Americold: AFFO Up, Occupancy Down

Summary

• Complex Structure: Americold is a uniquely complex REIT with multiple operating segments, requiring deeper analysis than typical REITs.
• Stock Volatility: After strong early gains, the stock has seen a multi-phase decline since 2021, with no clear recovery trend despite periods of stability.
• Occupancy Drop: Both economic and physical occupancy have sharply declined, raising red flags, especially with a record-high gap between the two.
• AFFO Growth: Surprisingly, AFFO per share has surged in 2023 and 2024. The gains in 2024 were all about warehouse services overpowering a decline in rental revenues. Warehouse services NOI is unlikely to grow forever, so we're really looking for improvement in occupancy.
• AFFO Calculations: We saw some interesting items here, which result in contacting the company. We got a quick reply, which is great. We're still digging deeper into the AFFO and the cash flows it represents.
• Development Strategy Questioned: Management continues to pursue development despite low share prices. Projected yields seem optimistic, so I'll be contacting management to dig deeper into that area.
• Position: No position presently. No clear picture for a long-term recovery in occupancy rates yet, so we're left without a clear catalyst.