Elme Communities
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 2025
ELME$1.77+0.6%Stored close · as of Oct 22, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0000104894-25-000049
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0000104894-25-000087
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 98 previous paragraphs and 126 current paragraphs.
62 unchanged; 31 reworded; 26 added; 5 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 7 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
Outlook
Current report
Proposed Purchase and Sale Agreement and Plan of Sale and Liquidation
Current report
Subsequent to quarter end, we entered into a Purchase Agreement dated August 1, 2025 (the “Purchase Agreement”), by and among Elme Communities, WashREIT OP LLC, a Delaware limited liability company and wholly owned subsidiary of Elme Communities (“Seller”), Echo Sub LLC, a Delaware limited liability company and wholly owned subsidiary of Seller (“Echo Sub” and together with Elme Communities and Seller, the “Company Parties”), CEVF VI Capital Holdings, LLC, a Delaware limited liability company (“Buyer”), and CEVF VI Co-Invest I Venture, LLC, a Delaware limited liability company (“Buyer Parent” and together with Buyer, the “Buyer Parties”). Pursuant to and subject to the terms and conditions of the Purchase Agreement, Buyer has agreed to purchase all of the limited liability company interests of Echo Sub in exchange for an aggregate purchase price of $1,605,560,100, subject to customary adjustments (the “Portfolio Sale Transaction”).
Current report
Immediately prior to the consummation of the Portfolio Sale Transaction, Echo Sub will hold all of the equity interests of our subsidiaries which own The Wellington; Trove; Elme Alexandria; Elme Manassas; Elme Druid Hills; Elme Dulles; Elme Herndon; Cascade at Landmark; Yale West; The Maxwell; Park Adams; Elme Eagles Landing; The Paramount; Roosevelt Towers; Elme Cumberland; Elme Leesburg; The Ashby; Bennett Park; and Clayborne Apartments (collectively, the “Sale Portfolio”).
Current report
In connection with approval of the Purchase Agreement, the board of trustees approved a Plan of Sale and Liquidation (“Plan of Sale and Liquidation”). The Plan of Sale and Liquidation includes a plan of liquidation that provides for our complete liquidation and dissolution in accordance with Section 331, Section 336 and Section 346(a) of the Code.
Current report
Consummation of the Portfolio Sale Transaction and effectiveness of the Plan of Sale and Liquidation are subject to approval by the affirmative vote of the holders of our shares of beneficial interests entitled to cast a majority of all the votes entitled to be cast on the matter. The Portfolio Sale Transaction is also subject to other customary closing conditions.
Current report
Concurrently with the consummation of the Portfolio Sale Transaction, we intend to repay all of the amounts outstanding under our Amended and Restated Revolving Credit Facility, our 2023 Term Loan, our 30-Year Unsecured Notes due 2028 and our 10-year notes due 2030.
Current report
In connection with entering into the Purchase Agreement and approval of the Plan of Sale and Liquidation by the board of trustees, we obtained a commitment to provide debt financing in the original principal amount of $520 million (or $565 million if one of the 19 properties is not included in the closing of the Portfolio Sale Transaction) (the “Loan”) which will be secured by substantially all of our real estate assets and subsidiary equity interests that remain after the closing under the Purchase Agreement, pursuant to a commitment letter (the “Commitment Letter”) from Goldman Sachs Bank USA. The Loan will have an initial term of one year with a one-year extension option, that may be exercised subject to certain conditions specified in the Commitment Letter. The funding of the Loan provided for in the Commitment Letter is contingent on the satisfaction of customary conditions, including but not limited to (a) execution and delivery of definitive documentation with respect to the Loan in accordance with the terms set forth in the Commitment Letter, and (b) closing of the Portfolio Sale Transaction. The actual documentation governing the Loan has not been finalized, and accordingly, the actual terms may differ from the description of such terms in the Commitment Letter.
Current report
Recent Tax Legislation
Current report
Effective July 4, 2025, certain changes to U.S. tax law were approved that may impact us and our shareholders. Among other changes, this legislation (i) permanently extended the 20% deduction for “qualified REIT dividends” for individuals and other non-corporate taxpayers under Section 199A of the Internal Revenue Code (the “Code”), (ii) increased the percentage limit under the REIT asset test applicable to taxable REIT subsidiaries (“TRSs”) from 20% to 25% for taxable years beginning after December 31, 2025, and (iii) increased the base on which the 30% interest deduction limit under Section 163(j) of the Code applies by excluding depreciation, amortization and depletion from the definition of “adjusted taxable income” (i.e. based on EBITDA rather than EBIT) for taxable years beginning after December 31, 2024.
Current report
Residential expenses from same-store residential properties increased $0.6 million, or 3.1%, to $21.2 million for the 2025 Quarter, compared to $20.6 million for the 2024 Quarter, primarily due to higher repairs and maintenance ($0.2 million), higher utilities ($0.2 million), higher personnel compensation ($0.1 million) and higher contract services ($0.1 million) expenses.
Current report
General and administrative expenses: Increase of $1.6 million primarily due to higher professional fees ($0.8 million) in connection with activities related to the board of trustee’s ongoing strategic alternatives review and higher incentive compensation ($1.0 million), partially offset by lower marketing expenses ($0.1 million) and higher internal management fee offset ($0.1 million).
Current report
2025 Period Compared to 2024 Period
Current report
(1)Other: Watergate 600
Current report
Real Estate Rental Revenue
Current report
Real estate rental revenue from same-store residential properties increased $4.3 million, or 3.9%, to $114.7 million for the 2025 Period, compared to $110.4 million for the 2024 Period, primarily due to higher rental income ($1.7 million), lower vacancy loss ($1.0 million), higher ancillary income ($0.5 million), lower credit losses ($0.5 million), higher recoveries ($0.3 million) and higher other rental and fee income ($0.3 million).
Current report
Real Estate Expenses
Current report
Residential real estate expenses as a percentage of residential revenue for the 2025 Period and 2024 Period were 36.5% and 37.1%, respectively.
Current report
Other NOI
Current report
Other NOI decreased $0.4 million due to lower rental revenue ($0.3 million) and higher operating expenses ($0.1 million) at Watergate 600.
Current report
Other Income and Expenses
Current report
Property management expenses: Increase of $0.1 million primarily due to higher internal management fee expenses at same-store properties.
Current report
Real estate depreciation and amortization: Decrease of $2.0 million primarily due to in-place lease amortization at Elme Druid Hills ($2.1 million) in the 2024 Period.
Current report
•Funding dividends and distributions to our shareholders (following the closing of the Portfolio Sale Transaction, we expect to suspend our regular quarterly distributions); and
Current report
In connection with entering into the Purchase Agreement and approval of the Plan of Sale and Liquidation by the board of trustees, we obtained a commitment for the Loan which will be secured by substantially all of our real estate assets and subsidiary equity interests that remain after the closing under the Purchase Agreement, pursuant to the Commitment Letter. The Loan is a property portfolio mortgage financing with an initial term of one year with a one-year extension option, that may be exercised subject to certain conditions specified in the Commitment Letter. The Loan is expected to be repaid with the proceeds of each sale of the our remaining real estate assets.
Current report
Net cash used in financing activities increased primarily due to payment of financing costs during the 2025 Period.
Removed paragraphs (5)
Previous report
During the 2025 Quarter, we announced that our board of trustees had initiated a formal review to evaluate strategic alternatives for Elme Communities in an effort to maximize shareholder value. This review remains ongoing and there is no deadline or definitive timetable set for completion of this review and there can be no assurance that this process will result in Elme Communities pursuing a transaction or any other strategic outcome.
Previous report
While we currently intendto continue to pay dividends at or about current levels, we will continue to assess the payment of our dividends on a quarterly basis. Future determinations regarding the declaration and payment of dividends, if any, will be at the discretion of our board of trustees which considers, among other factors, trends in our levels of NAREIT FFO and ongoing capital requirements to achieve a targeted payout ratio.
Previous report
•Funding dividends and distributions to our shareholders (which we intend to continue to pay at or about current levels);
Previous report
•Funding for potential property acquisitions throughout 2025, offset by proceeds from potential property dispositions.
Previous report
Net cash used in financing activities decreased primarily due to higher net borrowings on the Amended and Restated Revolving Credit Facility during the 2025 Quarter.
Reworded paragraphs (31)
Previous wording
We refer to the three months ended March 31, 2025 and March 31, 2024 as the “2025 Quarter” and the “2024 Quarter,” respectively.
Current wording
We refer to the three months ended June 30, 2025 and June 30, 2024 as the “2025 Quarter” and the “2024 Quarter,” respectively, and the six months ended June 30, 2025 and June 30, 2024 as the “2025 Period” and “2024 Period,” respectively.
Previous wording
This Form 10-Q contains forward-looking statements within the meaning of federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of Elme Communities to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Additional factors which may cause the actual results, performance, or achievements of Elme Communities to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements include, but are not limited to: the risks associated with the outcome, objectives and timing of the strategic alternatives review, including the incurrence of costs and expenses and diversion of management’s time in connection with such review; the risks associated with ownership of real estate in general and our real estate assets in particular; the economic health of the areas in which our properties are located, particularly with respect to the greater Washington, DC metro and Sunbelt regions; risks associated with our ability to execute on our strategies, including new strategies with respect to our operations and our portfolio, including the acquisition of apartment homes in the Sunbelt markets and our ability to realize any anticipated operational benefits from our internalization of community management functions; the risk of failure to enter into and/or complete acquisitions and dispositions; changes in the composition of our portfolio; reductions in or actual or threatened changes to the timing of federal government spending; the economic health of our residents; the impact from macroeconomic factors (including inflation, increases in interest rates, potential economic slowdowns or recessions, tariffs and trade barriers, supply chain disruptions and geopolitical conflicts); risks related to our ability to control our expenses if revenues decrease; compliance with applicable laws and corporate social responsibility goals, including those concerning the environment and access by persons with disabilities; risks related to legal proceedings; risks related to not having adequate insurance to cover potential losses; changes in the market value of securities; terrorist attacks or actions and/or cyber-attacks; …
Excerpt shortened here; the source contains the full paragraph.
Current wording
This Form 10-Q contains forward-looking statements within the meaning of federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Such statements involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance, or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Additional factors which may cause our actual results, performance, or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements include, but are not limited to: the satisfaction or waiver of other conditions to closing the Portfolio Sale Transaction pursuant to the Purchase Agreement; the possibility that our shareholders do not approve the Portfolio Sale Transaction and/or Plan of Sale and Liquidation (together, the “Proposed Transactions”) or that other conditions to the closing of the Portfolio Sale Transaction are not satisfied or waived at all or on the anticipated timeline; unanticipated difficulties or expenditures relating to the Proposed Transactions; changes in the amount and timing of the total liquidating distributions, including as a result of unexpected levels of transaction cost, liquidation costs or unpaid or additional liabilities and obligations; the inability to close our proposed new debt financing on the terms or timeline or for the amount anticipated fees associated with the repayment of our existing indebtedness; the possibility of converting to a liquidating trust or other liquidating entity; the ability of our board of trustees to terminate the Plan of Sale and Liquidation, whether or not approved by shareholders; the response of our residents, tenants and business partners to the announcement of the Proposed Transactions; potential difficulties in employee retention as a result of announcement of the Proposed Transactions; the occurrence of any event, change or other circumstances that could give rise to the termination of the Portfolio Sale Transaction; the risk that disruptions caused by or relating to the Proposed Transactions will harm our business, including current plans and operations; risks associated with third party contracts containing consent and/or other provisions that may be triggered by the Proposed Transactions; restrictions during the …
Excerpt shortened here; the source contains the full paragraph.
Previous wording
•Results of Operations. Discussion of our financial results comparing the 2025 Quarter to the 2024 Quarter.
Current wording
•Results of Operations. Discussion of our financial results comparing the 2025 Quarter to the 2024 Quarter and the 2025 Period to the 2024 Period.
Previous wording
The increase in net loss is primarily due to higher professional fees ($2.9 million) in the 2025 Quarter in connection with the previously disclosed cooperation agreement entered into on March 19, 2025 (the “Cooperation Agreement”) and activities related to the board of trustee’s ongoing strategic alternatives review and higher other income ($1.4 million) in the 2024 Quarter. These were partially offset by lower depreciation and amortization expenses ($1.7 million) and higher NOI ($1.7 million) in the 2025 Quarter.
Current wording
The increase in net loss is primarily due to higher general and administrative expenses ($1.6 million) and higher interest expense ($0.1 million), partially offset by lower depreciation and amortization expenses ($0.3 million) and higher NOI ($1.3 million).
Previous wording
The increase in NOI is primarily due to higher NOI from same-store properties ($1.9 million), partially offset by lower NOI at Watergate ($0.2 million). The higher same-store NOI was primarily due to higher rental rates. Residential same-store average occupancy for our portfolio increased to 94.8% as of March 31, 2025 from 94.3% as of March 31, 2024.
Current wording
The increase in NOI is primarily due to higher NOI from same-store properties ($1.6 million), partially offset by lower NOI at Watergate 600 ($0.2 million). The higher same-store NOI was primarily due to higher rental rates. Residential same-store average occupancy for our portfolio increased to 94.7% as of June 30, 2025 from 94.5% as of June 30, 2024.
Previous wording
The decrease in NAREIT FFO is primarily due to higher general and administrative expenses ($3.0 million) and higher other income ($1.4 million) in the 2024 Quarter, partially offset by higher NOI ($1.7 million).
Current wording
The decrease in NAREIT FFO is primarily due to higher general and administrative expenses ($1.6 million) and higher property management expenses ($0.1 million), partially offset by higher NOI ($1.3 million).
Previous wording
There were no significant investment transactions during the 2025 Quarter.
Current wording
There were no significant investment transactions during the 2025 Period.
Previous wording
As of April 29, 2025, our Amended and Restated Revolving Credit Facility has a borrowing capacity of $314.0 million.
Current wording
As of August 1, 2025, our Amended and Restated Revolving Credit Facility has a borrowing capacity of $306.0 million.
Previous wording
As of March 31, 2025, the interest rate on the Amended and Restated Revolving Credit Facility was based on the Adjusted Daily Simple SOFR (inclusive of the 0.10% credit spread adjustment) plus 0.85% applicable margin, the daily SOFR was 4.41% and the facility fee was 0.20%.
Current wording
As of June 30, 2025, the interest rate on the Amended and Restated Revolving Credit Facility was based on the Adjusted Daily Simple SOFR (inclusive of the 0.10% credit spread adjustment) plus 0.85% applicable margin, the daily SOFR was 4.45% and the facility fee was 0.20%.
Previous wording
The discussion that follows is based on our consolidated results of operations for the 2025 Quarter and the 2024 Quarter.
Current wording
The discussion that follows is based on our consolidated results of operations for the 2025 Quarter and the 2024 Quarter and the 2025 Period and 2024 Period.
Previous wording
Residential revenue from same-store residential properties increased $2.1 million, or 3.9%, to $57.0 million for the 2025 Quarter, compared to $54.9 million for the 2024 Quarter, primarily due to higher rental income ($1.0 million), lower credit losses ($0.5 million), lower vacancy loss ($0.4 million) and higher ancillary income ($0.2 million).
Current wording
Residential revenue from same-store residential properties increased $2.2 million, or 3.9%, to $57.7 million for the 2025 Quarter, compared to $55.5 million for the 2024 Quarter, primarily due to higher rental income ($0.8 million), lower vacancy loss ($0.6 million), higher recoveries ($0.3 million), higher other rental and fee income ($0.3 million) and higher ancillary income ($0.3 million).
Previous wording
Residential expenses as a percentage of residential revenue for the 2025 Quarter and the 2024 Quarter were 36.2% and 37.1%, respectively.
Current wording
Residential expenses as a percentage of residential revenue for the 2025 Quarter and the 2024 Quarter were 36.9% and 37.2%, respectively.
Previous wording
Real estate depreciation and amortization: Decrease of $1.7 million primarily due to lower depreciation and amortization at Elme Druid Hills due to in-place leases amortization in the 2024 Quarter ($1.8 million).
Current wording
Real estate depreciation and amortization: Decrease of $0.3 million primarily due to in-place lease amortization at Elme Druid Hills ($0.3 million) in the 2024 Quarter.
Previous wording
•Line of credit: Decrease primarily due to a lower weighted average interest rate of 5.3% in the 2025 Quarter, as compared to a weighted average interest rate of 6.3% in the 2024 Quarter, partially offset by a higher weighted average borrowings of $183.6 million in the 2025 Quarter, as compared to weighted average borrowings of $168.3 million in the 2024 Quarter.
Current wording
•Line of credit: Decrease primarily due to a lower weighted average interest rate of 5.3% in the 2025 Quarter, as compared to a weighted average interest rate of 6.3% in the 2024 Quarter, partially offset by a higher weighted average borrowings of $179.6 million in the 2025 Quarter, as compared to weighted average borrowings of $161.5 million in the 2024 Quarter.
Previous wording
The increase in same-store average occupancy was primarily due to higher average occupancy at Elme Cumberland, Elme Eagles Landing, The Ashby at McLean, Elme Manassas, Elme Herndon and Elme Druid Hills, partially offset by lower average occupancy at Elme Conyers, The Clayborne and Yale West.
Current wording
The increase in same-store average occupancy was primarily due to higher average occupancy at The Ashby at McLean, Elme Cumberland, Elme Eagles Landing, Elme Druid Hills, Elme Germantown and Elme Marietta, partially offset by lower average occupancy at Elme Conyers, Clayborne Apartments, Elme Bethesda and Cascade at Landmark.
Previous wording
Residential expenses from same-store residential properties increased $0.2 million, or 1.2%, to $20.5 million for the 2025 Quarter, compared to $20.3 million for the 2024 Quarter, primarily due to higher administrative ($0.3 million), higher repairs and maintenance ($0.3 million) and higher utilities ($0.2 million) expenses. The increase is partially offset by lower real estate tax ($0.5 million) and lower turnover ($0.1 million) expenses.
Current wording
Real estate expenses from same-store residential properties increased by $0.9 million, or 2.2%, to $41.7 million for the 2025 Period, compared to $40.9 million for the 2024 Period, primarily due to higher repairs and maintenance ($0.4 million), higher utilities ($0.3 million), higher administrative ($0.3 million), higher contract services ($0.2 million) and higher insurance ($0.1 million) expenses. The increase is partially offset by lower real estate taxes ($0.4 million).
Previous wording
General and administrative expenses: Increase of $3.0 million primarily due to higher professional fees ($2.9 million) in connection with the Cooperation Agreement and activities related to the board of trustee’s ongoing strategic alternatives review.
Current wording
General and administrative expenses: Increase of $4.6 million primarily due to higher professional fees ($3.2 million) in connection with the cooperation agreement entered into on March 19, 2025, and activities related to the board of trustee’s ongoing strategic alternatives review and higher incentive compensation ($1.5 million), partially offset by higher internal management fee offset ($0.2 million).
Previous wording
Other Income: Other income during the 2024 Quarter consists of additional payments received with respect to easements previously conveyed at The Wellington and Takoma Park, a previously owned retail property.
Current wording
Other Income: Other income during the 2024 Period consists of additional payments received with respect to easements previously conveyed at The Wellington and Takoma Park, a previously owned retail property.
Previous wording
We believe we will have adequate liquidity over the next twelve months to operate our business and to meet our cash requirements, including meeting our debt obligations, capital and contractual obligations, as well as the payment of dividends, and funding possible growth opportunities.
Current wording
Subsequent to quarter end, our board of trustees approved the Plan of Sale and Liquidation and the Portfolio Sale Transaction, and, on August 1, 2025, we entered into the Purchase Agreement. If the Portfolio Sale Transaction and Plan of Sale and Liquidation are approved by our shareholders, we expect it will materially impact our short and long-term capital needs and our plan to meet those needs. As of June 30, 2025, whether the Proposed Transactions are approved by our shareholders, and the Portfolio Sale Transaction is consummated, we believe we will have adequate liquidity over the next twelve months to operate our business and to meet our cash requirements, including meeting our debt obligations, capital and contractual obligations, as well as the payment of dividends.
Previous wording
We also believe we have adequate liquidity beyond 2025 and we have no debt maturities until 2026 and only $357.0 million of scheduled debt maturities prior to 2029, based on current amounts outstanding under our Amended and Restated Revolving Credit Facility. As of April 29, 2025, we had cash and cash equivalents totaling $2.7 million and a borrowing capacity of $314.0 million on our Amended and Restated Revolving Credit Facility, resulting in a total liquidity position of $316.7 million.
Current wording
If the Proposed Transactions are not approved by our shareholders, we believe we would have adequate liquidity beyond 2025 and would have no debt maturities until 2026 and only $350.0 million of scheduled debt maturities prior to 2029, based on current amounts outstanding under our Amended and Restated Revolving Credit Facility. As of August 1, 2025, we had cash and cash equivalents totaling $6.2 million and a borrowing capacity of $306.0 million on our Amended and Restated Revolving Credit Facility, resulting in a total liquidity position of $312.2 million. Concurrently with the consummation of the Portfolio Sale Transaction, we intend to repay all of the amounts outstanding under our Amended and Restated Revolving Credit Facility, our 2023 Term Loan, our 30-Year Unsecured Notes due 2028 and our 10-year notes due 2030, and to enter into the Loan to provide liquidity while we complete the sale of our remaining assets, which we are aiming to complete in the next 12 months, and our winddown (subject to shareholder approval of the Plan of Sale and Liquidation).
Previous wording
As of the end of the 2025 Quarter, our full-year 2025 capital requirements are summarized below:
Current wording
As of the end of the 2025 Period, our full-year 2025 capital requirements are summarized below:
Previous wording
•Approximately $41.0 - $46.0 million to invest in our existing portfolio of operating assets, inclusive of $26.0 - $31.0 million of major capital expenditures; and
Current wording
•Approximately $29.0 - $34.0 million to invest in our existing portfolio of operating assets, inclusive of $15.0 - $20.0 million of major capital expenditures.
Previous wording
There can be no assurance that our capital requirements will not be materially higher or lower than the above expectations. We currently believe that we will generate sufficient cash flow from operations and potential property sales and have access to the capital resources necessary to fund our requirements for the remainder of 2025. However, as a result of the uncertainty of the general market conditions in the greater Washington, DC metro and Sunbelt regions, economic conditions affecting the ability to attract and retain residents and tenants or achieve anticipated rental rates, declines in our share price, unfavorable changes in the supply of competing properties, or our properties not performing as expected, we may not generate sufficient cash flow from operations and property sales or otherwise have access to capital on favorable terms, or at all. If we are unable to obtain capital from other sources, we may need to alter capital spending to be materially different than what is stated above. If capital were not available, we may be unable to satisfy the distribution requirement applicable to REITs, make required principal and interest payments, make strategic acquisitions or make necessary and/or routine capital improvements or undertake improvement/redevelopment opportunities with respect to our existing portfolio of operating assets.
Current wording
There can be no assurance that our capital requirements will not be materially higher or lower than the above expectations. We currently believe that we will generate sufficient cash flow from operations and potential property sales, including the Portfolio Sale Transaction, and have access to the capital resources necessary to fund our requirements for the remainder of 2025. However, as a result of the uncertainty of the general market conditions in the greater Washington, DC metro and Sunbelt regions, economic conditions affecting the ability to attract and retain residents and tenants or achieve anticipated rental rates, declines in our share price, unfavorable changes in the supply of competing properties, the effects of our announced Portfolio Sale Transaction and Plan of Sale and Liquidation, if the Loan we expect to receive if we consummate the Portfolio Sale Transaction is not available on the amounts anticipated or our properties not performing as expected, we may not generate sufficient cash flow from operations and property sales or otherwise have access to capital on favorable terms, or at all. If we are unable to obtain capital from other sources, we may need to alter capital spending to be materially different than what is stated above. If capital were not available, we may be unable to satisfy the distribution requirement applicable to REITs, make required principal and interest payments or make necessary and/or routine capital improvements.
Previous wording
As of March 31, 2025, the weighted average maturity for our debt is 4.1 years. If principal amounts due at maturity cannot be refinanced, extended or paid with proceeds of other capital transactions, such as new equity capital, our cash flow may be insufficient to repay all maturing debt. Prevailing interest rates or other factors at the time of a refinancing, such as possible reluctance of lenders to make commercial real estate loans, may result in higher interest rates and increased interest expense or inhibit our ability to finance our obligations.
Current wording
As of June 30, 2025, the weighted average maturity for our debt is 3.8 years. If principal amounts due at maturity cannot be refinanced, extended or paid with proceeds of other capital transactions, such as new equity capital, our cash flow may be insufficient to repay all maturing debt. Prevailing interest rates or other factors at the time of a refinancing, such as possible reluctance of lenders to make commercial real estate loans, may result in higher interest rates and increased interest expense or inhibit our ability to finance our obligations.
Previous wording
On February 20, 2024, we entered into an equity distribution agreement (the “Equity Distribution Agreement”) with Wells Fargo Securities, LLC, BNY Mellon Capital Markets, LLC, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, KeyBanc Capital Markets Inc., TD Securities (USA) LLC and Truist Securities, Inc. as agents and forward sellers, as applicable, (collectively, the “Agents” or “Forward Sellers”, as applicable), and Wells Fargo Bank, National Association, The Bank of New York Mellon, Citibank, N.A., Goldman Sachs & Co. LLC, KeyBanc Capital Markets Inc., The Toronto-Dominion Bank and Truist Bank as forward purchasers pursuant to which up to an aggregate gross sales price of $350.0 million of Elme Communities’ common shares of beneficial interest, $0.01 par value per share, may be offered and sold from time to time through the Agents, acting as the Company’s sales agents or, if applicable, the Forward Sellers, or directly to the Agents as principals for their own accounts. In connection with entry into the Equity Distribution Agreement, we terminated our prior at-the-market offering program. At the time of such termination, approximately $340.0 million remained unsold under such prior program.
Current wording
On February 20, 2024, we entered into an equity distribution agreement (the “Equity Distribution Agreement”) with Wells Fargo Securities, LLC, BNY Mellon Capital Markets, LLC, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, KeyBanc Capital Markets Inc., TD Securities (USA) LLC and Truist Securities, Inc. as agents and forward sellers, as applicable, (collectively, the “Agents” or “Forward Sellers”, as applicable), and Wells Fargo Bank, National Association, The Bank of New York Mellon, Citibank, N.A., Goldman Sachs & Co. LLC, KeyBanc Capital Markets Inc., The Toronto-Dominion Bank and Truist Bank as forward purchasers pursuant to which up to an aggregate gross sales price of $350.0 million of Elme Communities’ common shares of beneficial interest, $0.01 par value per share, may be offered and sold from time to time through the Agents, acting as our sales agents or, if applicable, the Forward Sellers, or directly to the Agents as principals for their own accounts. In connection with entry into the Equity Distribution Agreement, we terminated our prior at-the-market offering program. At the time of such termination, approximately $340.0 million remained unsold under such prior program.
Previous wording
We did not issue common shares under the Equity Distribution Agreement or any prior equity distribution agreements during the 2025 Quarter or 2024 Quarter.
Current wording
We did not issue common shares under the Equity Distribution Agreement or any prior equity distribution agreements during the 2025 Period or 2024 Period.
Previous wording
We did not issue common shares under the dividend reinvestment program during the 2025 Quarter or 2024 Quarter.
Current wording
We did not issue common shares under the dividend reinvestment program during the 2025 Period or 2024 Period.
Previous wording
Elme Communities’ board of trustees can, at its discretion, authorize the issuance of up to 10.0 million preferred shares. The ability to issue preferred equity provides Elme Communities an additional financing tool that may be used to raise capital for future acquisitions or other business purposes. As of March 31, 2025, no preferred shares were issued and outstanding.
Current wording
Elme Communities’ board of trustees can, at its discretion, authorize the issuance of up to 10.0 million preferred shares. As of June 30, 2025, no preferred shares were issued and outstanding.
Previous wording
Net cash used in investing activities decreased primarily due to lower expenditure on capital improvements during the 2025 Quarter, partially offset by the cash provided by the land easements in the 2024 Quarter.
Current wording
Net cash used in investing activities decreased primarily due to lower expenditure on capital improvements during the 2025 Period, partially offset by the cash provided by the land easements in the 2024 Period.
Previous wording
The following table provides the calculation of our NAREIT FFO and a reconciliation of net loss to NAREIT FFO for the three months ended March 31, 2025 and 2024 (in thousands):
Current wording
The following table provides the calculation of our NAREIT FFO and a reconciliation of net loss to NAREIT FFO for the three and six months ended June 30, 2025 and 2024 (in thousands):
Previous wording
We base the discussion and analysis of our financial condition and results of operations upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. There were no changes made by management to the critical accounting policies in the three months ended March 31, 2025. We discuss the most critical estimates in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 14, 2025.
Current wording
We base the discussion and analysis of our financial condition and results of operations upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. There were no changes made by management to the critical accounting policies in the three and six months ended June 30, 2025. We discuss the most critical estimates in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 14, 2025.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
The increase in same-store average occupancy was primarily due to higher average occupancy at Elme Marietta, The Ashby at McLean and Park Adams, partially offset by lower average occupancy at Elme Conyers, Elme Bethesda and Cascade at Landmark.
Current report — wording carried from elsewhere
The following tables reconcile net loss to NOI and provide the basis for our discussion of our consolidated results of operations and NOI in the 2025 Period compared to the 2024 Period. All amounts are in thousands, except percentage amounts.
Current report — wording carried from elsewhere
Real estate rental revenue from our apartment communities is comprised of (a) rent from operating leases of multifamily residential apartments with terms of approximately one year or less, recognized on a straight-line basis, (b) revenue from the recovery of operating expenses from our residents, (c) credit losses on lease related receivables, (d) revenue from leases of retail space at our apartment communities and (e) parking and other tenant charges.
Current report — wording carried from elsewhere
Average occupancy for residential properties for the 2025 Period and 2024 Period was as follows:
Current report — wording carried from elsewhere
Interest expense: Interest expense by debt type for the six months ended June 30, 2025 and 2024 was as follows (in thousands):
Current report — wording carried from elsewhere
•Notes payable: Increase primarily due to a higher effective interest rate in the 2025 Period driven by the interest rate swap arrangements that became effective on January 10, 2025.
Current report — wording carried from elsewhere
•Line of credit: Decrease primarily due to a lower weighted average interest rate of 5.3% in the 2025 Period, as compared to a weighted average interest rate of 6.3% in the 2024 Period, partially offset by a higher weighted average borrowings of $181.6 million in the 2025 Period, as compared to weighted average borrowings of $164.9 million in the 2024 Period.