CHRISTIANSTED, U.S. Virgin Islands, Nov. 04, 2020 (GLOBE NEWSWIRE) -- Front Yard Residential Corporation (NYSE: RESI) today announced its financial and operating results for the third quarter of 2020.
Third Quarter 2020 Highlights and Recent Developments
- On October 19, 2020, Front Yard entered into a definitive merger agreement whereby a partnership led by Pretium and including funds managed by the real estate equity and alternative credit strategies of Ares Management Corporation will acquire Front Yard for $13.50 per share in a transaction valued at approximately $2.4 billion, including debt to be assumed or refinanced. The transaction is expected to close in the first quarter of 2021.
- Rental revenues increased to $56.9 million for the third quarter of 2020, up 3.3% over the second quarter of 2020 and up 12.2% year on year.
- Core Funds from Operations (“FFO”) was $0.19 per diluted share, up $0.01 from the second quarter of 2020 and up $0.19 year on year.¹
- Adjusted FFO was $0.09 per diluted share for the third quarter of 2020, in line with the second quarter of 2020.¹
- Stabilized Rental leased percentage was 98.8%, up from 98.3% as of June 30, 2020 and 94.3% as of September 30, 2019.
- Blended rent growth was 4.7%, with renewal rent growth of 4.0% and re-lease rent growth of 6.4%.
- Stabilized Rental Core Net Operating Income (“NOI”) Margin was 60.9%, down from 61.5% in the second quarter of 2020, reflecting seasonally higher operating costs, and up from 54.1% in the third quarter of 2019.¹
- Sold 37 non-core homes for proceeds of $5.0 million and a gain of $0.5 million over carrying value.
- As previously announced, agreed to terminate the existing asset management agreement with Altisource Asset Management Corporation (“AAMC”), facilitating Front Yard's transition from an externally managed REIT to an internally managed REIT. Front Yard will pay an aggregate termination fee of $46.0 million to AAMC, and Front Yard has agreed to acquire certain assets and operations from AAMC for an aggregate purchase price of $8.2 million.
“Our operating metrics remained very strong during the third quarter, which due to seasonality is typically a more challenging period. Improving occupancy levels and blended rent growth are reinforcing our operating results,” said George Ellison, Chief Executive Officer. “The merger agreement with Pretium provides the opportunity for our stockholders to realize immediate value while we continue to focus on a high quality experience for our residents.”
________________
¹ Stabilized Rental Core NOI Margin, Core FFO and Adjusted FFO are non-GAAP measures. Refer to the Reconciliation of Non-GAAP Financial Measures section for further information and reconciliation to GAAP net income.
Third Quarter 2020 Financial Results
GAAP net loss for the third quarter of 2020 was $63.2 million, or $1.08 per diluted share, compared to a net loss of $36.4 million, or $0.68 per diluted share, for the third quarter of 2019.
GAAP net loss for the nine months ended September 30, 2020 was $79.4 million, or $1.41 per diluted share, compared to a net loss of $79.9 million, or $1.49 per diluted share, for the nine months ended September 30, 2019.
About Front Yard Residential Corporation
Front Yard is an industry leader in providing quality, affordable rental homes to America’s families. Our homes offer exceptional value in a variety of suburban communities that have easy accessibility to metropolitan areas. Front Yard's tenants enjoy the space and comfort that is unique to single-family housing, at reasonable prices. Our mission is to provide our tenants with houses they are proud to call home. Additional information is available at www.frontyardresidential.com.
