1999 Performance Highlights
-- Funds From Operations (FFO) increased 14 percent
-- Industrial properties generated 82 percent of Company's total net
operating income
-- Company completed industrial facility leases totaling 4.6 million
square feet and generating 11 percent increase in effective rents over
ending rates on expired leases
-- Industrial same-store net operating income increased 9 percent from
one year ago
-- Multifamily same-store net operating income increased 8 percent from
one year ago
-- December 31, 1999 industrial occupancy rate: 96 percent
-- December 31, 1999 multifamily occupancy rate: 95 percent
-- 669 senior apartment units under development in California.
NEWPORT BEACH, Calif., Feb. 10 /PRNewswire/ -- Pacific Gulf Properties
Inc. (NYSE: PAG), an equity real estate investment trust (REIT) that owns,
develops and manages industrial and multifamily properties today reported
operating results for the period ended December 31, 1999. For the fourth
quarter ended December 31, 1999, pro forma Funds From Operations (assuming the
conversion of all preferred shares) totaled $15 million, or $.64 per share.
This represents an increase of 14% per share over the $13.2 million, or
$0.56 per share, generated one year ago, due primarily to increases in
same-store rents.
For the 12 months ended December 31, 1999, pro forma Funds From Operations
also increased 14% per share to $58.2 million, or $2.48 per share, over the
$51.1 million, or $2.18 per share, for the same period one year-ago. This
increase was due to growth in same-store rents, and to acquisitions made in
1998.
Net operating income, or gross rental income less rental operating
expenses, for the fourth quarter of 1999, was $24.3 million on revenues of
$32.1 million, compared with $22.0 million on revenues of $30.2 million for
the one-year-ago period. This represents a 10% increase for the Company.
Income before gain on sale of real estate increased 10% from $7.3 million for
the fourth quarter of 1998, to $8 million for the fourth quarter of 1999.
During the fourth quarter of 1998 the Company sold its Seattle apartment
portfolio, which generated a gain of $28.9 million. Due to the recognition of
this gain in 1998, income available to common shareholders decreased in the
fourth quarter of 1999 to $9.3 million, or $0.45 per fully diluted share,
compared with $34.9 million, or $1.51 per fully diluted share, in 1998.
Net operating income for the year was $93.3 million on revenues of
$124.2 million, compared with $82.6 million on revenues of $113.1 million one
year ago, representing a 13% increase. Income before gain on sale of real
estate increased 6% for the year, from $29.6 million for 1998, to
$31.4 million in 1999. Again, primarily due to the gain reported on the sale
of the Company's Seattle apartment portfolio in 1998, income available to
common shareholders for 1999 decreased to $34.9 million, or $1.71 per fully
diluted share, from $60 million, or $2.76 per fully diluted share, in 1998.
Said Pacific Gulf Properties' Chairman and Chief Executive Officer, Glenn
L. Carpenter, "The Company's strong operating performance and growth during
1999 confirms our successful positioning within both the industrial and senior
rental housing sectors. We will continue to invest in Industrial product to
fit the needs of the growing small to mid-sized businesses in the West."
"Also of significance is the Company's increasing emphasis on active
seniors housing. With over 660 apartment units designed exclusively for
individuals 55 years and older currently under construction, we intend to
continue our emphasis on developing housing communities geared to this growing
population segment," Mr. Carpenter said.
INDUSTRIAL PORTFOLIO
With its industrial portfolio, Pacific Gulf Properties completed leases
for one million square feet at its stabilized properties during the fourth
quarter, generating a 9% increase in effective rental rates over ending rates
on expired leases. Industrial properties generated 83% of the Company's total
net operating income for the fourth quarter ended December 31, 1999. For the
year ended December 31, 1999 industrial properties generated 82% of the
Company's total net operating income. During 1999, a total of 4.6 million
square feet was leased at the Company's stabilized properties, reflecting an
11% increase in effective rental rates.
Same-store results for the 11.6 million square feet of industrial
properties owned during both the fourth quarter of 1999 and the fourth quarter
of 1998 reflect an increase in net operating income of 5%, due primarily to a
6% increase in rental revenues. For all of 1999, same-store net operating
income increased 9%, due to a 7% increase in rental revenues.
As of December 31, 1999 the occupancy rate in the Company's industrial
portfolio was 96%, up from 95% as of December 31, 1998. During 1999, Pacific
Gulf added $14.6 million of industrial space to its portfolio, which includes
three properties encompassing approximately 304,000 square feet. At year-end,
the industrial portfolio totaled more than 15.5 million square feet, making
Pacific Gulf a significant owner of this property type in the Western United
States.
MULTIFAMILY PORTFOLIO
Same-store net operating income in the multifamily operations increased 8%
during the fourth quarter versus the same period one year ago, resulting
primarily from a 7% increase in rental revenues. For 1999, same-store net
operating income also increased 8%, versus the prior year, due to a 6%
increase in revenues. Overall occupancy for the multifamily portfolio at
December 31, 1999 was 95% in 1999, the same as that reported at December 31,
1998.
At December 31, 1999, Pacific Gulf's multifamily portfolio was comprised
of 3,069 units, of which 1,438 were communities designed for active seniors
age 55 and older. In addition, at year-end the Company had 669 senior
apartment units under development in Anaheim Hills, Temecula and Sacramento,
California.
Pacific Gulf Properties is a real estate investment trust (REIT) that
owns, develops and manages a growing portfolio of industrial properties
targeting small to mid-size tenants in selected high-growth U.S. western
markets. The Company's industrial portfolio includes 74 properties
encompassing more than 15.5 million square feet of space. Pacific Gulf
Properties also maintains a smaller multifamily portfolio that includes eight
rental communities comprising almost 1,500 units designed for the burgeoning
population of active seniors age 55 and older. The Company is headquartered
in Newport Beach, California. For more information, please check our web site
at http://www.pacificgulf.com.
Forward-looking statements and comments in this press release are made
pursuant to the safe harbor provisions of Section 21E of the Securities
Exchange Act of 1934. Such statements relating to, among other things,
events, conditions, prospects and financial trends that may affect the
company's future plans of operations, business strategy, growth of operations
and financial position are not guarantees of future performance and are
necessarily subject to risks and uncertainties, some of which are significant
in scope and nature, including without limitation, increased competition,
adverse economic trends, increasing interest rates and other factors.
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
December 31, 1999 December 31, 1998
ASSETS
Real estate assets
Operating properties
Land $232,665 $229,920
Buildings 657,347 633,268
890,012 863,188
Accumulated depreciation (72,715) (49,776)
817,297 813,412
Properties under development, including land 52,815 39,926
870,112 853,338
Cash and cash equivalents 2,177 2,276
Accounts receivable 4,005 4,984
Other assets 15,627 14,529
$891,921 $875,127
LIABILITIES AND SHAREHOLDERS' EQUITY
Loans payable $418,343 $403,845
Accounts payable and accrued liabilities 17,244 15,828
Dividends payable 10,366 9,844
Convertible subordinated debentures -- 12,244
445,953 441,761
Minority partners' interest in
consolidated partnerships 18,077 17,812
Commitments and contingencies -- --
Shareholders' equity
Preferred shares, $.01 par value;
10,000,000 shares authorized; 2,763,116
Senior Cumulative Convertible Class A
shares outstanding at Dec. 31, 1999, and
Dec. 31, 1998, respectively 28 28
Preferred shares, $.01 par value;
300,000 shares authorized; Class C Junior
Participating Cumulative Preferred Stock;
no shares outstanding -- --
Common shares, $.01 par value;
100,000,000 shares authorized; 20,685,402
and 20,017,814 shares outstanding at
Dec. 31, 1999 and Dec. 31,1998, respectively 207 201
Outstanding restricted stock (1,011) (1,203)
Additional paid-in capital 424,450 412,093
Retained Earnings 4,217 4,435
427,891 415,554
$891,921 $875,127
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended December 31,
1999 1998
REVENUES
Rental income
Industrial properties $25,476 $21,278
Multifamily properties 6,581 8,942
32,057 30,220
EXPENSES
Rental property operating expenses
Industrial properties 5,383 4,767
Multifamily properties 2,393 3,461
7,776 8,228
Depreciation 7,050 5,635
Interest (including amortization of
debenture discount and financing
costs of $168 and $233, respectively) 6,724 6,793
General and administrative expenses 2,139 1,991
Minority partners' interest in
earnings of consolidated partnerships 375 291
24,064 22,938
INCOME BEFORE GAIN ON SALE OF REAL ESTATE 7,993 7,282
Gain on sale of real estate 2,620 28,865
NET INCOME 10,613 36,147
Less: Preferred dividend requirements 1,264 1,236
INCOME AVAILABLE TO COMMON SHAREHOLDERS $9,349 $34,911
Earnings per share
Basic $.46 $1.75
Diluted $.45 $1.51
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Year Ended December 31,
1999 1998
REVENUES
Rental income
Industrial properties $98,288 $76,271
Multifamily properties 25,880 36,858
124,168 113,129
EXPENSES
Rental property operating expenses
Industrial properties 21,570 16,746
Multifamily properties 9,334 13,751
30,904 30,497
Depreciation 26,117 20,386
Interest (including amortization of
debenture discount and financing costs
of $801 and $1,129, respectively) 27,242 25,758
General and administrative expenses 7,165 5,903
Minority partners' interest in earnings
of consolidated partnerships 1,342 1,024
92,770 83,568
INCOME BEFORE GAIN ON SALE OF REAL ESTATE 31,398 29,561
Gain on sale of real estate 8,472 35,292
NET INCOME 39,870 64,853
Less: Preferred dividend requirements 4,971 4,856
INCOME AVAILABLE TO COMMON SHAREHOLDERS $34,899 $59,997
Earnings per share
Basic $1.73 $3.01
Diluted $1.71 $2.76
FUNDS FROM OPERATIONS (a)
SUPPLEMENTAL TABLE
(in thousands, except share data)
For the Three Months Ended For the Years Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998 1999 1998
Income Available to
Common Shareholders $9,349 $34,911 $34,899 $59,997
Gain on sale of real estate (2,620) (28,865) (8,472) (35,292)
Depreciation and amortization 7,050 5,635 26,117 20,386
Funds From Operations $13,779 $11,681 $52,544 $45,091
Weighted Average Common
Shares Outstanding 20,495 19,954 20,148 19,939
Funds From Operations
per Common Share $0.67 $0.59 $2.61 $2.26
(a) Industry analysts generally consider Funds From Operations ("FFO") an
appropriate measure of performance of a real estate investment trust
("REIT"). Funds From Operations present amounts available to common
shareholders and is defined as net income (computed in accordance with
generally accepted accounting principles), excluding gains (or losses)
from debt restructuring and sales of property, plus depreciation and
amortization (excluding amortization of deferred financing costs and
depreciation of non real estate assets), and after adjustments for
unconsolidated partnerships and joint ventures and preferred dividend
requirements.
PRO FORMA FUNDS FROM OPERATIONS (b)
Funds From Operations $13,779 $11,681 $52,544 $45,091
Preferred Dividend Requirements 1,264 1,236 4,971 4,856
Interest Expense on Debentures (57) 258 615 1,041
Amortization of Debenture
Discount and Costs 4 30 87 130
Pro Forma Funds
From Operations $14,990 $13,205 $58,217 $51,118
Weighted Average Common Shares
Outstanding 20,495 19,954 20,148 19,939
Additional Shares Assuming
Conversion
Other (c) 110 111 109 112
Preferred Stock 2,763 2,763 2,763 2,763
Debentures 115 660 470 660
Pro Forma Weighted Average
Outstanding Shares 23,483 23,488 23,490 23,474
Pro Forma Funds From
Operations per Common Share $0.64 $0.56 $2.48 $2.18
(b) Pro Forma Funds From Operations Calculations - Assumes the conversion
of Convertible Subordinated Debentures and Preferred Stock and
excludes the conversion of limited partnership units (consistent with
the Company's previous calculation methodology).
(c) Represents non-vested restricted stock and options as converted.
SOURCE Pacific Gulf Properties Inc.
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Related links:
http://www.pacificgulf.com
Company News On-Call:
http://www.prnewswire.com/comp/671475.html or fax,
800-758-5804, ext. 671475
CONTACT:
Donald G. Herrman, Chief Financial Officer,
949-223-5000, or Victoria J. Baker, General Information,
703-370-8652, both of Pacific Gulf Properties Inc.
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