How does the 10% increase in total income translate to same‑store rent growth versus portfolio expansion?
Short answer:
The 10 % rise in total income (from $60.3 M to $66.6 M) is the net result of both higher rents on the properties UM H already owned (same‑store rent growth) and additional revenue generated by new or newly‑leased properties (portfolio expansion). The press release does not break the $6.3 M increase into those two components, but we can infer how each piece likely contributed based on the numbers that are disclosed and on how REITs such as UM H typically generate growth.
1. What the numbers tell us
| Metric (Q2 2025) | Metric (Q2 2024) | % change |
|---|---|---|
| Total Income | $66.6 M | $60.3 M |
| Net Income (attributable) | $2.5 M ( $0.03 /‑diluted) | $0.527 M ( $0.01 /‑diluted) |
| Normalized FFO | $19.5 M ($0.23) | $16.8 M ($0.23) |
What is “same‑store rent growth?”
- Same‑store (or “same‑property”) rent growth measures the change in rent revenue generated by the existing portfolio from one period to the next, ignoring any new acquisitions or disposals. It reflects lease‑rate escalations, rent‑upgrades, higher occupancy, and improved operating efficiencies at the same assets.
What is “portfolio expansion?”
- Portfolio expansion captures revenue that comes from new properties added to the portfolio (acquisitions, new construction, or newly‑leased space) that were not part of the prior period’s “same‑store” base. The contribution appears as new rent revenue, not as a rise in the rent of existing leases.
2. How the 10 % increase can be “de‑composed”
2.1 Same‑store rent growth (the “price‑increase” side)
| Typical driver | How it would show up in UM H’s numbers |
|---|---|
| Base‑rent escalations (e.g., CPI‑linked escalations, rent‑increase clauses) | Small incremental increase in total rent per square‑foot for the existing 150‑plus properties. |
| Higher occupancy (e.g., reduced vacancies, lease‑up of previously vacant units) | More square‑feet earning rent – the “same‑store” portion of the $6.3 M uplift. |
| Lease‑renewal upgrades (e.g., tenant‑paid improvements, higher rent per unit after renewal) | Adds to the revenue base without adding new square‑footage. |
| Operational efficiencies (e.g., lower vacancy loss, better property management) | Improves net rent collected per unit of floor‑area. |
Indicative impact:
Because Normalized FFO per diluted share stayed at $0.23 while total income rose 10 %, a sizeable portion of the $6.3 M increase likely came from higher volume (more space under lease) rather than pure rent‑rate increases. If the entire increase had been purely due to a rent‑increase on the same square‑footage, the FFO per share would have risen more noticeably, unless the new rent was offset by higher expenses (e.g., higher property taxes or maintenance costs). Therefore, same‑store rent growth is probably modest – perhaps 2‑4 % of the total income increase.
2.2 Portfolio expansion (the “new‑store” side)
| Typical driver | How it would show up in UM H’s numbers |
|---|---|
| Acquisition of new properties (e.g., buying new malls, retail centers) | Adds new rental contracts that start generating revenue in Q2 2025 but were not present in Q2 2024. |
| New leasing activity (e.g., new tenant leases in existing assets, but on newly‑developed or previously vacant space) | Generates new rental income that is recorded as “new‑store” rent. |
| Development completions (e.g., newly‑finished floors or wings) | Adds to total rent without being part of the prior same‑store base. |
| Strategic joint‑ventures or partnership‑driven income | May appear as additional total income that is not tied to the historic property set. |
Indicative impact:
The $2.5 M net income (a 376 % jump) and the $2.7 M increase in normalized FFO ($19.5 M vs $16.8 M) are disproportionately larger than the 10 % rise in total revenue. This suggests that new‑store revenue (from newly‑acquired or newly‑leased space) contributed a large share of the improvement. The company likely added several million dollars of rent from new assets or leases that were not in the “same‑store” base. The fact that the per‑share FFO stayed at $0.23 (no per‑share increase) indicates that the additional FFO came mostly from added volume, not from a higher per‑share payout; i.e., the company is still generating roughly the same cash per existing share, but the total cash flow has risen because there are more properties or more leased space.
3. Putting it together: what the 10 % increase means
| Component | Approx. contribution (derived from trends) |
|---|---|
| Same‑store rent growth | ~$2–$3 M (roughly 3‑5 % of total income) – driven by modest rent escalations, modest occupancy improvements. |
| Portfolio expansion (new‑store rent) | ~$4–$5 M (≈ 7‑8 % of total income) – mainly from newly‑acquired properties or new leases that began generating rent in Q2 2025. |
| Other factors (e.g., non‑operating gains, lower tax, cost control) | The remaining $0–$0.3 M of the 10 % increase – perhaps the result of better expense management, tax benefits or one‑off gains. |
Note: The above split is illustrative only—the press release does not give a precise breakdown, and the numbers are derived from logical inference based on the change in normalized FFO and net income.
Key take‑aways
- The 10 % rise in total income is a composite result: a modest bump from higher rents on existing properties (same‑store) plus a larger uplift from new properties or new leased space (portfolio expansion).
- Same‑store rent growth appears modest (a few percentage points), because the FFO per share is flat.
If the same‑store rent increase had been the main driver, per‑share FFO would have risen more sharply. - Portfolio expansion appears to be the dominant driver of the earnings boost. The jump in net income (from $0.527 M to $2.5 M) and the 16 % rise in dollar‑based FFO suggest that new rental revenue (new‑store) is the main engine for the earnings improvement.
- The company’s per‑share cash generation (Normalized FFO) stayed at $0.23, indicating that while total cash flow has risen, the company has not yet translated the additional revenue into higher per‑share cash distributions (possibly due to higher operating costs or reinvestments into new assets).
4. What you could ask next (or analysts could look for)
| Question | Why it matters |
|---|---|
| What is the year‑over‑year change in “same‑store” rent per square foot? | Directly isolates rent‑increase impact independent of new space. |
| How many new properties/leases were added in Q2 2025? | Gives the exact size of the portfolio‑expansion contribution. |
| What is the occupancy rate in Q2 2025 vs Q2 2024? | Helps separate the impact of higher occupancy from rent‑escalation. |
| What are the capital‑expenditure (CapEx) and acquisition costs for the quarter? | Shows the cost side of the portfolio expansion and its effect on net income. |
| What portion of total expense growth (or reduction) contributed to the net‑income boost? | Helps determine whether the earnings increase is mainly due to higher revenue or lower costs. |
Bottom line
- Same‑store rent growth contributed modestly, likely via lease‑escalations and higher occupancy, but it did not drive the per‑share FFO growth.
- Portfolio expansion (new‑store rent) is the main catalyst behind the 10 % increase in total income and the sharp rise in net income and total cash generation.
- The company’s cash‑per‑share figure remains unchanged, suggesting that additional earnings are coming from additional assets rather than higher rent per existing asset.
Thus, the 10 % increase in total income reflects a blend of modest same‑store rent growth and a more substantial contribution from portfolio expansion.