Columbia Property Trust reports first net loss of pandemic

Executives expect lucrative leases in coming months

National /
Jul.July 30, 2021 02:18 PM
Columbia Property Trusts CEO Nelson Mills (iStock)

Columbia Property Trust CEO Nelson Mills (iStock)

For the first time since the onset of the pandemic, Columbia Property Trust reported a net quarterly loss.

Revenue for the second quarter was $63.4 million — down 20 percent from a year ago and down 1.5 percent from the first quarter — and the firm lost about $6 million.

The real estate investment trust’s normalized funds from operations per share was $0.32, down 20 percent from a year ago, and down 8.6 percent from the first quarter.

The revenue decline was partly because of lease expirations in the prolonged pandemic-driven downturn as well as the lack of lease termination fees during the second quarter, company officials said on an earnings call Thursday.

CEO Nelson Mills put a positive spin on its increase in available space, saying the firm can “generate more than $40 million per year of additional [net operating income] over the next several quarters just by leasing our existing availability.”

Office market vacancy rates would suggest that is not so easy, but Mills expressed confidence, citing the quality of Columbia’s space, the track record of its leasing team, and the improving leasing demand in the firm’s key markets.

As of June 30, Columbia’s portfolio was 93.5 percent leased, with the company signing new and renewal leases totaling 75,000 square feet during the quarter. The quarterly leasing volume was 17 percent less than a year ago but up nearly 9 percent from the first quarter.

“Not a large number yet, but our strongest performance since the second quarter of last year,” James Fleming, Columbia’s chief financial officer, said of the quarterly volume.

The nation’s office real estate market faces grave uncertainty because a majority of employees keep working from home, and office tenants are reconsidering their office needs. In response to the surging Delta variant, Twitter, one of Columbia’s major tenants in New York, announced it would again close its offices in New York and San Francisco.

Mills, however, said the number of property tours has recently increased across Columbia’s portfolio, including at the newly constructed boutique office building at 799 Broadway in Greenwich Village and the fully renovated 149 Madison Avenue in NoMad.

“We expect to sign a meaningful number of leases at attractive terms over the next several months,” he said.

Columbia officials declined to respond to an analyst’s questions on ongoing reviews prompted by an unsolicited takeover bid by Arkhouse Partners in March.

“We will be back to you all on the strategic reviews when that process is complete, and we look forward to sharing that outcome and explaining more about the process at that time,” Mills said.





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