Elme Communities Announces Second Quarter 2025 Results
Elme Communities (NYSE:ELME) reported its Q2 2025 financial results, alongside a major strategic announcement. The company has entered into a $1.6 billion agreement with Cortland Partners to sell 19 multifamily communities and announced a voluntary plan of sale and liquidation of its remaining assets.
Q2 2025 operational highlights include a 4.5% increase in same-store multifamily NOI, 94.7% average occupancy (up 0.2% YoY), and blended lease rate growth of 1.3%. The company maintained a strong balance sheet with $330 million in available liquidity and a Net Debt to Adjusted EBITDA ratio of 5.6x. The company declared a quarterly dividend of $0.18 per share and has withdrawn its 2025-2026 guidance due to the planned liquidation.
Elme Communities (NYSE:ELME) ha comunicato i risultati finanziari del secondo trimestre 2025, insieme a un'importante annuncio strategico. La società ha stipulato un accordo da 1,6 miliardi di dollari con Cortland Partners per la vendita di 19 comunità multifamiliari e ha annunciato un piano volontario di vendita e liquidazione dei restanti asset.
I punti salienti operativi del secondo trimestre 2025 includono un aumento del 4,5% del NOI multifamiliare a parità di struttura, un'occupazione media del 94,7% (in crescita dello 0,2% su base annua) e una crescita combinata dei tassi di locazione dell'1,3%. La società ha mantenuto un bilancio solido con 330 milioni di dollari di liquidità disponibile e un rapporto Debito Netto su EBITDA rettificato di 5,6x. È stato dichiarato un dividendo trimestrale di 0,18 dollari per azione e la guidance per il 2025-2026 è stata ritirata a causa della prevista liquidazione.
Elme Communities (NYSE:ELME) informó sus resultados financieros del segundo trimestre de 2025, junto con un importante anuncio estratégico. La compañía ha firmado un acuerdo de 1.600 millones de dólares con Cortland Partners para vender 19 comunidades multifamiliares y anunció un plan voluntario de venta y liquidación de sus activos restantes.
Los aspectos destacados operativos del segundo trimestre de 2025 incluyen un aumento del 4,5% en el NOI multifamiliar de tiendas comparables, una ocupación promedio del 94,7% (un aumento del 0,2% interanual) y un crecimiento combinado de la tasa de arrendamiento del 1,3%. La empresa mantuvo un balance sólido con 330 millones de dólares en liquidez disponible y una relación Deuda Neta a EBITDA Ajustado de 5,6x. La compañía declaró un dividendo trimestral de 0,18 dólares por acción y retiró su guía para 2025-2026 debido a la liquidación planificada.
Elme Communities (NYSE:ELME)는 2025년 2분기 재무실적과 함께 주요 전략 발표를 공개했습니다. 회사는 Cortland Partners와 19개 다가구 커뮤니티를 16억 달러에 매각하는 계약을 체결했으며, 남은 자산의 자발적 매각 및 청산 계획을 발표했습니다.
2025년 2분기 운영 주요 내용으로는 동일 점포 다가구 순영업소득(NOI)이 4.5% 증가, 평균 점유율 94.7%(전년 대비 0.2% 상승), 그리고 통합 임대료 성장률 1.3%가 포함됩니다. 회사는 3억 3천만 달러의 사용 가능한 유동성과 순부채 대비 조정 EBITDA 비율 5.6배로 견고한 재무구조를 유지했습니다. 분기 배당금으로 주당 0.18달러를 선언했으며, 예정된 청산으로 인해 2025-2026년 가이던스를 철회했습니다.
Elme Communities (NYSE:ELME) a publié ses résultats financiers du deuxième trimestre 2025, accompagnés d'une annonce stratégique majeure. La société a conclu un accord de 1,6 milliard de dollars avec Cortland Partners pour la vente de 19 communautés multifamiliales et a annoncé un plan volontaire de vente et de liquidation de ses actifs restants.
Les faits marquants opérationnels du deuxième trimestre 2025 incluent une augmentation de 4,5 % du NOI multifamilial à périmètre constant, un taux d'occupation moyen de 94,7 % (en hausse de 0,2 % en glissement annuel) et une croissance combinée des loyers de 1,3 %. La société a maintenu un bilan solide avec 330 millions de dollars de liquidités disponibles et un ratio dette nette sur EBITDA ajusté de 5,6x. Un dividende trimestriel de 0,18 dollar par action a été déclaré, et les prévisions 2025-2026 ont été retirées en raison de la liquidation prévue.
Elme Communities (NYSE:ELME) veröffentlichte seine Finanzergebnisse für das zweite Quartal 2025 zusammen mit einer wichtigen strategischen Ankündigung. Das Unternehmen hat eine 1,6-Milliarden-Dollar-Vereinbarung mit Cortland Partners zum Verkauf von 19 Mehrfamilienwohnanlagen getroffen und einen freiwilligen Verkaufs- und Liquidationsplan für die verbleibenden Vermögenswerte angekündigt.
Zu den operativen Highlights im zweiten Quartal 2025 gehören ein 4,5 % Anstieg des NOI bei vergleichbaren Mehrfamilienobjekten, eine durchschnittliche Belegungsrate von 94,7 % (plus 0,2 % im Jahresvergleich) und ein gemischtes Mietwachstum von 1,3 %. Das Unternehmen behielt eine starke Bilanz mit 330 Millionen US-Dollar verfügbarer Liquidität und einem Netto-Schulden-zu-bereinigtem EBITDA-Verhältnis von 5,6x bei. Die Gesellschaft erklärte eine vierteljährliche Dividende von 0,18 US-Dollar pro Aktie und zog aufgrund der geplanten Liquidation die Prognose für 2025-2026 zurück.
- Agreement to sell 19 multifamily communities for $1.6 billion
- Same-store multifamily NOI increased 4.5% year-over-year
- Strong liquidity position of $330 million
- Healthy balance sheet with only $125 million debt maturing before 2028
- Same-store occupancy improved to 94.7%, up 0.2% year-over-year
- Renewal lease rate growth of 4.9%
- Net loss of $0.04 per diluted share
- Negative new lease rate growth of -3.3%
- Watergate 600 occupancy declined to 82.3%
- Other same-store NOI decreased by 7.3%
- Company is liquidating all assets and dissolving operations
Insights
Elme Communities' liquidation plan following $1.6B property sale signals strategic exit amid stable financial performance.
The headline announcement in Elme's Q2 results is the company's decisive strategic shift toward complete liquidation. The Board has approved a plan to sell all remaining assets following the already-announced
Financially, Elme delivered stable operational results in Q2, with core FFO of
The company's blended lease rate growth of
From a balance sheet perspective, Elme maintains
This liquidation decision suggests the Board determined greater shareholder value could be realized through asset sales in the current market than through continued operations, potentially indicating concerns about future growth prospects or recognition of a valuation gap between public and private market values for multifamily assets.
BETHESDA, Md., Aug. 05, 2025 (GLOBE NEWSWIRE) -- Elme Communities (the “Company” or “Elme”) (NYSE: ELME), a multifamily REIT, reported financial and operating results today for the quarter ended June 30, 2025:
| Financial Results | |||||||
| Three months ended June 30, | |||||||
| 2025 | 2024 | ||||||
| Net loss per diluted share | $ | (0.04 | ) | $ | (0.04 | ) | |
| Core FFO per diluted share | 0.24 | 0.23 | |||||
Operational Highlights
- Same-store multifamily NOI increased by
4.5% compared to the prior year quarter - Same-store Average Effective Monthly Rent Per Home increased
1.4% compared to the prior year quarter - Effective blended Lease Rate Growth was
1.3% for our Same-Store Portfolio during the quarter, comprised of effective new Lease Rate Growth of (3.3)% and effective renewal Lease Rate Growth of4.9% - Retention was
62% during the quarter, in line with expectations - Same-store multifamily Average Occupancy was
94.7% during the quarter, up0.2% compared to the prior year quarter
Balance Sheet
- Available liquidity was
$330 million as of June 30, 2025, consisting of availability under the Company's revolving credit facility and cash on hand - Annualized second quarter Net Debt to Adjusted EBITDA ratio was 5.6x
- The Company has a strong balance sheet with only
$125 million of debt maturing before 2028 and no secured debt
Strategic Review Update
On August 4, 2025, Elme announced that it had entered into a Purchase and Sale Agreement with Cortland Partners, dated August 1, 2025 (the “Purchase Agreement”), providing for the sale of 19 multifamily communities for approximately
Second Quarter Operating Results
- Multifamily same-store NOI - Same-store NOI increased
4.5% compared to the corresponding prior year period driven primarily by higher rental revenue and fee and ancillary income. Average occupancy for the quarter increased0.2% from the prior year period to94.7% . - Other same-store NOI - The Other same-store portfolio is comprised of one asset, Watergate 600. Other same-store NOI decreased by
7.3% compared to the corresponding prior year period due to lower occupancy. Watergate 600 was82.3% occupied and leased at quarter end.
2025 Guidance
Given the announced portfolio sale transaction and adoption of the Plan of Sale and Liquidation, the Company is withdrawing it’s prior 2025 guidance and assumptions and does not expect to issue new guidance for 2025 or 2026.
Dividends
On July 3, 2025, Elme Communities paid a quarterly dividend of
On August 4, 2025, Elme Communities announced that its Board of Trustees has declared a quarterly dividend of
Presentation Webcast and Conference Call Information
The Second Quarter 2025 Earnings Call is scheduled for Wednesday, August 6, 2025 at 10:00 A.M. Eastern Time. There will also be a webcast presentation. Conference Call access information is as follows:
| USA Toll Free Number: | 1-888-506-0062 |
| International Toll Number: | 1-973-528-0011 |
| Conference ID: | 990450 |
The instant replay of the Earnings Call will be available until Wednesday, August 20, 2025. Instant replay access information is as follows:
| USA Toll Free Number: | 1-877-481-4010 |
| International Toll Number: | 1-919-882-2331 |
| Conference ID: | 52639 |
The replay of the call will also be available on the Investors section of Elme Communities' website at www.elmecommunities.com. Online playback of the webcast will be available following the Conference Call.
About Elme Communities
Elme Communities is committed to elevating what home can be for middle-income renters by providing a higher level of quality, service, and experience. The Company is a multifamily real estate investment trust that owns and operates approximately 9,400 apartment homes in the Washington, DC metro and the Atlanta metro regions, and owns approximately 300,000 square feet of commercial space. Focused on providing quality, affordable homes to a deep, solid, and underserved base of mid-market demand, Elme Communities is building long-term value for shareholders.
Note: Elme Communities' press releases and supplemental financial information are available on the Company website at www.elmecommunities.com or by contacting Investor Relations at (202) 774-3200.
Forward-Looking and Cautionary Statements
Certain statements in our earnings release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of Elme to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Additional factors which may cause the actual results, performance, or achievements of Elme to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements include, but are not limited to: the satisfaction or waiver of the conditions to closing the sale of a 19-asset portfolio by Elme to an affiliate of Cortland Partners, LLC (the “Portfolio Sale Transaction”) pursuant to the Purchase and Sale Agreement; the possibility that Elme’s shareholders do not approve the Portfolio Sale Transaction and/or plan of sale and liquidation (the “Plan of Sale and Liquidation” and together with the Portfolio Sale Transaction, the “Proposed Transactions”) or that other conditions to the closing on all 19 of the properties included in the Portfolio Sale Transaction are not satisfied or waived at all or on the anticipated timeline; unanticipated difficulties or expenditures relating to the Proposed Transactions; changes in the amount and timing of the total liquidating distributions, including as a result of unexpected levels of transaction cost, delayed or terminated closings, liquidation costs or unpaid or additional liabilities and obligations; the inability to close our proposed new debt financing on the terms or timeline or for the amount anticipated; fees associated with the repayment of our existing indebtedness; the possibility of converting to a liquidating trust or other liquidating entity; the ability of our board of trustees to terminate the Plan of Sale and Liquidation, whether or not approved by shareholders; the response of our residents, tenants and business partners to the announcement of the Proposed Transactions; potential difficulties in employee retention as a result of announcement of the Proposed Transactions; the occurrence of any event, change or other circumstances that could give rise to the termination of the Portfolio Sale Transaction; the outcome of legal proceedings that may be instituted against Elme, its trustees and others related to the Proposed Transactions; the risk that disruptions caused by or relating to the Proposed Transactions will harm Elme’s business, including current plans and operations; risks relating to the market value of Elme’s common shares, including following approval of the Proposed Transactions by our shareholders; risks associated with third party contracts containing consent and/or other provisions that may be triggered by the Proposed Transactions; restrictions during the pendency of the Portfolio Sale Transaction that may impact Elme’s ability to pursue certain business opportunities or strategic transactions; general risks affecting the real estate industry and local real estate markets (including, without limitation, the market value of Elme’s properties and potential illiquidity of Elme’s remaining real estate investments); whether or not the sale of one or more of Elme’s properties may be considered a prohibited transaction under the Internal Revenue Code of 1986, as amended; Elme’s ability to maintain its status as a real estate investment trust for U.S. federal income tax purposes; the occurrence of any event, change or other circumstances that could give rise to the termination of one or both of the Proposed Transactions; the risks associated with ownership of real estate in general and our real estate assets in particular; general economic and market developments and conditions; and volatility and uncertainty in the financial markets.
The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect Elme’s businesses in the “Risk Factors” section of Elme’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed by Elme from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. While forward-looking statements reflect Elme’s good faith beliefs, they are not guarantees of future performance. Elme undertakes no obligation to update its forward-looking statements or risk factors to reflect new information, future events, or otherwise.
This Earnings Release also includes certain forward-looking non-GAAP information. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss) as a measure of our operating performance. Please see the following pages for the corresponding definitions and reconciliations of such non-GAAP financial measures.
| CONTACT: |
| Amy Hopkins |
| Vice President, Investor Relations |
| E-Mail: ahopkins@elmecommunities.com |
| ELME COMMUNITIES AND SUBSIDIARIES | |||||||||||||||
| FINANCIAL HIGHLIGHTS | |||||||||||||||
| (In thousands, except per share data) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| OPERATING RESULTS | 2025 | 2024 | 2025 | 2024 | |||||||||||
| Revenue | |||||||||||||||
| Real estate rental revenue | $ | 62,099 | $ | 60,103 | $ | 123,592 | $ | 119,616 | |||||||
| Expenses | |||||||||||||||
| Property operating and maintenance | 14,624 | 13,996 | 28,799 | 27,460 | |||||||||||
| Real estate taxes and insurance | 8,038 | 7,986 | 15,857 | 16,241 | |||||||||||
| Property management | 2,256 | 2,175 | 4,502 | 4,393 | |||||||||||
| General and administrative | 7,689 | 6,138 | 16,918 | 12,334 | |||||||||||
| Depreciation and amortization | 23,560 | 23,895 | 46,799 | 48,838 | |||||||||||
| 56,167 | 54,190 | 112,875 | 109,266 | ||||||||||||
| Real estate operating income | 5,932 | 5,913 | 10,717 | 10,350 | |||||||||||
| Other income (expense) | |||||||||||||||
| Interest expense | (9,498 | ) | (9,384 | ) | (18,958 | ) | (18,878 | ) | |||||||
| Other income | — | — | — | 1,410 | |||||||||||
| (9,498 | ) | (9,384 | ) | (18,958 | ) | (17,468 | ) | ||||||||
| Net loss | $ | (3,566 | ) | $ | (3,471 | ) | $ | (8,241 | ) | $ | (7,118 | ) | |||
| Net loss | $ | (3,566 | ) | $ | (3,471 | ) | $ | (8,241 | ) | $ | (7,118 | ) | |||
| Depreciation and amortization | 23,560 | 23,895 | 46,799 | 48,838 | |||||||||||
| NAREIT funds from operations | $ | 19,994 | $ | 20,424 | $ | 38,558 | $ | 41,720 | |||||||
| Leasing commissions capitalized | (4 | ) | — | (4 | ) | — | |||||||||
| Recurring capital improvements | (3,203 | ) | (2,144 | ) | (6,120 | ) | (4,915 | ) | |||||||
| Straight-line rents, net | 86 | 25 | 166 | 40 | |||||||||||
| Non-real estate depreciation & amortization of debt costs | 1,269 | 1,259 | 2,540 | 2,429 | |||||||||||
| Amortization of lease intangibles, net | (167 | ) | (163 | ) | (336 | ) | (325 | ) | |||||||
| Amortization and expensing of restricted share and unit compensation | 1,740 | 1,045 | 3,113 | 2,135 | |||||||||||
| Adjusted funds from operations | $ | 19,715 | $ | 20,446 | $ | 37,917 | $ | 41,084 | |||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| Per share data: | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net loss | (Basic) | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.10 | ) | $ | (0.08 | ) | |||
| (Diluted) | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.10 | ) | $ | (0.08 | ) | ||||
| NAREIT FFO | (Basic) | $ | 0.23 | $ | 0.23 | $ | 0.44 | $ | 0.47 | |||||||
| (Diluted) | $ | 0.23 | $ | 0.23 | $ | 0.43 | $ | 0.47 | ||||||||
| Dividends paid | $ | 0.18 | $ | 0.18 | $ | 0.36 | $ | 0.36 | ||||||||
| Weighted average shares outstanding - basic | 88,093 | 87,910 | 88,078 | 87,898 | ||||||||||||
| Weighted average shares outstanding - diluted | 88,093 | 87,910 | 88,078 | 87,898 | ||||||||||||
| Weighted average shares outstanding - diluted (for NAREIT FFO) | 88,414 | 87,975 | 88,436 | 87,936 | ||||||||||||
| ELME COMMUNITIES AND SUBSIDIARIES | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (In thousands, except per share data) | |||||||
| (Unaudited) | |||||||
| June 30, 2025 | December 31, 2024 | ||||||
| Assets | |||||||
| Land | $ | 383,808 | $ | 383,808 | |||
| Income producing property | 2,013,831 | 1,999,525 | |||||
| 2,397,639 | 2,383,333 | ||||||
| Accumulated depreciation and amortization | (662,209 | ) | (618,299 | ) | |||
| Net income producing property | 1,735,430 | 1,765,034 | |||||
| Properties under development or held for future development | 30,980 | 30,980 | |||||
| Total real estate held for investment, net | 1,766,410 | 1,796,014 | |||||
| Cash and cash equivalents | 4,786 | 6,144 | |||||
| Restricted cash | 2,307 | 2,465 | |||||
| Rents and other receivables | 12,250 | 12,511 | |||||
| Prepaid expenses and other assets | 24,451 | 28,628 | |||||
| Total assets | $ | 1,810,204 | $ | 1,845,762 | |||
| Liabilities | |||||||
| Notes payable, net | $ | 523,196 | $ | 522,953 | |||
| Line of credit | 175,000 | 176,000 | |||||
| Accounts payable and other liabilities | 38,230 | 36,293 | |||||
| Dividend payable | 15,947 | 15,898 | |||||
| Advance rents | 5,079 | 6,257 | |||||
| Tenant security deposits | 6,282 | 6,283 | |||||
| Total liabilities | 763,734 | 763,684 | |||||
| Equity | |||||||
| Shareholders' equity | |||||||
| Preferred shares; | — | — | |||||
| Shares of beneficial interest, | 882 | 880 | |||||
| Additional paid in capital | 1,743,161 | 1,740,078 | |||||
| Distributions in excess of net income | (686,226 | ) | (646,095 | ) | |||
| Accumulated other comprehensive loss | (11,624 | ) | (13,066 | ) | |||
| Total shareholders' equity | 1,046,193 | 1,081,797 | |||||
| Noncontrolling interests in subsidiaries | 277 | 281 | |||||
| Total equity | 1,046,470 | 1,082,078 | |||||
| Total liabilities and equity | $ | 1,810,204 | $ | 1,845,762 | |||
| The following tables contain reconciliations of net loss to NOI and same-store NOI for the periods presented (in thousands): | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net loss | $ | (3,566 | ) | $ | (3,471 | ) | $ | (8,241 | ) | $ | (7,118 | ) | |||
| Adjustments: | |||||||||||||||
| Property management expense | 2,256 | 2,175 | 4,502 | 4,393 | |||||||||||
| General and administrative expense | 7,689 | 6,138 | 16,918 | 12,334 | |||||||||||
| Real estate depreciation and amortization | 23,560 | 23,895 | 46,799 | 48,838 | |||||||||||
| Interest expense | 9,498 | 9,384 | 18,958 | 18,878 | |||||||||||
| Other income | — | — | — | (1,410 | ) | ||||||||||
| Total Net Operating Income (NOI) | $ | 39,437 | $ | 38,121 | $ | 78,936 | $ | 75,915 | |||||||
| Multifamily NOI: | |||||||||||||||
| Same-store Portfolio | $ | 36,483 | $ | 34,927 | $ | 72,944 | $ | 69,497 | |||||||
| Development | (61 | ) | (57 | ) | (124 | ) | (114 | ) | |||||||
| Total | 36,422 | 34,870 | 72,820 | 69,383 | |||||||||||
| Other NOI (Watergate 600) | 3,015 | 3,251 | 6,116 | 6,532 | |||||||||||
| Total NOI | $ | 39,437 | $ | 38,121 | $ | 78,936 | $ | 75,915 | |||||||
| The following table contains a reconciliation of net loss to core funds from operations for the periods presented (in thousands, except per share data): | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net loss | $ | (3,566 | ) | $ | (3,471 | ) | $ | (8,241 | ) | $ | (7,118 | ) | ||||
| Add: | ||||||||||||||||
| Real estate depreciation and amortization | 23,560 | 23,895 | 46,799 | 48,838 | ||||||||||||
| NAREIT funds from operations | 19,994 | 20,424 | 38,558 | 41,720 | ||||||||||||
| Add/(deduct): | ||||||||||||||||
| Other non-operating expenses(1) | 1,503 | 60 | 4,544 | 60 | ||||||||||||
| Severance expense | — | 64 | — | 64 | ||||||||||||
| Gain on land easements | — | — | — | (1,410 | ) | |||||||||||
| Core funds from operations | $ | 21,497 | $ | 20,548 | $ | 43,102 | $ | 40,434 | ||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| Per share data: | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| NAREIT FFO | (Basic) | $ | 0.23 | $ | 0.23 | $ | 0.44 | $ | 0.47 | |||||||
| (Diluted) | $ | 0.23 | $ | 0.23 | $ | 0.43 | $ | 0.47 | ||||||||
| Core FFO | (Basic) | $ | 0.24 | $ | 0.23 | $ | 0.49 | $ | 0.46 | |||||||
| (Diluted) | $ | 0.24 | $ | 0.23 | $ | 0.49 | $ | 0.46 | ||||||||
| Weighted average shares outstanding - basic | 88,093 | 87,910 | 88,078 | 87,898 | ||||||||||||
| Weighted average shares outstanding - diluted (for NAREIT and Core FFO) | 88,414 | 87,975 | 88,436 | 87,936 | ||||||||||||
(1) Other non-operating expenses during 2025 consist of advisory and legal services provided by third parties related to the previously disclosed cooperation agreement with Argosy-Lionbridge Management, LLC in Q1 2025 and our previously announced formal strategic alternatives review.
| Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) (in thousands): | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net loss | $ | (3,566 | ) | $ | (3,471 | ) | $ | (8,241 | ) | $ | (7,118 | ) | |||
| Add/(deduct): | |||||||||||||||
| Interest expense | 9,498 | 9,384 | 18,958 | 18,878 | |||||||||||
| Real estate depreciation and amortization | 23,560 | 23,895 | 46,799 | 48,838 | |||||||||||
| Non-real estate depreciation | 198 | 197 | 397 | 308 | |||||||||||
| Severance expense | — | 64 | — | 64 | |||||||||||
| Other non-operating expenses(1) | 1,503 | 60 | 4,544 | 60 | |||||||||||
| Gain on land easements | — | — | — | (1,410 | ) | ||||||||||
| Adjusted EBITDA | $ | 31,193 | $ | 30,129 | $ | 62,457 | $ | 59,620 | |||||||
(1) Other non-operating expenses during 2025 consist of advisory and legal services provided by third parties related to the previously disclosed cooperation agreement with Argosy-Lionbridge Management, LLC in Q1 2025 and our previously announced formal strategic alternatives review.
| Non-GAAP Financial Measures |
Adjusted EBITDA is earnings before interest expense, taxes, depreciation, amortization, gain/loss on sale of real estate, casualty gain/loss, real estate impairment, gain/loss on extinguishment of debt, gain/loss on interest rate derivatives, severance expense, acquisition expenses, gain from non-disposal activities, adjustment to deferred taxes, write-off of pursuit costs and gain on land easements. Adjusted EBITDA is included herein because we believe it helps investors and lenders understand our ability to incur and service debt and to make capital expenditures. Adjusted EBITDA is a non-GAAP and non-standardized measure and may be calculated differently by other REITs.
Adjusted Funds From Operations (“AFFO”) is a non-GAAP measure. It is calculated by subtracting from FFO (1) recurring improvements, tenant improvements and leasing costs, that are capitalized and amortized and are necessary to maintain our properties and revenue stream (excluding items contemplated prior to acquisition or associated with development / redevelopment of a property) and (2) straight line rents, then adding (3) non-real estate depreciation and amortization, (4) non-cash fair value interest expense and (5) amortization of restricted share compensation, then adding or subtracting the (6) amortization of lease intangibles, (7) real estate impairment and (8) non-cash gain/loss on extinguishment of debt, as appropriate. AFFO is included herein, because we consider it to be a performance measure of a REIT’s ability to incur and service debt and to distribute dividends to its shareholders. AFFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.
Core Adjusted Funds From Operations (“Core AFFO”) is calculated by adjusting AFFO for the following items (which we believe are not indicative of the performance of Elme Communities' operating portfolio and affect the comparative measurement of Elme Communities' operating performance over time): (1) gains or losses on extinguishment of debt and gains or losses on interest rate derivatives, (2) expenses related to acquisition and structuring activities, (3) non-share-based executive transition costs, severance expenses and other expenses related to corporate restructuring and executive retirements or resignations, (4) expenses consisting of advisory and legal services provided by third parties related to our previously announced formal strategic alternatives review and the previously disclosed cooperation agreement, (5) property impairments, casualty gains and losses, and gains or losses on sale not already excluded from Core AFFO, as appropriate, (6) write-off of pursuit costs, (7) adjustment to deferred taxes and (8) gain on land easements. These items can vary greatly from period to period, depending upon the volume of our acquisition activity and debt retirements, among other factors. We believe that by excluding these items, Core AFFO serves as a useful, supplementary performance measure of Elme Communities' ability to incur and service debt, and distribute dividends to its shareholders. Core AFFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.
Core Funds From Operations (“Core FFO”) is calculated by adjusting NAREIT FFO for the following items (which we believe are not indicative of the performance of Elme Communities' operating portfolio and affect the comparative measurement of Elme Communities' operating performance over time): (1) gains or losses on extinguishment of debt and gains or losses on interest rate derivatives, (2) expenses related to acquisition and structuring activities, (3) executive transition costs, severance expenses and other expenses related to corporate restructuring and executive retirements or resignations, (4) expenses consisting of advisory and legal services provided by third parties related to our previously announced formal strategic alternatives review and the previously disclosed cooperation agreement, (5) property impairments, casualty gains and losses, and gains or losses on sale not already excluded from NAREIT FFO, as appropriate, (6) write-off of pursuit costs, (7) adjustment to deferred taxes and (8) gain on land easements. These items can vary greatly from period to period, depending upon the volume of our acquisition activity and debt retirements, among other factors. We believe that by excluding these items, Core FFO serves as a useful, supplementary measure of Elme Communities' ability to incur and service debt, and distribute dividends to its shareholders. Core FFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.
NAREIT Funds From Operations (“FFO”) is defined by the 2018 National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) FFO White Paper Restatement, as net income (computed in accordance with generally accepted accounting principles (“GAAP”) excluding gains (or losses) associated with sales of properties, impairments of depreciable real estate and real estate depreciation and amortization. We consider NAREIT FFO to be a standard supplemental measure for real estate investment trusts (“REITs”), and believe it is a useful measure because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which historically assumes that the value of real estate assets diminishes predictably over time. Since real estate values have instead historically risen or fallen with market conditions, we believe that NAREIT FFO more accurately provides investors an indication of our ability to incur and service debt, make capital expenditures and fund other needs. Our NAREIT FFO may not be comparable to FFO reported by other REITs. These other REITs may not define the term in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently. NAREIT FFO is a non-GAAP measure.
Net Debt to Adjusted EBITDA represents net debt as of period end divided by adjusted EBITDA for the period, as annualized (i.e. three months periods are multiplied by four) or on a trailing 12 month basis. We define net debt as the total outstanding debt reported as per our consolidated balance sheets less cash and cash equivalents at the end of the period.
Net Operating Income (“NOI”), defined as real estate rental revenue less direct real estate operating expenses, is a non-GAAP measure. NOI is calculated as net income, less non-real estate revenue and the results of discontinued operations (including the gain or loss on sale, if any), plus interest expense, depreciation and amortization, lease origination expenses, general and administrative expenses, acquisition costs, real estate impairment, casualty gain and losses and gain or loss on extinguishment of debt. NOI does not include management expenses, which consist of corporate property management costs and property management fees paid to third parties. NOI is the primary performance measure we use to assess the results of our operations at the property level. We believe that NOI is a useful performance measure because, when compared across periods, it reflects the impact on operations of trends in occupancy rates, rental rates and operating costs on an unleveraged basis, providing perspective not immediately apparent from net income. NOI excludes certain components from net income in order to provide results more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. As a result of the foregoing, we provide NOI as a supplement to net income, calculated in accordance with GAAP. NOI does not represent net income or income from continuing operations calculated in accordance with GAAP. As such, NOI should not be considered an alternative to these measures as an indication of our operating performance.
| Other Definitions |
Average Effective Monthly Rent Per Home represents the average of effective rent (net of concessions) for in-place leases plus the market rent for vacant homes, divided by the total number of homes. We believe Average Effective Monthly Rent Per Home is a useful metric in evaluating the average pricing of our homes. It is a component of Residential Revenue, which is used to calculate our NOI. It does not represent actual rental revenue collected per unit.
Average Occupancy is based on average daily occupied apartment homes as a percentage of total apartment homes.
Current Strategy represents the class of each community in our portfolio based on a set of criteria. Our strategies consist of the following subcategories: Class A, Class A-, Class B Value-Add and Class B. A community's class is dependent on a variety of factors, including its vintage, site location, amenities and services, rent growth drivers and rent relative to the market.
- Class A communities are recently-developed, well-located, have competitive amenities and services and command average rental rates well above market median rents.
- Class A- communities have been developed within the past 20 years and feature operational improvements and unit upgrades and command rents at or above median market rents.
- Class B Value-Add communities are over 20 years old but feature operational improvements and strong potential for unit renovations. These communities command average rental rates below median market rents for units that have not been renovated.
- Class B communities are over 20 years old, feature operational improvements and command average rental rates below median market rents.
Debt Service Coverage Ratio is computed by dividing earnings attributable to the controlling interest before interest expense, taxes, depreciation, amortization, real estate impairment, gain on sale of real estate, gain/loss on extinguishment of debt, severance expense, acquisition and structuring expenses, gain/loss from non-disposal activities and gain on land easements by interest expense (including interest expense from discontinued operations) and principal amortization.
Debt to Total Market Capitalization is total debt divided by the sum of total debt plus the market value of shares outstanding at the end of the period.
Earnings to Fixed Charges Ratio is computed by dividing earnings attributable to the controlling interest by fixed charges. For this purpose, earnings consist of income from continuing operations (or net income if there are no discontinued operations) plus fixed charges, less capitalized interest. Fixed charges consist of interest expense (excluding interest expense from discontinued operations), including amortized costs of debt issuance, plus interest costs capitalized.
Ending Occupancy is calculated as occupied homes as a percentage of total homes as of the last day of that period.
Lease Rate Growth is defined as the average percentage change in either gross (excluding the impact of concessions) or effective rent (net of concessions) for a new or renewed multifamily lease compared to the prior lease based on the move-in date. The “blended” rate represents the weighted average of new and renewal lease rate growth achieved.
Recurring Capital Improvements represent non-accretive building improvements required to maintain a property's income and value. Recurring capital improvements do not include acquisition capital that was taken into consideration when underwriting the purchase of a building or which are incurred to bring a building up to “operating standard”. This category includes improvements made as needed upon vacancy of an apartment. Aside from improvements related to apartment turnover, these improvements include facade repairs, installation of new heating and air conditioning equipment, asphalt replacement, permanent landscaping, new lighting and new finishes.
Retention represents the percentage of multifamily leases renewed that were set to expire in the period presented.
Same-store Portfolio includes properties that were owned for the entirety of the years being compared, and exclude properties under redevelopment or development and properties acquired, sold or classified as held for sale during the years being compared. We categorize our properties as “same-store” or “non-same-store” for purposes of evaluating comparative operating performance. We define development properties as those for which we have planned or ongoing major construction activities on existing or acquired land pursuant to an authorized development plan. Development properties are categorized as same-store when they have reached stabilized occupancy (
FAQ
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