Carter Validus Mission Critical REIT II Announced Q2 2018 Financial Results
September 5, 2018 | James Sprow | Blue Vault
Carter Validus Mission Critical REIT II, Inc. (the “Company”) announced on August 29 its financial and operating results for the quarter ended June 30, 2018. According to its press release, the following were the financial highlights for Q2 2018:
• Net income attributable to common stockholders totaled $7.2 million.
• Net operating income, or NOI, totaled $34.2 million.
• Funds from operations, or FFO, as defined by the National Association of Real Estate Investment Trusts, or NAREIT, attributable to common stockholders equaled $21.5 million.
• Modified funds from operations, or MFFO, as defined by the Institute for Portfolio Alternatives (formerly known as the Investment Program Association), or the IPA, attributable to common stockholders equaled $17.0 million.
• The Company acquired three real estate properties for an aggregate purchase price of $74.8 million.
• Total second quarter 2018 revenue of $44.0 million was a 59% increase over total revenue of $27.6 million for the same period in the prior year.
• NOI totaled $34.2 million for the quarter ended June 30, 2018, representing an increase of approximately 53% compared to NOI of $22.3 million for the quarter ended June 30, 2017.
• There was an increase in contractual rental revenue resulting from average annual rent escalations of 1.46% at the Company’s same store properties, before the impact of straight-line rental revenue.
• Second quarter 2018 non-same store rental and parking revenue and tenant reimbursement revenue increased from the same period in the prior year due to property acquisitions.
Portfolio Overview and Leasing Activity
• As of June 30, 2018, the Company owned 57 real estate investments, consisting of 75 properties, comprising approximately 5,455,000 of rental square feet, which had an aggregate purchase price of approximately $1.7 billion.
• The Company’s real estate investments are located in 38 metropolitan statistical areas, or MSAs.
• As of June 30, 2018, the Company had 134,000 square feet of vacant rentable space. The Company leased 31,000 square feet during the second quarter of 2018 at the 250 Williams Atlanta Data Center, which included a renewal of the existing leased space and an expansion into vacant space.
• The Company’s operating real estate investments have a weighted average occupancy rate of 97.5% as of June 30, 2018.
• During the second quarter of 2018, the Company acquired three real estate properties, consisting of two healthcare properties and one data center, for an aggregate purchase price of $74.8 million. The properties total approximately 133,000 rentable square feet, are 100% leased and have remaining lease terms ranging from seven to twelve years at June 30, 2018.
• Year-to-date, the Company has acquired five real estate properties, consisting of two healthcare properties and three data centers, for an aggregate purchase price of approximately $126.9 million. The properties total approximately 266,000 rentable square feet, have a weighted average occupancy of 91% and have a weighted average remaining lease term of 7.6 years.
• As of June 30, 2018, the weighted average remaining lease term of the Company’s real estate properties was 9.75 years.
Michael Seton, Chief Executive Officer, President and Director, stated, “We believe we remain on pace for achieving our targeted acquisition volume for 2018 and are confident that we are building a diversified, well-positioned portfolio of data center and healthcare properties. We will continue to diligently manage our portfolio to continually find ways to maximize value for our stockholders.”
About Carter Validus Mission Critical REIT II, Inc.
Carter Validus Mission Critical REIT II, Inc. is a non-traded, publicly registered real estate investment trust that engages in the acquisition of quality income-producing commercial real estate with a focus on data centers and healthcare facilities, preferably with long-term net leases to creditworthy tenants. As of June 30, 2018, the Company owned 57 real estate investments, consisting of 75 properties located in 38 MSAs across the United States. As of June 30, 2018, the Company’s data center portfolio consisted of 28 properties and its healthcare portfolio consisted of 47 properties with a diversified focus, including medical office buildings, specialty surgical centers, and hospital properties.
According to Blue Vault, the REIT’s most recent estimated NAV per share was $11.11 as of December 31, 2017. The REIT raised $879.0 million in its offering, including DRIP proceeds, which closed July 31, 2017. The REIT was paying distributions at the rate of 5.64% annualized and 4.86% annualized on its Class A and Class T common shares, respectively, based upon the original offering prices, net of fees for Class T shares. About 26.1% of the REIT’s debt matures before 2020 and 29.7% is at unhedged variable rates, indicating some refinancing need and interest rate risk. The REIT has paid out a cumulative 28% of MFFO in cash distributions exclusive of DRIP since inception, and over the last 12 months has a cash payout ratio of 35% of MFFO. These cash payout ratios are clearly sustainable.
Sources: SEC, Carter Validus, Blue Vault
Learn more about Carter Validus on the Blue Vault Sponsor Focus page
Carter Validus Mission Critical REIT II to Close Offering November 27, 2018
