ARLINGTON, Va., Oct. 25 /PRNewswire/ -- Charles E. Smith Residential
Realty, Inc. (NYSE: SRW), the nation's leading urban multifamily residential
REIT, today announced Funds from Operations (FFO) of $0.83 per share for the
quarter ended September 30, 1999, an increase of 10.7% over the third quarter
of 1998. For the nine month period ended September 30, 1999, FFO was $2.35
per share, up 11.4 %, compared with the first nine months of 1998. Per share
amounts are for fully diluted shares. The increase is attributable primarily
to core portfolio operating income growth of 7.7% and strong leasing
performance at new development properties. The Company also announced an
annualized dividend increase of $0.06 per share, to $2.20 per share on an
annualized basis.
"Our core portfolio growth continues to be strong, driven by healthy rent
increases, and our 1999 development deliveries are leasing ahead of plan,"
said Ernest Gerardi, Jr., President and Chief Operating Officer of Charles E.
Smith Residential. "We were also successful in attracting additional equity
capital this quarter through placements totaling $175 million in convertible
preferred securities."
Mr. Gerardi continued, "The combination of our urban living strategy and
strong market fundamentals is working well. We see Washington/Northern
Virginia, Chicago, Boston and Southeast Florida all experiencing positive
urban demographic shifts, excellent job growth and attractive demand/supply
conditions creating a favorable outlook for our company."
Recent Activity
During the third quarter, two Smith Residential properties in the
Washington/Northern Virginia market reached stabilization -- Courthouse Place
with 564 units and Springfield Station with 631 units. The Company has an
additional 2,000 units under construction or pre-purchase agreement in this
market including Reston Landing, Park Connecticut, Ballston Place, 2201 Wilson
Boulevard, Stoneridge and Alban Towers.
In Chicago, the Company's 52-story, 809-unit One Superior Place opened in
August and is already 73% leased. It is the first residential rental property
to open in downtown Chicago since 1991.
In September, the Company announced plans to acquire a 1,339-unit bayfront
high rise property in South Miami Beach, Fla. This acquisition represents an
excellent opportunity to enhance the property's value through repositioning.
It is one of the few large rental properties in South Beach and a program of
renovations and upgrades will increase its appeal to urban lifestyle renters.
Operating Results
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 62% of its Operating Partnership and
is its sole general partner.
The Operating Partnership's total Funds from Operations (FFO) was
$30.1 million for the third quarter of 1999, an increase of 16.6 % over the
same quarter of 1998. For the nine months ended September 30, 1999, the
Operating Partnership's FFO was $84.2 million, up 18.8% over the same nine
month period of 1998.
The Operating Partnership's total revenue from rental properties was
$79.2 million for the third quarter of 1999, an increase of 20.0% over the
third quarter of 1998, and total rental property revenue for the first nine
months of 1999 was $218.7 million, an increase of 19.3% over total rental
revenue for the first nine months of 1998.
The Operating Partnership's operating income from rental properties before
depreciation for the third quarter of 1999 was $46.5 million, up 21.4% over
the same quarter of the prior year, and for the first nine months of 1999,
operating income was $131.9 million, up 21.8% over the same nine month period
in 1998.
Dividend Increase
On October 25, 1999, The Board of Directors declared a dividend of $0.55
per share for the quarter ended September 30, 1999, an increase of 2.8% over
the $0.535 per share dividend paid for each of the first two quarters of 1999.
The dividend will be payable on November 15, 1999, to shareholders of record
as of November 9, 1999.
Quarterly Conference Call
The Company will hold a conference call on Tuesday, October 26, 1999, to
review the information reported in this release. The conference call will
begin at 11:00 AM (Eastern Time). To participate, please call 1-800-670-3538
shortly before 11:00 AM that day, and identify yourself as a participant in
the Charles E. Smith Residential Realty conference.
If you are unable to join the call at 11:00 AM, a recording will be
available from 1:00 PM Tuesday, October 26th until 1:00 PM Friday, October
29th. To access this service, please call 1-800-633-8284 and enter
Reservation Number 13091314 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 under the symbol "SRW."
The Company and its subsidiaries and affiliates own, acquire, develop, and
manage multifamily residential units in Washington, D.C., Northern Va.,
Chicago, Boston and Southeast Florida. As of 10/1/99, the Company owns
approximately 23,000 units and has approximately 3,000 under construction
and/or pre-purchase agreement. The total market capitalization of the
Company -- Charles E. Smith Residential Realty, including its Operating
Partnership -- exceeds $2.3 billion. Investor information including press
releases about Charles E. Smith Residential Realty is available on the
Company's Web site at: http://www.charlesesmith.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
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.
(Table to Follow)
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Financial Highlights
For the Three and Nine Months Ended September 30, 1999 and 1998
(unaudited)
3 Months Ended 9 Months Ended
September 30, September 30,
(dollars in thousands,
except per share
data) 1999 1998 % Change 1999 1998 % Change
Financial Highlights
Revenue from the
Operating
Partnership $79,194 $66,019 20.0% $218,749 $183,389 19.3%
Funds From
Operations of
the Operating
Partnership 30,112 25,818 16.6% 84,167 70,838 18.8%
Funds From
Operations -
attributable to
shareholders 18,646 15,443 20.7% 52,344 41,161 27.2%
Per Share
- basic $0.84 $0.75 12.0% $2.37 $2.13 11.3%
Per Share
- diluted (a) $0.83 $0.75 10.7% $2.35 $2.11 11.4%
Net Income of
the Operating
Partnership $28,472 $13,708 107.7% $69,727 $45,297 53.9%
Net Income -
attributable
to common
shareholders 14,680 5,406 171.5% 35,643 18,382 93.9%
Per Common
Share - basic $0.75 $0.32 134.4% $1.86 $1.16 60.3%
Per Common
Share -
diluted (a) $0.72 $0.32 125% $1.81 $1.15 57.4%
Dividends Declared
per Share $0.55 $0.535 2.8% $1.62 $1.575 2.9%
Total Assets $1,489,183 $1,142,775 30.3%
Interest Coverage
Ratio 3.59 2.87 3.39 3.06
Apartment Units
Core Portfolio 16,902 16,902 --
Acquisition Portfolio 5,097 3,049 --
Development Portfolio
(in service) 1,492 200 --
Total 23,491 20,151 --
(a) Weighted average shares and partnership units outstanding on a diluted
basis during the periods were as follows (in 000's):
3 Months Ended 9 Months Ended
Sept. 30, Sept. 30,
1999 1998 1999 1998
Common Shares 19,957 17,030 19,335 16,048
Convertible Preferred
Shares (Series A & B) 2,640 3,764 2,979 3,496
Partnership Units 13,744 13,756 13,440 13,963
Total Shares and
Partnership Units 36,341 34,550 35,754 33,507
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Operating Summary
For the Three and Nine Months Ended September 30, 1999 and 1998
(unaudited)
3 Months Ended 9 Months Ended
September 30, September 30,
(dollars in
thousands,
except per
share data) 1999 1998 % Change 1999 1998 % Change
RENTAL PROPERTIES (a)
Revenue $79,194 $66,019 20.0% $218,749 $183,389 19.3%
Operating
expenses (32,709) (27,740) 17.9% (86,867) (75,105) 15.7%
Depreciation
and
amortization (8,363) (7,970) 4.9% (24,304) (21,445) 13.3%
38,122 30,309 25.8% 107,578 86,839 23.9%
EQUITY IN INCOME
OF JOINT
VENTURES 257 0 N/A 408 0 N/A
EQUITY IN INCOME
OF PROPERTY
SERVICE
BUSINESSES
(PSB's) 2,127 2,693 -21.0% 3,255 5,584 -41.7%
OTHER INCOME AND
EXPENSES
Corporate
general and
administrative
expenses (2,156) (2,177) -1.0% (6,785) (6,405) 5.9%
Interest
expense, net (15,092) (12,194) 23.8% (41,435) (34,216) 21.1%
Gain on sales 5,214 0 N/A 7,065 3,120 126.4%
Loss on unused
treasury lock 0 (4,923) -100.0% 0 (4,923) -100.0%
Extraordinary
item - loss on
extinguishment
of debt 0 0 N/A (359) (4,702) -92.4%
NET INCOME OF
THE OPERATING
PARTNERSHIP 28,472 13,708 107.7% 69,727 45,297 53.9%
Minority
Interest (10,702) (5,434) 96.9% (26,239) (18,977) 38.3%
Net Income 17,770 8,274 114.8% 43,488 26,320 65.2%
Less income
attributable
to preferred
shares (3,090) (2,868) 7.7% (7,845) (7,938) - 1.2%
Net Income
attributable
to Common
Shares $14,680 $5,406 171.5% $35,643 $18,382 93.9%
Net Income per
Common Share
- basic $0.75 $0.32 134.4% $1.86 $1.16 60.3%
Net Income per
Common Share
- diluted $0.72 $0.32 125.0% $1.81 $1.15 57.4%
NET INCOME OF
THE OPERATING
PARTNERSHIP $28,472 $13,708 107.7% $69,727 $45,297 53.9%
Less: Preferred
dividends(b) (1,820) (1,011) 80.0% (3,808) (2,637) 44.4%
Gain on sales (5,214) 0 N/A (7,065) (3,120) 126.4%
Add: Depreciation
of real
property 8,363 7,970 4.9% 24,304 21,445 13.3%
Depreciation
from
unconsolidated
joint ventures 205 0 N/A 328 0 N/A
Amortization
of goodwill 106 228 -53.5% 322 228 41.2%
Loss on unused
treasury lock 0 4,923 -100.0% 0 4,923 -100.0%
Extraordinary
item - loss
on
extinguishment 0 0 N/A 359 4,702 -92.4%
of debt
FFO OF THE
OPERATING
PARTNERSHIP 30,112 25,818 16.6% 84,167 70,838 18.8%
Minority
Interest (11,466) (10,375) 10.5% (31,823) (29,677) 7.2%
FFO attributable
to shareholders $18,646 $15,443 20.7% $52,344 $41,161 27.2%
Funds From
Operations per
Share - basic $0.84 $0.75 12.0% $2.37 $2.13 11.3%
Funds From
Operations per
Share - diluted $0.83 $0.75 10.7% $2.35 $2.11 11.4%
(a) Details are shown on the following table.
(b) Excludes Series A and B, which are considered Common Share
equivalents.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Rental Property Details
For the Three and Nine Months Ended September 30, 1999 and 1998
(unaudited)
3 Months Ended 9 Months Ended
September 30, September 30,
(dollars in
thousands) 1999 1998(d) %Change 1999 1998(d) %Change
CORE RESIDENTIAL PORTFOLIO (a)
Revenue $56,284 $53,135 5.9% $164,564 $154,738 6.4%
Operating Expenses (22,527) (21,780) 3.4% (63,004) (61,432) 2.6%
33,757 31,355 7.7% 101,560 93,306 8.8%
ACQUISITION PORTFOLIO (b)
Revenue 17,404 10,054 -- 40,211 20,871 --
Operating Expenses (7,567) (4,937) -- (17,967) (10,611) --
9,837 5,117 -- 22,244 10,260 --
DEVELOPMENT PORTFOLIO (c)
Revenue 3,049 387 -- 6,421 474 --
Operating Expenses (1,761) (261) -- (3,422) (665) --
1,288 126 -- 2,999 (191) --
RETAIL PORTFOLIO
Revenue 2,457 2,443 0.6% 7,553 7,306 3.4%
Operating Expenses (854) (762) 12.1% (2,474) (2,397) 3.2%
1,603 1,681 -4.6% 5,079 4,909 3.5%
TOTAL PORTFOLIO
Revenue 79,194 66,019 20.0% 218,749 183,389 19.3%
Operating Expenses (32,709) (27,740) 17.9% (86,867) (75,105) 15.7%
$46,485 $38,279 21.4% $131,882 $108,284 21.8%
(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
Countryside (Chicago, IL)
Somerset (Chicago, IL)
The Consulate (Washington, D.C.)
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 Nine Months Ended September 30, 1999 and 1998
(dollars in thousands)
Gross Operating Monthly GOI
Income Per Unit Occupancy
Number of %Change %Change
Market/ Apartment From From
Sub-Market Units Q3 99 % of Total Q3 99 Q3 98 Q3 99 Q3 98
WASHINGTON, DC
Northwest 2,843 $9,479 16.8% $1,111 7.7% 97.8% -0.6%
NORTHERN VIRGINIA
Crystal City 3,708 14,098 25.0% 1,267 4.4% 98.0% -0.4%
Rosslyn/Ballston 1,110 4,749 8.4% 1,426 8.7% 98.9% 3.0%
Tysons/Dulles 2,809 8,572 15.2% 1,017 5.5% 97.5% -0.2%
Other 5,021 14,294 25.5% 949 5.8% 97.7% 0.4%
Total Northern
Virginia 12,648 41,713 74.1% 1,099 5.6% 97.9% 0.3%
BOSTON/CHICAGO 494 2,900 5.2% 1,957 6.3% 97.8% 0.2%
OTHER 917 2,192 3.9% 797 3.7% 98.4% -0.2%
CORE RESIDENTIAL
PORTFOLIO 16,902 $56,284 100.0% $1,110 5.9% 97.9% 0.1%
Gross Operating Monthly GOI
Income Per Unit Occupancy
Number of %Change %Change
Market/ Apartment From From
Sub-Market Units YTD 99 % of Total YTD 99 YTD 98 YTD 99 YTD 98
WASHINGTON, DC
Northwest 2,843 $27,700 16.8% $1,083 7.8% 98.3% 0.5%
NORTHERN VIRGINIA
Crystal City 3,708 41,404 25.2% 1,241 5.5% 97.6% 1.1%
Rosslyn/Ballston 1,110 13,632 8.3% 1,365 6.6% 95.9% 0.7%
Tysons/Dulles 2,809 25,147 15.3% 995 6.4% 97.2% 1.5%
Other 5,021 41,662 25.3% 922 5.7% 97.1% 1.4%
Total Northern
Virginia 12,648 121,845 74.1% 1,070 5.9% 97.2% 1.3%
BOSTON/CHICAGO 494 8,605 5.2% 1,935 9.7% 97.9% 0.5%
OTHER 917 6,414 3.9% 777 4.7% 98.0% 0.5%
CORE RESIDENTIAL
PORTFOLIO 16,902 $164,564 100.0% $1,082 6.4% 97.4% 1.1%
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Funds Available for Distribution (FAD) Calculation
For the Three and Nine Months Ended September 30, 1999 and 1998
(unaudited)
3 Months Ended 9 Months Ended
September 30, September 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 $28,472 $13,708 107.7% $69,727 $45,297 53.9%
Less: Preferred
dividends(a) (1,820) (1,011) 80.0% (3,808) (2,637) 44.4%
Gain on
sales (5,214) 0 N/A (7,065) (3,120) 126.4%
Add: Depreciation
of real
property 8,363 7,970 4.9% 24,304 21,445 13.3%
Depreciation
from
unconsolidated
joint ventures 205 0 N/A 328 0 N/A
Amortization
of goodwill 106 228 -53.5% 322 228 41.2%
Loss on unused
treasury lock 0 4,923 -100.0% 0 4,923 -100.0%
Extraordinary
item - loss
on debt
extinguishment 0 0 N/A 359 4,702 -92.4%
FFO OF THE OPERATING
PARTNERSHIP $30,112 $25,818 16.6% $84,167 $70,838 18.8%
Add: Amortization
of deferred
financing
costs 489 378 29.4% 1,106 1,312 -15.7%
Amortization
of unit grants 156 78 100.0% 448 460 -2.6%
Less: Additions to
rental
property(b) (6,337) (4,322) 46.6% (14,703) (13,170) 11.6%
Principal
curtailments
on mortgage
debt (1,085) (420) 158.3% (2,535) (1,078) 135.2%
Straight-
lining of
retail rents (110) (83) 32.5% (207) (341) -39.3%
FAD OF THE OPERATING
PARTNERSHIP 23,225 21,449 8.3% 68,276 58,021 17.7%
Minority Interest (8,834) (8,628) 2.4% (25,814) (24,308) 6.2%
FAD Attributable
to shareholders $14,391 $12,821 12.2% $42,462 $33,713 26.0%
Funds Available
for Distribution
per Share - basic $0.65 $0.62 4.8% $1.92 $1.74 10.3%
Dividends declared
per share $0.550 $0.535 2.8% $1.620 $1.575 2.9%
Payout Ratios
As a percentage
of FFO 65% 71% 68% 74%
As a percentage
of FAD 85% 86% 84% 91%
(a) Excludes Series
A and B, which
are considered
Common Share
equivalents
(b) Additions to
Rental Property
consist of the
following:
Core Residential
Portfolio $4,784 $3,813 $11,158 $10,866
Core
Redevelopment 286 114 955 1,280
Acquisition/
Disposition
Portfolio 1,259 389 2,570 980
Retail Portfolio 8 6 20 44
Total Additions to
Rental Property $6,337 $4,322 $14,703 $13,170
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Debt Composition
As of September 30, 1999
Average Average
Interest Dollars in % of Years to
Rate Thousands Total Maturity
Fixed Rate Debt
Long Term Mortgages 7.12% $784,081 87.5% 9.9
Variable Rate Debt
Construction Loans 6.42% 73,095 8.2% 1.8
$100M Revolver 6.50% 25,000 2.8% 1.4
$185M Revolver 6.44% 13,000 1.4% 1.4
Sub-Total 6.46% 111,095 12.4% 1.7
Other 3.99% 488 0.1% 1.3
Total Debt 7.03% $895,664 100.0% 8.9
Maturity Schedule
2001 124,263
2004 29,826
2006 92,776
2007 84,503
2008 73,000
2009 213,475
2010 87,550
2011 38,000
2013 140,000
2020 12,271
As of As of As of As of As of
09/30/99 06/30/99 03/31/99 12/31/98 09/30/98
Debt to Total Market
Capitalization Ratio 38.8% 40.9% 43.8% 40.3% 40.4%
Market Capitalization
(in millions) $2,308 $2,113 $2,026 $1,960 $1,859
Stock Price $34.188 $33.938 $30.813 $32.125 $30.375
* Debt to Total Market Capitalization Ratio at 09/30/99 is based on
19,758,104 common shares, 2,640,325 convertible preferred shares, and
13,803,985 partnership units outstanding at a common stock price of
$34.188, $50M of perpetual preferred shares, $80M of Series E & H
convertible preferred shares, and $45M of Series H convertible
preferred partnership units.
SOURCE Charles E. Smith Residential Realty, Inc.
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Related links:
http://www.smithreit.com
CONTACT:
Investors, Chandler Spears, 703-769-1044 or
Media, Susan Goyette, 703-769-6746, both of Charles E. Smith
Residential Realty, Inc.
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