PS Business Parks (PSB) Q4 FFO And Revenues Beat Estimates

PS Business Parks, Inc. (NYSE:PSB) reported fourth-quarter 2019 core funds from operations (FFO) per share of $1.65, which exceeded the Zacks Consensus Estimate of $1.63. The figure remains flat, year over year.

Results highlight improvement in same-park net operating income (NOI), backed by growth in rental rates, as well as higher NOI from non-same-park and multi-family assets.

However, shares of PS Business Parks depreciated 1.87% during Wednesday’s regular trading session, reflecting broader market sentiments.

Rental income came in at around $106.2 million, marking 2% growth from the year-ago quarter.

For full-year 2019, core FFO per share came in at $6.78, higher than the prior-year tally of $6.47. Rental income for the year came in at 429.8 million, up 3.9% year on year.

Quarter in Detail

Same-park rental income was up 6.6% year over year to $97.6 million, while same-park NOI climbed 6.1% to $70.3 million on improving rental rates.

Same-Park revenue per occupied-square-foot increased 7.8% to $16.10. However, weighted average square-foot occupancy shrunk 100 basis points year on year to 94.4%.

Portfolio Activity

During the fourth quarter, PS Business Parks completed the sale of three business parks in Montgomery County, MD — Metro Park North, Meadow Business Park and WesTech Business Park. These parks comprised 128 buildings, aggregating 1.3 million square feet of space, and were sold for $148.8 million.

Further, the company acquired a muti-tenant flex park — San Tomas Business Center —comprising roughly 79,000 rentable square feet in Santa Clara, CA, for $16.6 million.

Liquidity

PS Business Parks exited fourth-quarter 2019 with cash and cash equivalents of $62.8 million, up from the $37.4 million reported at the end of 2018.

Dividend Update

On Feb 18, the company announced a quarterly dividend of $1.05 per share. The dividend is payable on Mar 31, to shareholders of record as of Mar 16, 2020.

PS Business Parks currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We, now, look forward to the earnings releases of other REITs like Public Storage (NYSE:PSA) , American Tower Corporation (NYSE:AMT) and Mack-Cali Realty Corporation (NYSE:CLI) , all of which are slated to report their quarterly numbers next week.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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