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» Colonial Properties Trust's CEO Discusses Q1 2011 Results - Earnings Call Transcript
Tom Lowder, our Chairman and Chief Executive Officer and Reynolds Thompson, President and Chief Financial Officer will lead today’s call. On the call, they will discuss our business developments, financial results for the first quarter and our guidance for 2012. After their comments, we’ll open up the call to take your questions. Paul Earle, our Chief Operating Officer is also here to field questions.I’ll now turn the call over to Tom. Thomas H. Lowder Thanks, Jerry, and welcome to everyone joining us. The operating momentum we discussed in our last call has continued in the first quarter. We’re off to a great start in 2012 and making progress on achieving our objectives for 2012 which are to grow the company, achieve investment grade rating and improve the portfolio. The 8.3% same-property NOI growth during the quarter, the 11% year-over-year increase in FFO and the increase in our development pipeline to almost $200 million are clear indicators of our growth. Operating fundamentals in our portfolio are strong. We continue to push both new and renewal lease rates, resulted in a 6% increase in our same-property revenue over last year. Our occupancy remains high at 96%, turnover remains consistent at 60%, and our same-property operating margin was 132 basis points higher than a year ago. Our home prices have fallen, the tougher mortgage underwriting standards that kept our move-outs to home purchases limited. We’re beginning to see new apartment supply in certain of our markets such as Austin and Raleigh, however, we do not anticipate the new supply to be a significant factor this year and into 2013. Our asset recycling and simplification of the business, which Reynolds will discuss in a moment, is clearly having a positive impact on overall results. During the quarter, S&P recognized the work we’ve accomplished on our balance sheet as well as the strengthening multifamily fundamentals start upgrading our senior unsecured notes rating to BBB minus. This upgrade has already paid off in terms of lower pricing on our new unsecured credit facility in the $250 million term loan we completed last year. We’ve had good discussions with both Moody’s and Fitch and planning to have more substantial conversations following the second quarter.
Now, Reynolds will provide more details on our operating performance and activity during the quarter, I’ll conclude the call with our updated guidance for this year. Reynolds?C. Reynolds Thompson III Thank you, Tom. FFO for the first quarter was $0.30 per share. Building on our strong performance in 2001, our first quarter same-property net operating income increased 8.3% and revenue increased 6% versus the prior year, both stats represented company record for the first quarter. Multifamily same-property physical occupancy was 96% at the end of the quarter. New lease rates were slightly positive and renewal rates were up 6.4% for the quarter. April new lease rates were up 3.4%, which is 250 basis points ahead of where new lease rates were in April of 2011. Renewal letters are going out at 7% and the renewal trends for April are up. Average revenue per occupied unit reached $911 during the first quarter, up 0.7% sequentially and up 5.4% from the first quarter of 2011. Revenue per occupied unit is now 3.9% above the prior peak. Rents as a percent of income were 15.6% for the quarter, 440 basis points below our prior peak of approximately 20% in 2008. That’s one indication that we should not have near-term resistance to rental rate increases. Resident turnover was 60%, 30 basis points above the prior year and flat to last quarter. Move-outs as a result of rental rate increases were 14%, up 80 basis points over prior year. Move-outs due to home purchases were 14.2% for the quarter, up 110 basis points over last year. The turnover due to home purchases is still below our historical average. Read the rest of this transcript for free on seekingalpha.com