NEWPORT BEACH, Calif., May 4 /PRNewswire/ -- Pacific Gulf Properties Inc.
(NYSE: PAG), a real estate investment trust that owns, develops and manages
industrial properties in the West, reports that for the first quarter ended
March 31, 1999, pro forma funds from operations (assuming the conversion of
all preferred shares and all remaining subordinated debentures) totaled $14.0
million, or $0.60 per share, an increase of 15% per share over the $12.1
million, or $0.52 per share, for the same period in 1998.
Net operating income (gross rental revenues less rental operating
expenses) for the first quarter of 1999 was $22.1 million on gross rental
revenues of $29.7 million, compared with $18.3 million on gross rental
revenues of $25.3 million for the first quarter 1998. Income available to
common shareholders for the first quarter 1999 was $9.8 million, or $0.48 per
diluted share, versus $6.2 million, or $0.31 per diluted share, for the
year-ago period.
During the quarter, the company sold its Park Place Apartment Community in
Southern California for $11.0 million, realizing a gain on sale of $3.4
million. Proceeds of the sale were used to pay down the company's line of
credit.
"The increases we generated in first quarter per share results were
primarily attributable to internal growth from Pacific Gulf's existing
portfolio," said Glenn L. Carpenter, Pacific Gulf's chairman and chief
executive officer. "We continue to pursue a strategy focused on growth from
within, rather than having to rely on acquisitions as a source of growth. The
viability of this strategy derives from the continuing strength of our markets
throughout the West and specifically from the demand for product within our
target niche of small to mid-size industrial tenants."
Industrial Portfolio Posts Stable Growth
The company's industrial portfolio generated net operating income of $18.0
million, or 82% of the total, in the first quarter 1999 compared with $12.5
million, or 68% of the total, in the year-ago quarter. The 44% increase in
net operating income illustrates the company's progress toward executing its
strategy to focus primarily on expanding its industrial portfolio.
Pacific Gulf completed leases for 1,526,000 square feet at its stabilized
properties during the first quarter, generating an average 11% increase in
rental rates over ending rates on expired leases. Same store results for the
10.8 million square feet of industrial properties owned during both 1999 and
1998 reflect an increase in rental revenues of 9% offset by an increase in
rental expenses of 4%, resulting in a 10% increase in net operating income.
Occupancy for the stabilized industrial portfolio was 95% as of March 31,
1999, compared with 96% as of March 31, 1998.
Multifamily Portfolio NOI Continues To Climb
Same-store net operating income for the company's multifamily portfolio
was $3.8 million for the first quarter 1999, an increase of 6% over the $3.6
million for the same period in 1998. This increase was due primarily to a 6%
increase in revenues offset by an increase of 4% in costs. Overall occupancy
for the multifamily portfolio was 95% as of March 31, 1999, and 1998.
As of March 31, the company's multifamily portfolio included 3,069 units,
1,438 of which make up eight rental communities dedicated to active seniors
age 55 and older.
About Pacific Gulf Properties
Pacific Gulf Properties is a real estate investment trust that owns,
develops and manages a growing portfolio of industrial properties targeting
small to mid-size tenants in selected high-growth western markets. The
company's industrial portfolio includes 73 properties encompassing more than
15.5 million square feet of space. Pacific Gulf 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, Calif.
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)
March 31, 1999 December 31, 1998
(Unaudited)
ASSETS
Real estate assets
Operating properties
Land $228,431 $229,920
Buildings 631,163 633,268
859,594 863,188
Accumulated depreciation (54,699) (49,776)
804,895 813,412
Properties under development,
including land 47,733 39,926
852,628 853,338
Cash and cash equivalents 3,102 2,276
Accounts receivable 5,204 4,984
Other assets 15,404 14,529
$876,338 $875,127
LIABILITIES AND SHAREHOLDERS' EQUITY
Loans payable $402,535 $403,845
Accounts payable and accrued
liabilities 16,754 15,828
Dividends payable 9,851 9,844
Convertible subordinated debentures 12,107 12,244
441,247 441,761
Minority partners' interest in
consolidated partnerships 18,136 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 March 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;
20,036,272 and 20,017,814 shares
outstanding at March 31, 1999 and
Dec. 31,1998, respectively 201 201
Outstanding restricted stock (1,502) (1,203)
Additional paid-in capital 412,638 412,093
Retained Earnings (distributions
in excess of net earnings) 5,590 4,435
416,955 415,554
$876,338 $875,127
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended March 31,
1999 1998
REVENUES
Rental income
Industrial properties $23,330 $16,307
Multifamily properties 6,360 9,011
29,690 25,318
EXPENSES
Rental property operating expenses
Industrial properties 5,283 3,783
Multifamily properties 2,277 3,238
7,560 7,021
Depreciation 6,060 4,390
Interest (including amortization
of debenture discount and
financing costs of $213 and $221,
respectively) 6,737 5,275
General and administrative expenses 1,380 1,111
Minority partners' interest in
earnings of consolidated partnerships 297 106
22,034 17,903
INCOME BEFORE GAIN ON SALE
OF REAL ESTATE 7,656 7,415
Gain on sale of real estate 3,351 --
NET INCOME 11,007 7,415
Less: Preferred dividend
requirements 1,236 1,207
INCOME AVAILABLE TO COMMON
SHAREHOLDERS $9,771 $6,208
Earnings per share
Basic $0.49 $0.31
Diluted $0.48 $0.31
FUNDS FROM OPERATIONS (a)
SUPPLEMENTAL TABLE
(in thousands, except share data)
For the Three Months Ended
March 31, 1999 March 31, 1998
Income Available to Common
Shareholders $9,771 $6,208
Gain on sale of real estate (3,351) --
Depreciation and amortization 6,060 4,390
Funds from Operations $12,480 $10,598
Weighted Average Common Shares
Outstanding (b) 19,952 19,930
Funds from Operations per Common Share $0.63 $0.53
(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 $12,480 $10,598
Preferred Dividend Requirements 1,236 1,207
Interest Expense on Debentures 256 264
Amortization of Debenture
Discount and Costs 30 34
Pro Forma Funds from Operations $14,002 $12,103
Weighted Average Common Shares
Outstanding 19,952 19,930
Additional Shares Assuming Conversion
Other (c) 106 105
Preferred Stock 2,763 2,763
Debentures 653 669
Pro Forma Weighted Average
Outstanding Shares 23,474 23,467
Pro Forma Funds from Operations
per Common Share $0.60 $0.52
(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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CONTACT:
Donald G. Herrman, Chief Financial Officer of
Pacific Gulf Properties, 949-223-5000; or General Inquiries,
Virginia St. John-Needham, 310-442-0599, Analysts, Nan Teele,
415-986-1591, or Media Inquiries, Stephen Moore, 310-442-0599,
all of The Financial Relations Board
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