Reven Housing REIT, Inc. (the Company, Reven Housing, RVEN) (NASDAQ: RVEN), an owner and operator of single-family residential property, today reported financial results for the third quarter ended September 30, 2018.
Third Quarter Highlights
- Reported net loss of 1.2 million or ($0.11) per share as compared to a net loss of $1.3 million, or ($0.12) per share, in the prior year period.
- Core FFO decreased to $165,417 from $248,451 in the year-ago period but was unchanged at $0.02 per share year over year.
- Increased rental income by 8.2% to $2.2 million from $2.04 million due to the increase of single family homes in the Companys portfolio over the last twelve months.
- Achieved portfolio occupancy of 92.9% versus 93.9% in the year ago period.
- Entered into a $51.3 million loan with Arbor Agency Lending, LLC, on behalf of Federal Home Loan Mortgage Corporation (Freddie Mac).
- Independent valuation of Companys portfolio concluded that the estimated net asset value for Reven is approximately $6.00 per share, as of September 30, 2018.
- Reported net loss of $2.4 million or ($0.23), compared to a net loss of approximately $2.0 million, or ($0.18) per share, in the prior year period.
- Increased Core FFO to $633,373, or $0.06 per share, from $424,189, or $0.04 per share,
- Rental income increased 13.9% year-over-year to $6.62 million primarily due to the acquisition of 75 single family homes over the last twelve months.
- Acquired 27 single family homes in Birmingham Alabama for approximately $1.68 million
Chad Carpenter, Chief Executive Officer of Reven Housing REIT, stated, The third quarter was marked by continued execution of our business plan and the completion of a $51 million financing with Freddie Mac. This financing provided Reven with proceeds to repay existing debt as well as additional capital to pursue accretive acquisitions. Third party valuations required for the financing and completed on behalf of Freddie Mac highlighted the value embedded in Reven estimating the companys net asset value at approximately $6.00 per share. Mr. Carpenter continued, We are starting to deploy some of the refinancing proceeds with new acquisitions in Oklahoma City, a new market for us, Memphis and Birmingham.
Third Quarter Financial Results
- For the third quarter ended September 30, 2018, Reven Housing reported rental income growth of 8.2% to $2.2 million compared to the prior year period. The main driver for the year-over-year increase in rental revenue was due to the increase in the number of homes in the Companys portfolio to 826, from 755 homes in the prior year period. As of September 30, 2018, the Companys portfolio was 92.9% occupied which represents a 100 bps decline from the quarter ended September 30, 2017. During the quarter, the Company improved its lease turnover to 7.6% of the quarter end portfolio from 8.6% of the quarter end portfolio in the year ago period on a larger home count.
- Net operating income (NOI) from rentals was $1.06 million, or 47.9% of revenue, versus NOI from rentals of $1.1 million, or 54.0% of revenue, in 2017. The main driver for the decrease in NOI margin despite an increase in revenue was higher repair and insurance costs.
- Net loss for the third quarter 2018 was reduced to $1.16 million, or ($0.11) per share, compared to a net loss of $1.31 million, or ($0.12) per share, in the prior year period. In the quarter, the Company incurred a $0.06 charge related to early extinguishment of debt from the Freddie Mac Financing.
Year-to-Date Financial Results
- For the nine months ended September 30, 2018, total rental income increased 13.9% to $6.62 million, due to the increase in rental homes.
- Net Operating Income or NOI for the first nine months of 2018 was $3.44 million, or 51.9% of rental revenue, compared to NOI of $3.13 million, or 53.8% of rental revenue, in the prior year period. The main driver for the decrease in NOI margin despite an increase in revenue was higher repairs and insurance costs.
- Net loss for the nine months ended September 30, 2018 was $2.43 million, or ($0.23) per share, compared to a net loss of $1.96 million, or ($0.18) per share, for the nine months ended September 30, 2017.
Operations, Acquisitions and Dispositions and Balance Sheet
At the end of the third quarter 2018, Reven Housing REIT owned 826 homes in major metropolitan areas across the southwest and southeast regions of the United States. At quarter-end, the portfolio was 92.9% occupied and had an average monthly rent of $996.00. per month, up 1.1% from the year-ago period.
The Company did not make any acquisitions during the quarter.
As of the end of the third quarter, the Company had $24.0 million in cash, cash equivalents and restricted cash on the balance sheet and $50.1 million in notes payable, net. During the quarter, the Company entered into an interest only, seven-year loan at a fixed rate of 4.74% for $51.3 million with Arbor Agency Lending, LLC, an approved Seller/Servicer for Federal Home Loan Mortgage Corporation (Freddie Mac). The proceeds were used to pay down approximately $33 million of the Companys eight outstanding amortizing mortgage notes.
On October 11, 2018, the Companys Board of Directors decided to initiate a quarterly dividend of the Companys common stock of $0.01 per share, which represents an annual dividend yield of approximately 1%.
About Reven Housing REIT, Inc.
Reven Housing REIT, Inc., (NASDAQ: RVEN) engages in the acquisition and ownership of portfolios of occupied single family rental properties in the United States. Reven currently owns and operates single family rental properties in Alabama, Florida, Georgia, Mississippi, Tennessee and Texas.
For more information, please visit http://www.revenhousingreit.com/.
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. The ultimate occurrence of events and results referenced in these forward-looking statements is subject to known and unknown risks and uncertainties, many of which are beyond our control. These forward-looking statements are based upon the Company’s present intentions and expectations, but the events and results referenced in these statements are not guaranteed to occur. Investors should not place undue reliance upon forward-looking statements. For a discussion of these and other risks facing our business, see the information under the heading Risk Factors in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 29, 2018 and our other filings with the SEC from time to time, which are accessible on the SECs website at www.sec.gov.