Realty Income misses fourth-quarter FFO estimates on higher costs

By Thomson Reuters Feb 20, 2024 | 5:14 PM

(Reuters) – Realty Income Corp on Tuesday reported funds from operation (FFO) per share for the fourth quarter below Wall Street estimates, as elevated property maintenance costs offset growth in rental revenue.

The real estate investment trust’s (REIT) portfolio includes more than 13,000 commercial properties across countries such as the United States, UK and Spain and industries such as retail, gaming and industrial.

The company has been able to increase rental revenue by recapturing existing clients at higher rental rates and using data analytics to invest in high-growth real estate.

However, higher cost of capital and inflation-led property management costs have trimmed profits.

Realty Income reported adjusted funds from operations of $1.01 per share for the quarter ended Dec. 31, compared with analysts’ estimates of $1.04 per share, according to LSEG data.

The San-Diego, California based company reported same-store rental revenue growth of 2.6% and a rent recapture rate of 103.6% on properties re-leased.

Total revenue for the reported quarter was $1.08 billion, up from $888.7 million last year.

(Reporting by Ananta Agarwal and Pritam Biswas in Bengaluru; Editing by Shailesh Kuber)