ARLINGTON, Va., Feb. 7 /PRNewswire/ -- Charles E. Smith Residential
Realty, Inc. (NYSE: SRW), the nation's leading urban multifamily residential
REIT, today announced Funds from Operations (FFO) for 1999 of $72.5 million,
up 24.9% over the prior year. 1999 FFO per share was up 11.0% to $3.23 per
share. For the quarter ended December 31, 1999, FFO was $20.1 million, up
19.2% over fourth quarter 1998 FFO. Fourth quarter 1999 FFO per share was
$0.87, up 10.1% over the fourth quarter of 1998. (Per share amounts are for
diluted shares.) The increases are attributable primarily to core portfolio
operating income growth and excellent performance from the Company's newly
delivered development properties.
"1999 was our best year yet," said Ernest A. Gerardi, Jr., CEO and
President of Charles E. Smith Residential, "and we are in an excellent
position going forward. Our FFO per share growth is the strongest since our
IPO. We are also pleased that our success is beginning to be recognized by
the marketplace. Our total shareholder return for 1999 was 17.6 % and was the
highest of all equity REITs with total equity capitalization over $1.0
billion."
Mr. Gerardi continued, "The key to our strong results is our focus on the
growing urban living trend. In 1999, we successfully extended our geographic
presence and now have over one-third of our portfolio in the thriving urban
markets of Chicago, Boston and Southeast Florida. All of these markets, as
well as the Washington/Northern Virginia market, continue to exhibit strong
apartment fundamentals, healthy employment growth and a high demand for urban
living. Our performance and unique investment opportunities have enabled us
to obtain capital in difficult equity market conditions. We raised over $400
million in 1999 through a disciplined approach including convertible preferred
placements, acquisition-related equity exchanges, joint ventures and asset
dispositions, while keeping our conservative capital structure intact. In
total, we increased the market capitalization of the company by 25% during the
year, to $2.5 billion."
Recent Activity
In November, Smith Residential completed the acquisition of a 1,339-unit,
5-building high-rise apartment property located in the South Beach section of
Miami Beach, Fla. The Company acquired the property for approximately $85
million and will redevelop it with $25 to $30 million of renovations.
In January, Smith Residential completed the acquisition of a 2,669-unit
high rise portfolio in the Hollywood Beach/Aventura area of Ft. Lauderdale,
Fla. The $178 million purchase includes a portfolio of eight buildings, four
on the oceanfront and four on the intracoastal waterway. A major capital
improvement program is scheduled over the next several years to reposition and
enhance the property's value. Closing occurred in December 1999 on the first
three buildings and in January 2000 on the remaining buildings. With these
acquisitions, the Company is the largest owner of high-rise multifamily rental
property in Southeast Fla.
Asset Dispositions
In December, Smith Residential completed disposition of five properties,
totaling 1,420 units. The properties included Potomac View, Windsor Towers
and Columbian-Stratford in Northern Va., Fort Chaplin in Washington, D.C. and
Suburban Towers in Md.
Proceeds from these dispositions were approximately $79 million, bringing
the total 1999 disposition proceeds for the Company in excess of $100 million.
Operating Results
Charles E. Smith Residential Realty is structured as an umbrella
partnership real estate investment trust, or UPREIT, in which all property
ownership and business operations are conducted in an Operating Partnership
and its subsidiaries and affiliates. Charles E. Smith Residential Realty,
Inc. (the REIT) currently owns approximately 65% of its Operating Partnership
and is its sole general partner.
The Operating Partnership's total Funds from Operations (FFO) was $32.3
million for the fourth quarter of 1999, an increase of 16.6% over 1998. For
the year ended December 31, 1999, the Operating Partnership's FFO was $116.5
million, up 18.2% over 1998.
The Operating Partnership's total revenue from rental properties was $82.5
million for the fourth quarter of 1999, an increase of 23.7% over 1998, and
total rental property revenue for the year ended December 31, 1999, was $301.2
million, an increase of 20.5% over 1998.
The Operating Partnership's operating income from rental properties before
depreciation for the fourth quarter of 1999 was $50.4 million, up 25.1% over
1998, and for the year ended December 31, 1999, operating income was $182.3
million, up 22.7% over 1998.
Quarterly Conference Call
The Company will hold a conference call on Tuesday, February 8, 2000, to
review the information reported in this release. The conference call will
begin at 11:00 AM (EST). To participate, please call 1-888-497-4617 shortly
before 11:00 AM that day, and identify yourself as a participant in the
Charles E. Smith Residential Realty 1999 Operating Results conference call.
If you are unable to join the call at 11:00 AM, a recording will be
available from 1:00 PM (EST), February 8th until 1:00 PM (EST), February 11th.
To access this service, please call 1-800-633-8284 and enter Reservation
Number 14094180 followed by the "#" sign.
Charles E. Smith Residential Realty, Inc. is a self-managed real estate
investment trust listed on the New York Stock Exchange under the symbol "SRW."
The Company and its subsidiaries and affiliates own, acquire, develop, and
manage multifamily residential units in Washington, D.C., Northern Va.,
Chicago, Boston and Southeast Fla. As of February 7, 2000, the Company owns
and/or has an ownership interest in approximately 26,000 units and has
approximately 3,000 units under construction and/or pre-purchase agreement.
The total market capitalization of the Company -- Charles E. Smith Residential
Realty, Inc., including its Operating Partnership -- exceeds $2.5 billion.
Investor information, including press releases about Charles E. Smith
Residential Realty, is available on the Company's web site at
http://www.charlesesmith.com and also through PR Newswire "News on Call" by fax
800-758-5804, ext. 101271, or at http://www.prnewswire.com.
This news release contains forward-looking statements regarding the
Company's outlook, including statements of goals, intentions, and expectations
based on assumptions about general economic and market conditions, competitive
dynamics and other factors that, by their nature, are subject to significant
uncertainties, some of which are discussed in the Company's filings with the
Securities and Exchange Commission. Because of these uncertainties, and the
assumptions on which statements in this release are based, actual future
results may differ materially.
(Table to Follow)
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Financial Highlights
For the Three Months and Year Ended December 31, 1999 and 1998
3 Months Ended December 31, Year Ended December 31,
(dollars in
thousands,
except per
share data) 1999 1998 % Change 1999 1998 % Change
Financial Highlights
Revenue from the
Operating
Partnership $82,484 $66,677 23.7% $301,233 $250,067 20.5%
Funds From Operations
of the Operating
Partnership 32,345 27,750 16.6% 116,512 98,588 18.2%
Funds From Operations
- attributable to
shareholders 20,120 16,873 19.2% 72,464 58,034 24.9%
Per Share -
basic $0.88 $0.80 10.0% $3.25 $2.93 10.9%
Per Share -
diluted (a) $0.87 $0.79 10.1% $3.23 $2.91 11.0%
Net Income of the
Operating
Partnership $84,087 $24,573 242.2% $153,814 $69,870 120.1%
Net Income -
attributable to
common
shareholders 46,594 12,025 287.5% 82,237 30,407 170.5%
Per Common Share -
basic $2.30 $0.68 238.2% $4.24 $1.86 128.0%
Per Common Share -
diluted (a) $2.20 $0.68 223.5% $4.04 $1.85 118.4%
Dividends Declared
per Share $0.55 $0.535 2.8% $2.17 $2.11 2.8%
Total Assets $1,703,788 $1,185,399 43.7%
Interest Coverage
Ratio (b) 3.62 3.47 3.33 3.20
As of As of
Apartment Units Dec. 31, 1999 Dec. 31, 1998
Core Portfolio 15,482 15,482 - -
Acquisition/Disposition Portfolio 7,635 3,797 - -
Development Portfolio (in service) 1,058 383 - -
Total 24,175 19,662 - -
(a) Weighted average shares and partnership units outstanding on a
diluted basis during the periods were as follows (in 000's):
3 Months Ended Dec. 31, Year Ended Dec. 31,
1999 1998 1999 1998
Common Shares 20,528 17,705 19,638 16,483
Convertible Preferred
Shares (Series A & B) 2,640 3,606 2,894 3,523
Partnership Units 13,860 13,657 13,561 13,866
Total Shares and
Partnership Units 37,028 34,968 36,093 33,872
(b) Excludes gains on sales and extraordinary losses on extinguishment
of debt.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Operating Summary
For the Three Months and Year Ended December 31, 1999 and 1998
3 Months Ended December 31, Year Ended December 31,
(dollars in thousands,
except per
share data) 1999 1998 % Change 1999 1998 % Change
RENTAL PROPERTIES (a)
Revenue $82,484 $66,677 23.7% $301,233 $250,067 20.5%
Operating
expenses (32,083) (26,385) 21.6% (118,950) (101,491) 17.2%
Depreciation and
amortization (9,602) (7,513) 27.8% (33,906) (28,958) 17.1%
40,799 32,779 24.5% 148,377 119,618 24.0%
EQUITY IN INCOME
OF JOINT VENTURES 336 0 N/A 744 0 N/A
EQUITY IN INCOME OF
PROPERTY SERVICE
BUSINESSES
(PSBs) 3,287 2,849 15.4% 6,542 8,433 -22.4%
OTHER INCOME AND EXPENSES
Corporate general
and administrative
expenses (2,822) (2,542) 11.0% (9,607) (8,947) 7.4%
Interest expense,
net (14,120) (11,861) 19.0% (55,555) (46,077) 20.6%
Gain on property
sales 56,608 15,030 276.6% 63,673 18,150 250.8%
Loss on unused
treasury lock 0 0 N/A 0 (4,923) -100.0%
Extraordinary item -
loss on extinguishment
of debt (1) (11,682) -100.0% (360) (16,384) -97.8%
NET INCOME OF THE
OPERATING
PARTNERSHIP 84,087 24,573 242.2% 153,814 69,870 120.1%
Minority
Interest (32,297) (9,764) 230.8% (58,536) (28,741) 103.7%
Net Income 51,790 14,809 249.7% 95,278 41,129 131.7%
Less income
attributable
to preferred
shares (5,196) (2,784) 86.6% (13,041) (10,722) 21.6%
Net Income
attributable
to Common
Shares $46,594 $12,025 287.5% $82,237 $30,407 170.5%
Net Income per
Common Share
- basic $2.30 $0.68 238.2% $4.24 $1.86 128.0%
Net Income per
Common Share
- diluted $2.20 $0.68 223.5% $4.04 $1.85 118.4%
NET INCOME OF
THE OPERATING
PARTNERSHIP $84,087 $24,573 242.2% $153,814 $69,870 120.1%
Preferred
dividends (b) (4,285) (1,010) 324.3% (8,093) (3,647) 121.9%
Gain on property
sales (56,608) (15,030) 276.6% (63,673) (18,150) 250.8%
Gain on sale
- PSBs (802) 0 N/A (802) 0 N/A
Depreciation of
real property 9,602 7,513 27.8% 33,906 28,958 17.1%
Depreciation from
unconsolidated
joint ventures 242 0 N/A 570 0 N/A
Amortization of
goodwill 108 22 390.9% 430 250 72.0%
Loss on unused
treasury lock 0 0 N/A 0 4,923 -100.0%
Extraordinary item
- loss on
extinguishment
of debt 1 11,682 -100.0% 360 16,384 -97.8%
FFO OF THE OPERATING
PARTNERSHIP 32,345 27,750 16.6% 116,512 98,588 18.2%
Minority
Interest (12,225) (10,877) 12.4% (44,048) (40,554) 8.6%
FFO attributable to
shareholders $20,120 $16,873 19.2% $72,464 $58,034 24.9%
Funds From
Operations
per Share
- basic $0.88 $0.80 10.0% $3.25 $2.93 10.9%
Funds From
Operations
per Share
- diluted $0.87 $0.79 10.1% $3.23 $2.91 11.0%
(a) Details are shown on the following page.
(b) Excludes Series A & B, which are considered Common Share
equivalents.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Rental Property Details
For the Three Months and Year Ended December 31, 1999 and 1998
3 Months Ended December 31, Year Ended December 31,
(dollars in
thousands) 1999 1998(d) % Change 1999 1998(d) % Change
CORE RESIDENTIAL PORTFOLIO (a)
Revenue $53,175 $49,879 6.6% $207,810 $195,082 6.5%
Operating
Expenses (19,671) (18,981) 3.6% (78,654) (76,380) 3.0%
33,504 30,898 8.4% 129,156 118,702 8.8%
ACQUISITION/DISPOSITION PORTFOLIO (b)
Revenue 22,328 13,331 72,468 43,738
Operating
Expenses (9,753) (5,962) (31,741) (20,607)
12,575 7,369 N/A 40,727 23,131 N/A
DEVELOPMENT PORTFOLIO (c)
Revenue 4,554 784 10,975 1,258
Operating
Expenses (1,765) (635) (5,187) (1,300)
2,789 149 N/A 5,788 (42) N/A
RETAIL PORTFOLIO
Revenue 2,427 2,683 -9.5% 9,980 9,989 -0.1%
Operating
Expenses (894) (807) 10.8% (3,368) (3,204) 5.1%
1,533 1,876 -18.3% 6,612 6,785 -2.5%
TOTAL PORTFOLIO
Revenue 82,484 66,677 23.7% 301,233 250,067 20.5%
Operating
Expenses (32,083) (26,385) 21.6% (118,950) (101,491) 17.2%
$50,401 $40,292 25.1% $182,283 $148,576 22.7%
(a) Includes 15,482 apartment units.
(b) Includes the following properties:
1999 Acquisitions 1999 Dispositions
Buchanan (Northern VA) The Manor
Parkwest (Chicago, IL) Potomac View
Terrace (Chicago, IL) Columbian Stratford
Countryside (Chicago, IL) Windsor Towers
Somerset (Chicago, IL) Fort Chaplin
The Consulate (Washington, DC) Suburban Tower
Forte Towers (Southeast FL)
Aventura (Southeast FL)
1998 Acquisitions 1998 Dispositions
Tunlaw Gardens (Washington, DC) Oxford Manor
Tunlaw Park (Washington, DC) Marbury Plaza
Parc Vista (Northern VA)
McClurg Court (Chicago, IL)
Cronin's Landing (Boston, MA)
(c) Includes the following properties:*
Springfield Station (Northern VA) (through 5/99)
Courthouse Place (Northern VA)
One Superior Place (Chicago, IL)
The Park Connecticut (Washington, DC)
* Excludes projects under contingent pre-purchase agreements.
(d) Certain amounts have been reclassified to conform with the current
year presentation.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Core Residential Portfolio Statistics
For the Three Months and Year Ended December 31, 1999 and 1998
Gross Operating Monthly GOI Occupancy
Income Per Unit
Number of % Change % Change
Apartment % of From From
Market/Sub-Market Units Q4 99 Total Q4 99 Q4 98 Q4 99 Q4 98
(000's)
WASHINGTON, D.C. 3,039 $10,212 19.2% $1,120 9.0% 98.7% 0.3%
NORTHERN VIRGINIA
Crystal City 3,708 14,130 26.6% 1,270 4.7% 97.3% -0.8%
Rosslyn/Ballston 1,110 4,617 8.7% 1,386 8.1% 97.4% 4.2%
Tysons/Dulles 2,617 8,068 15.2% 1,028 5.2% 97.3% -0.2%
Other 4,514 13,144 24.7% 971 7.1% 98.1% 1.1%
Total Northern
Virginia 11,949 39,959 75.2% 1,115 5.9% 97.6% 0.6%
BOSTON/CHICAGO 494 3,004 5.6% 2,027 7.4% 97.8% 1.2%
CORE RESIDENTIAL
PORTFOLIO 15,482 $53,175 100.0% $1,145 6.6% 97.8% 0.5%
Gross Operating Monthly GOI Occupancy
Income Per Unit
Number of % Change % Change
Apartment % of From From
Market/Sub-Market Units YTD 99 Total YTD 99 YTD 98 YTD 99 YTD 98
(000's)
WASHINGTON, D.C. 3,039 $39,583 19.0% $1,085 8.1% 98.4% 0.5%
NORTHERN VIRGINIA
Crystal City 3,708 55,533 26.7% 1,248 5.3% 97.5% 0.6%
Rosslyn/Ballston 1,110 18,249 8.8% 1,370 6.9% 96.3% 1.6%
Tysons/Dulles 2,617 31,792 15.3% 1,012 6.2% 97.3% 1.2%
Other 4,514 51,044 24.6% 942 6.2% 97.3% 1.4%
Total Northern
Virginia 11,949 156,618 75.4% 1,092 5.9% 97.2% 1.1%
BOSTON/CHICAGO 494 11,609 5.6% 1,958 9.1% 97.9% 0.7%
CORE RESIDENTIAL
PORTFOLIO 15,482 $207,810 100.0% $1,119 6.5% 97.5% 1.0%
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Funds Available for Distribution (FAD) Calculation
For the Three Months and Year Ended December 31, 1999 and 1998
3 Months Ended December 31, Year Ended December 31,
(dollars in
thousands, except
per share data) 1999 1998 % Change 1999 1998 % Change
FFO OF THE OPERATING
PARTNERSHIP $32,345 $27,750 16.6% $116,512 $98,588 18.2%
Amortization of
deferred financing
costs 386 329 17.3% 1,492 1,641 -9.1%
Recurring capital
improvements (a) (3,676) (2,931) 25.4% (12,913) (13,687) -5.7%
Principal curtailments
on mortgage debt (1,245) (411) 202.9% (3,780) (1,489) 153.9%
Other 207 (120) -272.5% 448 (1) N/A
FAD OF THE OPERATING
PARTNERSHIP 28,017 24,617 13.8% 101,759 85,052 19.6%
Minority
Interest (10,561) (9,652) 9.4% (38,471) (34,986) 10.0%
FAD attributable
to shareholders $17,456 $14,965 16.6% $63,288 $50,066 26.4%
Funds Available for
Distribution per
Share - basic $0.76 $0.71 7.0% $2.84 $2.52 12.7%
Dividend declared
per Share $0.55 $0.535 2.8% $2.17 $2.11 2.8%
Payout Ratios
As a percentage
of FFO 63% 67% 67% 72%
As a percentage
of FAD 72% 75% 76% 84%
(a) Capital improvements consist of the following:
Core Residential
Portfolio $3,634 $2,661 $12,367 $12,453
Disposition Portfolio 38 182 522 1,102
Retail Portfolio 4 88 24 132
Total Recurring
capital
improvements 3,676 2,931 12,913 13,687
Non-recurring Core
Repositioning 6,384 30 9,281 1,842
Total $10,060 $2,961 $22,194 $15,529
Non-recurring Core Repositioning improvements (primarily kitchen and bath
renovations) as well as capital improvements on the acquisition portfolio are
excluded from the FAD calculation.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Debt Composition
As of December 31, 1999
Average Average
Interest Dollars in % of Years to
Rate Thousands Total Maturity
Fixed Rate Debt
Long Term Mortgages 7.18% $817,278 84.3% 9.3
Variable Rate Debt
Construction Loans 6.53% 80,045 8.3% 1.5
$100M Revolver 7.22% 25,000 2.6% 1.2
$185M Revolver 7.46% 47,000 4.8% 1.2
Sub-Total 6.94% 152,045 15.7% 1.4
Total Debt 7.14% $969,323 100.0% 8.1
Maturity Schedule:
2001 $196,893
2002 2,046
2004 29,720
2006 92,746
2007 84,302
2008 73,000
2009 212,856
2010 87,550
2011 38,000
2013 140,000
2020 12,210
Total $969,323
As of As of As of As of As of
12/31/99 9/30/99 6/30/99 3/31/99 12/31/98
Debt to Total
Market
Capitalization
Ratio 38.6% 38.8% 40.9% 43.8% 40.3%
Market
Capitalization
(in millions) $2,509 $2,308 $2,113 $2,026 $1,960
Stock Price $35.375 $34.188 $33.938 $30.813 $32.125
* Debt to Total Market Capitalization Ratio at 12/31/99 is based on
20,673,039 common shares, 2,640,325 convertible preferred shares, and
13,855,404 partnership units outstanding at a common stock price of $35.375,
$50M of perpetual preferred shares, $130M of Series E, F, G & H convertible
preferred shares, and $45M of Series H convertible preferred partnership
units.
SOURCE Charles E. Smith Residential Realty, Inc.
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Related links:
http://www.charlesesmith.com
CONTACT:
For Investors: Chandler Spears,
703-769-1044; or For Media: Susan Goyette, 703-769-6746; both of
Charles E. Smith Residential Realty, Inc.
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