Washington Real Estate Investment Trust (WRE), also called WashREIT, owns and operates real estate properties in Washington, DC. The company is undergoing a strategic transformation, including the divestiture of its office and retail assets, to narrow its focus to multifamily properties.
Let’s take a look at the company’s latest financial performance, corporate developments, and the newly added risk factor. (See Washington Real Estate Investment Trust stock charts on TipRanks).
WashREIT’s Q2 Financial Results
The company reported revenue of $41.3 million for Q2 2021, compared to $43.8 million in the same quarter last year. It posted a loss per share of $0.08, compared to the loss per share of $0.07 in the same quarter last year. The consensus estimate called for a loss per share of $0.03.
The company ended Q2 with $1.35 billion in liquidity that consisted of cash on hand and a $700 million revolving credit facility. It plans to distribute a quarterly dividend of $0.17 per share on October 5 to shareholders of record on September 22.
For 2021, WashREIT anticipates same-store multifamily net operating income (NOI) in the range of $85.5 million to $86.5 million. It expects its Trove property to generate NOI in the band of $3 million to $3.5 million. Markedly, WashREIT sees future Trove NOI ranging between $7 million and $7.5 million annually. Additionally, Watergate 600 NOI is expected to be in the range of $12 million to $12.5 million in 2021.
WashREIT’s Corporate Developments
In July, the company completed the sale of its office assets for $766 million. The office portfolio sale excluded the Watergate 600 property.
After selling its office properties, WashREIT is now in the process of selling its retail assets for $168.3 million. It expects the transaction to close in Q3 2021.
The company plans to use the proceeds from the office and retail property sales to reduce its debt and expand its multifamily portfolio. It plans to acquire multifamily assets in the Southeastern markets of Atlanta, Charlotte, and Raleigh/Durham.
WashREIT’s Risk Factors
The new TipRanks Risk Factors tool reveals 33 risk factors for WashREIT. Since Q4 2020, the company has updated its risk profile with one new risk factor.
WashREIT plans to expand beyond the Washington, DC metro area into Southeastern markets as part of its strategic transformation focused on multifamily properties. It cautions investors that it may not succeed in the new markets. The company cited the challenge of building significant market share or generating the desired return on investments in new markets.
The majority of WashREIT’s risk factors fall under the Finance and Corporate category, with 48% of total risks. That is below the sector average of 58%. WRE stock has gained about 14% year-to-date.
Analysts’ Take
In June, J.P. Morgan analyst Anthony Paolone reiterated a Hold rating on WRE stock and lowered his price target to $22 from $24. Paolone’s new price target suggests 11.08% downside potential.
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