Banyan Strategic Realty Trust Highlights*
-- Fourth Quarter FFO of $0.205 per share, up 40 percent from a year ago;
full year FFO per share of $0.75, up 44 percent
-- 1998 Revenues of $39.4 million, an increase of 37 percent from a year
ago
-- Full year EBITDA of $21.4 million, up 53 percent from previous year
-- 1998 portfolio growth of 29 percent to 3.7 million square feet
-- Average occupancy of portfolio of 90 percent at December 31, 1998
-- Quarterly cash distribution of $0.12 per share declared. Total
distributions up 20 percent for the full year.
* Per share data presented on diluted basis.
CHICAGO, Feb. 17 /PRNewswire/ -- Banyan Strategic Realty Trust
(Nasdaq: BSRTS) a real estate investment trust, today announced fourth quarter
1998 funds from operations (FFO) of $2.8 million, or $0.205 per share, a more
than 40 percent increase in total FFO from last year's fourth quarter. For
the full year 1998, total FFO increased 44 percent from the previous year to
$10.4 million, or $0.75 per share. The company's improved fourth quarter and
year-end results were driven by its portfolio growth during 1998, along with
continued internal growth and the strong demand throughout the markets it
serves by its office and flex/industrial properties.
During 1998, Banyan acquired a total of 10 office and/or flex/industrial
properties, bringing the total amount invested in new acquisitions in 1998 to
approximately $60 million, or 834,600 net rentable square feet, a 29 percent
increase in square footage from year-end 1997. Weighted average occupancy
rates at the Trust's 32 properties as of December 31, 1998 was approximately
90 percent.
Consolidated Financial Results
Banyan reported fourth quarter 1998 revenues of $10.6 million, an increase
of 28.7 percent from the $8.3 million in revenues during the same period the
previous year. FFO increased 34 percent to $2.8 million, or $0.205 per share,
from $2.0 million, or $0.15 per share in the fourth quarter last year. Net
income in the recent quarter was $1.4 million, or $0.10 per share, compared
with net income of $1.0 million, or $0.08 per share during the same period the
previous year.
For the twelve months ending December 31, 1998, Banyan reported a 36
percent increase in revenues to $39.4 million, compared with revenues of
$28.8 million during the same period the previous year. Total FFO increased
44 percent in 1998 to $10.4 million, or $0.75 per share, from FFI of
$5.8 million, or $0.52 per share during 1997. Net income was $5.4 million, or
$0.39 per share in 1998, compared with net income of $3.5 million or $0.32 per
share the previous year.
Ten New Acquisitions in 1998 increased portfolio by 26 percent
During 1998, Banyan acquired 10 properties for a total consideration of
$59.6 million, increasing its total portfolio by 834,600 square feet, a
29 percent increase from the previous year. New acquisitions during 1998
included office and flex/industrial buildings totaling 328,100 square feet in
Norcross, Ga., in northeast suburban Atlanta; flex/industrial buildings
totaling 119,300 square feet in Duluth and Suwanee, Ga., also northeast
suburbs of Atlanta, multi-tenant office properties in Orlando and Winter Park,
Fla., comprising 291,300 square feet; and Tower Lane Business Park in
Bensenville, Ill., outside Chicago, comprising 95,900 square feet of
flex/industrial space.
"All our acquisitions last year were made at what we think are very
favorable capitalization rates, averaging 11 percent, allowing for immediate
impact on earnings and FFO. Importantly, the additions made to our suburban
Atlanta and Chicago property base, as well as our new entry into the Orlando
market, are consistent with our strategy of serving the smaller tenants in
markets with sound real estate fundamentals," Mr. Levine said. "As
opportunities present themselves, we will continue to seek these same kind of
value-added, accretive acquisitions in our niche markets in the office and
flex/industrial sectors of economically strong mid-size cities and
metropolitan suburban areas."
Portfolio Performance -- Rental Income Up Significantly for Fourth Quarter
and Full Year
Rental income from the Trust's portfolio increased 27 percent to
$9.4 million during the fourth quarter, compared with $7.4 million during the
same period a year ago, reflecting the addition of ten properties acquired
since the end of last year's fourth quarter. For the full year 1998, rental
income increased 35.8 percent to $34.5 million compared with $25.4 million the
previous year. Total property operating expenses as a percent of total
revenue decreased to 32.9 percent in the fourth quarter of 1998 from
34.0 percent for the same period the previous year. Total net operating
income increased 30.7 percent to $7.1 million in the fourth quarter ended
December 31, 1998, compared with the same period last year. For the full year
1998, net operating income increased 43.6 percent to $26.0 million, compared
with $18.1 million in 1997.
Balance Sheet
At December 31, 1998, total assets at net book value were approximately
$222.6 million. The debt total market capitalization ratio was 68 percent,
based on a total market capitalization of $227.0 million on a December 31,
1998 share price of $5.625. EBITDA (earnings before interest, tax,
depreciation and amortization) was $5.9 million, up 37.9 percent from the
previous year's fourth quarter. For the full year, EBITDA was $21.4 million,
an increase of 53.2 percent for the previous year. EBITDA coverage ratio
through December 31, 1998 was 2.18. The Trust had $151.6 million of total
debt outstanding as of December 31, 1998.
Quarterly Cash Distribution and Funds Available for Distribution (FAD)
On January 6, Banyan declared a quarterly cash distribution of $0.12 per
share for the fourth quarter ended December 31, 1998. The distribution is
payable February 22, 1999 to shareholders of record as of January 22, 1999.
During 1998, the annualized distribution was $0.48 per share, in increase of
20 percent from the previous year, based on the Trust's increased levels of
FFO.
Funds Available for Distribution (FAD) totaled $2.3 million for the three
months ended December 31, 1998, or $0.17 per share. FAD for the year ended
December 31, 1998 totalled $8.6 million, or $0.62 per share. FAD is
calculated by adjusting FFO for straight-line rents, lease commissions paid
and normalized reserves for capital improvements. The capital reserve is
$0.075 per square foot for flex/industrial properties, $0.10 per square foot
for office properties, $0.15 per square foot for retail property and $200 per
residential unit.
Outlook
Mr. Levine added, "Even with our existing portfolio, we have targeted 1999
FFO of between $0.82 and $0.83 per share. In addition, we will maintain our
focus on internal growth through favorable leasing transactions and rental
increase, since the markets in which we operate exhibit strong real estate
fundamentals. At the same time, we continue to seek value-added acquisitions.
Our conversion to an UPREIT format during the fourth quarter gives us added
flexibility in structuring capital alternatives in the future."
Banyan Strategic Realty Trust is an equity Real Estate Investment Trust
(REIT) that owns and acquires primarily office and flex/industrial properties.
The properties are located in certain major metropolitan areas of Atlanta,
Ga., and Chicago, Ill., and smaller markets such as Huntsville, Ala.;
Louisville, Ky.; Memphis, Tenn.; and Orlando, Fla., located in the Midwestern
and Southeastern United States. The Trust's current portfolio consists of 32
properties totaling 3.7 million rentable square feet and 864 apartment units.
As of this date, the Trust has 13,390,688 shares of beneficial interest
outstanding.
Except for the historical information contained herein, certain matters
discussed in this release are forward-looking statements, the achievement of
which involve risks and uncertainties that are detailed from time to time in
our reports filed with the Securities and Exchange Commission, including the
report on Form 10-K for the year ended December 31, 1997 and Form 10-Q for the
quarter ended September 30, 1998. The "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Risks Factors" section was
included in our Form 10-Q for the period ended September 30, 1998 filed with
the Securities and Exchange Commission on November 12, 1998. This section
will next be updated and filed with the Commission by March 30, 1999 as part
of our report on Form 10-K for the period ended December 31, 1998. Without
limitation, the foregoing words such as "anticipates," "expects," "intends,"
"plans," and similar expressions are intended to identify forward-looking
statements.
See Banyan's Website at http://www.banyanreit.com.
BANYAN STRATEGIC REALTY TRUST
SELECTED FINANCIAL DATA
(Dollars in Thousands, except per share data)
Three Months Ended Year Ended
12/31/98 12/31/97 12/31/98 12/31/97
Total revenue $10,643 $8,269 $39,416 $28,785
Recovery of losses on
loans, notes and
interest receivable - 161 - 161
Operating expenses (9,133) (7,078) (33,325) (25,664)
Operating income 1,510 1,352 6,091 3,282
Minority interest
in consolidated
partnerships (123) (126) (572) (590)
Income of real estate
ventures - - - 37
Net gain on disposition
of investments in
real estate - (195) - 881
Extraordinary item,
net of minority
interest - (64) (141) (64)
Net income $1,387 $967 $5,378 $3,546
Earnings per share of
Beneficial Interest
- Basic:
Income before Net Gains
and Extraordinary Item $0.10 $0.09 $0.41 $0.24
Net Income $0.10 $0.08 $0.40 $0.32
Earnings per share of
Beneficial Interest
- Diluted:
Income before Net Gains
and Extraordinary Item $0.10 $0.09 $0.40 $0.24
Net Income $0.10 $0.08 $0.39 $0.32
Funds from Operations
Net income $1,387 $967 $5,378 $3,546
Plus:
Depreciation expense 1,371 916 4,770 3,277
Depreciation included
in operations of
real estate ventures - - - 15
Lease commission
amortization 122 68 406 208
Less:
Minority interest share
of depreciation expense (80) (57) (284) (254)
Minority interest
share of lease
commission amortization (10) (5) (31) (21)
Recovery of losses
on loans, notes and
interest receivable - (161) - (161)
Net gain on
disposition of
investments in
real estate - 195 - (881)
Extraordinary item,
net of minority
interest - 64 141 64
Funds from operations $2,790 $1,987 $10,380 $5,793
BANYAN STRATEGIC REALTY TRUST
PORTFOLIO SUMMARY
Location Square Occupancy
Footage %
FLEX/INDUSTRIAL
Milwaukee Industrial Portfolio Milwaukee, Wis. 235,800 81%
Elmhurst Metro Court Elmhurst, Ill. 140,800 69%
Willowbrook Court Willowbrook, Ill. 84,300 100%
Quantum Business Centre Louisville, Ky. 182,300 74%
6901 Riverport Drive Louisville, Ky. 322,100 100%
Lexington Business Center Lexington, Ky. 308,800 44%
Newtown Business Center Lexington, Ky. 87,100 95%
Avalon Ridge Business Park Norcross, Ga. 57,400 100%
Metric Plaza Winter Park, Fla. 32,000 100%
Park Center Orlando, Fla. 47,400 75%
University Corporate Center Winter Park, Fla. 127,800 100%
Tower Lane Business park Bensenville, Ill. 95,900 90%
Johns Creek Office
and Industrial Park Duluth and Suwanee, Ga. 119,300 100%
Sub-Total 1,841,000
OFFICE
Colonial Penn Insurance Tampa, Fla. 79,200 100%
Florida Power & Light Sarasota, Fla. 81,100 100%
Woodcrest Office Park Tallahassee, Fla. 264,900 91%
Midwest Office Center Oakbrook Terrace, Ill. 77,000 94%
Phoenix Business Park Atlanta, Ga. 110,600 94%
Butterfield Office Plaza Oak Brook, Ill. 200,800 93%
Southlake Corporate Center Morrow, Ga. 56,200 93%
University Square Business Ctr. Huntsville, Ala. 184,700 94%
Technology Center Huntsville, Ala. 48,500 100%
Airways Plaza Office Center Memphis, Tenn. 87,800 97%
Peachtree Pointe Office Park Norcross, Ga. 71,700 96%
Avalon Center Office Park Norcross, Ga. 53,300 100%
Sand Lake Tech Center Orlando, Fla. 84,100 97%
Technology Park Norcross, Ga. 145,700 100%
Sub-Total 1,545,600 95%
RETAIL
Northlake Tower Festival
Shopping Center Atlanta, Ga. 321,600 99%
Total 3,708,200 89%
Scheduled Lease Expirations
1999 2000 2001 After
2001
FLEX/INDUSTRIAL
Milwaukee Industrial
Portfolio Milwaukee, Wis. 14% 15% 9% 43%
Elmhurst Metro Court Elmhurst, Ill. 40% 3% 25% 1%
Willowbrook Court Willowbrook, Ill. 57% 11% 13% 19%
Quantum Business Centre Louisville, Ky. 16% 21% 19% 18%
6901 Riverport Drive Louisville, Ky. 0% 45% 0% 55%
Lexington Business Center Lexington, Ky. 20% 15% 9% 0%
Newtown Business Center Lexington, Ky. 33% 4% 37% 21%
Avalon Ridge Business Park Norcross, Ga. 0% 0% 0% 100%
Metric Plaza Winter Park, Fla. 0% 0% 0% 100%
Park Center Orlando, Fla. 6% 7% 42% 20%
University Corporate Center Winter Park, Fla. 28% 46% 11% 15%
Tower Lane Business park Bensenville, Ill. 34% 26% 22% 8%
Johns Creek Office
and Industrial Park Duluth and Suwanee, Ga. 0% 0% 50% 50%
Sub-Total 18% 20% 15% 29%
OFFICE
Colonial Penn Insurance Tampa, Fla. 0% 100% 0% 0%
Florida Power & Light Sarasota, Fla. 0% 0% 11% 89%
Woodcrest Office Park Tallahassee, Fla. 14% 21% 12% 44%
Midwest Office Center Oakbrook Terrace, Ill. 23% 33% 14% 24%
Phoenix Business Park Atlanta, Ga. 34% 26% 13% 21%
Butterfield Office Plaza Oak Brook, Ill. 16% 27% 16% 34%
Southlake Corporate Center Morrow, Ga. 0% 13% 42% 38%
University Square
Business Center Huntsville, Ala. 39% 12% 24% 19%
Technology Center Huntsville, Ala. 0% 100% 0% 0%
Airways Plaza Office Center Memphis, Tenn. 93% 0% 4% 0%
Peachtree Pointe Office Park Norcross, Ga. 33% 18% 13% 32%
Avalon Center Office Park Norcross, Ga. 0% 0% 0% 100%
Sand Lake Tech Center Orlando, Fla. 23% 0% 0% 74%
Technology Park Norcross, Ga. 21% 9% 26% 44%
Sub-Total 23% 22% 14% 36%
RETAIL
Northlake Tower
Festival Shopping Center Atlanta, Ga. 4% 18% 3% 74%
Total 19% 21% 14% 35%
RESIDENTIAL
Residential Occupancy
Units %
Country Creek Oklahoma City, Okla. 320 90%
Willowpark Lawton, Okla. 160 94%
Winchester Run Oklahoma City, Okla. 192 95%
Woodrun Village Oklahoma City, Okla. 192 98%
Total 864 94%
PORTFOLIO TOTAL 90%
SOURCE Banyan Strategic Realty Trust
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Related links:
http://www.banyanreit.com
CONTACT:
Karen Dickelman, Director - Investor
Relations of Banyan Strategic Realty Trust, 312-683-3671; or
General Info., Tony Ebersole, 312-640-6728, Media Inquiries,
Laura Kuhlmann, 312-640-6727, or Analyst Inquiries, Georganne
Palffy, 312-640-6768, all of The Financial Relations Board
NOTE TO EDITORS: For further information regarding Banyan free of
charge via fax, dial 1-800-PRO-INFO and enter "BSRTS."
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