inc. and UDR Inc. — reported FFO per share in line with their respective consensus estimates.
