Core Portfolio NOI Continues to Drive Strong FFO Growth
ARLINGTON, Va., July 26 /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 second
quarter, ended June 30, 1999, was $0.81 per share, an increase of 11.0% over
the Company's second quarter 1998. (All per share amounts are for diluted
shares.) For the six month period ended June 30, 1999, the Company's FFO was
$1.52 per share, up 10.9%, as compared with the first six months of 1998. The
Company attributed its strong FFO growth to a combination of excellent
operating income growth at core (same-store) properties of 10.3%, together
with increasing contributions from leasing of new development properties. FFO
is generally regarded as the best measure of a REIT's performance.
"1999 continues to be a very strong year" said Ernest Gerardi, Jr.,
President of Charles E. Smith Residential Realty, Inc. "Our core portfolio
growth reaffirms the strength of our urban living leadership strategy, with
broad demand strength in all of our markets reflecting the increasing momentum
of the urban revitalization going on across the country. This has translated
into exceptional leasing success, with all of our lease-up properties renting
well ahead of schedule -- anywhere from 15% to 60%. It bodes well for the
future of our development pipeline with 1,195 units stabilizing this year, an
additional 3,000+ units currently under construction in Chicago, Washington,
D.C., Northern Virginia and Southeast Florida, and promising additional sites
in the planning process.
As part of its development program, the Company recently announced that it
will be redeveloping a prominent 1920's vintage historic landmark property --
Alban Towers, located opposite the Washington National Cathedral in northwest
Washington, D.C. -- into 225 luxury apartments. Earlier this month, the
Company also acquired a 269-unit high rise property on the Connecticut Avenue
corridor in northwest Washington, D.C., and closed on the final two
properties, totaling 1,878 units, of a previously announced portfolio
acquisition in the Chicago market. These acquisitions increased the Company's
portfolio to 22,000 units.
The Company announced a $75 million private placement of convertible
preferred securities with Security Capital Preferred Growth, Incorporated in
early July, and during the second quarter completed joint venture transactions
on three properties totaling $171 million with J.P. Morgan. The joint
ventures, all in Northern Virginia, included acquisition of a 330-unit high
rise, recapitalization of a 631-unit development property nearing completion
of lease-up, and a new 630-unit development property just commencing
construction.
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 Funds from Operations was $28.6 million,
for the second quarter of 1999, an increase of 17.6% over the same quarter of
1998. For the first six months of 1999, the Operating Partnership's FFO was
$54.1 million, up 20.1% over the same six month period of 1998.
The Operating Partnership's total revenue from rental properties was $70.5
million for the second quarter of 1999, an increase of 14.3% over second
quarter 1998, and total rental property revenue for the first six months of
1999 was $139.6 million, an increase of 18.9% over total rental revenue for
the first six months of 1998.
The Operating Partnership's operating income from rental properties before
depreciation for the second quarter of 1999 was $43.9 million, up 19.9% over
the same quarter of the prior year, and for the first six months of 1999
operating income was $85.4 million, up 22.0% over the same six month period in
1998.
The Company will hold a teleconference on Tuesday, July 27th at 11:00 EDT
to review the information reported in this release. To participate, please
call 1-800-850-9878 shortly before 11:00AM on that day, 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 Tuesday, July 27, 1999, until 1:00 PM, Friday, July 30,
1999. To access this service, please call 1-800-633-8284 and enter
Reservation Number 12627298 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
22,000 apartment units, and has more than 4,000 development units under
construction. The total market capitalization of the Company -- Charles E.
Smith Residential Realty, including its Operating Partnership -- exceeds $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, including statements of goals, intentions, and expectations
regarding or 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.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Financial Highlights
For the Three and Six Months Ended June 30, 1999 and 1998
(unaudited)
3 Months Ended June 30, 6 Months Ended June 30,
(dollars in thousands,
except per
share data) 1999 1998 % Change 1999 1998 % Change
Financial Highlights
Revenue from the
Operating
Partnership $70,522 $61,721 14.3%$139,555 $117,371 18.9%
Funds From Operations
of the Operating
Partnership 28,647 24,362 17.6% 54,053 45,020 20.1%
Funds From Operations
- attributable
to shareholders 17,958 14,169 26.7% 33,696 25,718 31.0%
Per Share - basic $0.81 $0.73 11.0% $1.53 $1.37 11.7%
Per Share -
diluted(a) $0.81 $0.73 11.0% $1.52 $1.37 10.9%
Net Income of the
Operating
Partnership $21,704 $18,274 18.8% $41,255 $31,589 30.6%
Net Income -
attributable
to common
shareholders 11,208 7,022 59.6% 20,963 12,976 61.6%
Per Common Share
- basic $0.58 $0.46 26.1% $1.11 $0.84 32.1%
Per Common Share
- diluted (a) $0.58 $0.45 28.9% $1.11 $O.84 32.1%
Dividends Declared
per Share $0.535 $0.520 2.9% $1.070 $1.040 2.9%
Total Assets $1,284,914 $1,044,454 23.0%
Interest Coverage
Ratio 3.32 3.32 3.28 3.17
Apartment Units
Core Portfolio 16,902 16,902
Acquisition Portfolio 2,950 2,768
Development Portfolio (in service) 564 80
Total 20,416 19,750
(a) Weighted average share and partnership units outstanding on a diluted
basis during the periods were as follows (in 000's):
3 Months Ended June 30, 6 Months Ended June 30,
1999 1998 1999 1998
Common Shares &
Equivalents 19,468 15,580 19,027 15,559
Convertible Preferred
Shares 2,952 3,856 3,152 3,359
Partnership Units 13,164 14,056 13,291 14,057
Total Shares and
Partnership Units 35,584 33,492 35,470 32,975
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Operating Summary
For the Three and Six Months Ended June 30, 1999 and 1998
(unaudited)
3 Months Ended June 30, 6 Months Ended June 30,
(dollars in thousands,
except per share
data) 1999 1998 % Change 1999 1998 % Change
RENTAL PROPERTIES (a)
Revenue $70,522 $61,721 14.3% $139,555 $117,371 18.9%
Operating
expenses (26,600) (25,088) 6.0% (54,158) (47,366) 14.3%
Depreciation and
amortization (7,713) (7,088) 8.8% (15,941) (13,475) 18.3%
36,209 29,545 22.6% 69,456 56,530 22.9%
EQUITY IN INCOME
OF JOINT VENTURES 125 0 N/A 151 0 N/A
EQUITY IN INCOME
OF PROPERTY SERVICE
BUSINESSES (PSB's)1,126 2,227 -49.4% 1,128 2,891 -61.0%
OTHER INCOME AND
EXPENSES
Corporate general
and administrative
expenses (2,420) (2,203) 9.9% (4,629) (4,228) 9.5%
Interest expense,
net (13,329) (11,295) 18.0% (26,343) (22,022) 19.6%
(Loss) gain on
sale of property (7) 0 N/A 1,851 3,120 -40.7%
Extraordinary item -
loss on
extinguishment
of debt 0 0 N/A (359) (4,702) -92.4%
NET INCOME OF THE
OPERATING
PARTNERSHIP 21,704 18,274 18.8% 41,255 31,589 30.6%
Minority Interest (8,095) (7,672) 5.5% (15,537) (13,543) 14.7%
Net Income 13,609 10,602 28.4% 25,718 18,046 42.5%
Less income
attributable to
preferred shares(2,401) (3,580) -32.9% (4,755) (5,070) -6.2%
Net Income
attributable to
Common Shares $11,208 $7,022 59.6% $20,963 $12,976 61.6%
Net Income per
Common Share -
basic $O.58 $0.46 26.1% $1.11 $0.84 32.1%
Net Income per
Common Share -
diluted $0.58 $0.45 28.9% $1.11 $0.84 32.1%
NET INCOME OF THE
OPERATING
PARTNERSHIP $21,704 $18,274 18.8% $41,255 $31,589 30.6%
Less: Perpetual
preferred
dividends (999) (1,000) -0.1% (1,988) (1,626) 22.3%
Gain on sale of
property 7 0 N/A (1,851) (3,120) -40.7%
Add: Depreciation
of real property 7,713 7,088 8.8% 15,941 13,475 18.3%
Depreciation from
unconsolidated
joint ventures 114 0 N/A 122 0 N/A
Amortization of
goodwill 108 0 N/A 215 0 N/A
Extraordinary item -
loss on debt
extinguishment 0 0 N/A 359 4,702 -92.4%
FFO OF THE OPERATING
PARTNERSHIP 28,647 24,362 17.6% 54,053 45,020 20.1%
Minority
Interest (10,689) (10,193) 4.9% (20,357) (19,302) 5.5%
FFO attributable
to shareholders$17,958 $14,169 26.7% $33,696 $25,718 31.0%
Funds From
Operations per
Share - basic $0.81 $0.73 11.0% $1.53 $1.37 11.7%
Funds From
Operations per
Share - diluted $0.81 $O.73 11.0% $1.52 $1.37 10.9%
(a) Details follow.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Rental Property Details
For the Three and Six Months Ended June 30, 1999 and 1998
(unaudited)
3 Months Ended June 30, 6 Months Ended June 30,
(dollars in
thousands) 1999 1998(d) % Change 1999 1998(d) % Change
CORE RESIDENTIAL
PORTFOLIO (a)
Revenue $54,706 $51,743 5.7% $108,280 $101,603 6.6%
Operating
Expenses (19,806) (20,114) -1.5% (40,477) (39,688) 2.0%
34,900 31,629 10.3% 67,803 61,915 9.5%
ACQUISITION
PORTFOLIO (b)
Revenue 11,469 7,492 -- 22,807 10,818 --
Operating
Expenses (5,236) (3,856) -- (10,400) (5,639) --
6,233 3,636 -- 12,407 5,179 --
DEVELOPMENT
PORTFOLIO (c)
Revenue 1,805 86 -- 3,372 87 --
Operating Expenses (780) (279) -- (1,661) (404) --
1,025 (193) -- 1,711 (317) --
RETAIL PORTFOLIO
Revenue 2,542 2,400 5.9% 5,096 4,863 4.8%
Operating Expenses (778) (839) -7.3% (1,620) (1,635) -0.9%
1,764 1,561 13.0% 3,476 3,228 7.7%
TOTAL PORTFOLIO
Revenue 70,522 61,721 14.3% 139,555 117,371 18.9%
Operating
Expenses (26,600) (25,088) 6.0% (54,158) (47,366) 14.3%
$43,922 $36,633 19.9% $85,397 $70,005 22.0%
(a) Includes 16,902 apartment units.
(b) Includes the following properties:
1999 Acquisitions 1999/1998 Dispositions
Buchanan (Northern VA) Oxford Manor
Parkwest (Chicago, IL) Marbury Plaza
Terrace (Chicago, IL) The Manor
1998 Acquisitions
Tunlaw Gardens (NW Washington, D.C.)
Tunlaw Park (NW Washington, D.C.)
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 (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
For the Three and Six Months Ended June 30, 1999
(dollars in thousands)
(unaudited)
Gross Monthly GOI
Operating Income Per Unit Occupancy
Number of % Change % Change
Apartment % of From From
Market/Sub-Market Units Q299 Total Q299 Q298 Q299 Q298
WASHINGTON, D.C.
Northwest 2,843 $9,256 16.9% $1,086 8.1% 99.0% 1.0%
NORTHERN VIRGINIA
Crystal City 3,708 13,761 25.2% 1,239 5.0% 97.3% 0.8%
Rosslyn/Ballston 1,110 4,509 8.2% 1,358 2.4% 94.6% -2.8%
Tysons/Dulles 2,809 8,418 15.4% 1,001 6.9% 97.2% 1.8%
Other 5,021 13,821 25.3% 918 5.1% 96.8% 1.4%
Total Northern
Virginia 12,648 40,509 74.0% 1,069 5.1% 96.8% 0.8%
BOSTON/CHICAGO 494 2,827 5.2% 1,908 9.3% 97.9% 1.3%
OTHER 917 2,114 3.9% 768 4.3% 97.8% 1.0%
CORE RESIDENTIAL
PORTFOLIO 16,902$54,706 100.0% $1,079 5.7% 97.3% 0.9%
Gross Monthly GOI
Operating Income Per Unit Occupancy
Number of % Change % Change
Apartment % of From From
Market/Sub-Market Units YTD99 Total YTD99 YTD98 YTD99 YTD98
WASHINGTON, D.C.
Northwest 2,843$18,221 16.8% $1,068 7.9% 98.6% 1.1%
NORTHERN VIRGINIA
Crystal City 3,708 27,306 25.2% 1,228 6.0% 97.4% 1.9%
Rosslyn/Ballston 1,110 8,883 8.2% 1,334 5.4% 94.3% -0.6%
Tysons/Dulles 2,809 16,575 15.3% 984 6.9% 97.1% 2.3%
Other 5,021 27,368 25.3% 909 5.7% 96.8% 1.9%
Total Northern
Virginia 12,648 80,132 74.0% 1,056 6.0% 96.8% 1.7%
BOSTON/CHICAGO 494 5,705 5.3% 1,925 11.5% 98.0% 0.6%
OTHER 917 4,222 3.9% 768 5.2% 97.8% 0.9%
CORE RESIDENTIAL
PORTFOLIO 16,902 $108,280 100.0% $1,068 6.6% 97.2% 1.6%
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Funds Available for Distribution (FAD) Calculation
For the Three and Six Months Ended June 30, 1999 and 1998
(unaudited)
3 Months Ended June 30, 6 Months Ended June 30,
(dollars in thousands, % Change % Change
except per share From From
data) 1999 1998 Last Year 1999 1998 Last Year
NET INCOME OF
THE OPERATING
PARTNERSHIP $21,704 $18,274 18.8% $41,255 $31,589 30.6%
Less: Perpetual
preferred
dividends (999) (1,000) -0.1% (1,988) (1,626) 22.3%
Gain on
sale of
property 7 0 N/A (1,851) (3,120) -40.7%
Add: Depreciation
of real
property 7,713 7,088 8.8% 15,941 13,475 18.3%
Depreciation
from uncon-
solidated
joint ventures 114 0 N/A 122 0 N/A
Amortization
of goodwill 108 0 N/A 215 0 N/A
Extraordinary
item - loss
on debt
extinguishment 0 0 N/A 359 4,702 -92.4%
FFO OF THE OPERATING
PARTNERSHIP $28,647 $24,362 17.6% $54,053 $45,020 20.1%
Add: Amortization
of deferred
financing costs 248 381 -34.9% 617 934 -33.9%
Amortization
of unit grants 203 201 1.0% 292 382 -23.6%
Less: Additions to
rental
property(a) (4,767) (5,201) -8.3% (8,409) (8,848) -5.0%
Principal
curtailments
on mortgage
debt (801) (282) 184.0% (1,450) (658) 120.4%
Straight-lining
of retail rents 60 (128) -146.9% (17) (258) -93.4%
FAD OF THE OPERATING
PARTNERSHIP 23,590 19,333 22.0% 45,086 36,572 23.3%
Minority Interest (8,801) (8,079) 8.9% (16,980) (15,680) 8.3%
FAD attributable
to shareholders $14,789 $11,254 31.4% $28,106 $20,892 34.5%
Funds Available
for Distribution
per Share - basic $0.67 $0.58 15.5% $1.28 $1.12 14.3%
Dividend
declared per Share $0.535 $0.520 2.9% $1.070 $1.040 2.9%
Payout Ratios
As a percentage
of FF0 66% 71% 70% 76%
As a percentage
of FAD 80% 90% 84% 93%
(a) Additions to Rental Property consist of the following:
Core Residential
Portfolio $3,579 $4,201 $6,374 $7,053
Core Redevelopment 320 664 669 1,166
Acquisition/Disposition
Portfolio 825 298 1,312 591
Retail Portfolio 43 38 54 38
Total Additions
to Rental Property $4,767 $5,201 $8,409 $8,848
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Debt Composition
As of June 30, 1999
Average Average
Interest Dollars in % of Years to
Rate Thousands Total Maturity
Fixed Rate Debt
Long Term Mortgages 7.06% $710,503 82.3% 10.5
Variable Rate Debt
Construction Loans 6.35% 101,003 11.7% 1.7
$1OOM Revolver 6.08% 52,000 6.0% 1.7
Sub-Total 6.26% 153,003 17.7% 1.7
Total Debt 6.92% $863,506 100.0% 9.0
As of As of As of As of As of
06/30/99 03/31/99 12/31/98 09/30/98 06/30/98
Debt to Total Market
Capitalization Ratio 40.9% 43.8% 40.3% 40.4% 38.3%
Market Capitalization
(in millions) $2,113 $2,026 $1,960 $1,859 $1,810
Stock Price $33.938 $30.813 $32.125 $30.375 $32.000
* Debt to Total Market Capitalization Ratio at 06/30/99 is based on
19,571,644 common shares, 2,640,325 convertible preferred shares, and
13,125,121 partnership units outstanding at a common stock price of $33.938
and $50M of perpetual preferred stock.
SOURCE Charles E. Smith Residential Realty, Inc.
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Related links:
http://www.smithreit.com
CONTACT:
Investors: Greg Samay, 703-769-1029, or
Media: John Kurtz, 703-769-1153, both of Charles E. Smith
Residential Realty, Inc.
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