elme-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________

FORM 10-Q

___________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

COMMISSION FILE NO. 1-6622


ELME COMMUNITIES
(Exact name of registrant as specified in its charter)


Maryland						53-0261100
(State of incorporation)						(IRS Employer Identification Number)

7550 WISCONSIN AVE, SUITE 900, BETHESDA, MD 20814

(Address of principal executive office) (Zip code)

Registrant’s telephone number, including area code: (202) 774-3200

___________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Shares of Beneficial Interest	ELME	NYSE

___________________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 29, 2024, 88,010,570 common shares were outstanding.

ELME COMMUNITIES

INDEX


		Page
Part I: Financial Information

Item 1.	Consolidated Financial Statements (Unaudited)
	Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Comprehensive Income (Loss)	7
	Consolidated Statements of Equity	8
	Consolidated Statements of Cash Flows	10
	Notes to Consolidated Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35

Item 4.	Controls and Procedures	36

Part II: Other Information

Item 1.	Legal Proceedings	37

Item 1A.	Risk Factors	37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37

Item 3.	Defaults upon Senior Securities	37

Item 4.	Mine Safety Disclosures	37

Item 5.	Other Information	37

Item 6.	Exhibits	38

	Signatures	39

PART I

FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

The information furnished in the accompanying unaudited Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Comprehensive Income (Loss), Consolidated Statements of Equity and Consolidated Statements of Cash Flows reflects all adjustments, consisting of normal recurring items, which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods. The accompanying financial statements and notes thereto should be read in conjunction with the financial statements and notes for the three years ended December 31, 2023 included in our 2023 Annual Report on Form 10-K filed on February 16, 2024.

ELME COMMUNITIES AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE DATA)


	June 30, 2024		December 31, 2023
	(Unaudited)
Assets
Land	$	383,808	$	384,097
Income producing property	1,976,127		1,960,020
	2,359,935		2,344,117
Accumulated depreciation and amortization	(573,054)		(528,024)
Net income producing property	1,786,881		1,816,093
Properties under development or held for future development	30,980		30,980
Total real estate held for investment, net	1,817,861		1,847,073

Cash and cash equivalents	5,629		5,984
Restricted cash	2,263		2,554
Rents and other receivables	12,575		17,642
Prepaid expenses and other assets	23,147		26,775

Total assets	$	1,861,475	$	1,900,028
Liabilities
Notes payable, net	$	522,734	$	522,345

Line of credit	156,000		157,000
Accounts payable and other liabilities	37,283		38,997
Dividend payable	15,905		15,863
Advance rents	5,074		5,248
Tenant security deposits	6,334		6,225

Total liabilities	743,330		745,678
Equity
Shareholders’ equity
Preferred shares; $0.01 par value; 10,000 shares authorized; no shares issued or outstanding	—		—
Shares of beneficial interest, $0.01 par value; 150,000 shares authorized; 88,011 and 87,867 shares issued and outstanding, as of June 30, 2024 and December 31, 2023, respectively	880		879
Additional paid in capital	1,737,941		1,735,530
Distributions in excess of net income	(608,310)		(569,391)
Accumulated other comprehensive loss	(12,651)		(12,958)
Total shareholders’ equity	1,117,860		1,154,060
Noncontrolling interests in subsidiaries	285		290
Total equity	1,118,145		1,154,350
Total liabilities and equity	$	1,861,475	$	1,900,028

See accompanying notes to the consolidated financial statements.

ELME COMMUNITIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue
Real estate rental revenue	$	60,103	$	56,599	$	119,616	$	112,408
Expenses
Property operating and maintenance	13,996		13,325		27,460		25,664
Real estate taxes and insurance	7,986		6,933		16,241		14,115
Property management	2,175		2,178		4,393		3,947
General and administrative	6,138		6,680		12,334		13,521
Transformation costs	—		2,454		—		5,354
Depreciation and amortization	23,895		21,415		48,838		42,951


	54,190		52,985		109,266		105,552

Real estate operating income	5,913		3,614		10,350		6,856
Other income (expense)
Interest expense	(9,384)		(6,794)		(18,878)		(13,625)

Loss on extinguishment of debt	—		—		—		(54)
Other income	—		569		1,410		569

	(9,384)		(6,225)		(17,468)		(13,110)







Net loss	$	(3,471)	$	(2,611)	$	(7,118)	$	(6,254)






Basic net loss per common share	$	(0.04)	$	(0.03)	$	(0.08)	$	(0.07)




Diluted net loss per common share	$	(0.04)	$	(0.03)	$	(0.08)	$	(0.07)

Weighted average shares outstanding – basic	87,910		87,741		87,898		87,695
Weighted average shares outstanding – diluted	87,910		87,741		87,898		87,695