Elme Communities (ELME) Q4 2023 earnings summary

Executive summary

• Research-led, value-oriented multifamily strategy targets mid-market renters in Washington and Atlanta, with rents below much new supply and renovation opportunities across 3,300 homes.

• Portfolio totals 9,400 homes; Washington Metro contributes over 80% of multifamily NOI, and 89% of homes are affordable to households earning area median income.

• Q4 NOI rose 4.6% YoY to $38.598M; FY 2023 NOI grew 9.4% to $148.081M.

• All community-level operations moved to the internal platform in 2023; further centralization and technology initiatives target NOI growth.

Financial highlights

• FY 2023 revenue was $227.911M versus $209.380M in 2022; net loss was $52.977M versus $30.868M.

• FY 2023 Core FFO was $0.97 per diluted share versus $0.88 in 2022; Q4 Core FFO was $0.24 per share, unchanged YoY.

• FY 2023 Adjusted EBITDA was $116.489M versus $102.928M; total NOI was $148.081M versus $135.379M.

• FY same-store multifamily NOI increased 8.3% to $120.891M; total multifamily NOI was $134.776M versus $121.765M.

• Q4 revenue was $58.9M; net loss was $3.1M, or $0.04 per diluted share, versus a $3.5M loss a year earlier.

Outlook and guidance

• FY 2024 Core FFO guidance is $0.90-$0.96 per diluted share, versus $0.97 in FY 2023; higher interest expense is expected to drive a YoY decline.

• FY 2024 same-store multifamily NOI growth guidance is 0.25%-2.0%; non-same-store multifamily NOI is forecast at $5.25M-$6.25M.

• Guidance includes $12M-$13M other same-store NOI, $37.25M-$38.25M interest expense, $8.5M-$9.0M property management expense, and $24.25M-$25.25M G&A net of core adjustments.

• Blended effective lease-rate growth is expected to average 1%-2% in 2024; the same-store pool had 1.7% earn-in and 1.2% loss-to-lease as of January 31, 2024.

• Infrastructure transformation targets $4.25M-$4.75M FFO upside over 2023-2025, with 20% captured in 2023; managed WiFi and future centralization phases offer further potential upside.