Can Vereit Inc (NYSE:VER) Make A Comeback?


After recording red close earlier in the week, the stock of Vereit Inc (NYSE:VER) recorded gains of around 1% in yesterday’s trading session to close at $8.44. The company posted Q2 2017 results in August wherein it reported that consolidated revenue came at $336.9 million as compared to $371 million for the comparable quarter in 2016, mainly due to 2016 and 2017 dispositions.

The highlights

Glenn J. Rufrano, the CEO of Vereit, reported that they are delighted with the company’s second quarter performance showcasing effective capital allocation and the capability to successfully execute on intended dispositions and acquisitions. Based on year-to-date performance, they are able to narrow their AFFO projection.

During the previous two years, they have shown their ability to execute on their plan to re-shape the portfolio and improve their balance sheet. With a business system focused on a large, diversified portfolio constituted of single-tenant retail, office, industrial and restaurant, they can lower risk while maintaining optionality via different market conditions. They are now set to offer capital to corporate customers via a pointed acquisition procedure.

As of June 30, 2017, Vereit’s portfolio comprised of 4,105 assets with total investment grade tenancy of around 40%, portfolio occupancy of 98.6%, and a weighted-average left lease term of 9.5 years. In Q2 2017, same-store rents were flat versus the same quarter in 2016. Discounting the effects of certain preliminary lease renewal initiatives, same store rents would have surged 0.3%. The firm bought 38 properties for around $101.6 million at an average cash cap percentage of 7%.

During the quarter closed June 30, 2017, the firm disposed of 37 properties for around $224.8 million at a mean cash cap rate of 6.9%, counting net sales of $73.5 million in Red Lobster restaurants. The gain on Q2 2017 sales was around $43.1 million.

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