AH Realty Raises Outlook as Office Growth Accelerates
The property trust reduced net-debt-to-adjusted-EBITDAre leverage to 7.1 times after repaying about $460.5 million of debt.
AH Realty Trust (AHRT) raised its full-year adjusted funds-from-operations outlook as stronger office performance accompanied the real-estate investment trust’s exit from multifamily properties. The company lifted its 2026 forecast to $0.53 to $0.57 a diluted share, increasing both ends by 2 cents from its first-quarter range.
The outlook increase marked a shift from the quarter’s sequential earnings decline. Adjusted FFO slipped to $14.1 million, or $0.14 a diluted share, from $15.1 million, or $0.15 a share, in the first quarter. The measure edged up from $13.8 million a year earlier, while per-share FFO was unchanged.
The company’s GAAP net loss narrowed to $24.2 million, or $0.25 a share, from $33.3 million, or $0.33 a share, in the preceding quarter. AH Realty had reported net income of $3.9 million, or $0.04 a share, a year earlier. New real-estate and investment impairments totaled $36.3 million, including $20.9 million tied to multifamily properties.
Office properties drove the operating improvement. Office cash same-store net operating income rose 8.3% from a year earlier, accelerating from 0.7% growth in the first quarter, while retail growth increased to 2.9% from 2.2%. Office new-lease spreads widened to 20.5% on a GAAP basis and 9.5% on a cash basis, and stabilized office leased occupancy increased to 96.7% from 96.0% sequentially.
Property NOI increased to $35.3 million from $34.5 million a year earlier, as office NOI rose to $15.4 million and retail NOI increased to $18.0 million. Interest expense declined to $14.1 million from $15.3 million following debt repayments, though total adjusted EBITDAre fell to $35.2 million from $45.0 million.
AH Realty also raised its full-year cash same-store NOI growth assumptions to ranges of 2.5% to 3.5% for retail and 2.75% to 3.75% for office. The higher assumptions followed stronger leasing spreads and a sequential increase in stabilized leased occupancy to 95.9% from 95.4%.
The company completed the first closing of its multifamily exit, selling nine properties and six associated retail and office components for $485 million. Two additional multifamily properties remained under contract for $77 million. The proceeds supported the debt reduction, while AH Realty continued returning capital through repurchases of 2.0 million shares for $12.4 million during the quarter.