KORE US REIT (CMOU) Q1 2024 TU earnings summary

Executive summary

• 1Q 2024 gross revenue was US$37.1m, unchanged YoY; income available for distribution fell 8.8% to US$11.9m, primarily due to higher financing costs.

• Portfolio leasing activity covered 335,437 sf, equal to 7.0% of NLA; negative rental reversion and weakening office-market rent forecasts remain headwinds.

Financial highlights

• Net property income was US$21.0m, down 0.8% YoY; adjusted NPI, excluding non-cash straight-line rent, lease incentives and leasing commission amortisation, was US$21.6m, up 0.4%.

• Income available for distribution was US$11.9m versus US$13.1m in 1Q 2023; finance and other trust expenses rose 14.9% to US$7.7m.

Outlook and guidance

• CoStar projected 12-month rent growth of 0.6% on average in key growth markets where the portfolio is present, versus -1.4% for the U.S. and -2.4% for gateway cities.

• Federal Reserve officials maintained an outlook for three rate cuts in 2024; strategists expected the U.S. to avoid recession as interest-rate policy evolves.