ARLINGTON, Va., April 28 /PRNewswire/ -- Charles E. Smith Residential
Realty, Inc. (NYSE: SRW), one of the country's leading residential REITs,
announced today that Funds from Operations (FFO) for the company's first
quarter, ended March 31, 1999, was $25.4 million, an increase of 22.9% over
the first quarter of 1998. The company's first quarter 1999 FFO per (diluted)
share was $0.72, up 12.5% over the prior year's first quarter. The FFO
increase was attributed to strong core portfolio operating income growth of
8.7%, together with contributions from both acquisitions and recently opened
development properties. FFO is widely considered to be the most appropriate
measure of a real estate investment trust's operating performance.
"These results get 1999 off to an excellent start," said Ernest Gerardi,
Jr., President of Charles E. Smith Residential. "We are extremely pleased
with this quarter's performance. Our strong core portfolio earnings growth,
together with outstanding leasing results at newly opened properties, reflects
the strength and success of our franchise as leaders in urban living."
Charles E. Smith Residential Realty is structured as an umbrella
partnership real estate investment trust, or UPREIT, under which all property
ownership and business operations take place in an Operating Partnership and
its subsidiaries and affiliates. Charles E. Smith Residential Realty, Inc.
(the REIT) currently owns approximately 63% of its Operating Partnership and
is its sole general partner.
The Operating Partnership's total revenue from rental properties was
$69.0 million for the first quarter of 1999, an increase of 24.0% over first
quarter 1998. The Operating Partnership's income from rental properties
before depreciation for the first quarter was $41.5 million, up 24.3% over the
same quarter of the prior year. The Operating Partnership's first quarter
earnings before interest, taxes, depreciation and amortization (EBITDA) was
$41.5 million, an increase of 33.4% compared with first quarter 1998.
Charles E. Smith Residential Realty, Inc.'s net income attributable to
common shares for the first quarter of 1999 was $9.8 million, or $0.53 per
share (diluted), an increase of 35.9% over the net income for the first
quarter of 1998.
During the first quarter the company completed the acquisition of three
properties, with a total of 1,008 apartment units, representing a total
investment of $106 million. Two of the properties, with 566 units, are in the
Chicago market, and the third is a 442-unit property in Crystal City in
northern Virginia. The company also sold a 435-unit property in suburban
Maryland for $22.6 million, proceeds from which will fund new investments in
favorable growth markets, reflecting the company's strategy of redeploying
capital into markets with the most attractive long term performance potential.
The company's markets continue to show very strong demand, as evidenced by
high core portfolio occupancy of 97.1% for the first quarter, and excellent
leasing results at new development properties. In Northern Virginia, at two
properties that opened for occupancy in 1998, over 75% of a total of 1,195
units have been leased. In Chicago, an 809-unit property scheduled to open
this fall began preleasing in mid-March and nearly 100 units have already been
leased.
The Company will hold a teleconference on Thursday, April 29, 1999 at
11:00 AM EST to review the information reported in this release. To
participate, please call 1-800-834-5979 shortly before 11:00 AM and identify
yourself as a participant in the Charles E. Smith Residential Realty
teleconference. If you are unable to join the call at 11:00 AM, a post-view
recording will be available from 1:00 PM, Thursday, April 29, 1999, until 1:00
PM, Friday, April 30, 1999 and will resume at 9:00 AM, Monday, May 3, until
9:00 AM, Wednesday, May 5. To access this service, please call 1-800-633-8284
and enter Reservation Number 11845503 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 (SRW). The Company and
its subsidiaries and affiliates own, acquire, develop, and manage multi-family
residential properties; and also provide a full range of real estate services
to other property owners. The Company owns a portfolio of approximately
20,000 apartment units, has over 3,000 units under construction or prepurchase
agreement, and manages an additional 5,000+ units for other owners. The total
market capitalization of the Company -- Charles E. Smith Residential Realty,
including its Operating Partnership -- is approximately $2 billion. Investor
information including press releases about Charles E. Smith Residential Realty
is available on the Company's Web site at: http://www.smithreit.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, which are based on assumptions about economic and market
conditions, competitive dynamics and other factors subject to a number of
risks and uncertainties, some of which are discussed in the Company's filings
with the Securities and Exchange Commission. Actual results could differ
materially.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Highlights
For the Three Months Ended March 31, 1999 and 1998
3 Months Ended March 31,
(dollars in thousands,
except per share data) 1999 1998 % Change
Financial Highlights
Revenue From the
Operating Partnership $69,033 $55,670 24.0%
Funds From Operations
of the Operating Partnership 25,398 20,658 22.9%
Funds From Operations
-- attributable to shareholders 15,730 11,549 36.2%
Per Share -- basic (A) $0.72 $0.64 12.5%
Per Share -- diluted $0.72 $0.64 12.5%
Net Income of the
Operating Partnership $19,551 $13,315 46.8%
Net Income -- attributable
to common shareholders 9,755 5,954 63.8%
Per Common Share -- basic (A) $0.53 $0.39 35.9%
Per Common Share -- diluted $0.53 $0.39 35.9%
Dividends Declared per Share $0.535 $0.520 2.9%
Total Assets $1,305,940 $908,801 43.7%
Interest Coverage Ratio 3.24 3.01 7.6%
Apartment Units
Core 16,902 16,902 --
Acquisitions 2,950 287 --
Development 2,146 2,004 --
Total 21,998 19,193 14.6%
Development units in service 678 0 --
(A) Weighted average shares and partnership units outstanding during the
periods were as follows (in 000's):
3 Months Ended March 31,
1999 1998
Common Shares 18,479 15,167
Convertible Preferred Shares 3,354 2,878
Partnership Units 13,418 14,233
Total Shares and
Partnership Units 35,251 32,278
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Operating Summary
For the Three Months Ended March 31, 1999 and 1998
3 Months Ended March 31,
(dollars in thousands,
except per share data) 1999 1998 % Change
RENTAL PROPERTIES (A)
Revenue $69,033 $55,670 24.0%
Operating Expenses (27,558) (22,298) 23.6%
Depreciation and Amortization (8,228) (6,387) 28.8%
33,247 26,985 23.2%
EQUITY IN INCOME OF
PROPERTY SERVICE
BUSINESSES (PSB's) AND OTHER 28 664 -95.8%
OTHER INCOME AND EXPENSES
Corporate General and
Administrative Expenses (2,209) (2,025) 9.1%
Interest Expense, net (13,014) (10,727) 21.3%
Gain on sale of property 1,858 3,120 -40.4%
Extraordinary item --
loss on extinguishment
of debt (359) (4,702) -92.4%
NET INCOME OF THE
OPERATING PARTNERSHIP 19,551 13,315 46.8%
Minority Interest (7,442) (5,871) 26.8%
Net Income 12,109 7,444 62.7%
Less income attributable
to preferred shares (2,354) (1,490) 58.0%
Net Income attributable
to Common Shares $9,755 $5,954 63.8%
Net Income per
Common Share -- basic $0.53 $0.39 35.9%
Net Income per
Common Share -- diluted $0.53 $0.39 35.9%
NET INCOME OF THE
OPERATING PARTNERSHIP $19,551 $13,315 46.8%
Less: Perpetual
Preferred Dividends (989) (626) -58.0%
Gain on sale
of property (1,858) (3,120) 40.4%
Add: Depreciation of
Real Property 8,228 6,387 28.8%
Amortization of Goodwill 107 0 N/A
Extraordinary item --
loss on debt
extinguishment 359 4,702 -92.4%
FFO OF THE
OPERATING PARTNERSHIP 25,398 20,658 22.9%
Minority Interest (9,668) (9,109) 6.1%
FFO attributable to
shareholders $15,730 $11,549 36.2%
(A) Details are as follows.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Rental Property Details
For the Three Months Ended March 31, 1999 and 1998
3 Months Ended March 31,
(dollars in thousands) 1999 1998 (D) % Change
CORE RESIDENTIAL PORTFOLIO (A)
Revenue $53,574 $49,860 7.4%
Operating Expenses (20,671) (19,592) 5.5%
32,903 30,268 8.7%
ACQUISITION/DISPOSITION PORTFOLIO (B)
Revenue 11,338 3,346 --
Operating Expenses (5,164) (1,797) --
6,174 1,549 --
DEVELOPMENT PORTFOLIO (C)
Revenue 1,567 1 --
Operating Expenses (881) (125) --
686 (124) --
RETAIL PORTFOLIO
Revenue 2,554 2,463 3.7%
Operating Expenses (842) (784) 7.4%
1,712 1,679 2.0%
TOTAL PORTFOLIO
Revenue 69,033 55,670 24.0%
Operating Expenses (27,558) (22,298) 23.6%
$41,475 $33,372 24.3%
(A) Includes 16,902 apartment units.
(B) Includes the following properties:
1999 Acquisitions 1999/1998 Dispositions
Buchanan (Northern VA) Oxford Manor
Parkwest (Chicago) Marbury Plaza
Terrace (Chicago) The Manor
1998 Acquisitions
Tunlaw Gardens (NW Washington, D.C.)
Tunlaw Park (NW Washington, D.C.)
Parc Vista (Northern VA)
McClurg Court (Chicago)
Cronin's Landing (Boston)
(C) Includes the following properties: **
Springfield Station (Northern VA)
Courthouse Place (Northern VA)
One Superior Place (Chicago)
The Park Connecticut (NW Washington, D.C.)
** 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
March 31, 1999
(dollars in thousands)
Gross Operating Monthly Revenue Occupancy
Income Per Unit
Number of % Change Change
Market/ Apartment From From
Sub-Market Units Q1 99 % of Total Q1 99 Q1 98 Q1 99 Q1 98
WASHINGTON,
D.C.
Northwest 2,843 $8,963 16.7% $1,051 7.6% 98.1% 1.1%
NORTHERN
VIRGINIA
Crystal
City 3,708 13,543 25.3% 1,217 7.3% 97.6% 3.1%
Rosslyn/
Ballston 1,110 4,379 8.2% 1,315 9.0% 94.0% 1.6%
Tysons/
Dulles 2,809 8,158 15.2% 968 7.0% 97.0% 2.8%
Other 5,021 13,545 25.3% 899 6.3% 96.7% 2.3%
Total
Northern
Virginia 12,648 39,625 74.0% 1,044 7.1% 96.8% 2.7%
BOSTON/
CHICAGO 494 2,877 5.4% 1,942 13.7% 98.1% -0.1%
OTHER 917 2,109 3.9% 766 6.2% 97.8% 0.8%
CORE
RESIDENTIAL
PORTFOLIO 16,902 $53,574 100.0% $1,057 7.4% 97.1% 2.2%
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Funds Available for Distribution (FAD) Calculation
For the Three Months Ended March 31, 1999 and 1998
3 Months Ended March 31,
1999 1998 % Change
(dollars in thousands,
except per share data)
FFO OF THE OPERATING
PARTNERSHIP $25,398 $20,658 22.9%
Add: Amortization of
Deferred Financing Costs 369 553 -33.3%
Amortization of Unit Grants 89 181 -50.8%
Less: Additions to Rental
Property(A) (3,642) (3,647) -0.1%
Principal Curtailments on
Mortgage Debt (649) (376) 72.6%
Straight-Lining of Retail
Rents (77) (130) -40.8%
FAD OF THE OPERATING
PARTNERSHIP 21,488 17,239 24.6%
Minority Interest (8,179) (7,601) 7.6%
FAD attributable to
shareholders $13,309 $9,638 38.1%
Funds Available for
Distribution per Share
-- basic $0.61 $0.53 15.1%
Dividend Declared per Share $0.535 $0.520 2.9%
Payout Ratios
As a Percentage of FFO 74% 8l%
As a Percentage of FAD 88% 98%
(A) Additions to Rental Property consist of the following:
Core Residential Portfolio $2,795 $2,852
Core Redevelopment 349 502
Acquisition/Disposition Portfolio 487 293
Retail Portfolio 11 0
Total Additions to Rental Property $3,642 $3,647
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Debt Composition
As of March 31, 1999
Average Average
Interest Dollars in % of Years to
Rate Thousands Total Maturity
Fixed Rate Debt
Long Term Mortgages 7.07% $681,796 76.9% 10.9
Variable Rate Debt
Construction Loans 6.27% 82,190 9.2% 1.9
$185M Revolver 6.03% 71,000 8.0% 1.9
$100M Revolver 6.12% 52,000 5.9% 1.9
Sub-Total 6.15% 205,190 23.1% 1.9
Total Debt 6.86% $886,986 100.0% 8.8
Maturity Schedule
1999 3,163
2000 35,900
2001 169,290
2004 30,000
2006 61,160
2007 21,959
2008 73,000
2009 214,574
2010 87,550
2011 38,000
2013 140,000
2020 12,390
As of As of As of As of As of
03/31/99 12/31/98 09/30/98 06/30/98 03/31/98
Debt to Total Market
Capitalization
Ratio 43.8% 40.3% 40.4% 38.3% 34.7%
Market
Capitalization
(in millions) $2,026 $1,960 $1,859 $1,810 $1,722
Stock Price $30.813 $32.125 $30.375 $32.000 $33.250
* Debt to Total Market Capitalization Ratio at 03/31/99 is based on
18,878,991 common shares, 3,229,586 convertible preferred shares, and
13,248,139 partnership units outstanding at a common stock price of $30.813
and $50M of perpetual preferred stock.
SOURCE Charles E. Smith Residential Realty, Inc.
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Related links:
http://www.smithreit.com
CONTACT:
Media, John Kurtz, 703-769-1153; or
Investors, Greg Samay, 703-769-1029, both of Charles E. Smith
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