Company Appoints COO, Raises Annual Dividend by 14 Cents
And Announces South Florida Acquisition
ARLINGTON, Va., Oct. 25 /PRNewswire/ -- Charles E. Smith Residential
Realty, Inc. (NYSE: SRW), the nation's leading urban multifamily REIT,
announced today Funds From Operations (FFO) of $0.94 per diluted share for
the quarter ended September 30, 2000, an increase of 13.3% over the third
quarter of 1999. For the nine-month period ended September 30, 2000, FFO was
$2.66 per diluted share, an increase of 13.2% compared with $2.35 for the
first nine months of 1999. The increase is attributable primarily to strong
third quarter core portfolio net operating income growth of 11.5%, driven by a
revenue increase of 8.1%.
The Company also announced that W.D. (Denny) Minami, Executive Vice
President and Chief Financial Officer, has been appointed to the additional
position of Chief Operating Officer. This broadened responsibility recognizes
Mr. Minami's role and contributions to the Company's success.
The Company has raised its quarterly dividend to $0.585 per share, an
increase of $0.14 per share on an annualized basis. The Company also
announced the acquisition of a $95 million, 804-unit high-rise oceanfront
property in Bal Harbour, Fla. With this acquisition, Smith Residential
increases its market leadership position to over 4,800 units in the urban
corridor extending along the ocean from South Miami Beach to Ft. Lauderdale.
Ernest Gerardi, Jr., Smith Residential's CEO, said, "We are very pleased
to have Denny Minami in the expanded role of COO, and we look forward to his
continuing contributions. Our strong operating results continue to
demonstrate the success of our strategy of concentrating in several key
growing urban markets -- Washington, D.C./Northern Virginia, Chicago, Boston
and Southeast Florida. In selecting these markets, we looked carefully at
their long-term economic fundamentals and at the strength of the urban living
expansion in each. Our significant steady growth in core portfolio net
operating income continues to validate the success of this strategy and these
markets.
In addition, in each of our markets we continue to uncover and evaluate
investment opportunities, which may involve development, acquisition, or
repositioning. The addition of the Bal Harbour property is a good example.
Upscale urban living is clearly accelerating along the ocean corridor in
Southeast Florida and this acquisition extends our market leadership position
to nearly 5,000 units in excellent locations in this fast growing area."
Dividend Increase
On October 24th, the Board of Directors of Smith Residential Realty, Inc.,
declared a dividend of $0.585 per share for the quarter ended September 30,
2000, an increase of 6.4% over the $.55 per share dividend paid for each of
the first two quarters of 2000. On an annualized basis, the Company's
dividend is now $2.34 per share. The dividend will be payable on November 15,
2000, to shareholders of record as of November 7, 2000.
Operating Results
Charles E. Smith Residential Realty is structured as an umbrella
partnership real estate investment trust, or UPREIT, in which all property
ownership and business operations are conducted in an Operating Partnership
and its subsidiaries and affiliates. Charles E. Smith Residential Realty,
Inc. (the REIT) currently owns approximately 65% of its Operating Partnership
and is its sole general partner.
The Operating Partnership's total FFO was $40.5 million for the third
quarter of 2000, an increase of 34.4% over the third quarter of 1999. For the
first nine months of 2000, the Operating Partnership's FFO was $104.6 million,
up 24.3% over the same nine month period of 1999.
The Operating Partnership's total revenue from rental properties was $98.7
million for the third quarter of 2000, an increase of 24.7% over the third
quarter of 1999. For the first nine months of 2000, total rental revenue was
$282.3 million, an increase of 29.1% over total rental revenue for the first
nine months of 1999.
The Operating Partnership's operating income from rental properties before
depreciation for the third quarter of 2000 was $59.8 million, up 28.6% over
the third quarter of 1999. For the first nine months of 2000, operating
income was $172.8 million, up 31% over the same nine-month period of 1999.
Growth of South Florida Portfolio
Harbour House, the 804-unit acquisition announced today, is a premiere
address in exclusive Bal Harbour on Collins Avenue. The property has an
exceptional ocean beach and Smith Residential now owns six of only seven major
high-rise rental apartment buildings directly on the oceanfront in the urban
corridor from South Beach to Ft. Lauderdale. The apartments average 992
square feet, not including balconies, and most offer exceptional views of the
ocean and intracoastal waterway. The $95 million transaction was funded
through draws on the Company's lines of credit. The Company plans to invest
between $25 and $45 million, depending on the incremental return on
investment, to upgrade and reposition the property.
Quarterly Conference Call
The Company will hold a conference call on Thursday, October 26, 2000, to
review the information reported in this release. To participate, please call
1-800-633-8956 shortly before 11:00 AM that day, and identify yourself as a
participant in the Charles E. Smith Residential Realty Third Quarter 2000
Operating Results conference call.
If you are unable to join the call at 11:00 AM, a recording will be
available from 1:00 PM (EST), October 26th until 1:00 PM (EST), October 29th.
To access the PostView, please call 1-800-633-8284 and enter reservation
number 16464981 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 Fla. The Company owns or has an interest in
approximately 28,000 units and has another 2,200 units under construction or
subject to pre-purchase agreements. The total market capitalization of the
Company - Charles E. Smith Residential Realty, Inc., including its Operating
Partnership - exceeds $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's News on Call by
fax at 1-800-758-5804, 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.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Financial Highlights
For the Three and Nine Months Ended September 30, 2000 and 1999
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(dollars in thousands,
except per share data) % %
2000 1999 Change 2000 1999 Change
Financial Highlights
Revenue from
the Operating
Partnership $98,742 $79,194 24.7% $282,312 $218,749 29.1%
Funds From
Operations of
the Operating
Partnership 40,485 30,112 34.4% 104,583 84,167 24.3%
Funds From
Operations
- attributable
to shareholders 26,377 18,646 41.5% 67,696 52,344 29.3%
Per Share
- basic $0.95 $0.84 13.1% $2.69 $2.37 13.5%
Per Share
- diluted (a) $0.94 $0.83 13.3% $2.66 $2.35 13.2%
Net Income
- attributable
to common
shareholders 14,504 14,680 -1.2% 40,933 35,643 14.8%
Per Common
Share - basic $0.67 $0.75 -10.7% $1.93 $1.86 3.8%
Per Common
Share
- diluted $0.65 $0.72 -9.7% $1.89 $1.81 4.4%
Dividends Declared
per Share $0.585 $0.55 6.4% $1.685 $1.62 4.0%
Total Assets $1,912,282 $1,489,183 28.4%
Interest Coverage
Ratio (b) 3.32 3.24 3.18 3.23
As of As of
Apartment Units September September
30, 2000 30, 1999
Core Portfolio 17,424 17,424
Acquisition/Disposition Portfolio 7,748 4,575
Development Portfolio (in service) 1,515 861
Total 26,687 22,860
(a)Weighted average shares and partnership units outstanding on a diluted
basis during the periods were as follows (in 000's):
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Common Shares
(includes
common share
equivalents) 22,339 19,957 21,682 19,335
Convertible
Preferred
Shares/Units 7,233 2,640 3,992 2,979
Common
Partnership Units 13,608 13,744 13,703 13,440
Total Shares
and Partnership
Units 43,180 36,341 39,377 35,754
(b)Excludes gains on sales and extraordinary losses on extinguishment of
debt.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Operating Summary
For the Three and Nine Months Ended September 30, 2000 and 1999
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(dollars in
thousands,
except per % %
share data) 2000 1999(c) Change 2000 1999(c) Change
RENTAL
PROPERTIES (a)
Revenue $98,742 $79,194 24.7% $282,312 $218,749 29.1%
Operating
expenses (38,954) (32,709) 19.1% (109,537) (86,867) 26.1%
Depreciation
and
amortization (11,531) (8,363) 37.9% (32,993) (24,304) 35.8%
48,257 38,122 26.6% 139,782 107,578 29.9%
EQUITY IN INCOME
OF UNCONSOLIDATED
PROPERTIES 524 347 51.0% 1,849 677 173.1%
EQUITY IN INCOME
OF PROPERTY
SERVICE
BUSINESSES 2,890 2,127 35.9% 5,045 3,255 55.0%
OTHER INCOME AND EXPENSES
Corporate general
and administrative
expenses (2,810) (2,156) 30.3% (8,507) (6,785) 25.4%
Interest
expense, net (19,268) (15,182) 26.9% (57,109) (41,704) 36.9%
Gain (loss)
on sales -- 5,214 -100.0% 4,161 7,065 -41.1%
Extraordinary
item - loss on
extinguishment
of debt -- -- N/A -- (359) -100.0%
NET INCOME OF THE
OPERATING
PARTNERSHIP 29,593 28,472 3.9% 85,221 69,727 22.2%
Minority
Interest (10,077) (10,702) -5.8% (29,254) (26,239) 11.5%
Net
Income 19,516 17,770 9.8% 55,967 43,488 28.7%
Less income
attributable
to preferred
shares (5,012) (3,090) 62.2% (15,034) (7,845) 91.6%
Net Income
attributable
to common
shares $14,504 $14,680 -1.2% $40,933 $35,643 14.8%
Net Income per
common share
- basic $0.67 $0.75 -10.7% $1.93 $1.86 3.8%
Net Income per
common share
- diluted $0.65 $0.72 -9.7% $1.89 $1.81 4.4%
NET INCOME OF
THE OPERATING
PARTNERSHIP $29,593 $28,472 3.9% $85,221 $69,727 22.2%
Preferred
dividends (b) (989) (1,820) -45.7% (10,513) (3,808) 176.1%
(Gain) loss
on sales -- (5,214) -100.0% (4,161) (7,065) -41.1%
Depreciation
of rental
property 11,531 8,363 37.9% 32,993 24,304 35.8%
Depreciation
of unconsolidated
properties 240 205 17.1% 718 328 118.9%
Amortization
of goodwill 110 106 3.8% 325 322 0.9%
Extraordinary
item - loss
on extinguishment
of debt -- -- N/A -- 359 -100.0%
FFO OF THE
OPERATING
PARTNERSHIP 40,485 30,112 34.4% 104,583 84,167 24.3%
Minority
Interest (14,108) (11,466) 23.0% (36,887) (31,823) 15.9%
FFO attributable
to
shareholders $26,377 $18,646 41.5% $67,696 $52,344 29.3%
Funds From
Operations
per Share
- basic $0.95 $0.84 13.1% $2.69 $2.37 13.5%
Funds From
Operations
per Share
- diluted $0.94 $0.83 13.3% $2.66 $2.35 13.2%
(a)Details are shown on the following page.
(b)Includes Preferred Series which are not considered common share
equivalents for the period in question.
(c)Certain amounts have been reclassified to conform to the current year's
presentation.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Rental Property Details
For the Three and Nine Months Ended September 30, 2000 and 1999
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(dollars in % %
thousands) 2000 1999(e) Change 2000 1999(e) Change
CORE RESIDENTIAL
PORTFOLIO (a)
Revenue $66,227 $61,260 8.1% $192,063 $178,891 7.4%
Operating
Expenses (25,806) (24,994) 3.2% (72,281) (70,016) 3.2%
40,421 36,266 11.5% 119,782 108,875 10.0%
ACQUISITION/
DISPOSITION
PORTFOLIO (b)
Revenue 23,300 12,428 63,685 25,884
Operating
Expenses (9,454) (5,100) (27,287) (10,955)
13,846 7,328 N/A 36,398 14,929 N/A
DEVELOPMENT
PORTFOLIO (c)
Revenue 8,424 3,049 20,997 6,421
Operating
Expenses (3,327) (1,761) (7,985) (3,422)
5,097 1,288 N/A 13,012 2,999 N/A
RETAIL
PORTFOLIO (d)
Revenue 791 2,457 -67.8% 5,567 7,553 -26.3%
Operating
Expenses (367) (854) -57.0% (1,984) (2,474) -19.8%
424 1,603 -73.5% 3,583 5,079 -29.5%
TOTAL PORTFOLIO
Revenue 98,742 79,194 24.7% 282,312 218,749 29.1%
Operating
Expenses (38,954) (32,709) 19.1% (109,537) (86,867) 26.1%
$59,788 $46,485 28.6% $172,775 $131,882 31.0%
(a) Includes 17,424 apartment units.
(b) Includes the following residential properties:
2000 Acquisitions
Ocean View at Sunset Pointe - North (Southeast FL)
Ocean View at Sunset Pointe - South (Southeast FL)
Dearborn Place (Chicago, IL)
Reston Landing (Northern VA)
1999 Acquisitions 1999 Dispositions
Buchanan (Northern VA) The Manor
The Park Lincoln (Chicago, IL) Potomac View
Terrace (Chicago, IL) Columbian Stratford
Countryside (Chicago, IL) Windsor Towers
Stonegate (Chicago, IL) Fort Chaplin
The Consulate (Washington, DC) Suburban Tower
Forte Towers (Southeast FL)
Ocean View at Aventura Beach (Southeast FL)
(c) Includes the following properties: *
Springfield Station (Northern VA) (through 5/99)
Courthouse Place (Northern VA)
One Superior Place (Chicago, IL)
The Park Connecticut (Washington, DC)
* Excludes projects under contingent pre-purchase agreements.
(d) Worldgate Centre was sold in June 2000.
(e) Certain amounts have been reclassified to conform with the current
year's presentation.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Core Residential Portfolio Statistics
For the Three and Nine Months Ended September 30, 2000 and 1999
(Unaudited)
Gross Operating Income Monthly GOI Per Unit
Number of % Change
Market/ Apartment From
Sub-Market Units Q3 00 % of Total Q3 00 Q3 99
(000's)
WASHINGTON,
D.C. 3,326 $12,133 18.3% $1,216 11.3%
NORTHERN VIRGINIA
Crystal City 4,007 16,407 24.8% 1,365 6.1%
Rosslyn/
Ballston 1,110 5,221 7.9% 1,568 9.9%
Tysons/
Dulles 2,617 8,872 13.4% 1,130 9.7%
Other 4,514 13,840 20.9% 1,022 6.5%
Total
Northern
Virginia 12,248 44,340 67.0% 1,207 7.4%
BOSTON/CHICAGO 1,850 9,754 14.7% 1,758 7.3%
CORE RESIDENTIAL
PORTFOLIO 17,424 $66,227 100.0% $1,267 8.1%
Occupancy
% Change
From
Q3 00 Q3 99
WASHINGTON, D.C. 97.8% 0.0%
NORTHERN VIRGINIA
Crystal City 96.9% -0.8%
Rosslyn/Ballston 96.0% -2.7%
Tysons/Dulles 97.0% -0.3%
Other 97.7% 0.2%
Total Northern
Virginia 97.1% -0.6%
BOSTON/CHICAGO 97.9% 0.9%
CORE RESIDENTIAL PORTFOLIO 97.3% -0.3%
Gross Operating Income Monthly GOI Per Unit
Number of % Change
Market/ Apartment From
Sub-Market Units YTD 00 % of Total YTD 00 YTD 99
(000's)
WASHINGTON,
D.C. 3,326 $35,038 18.2% $1,171 10.0%
NORTHERN VIRGINIA
Crystal City 4,007 47,869 24.9% 1,327 5.6%
Rosslyn/
Ballston 1,110 14,812 7.7% 1,483 8.7%
Tysons/
Dulles 2,617 25,576 13.3% 1,086 7.8%
Other 4,514 40,600 21.2% 999 7.1%
Total Northern
Virginia 12,248 128,857 67.1% 1,169 6.9%
BOSTON/CHICAGO 1,850 28,168 14.7% 1,692 6.5%
CORE RESIDENTIAL
PORTFOLIO 17,424 $192,063 100.0% $1,225 7.4%
Occupancy
% Change
From
YTD 00 YTD 99
WASHINGTON, D.C. 97.8% -0.4%
NORTHERN VIRGINIA
Crystal City 97.2% -0.1%
Rosslyn/Ballston 96.8% 1.9%
Tysons/Dulles 97.5% 0.4%
Other 98.0% 1.0%
Total Northern
Virginia 97.4% 0.5%
BOSTON/CHICAGO 97.4% 1.5%
CORE RESIDENTIAL
PORTFOLIO 97.5% 0.5%
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Funds Available for Distribution (FAD) Calculation
For the Three and Nine Months Ended September 30, 2000 and 1999
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(dollars in thousands,
except per share data) 2000 1999 % Change 2000 1999 % Change
FFO OF THE OPERATING
PARTNERSHIP $40,485 $30,112 34.4% $104,583 $84,167 24.3%
Amortization of
deferred financing
costs 366 489 -25.2% 1,300 1,106 17.5%
Recurring capital
improvements (a) (4,262) (3,559) 19.8% (9,447) (9,958) -5.1%
Principal
curtailments on
mortgage debt (1,532) (1,085) 41.2% (4,177) (2,535) 64.8%
Other 286 46 521.7% 505 241 109.5%
FAD OF THE OPERATING
PARTNERSHIP 35,343 26,003 35.9% 92,764 73,021 27.0%
Minority Interest (12,316) (9,871) 24.8% (32,718) (27,608) 18.5%
FAD attributable
to shareholders $23,027 $16,132 42.7% $60,046 $45,413 32.2%
Funds Available
for Distribution
per Share - basic $0.83 $0.72 15.3% $2.39 $2.05 16.6%
Dividend declared
per Share $0.585 $0.55 6.4% $1.685 $1.62 4.0%
Payout Ratios
As a percentage
of FFO 62% 65% 63% 68%
As a percentage
of FAD 70% 76% 71% 79%
(a) Capital improvements consist of the following:
Core Residential Portfolio $4,258 $3,346 $9,421 $9,433
Disposition & Retail Portfolios 4 213 26 525
Total Recurring capital
improvements 4,262 3,559 9,447 9,958
Non-recurring Core Repositioning 6,009 1,608 15,891 3,148
Total $10,271 $5,167 $25,338 $13,106
Non-recurring Core Repositioning improvements (primarily kitchen and bath
renovations) as well as capital improvements on the acquisition portfolio
are excluded from the FAD calculation.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Debt Composition
As of September 30, 2000
(Unaudited)
Average Average
Interest Dollars in % of Years to
Rate Thousands Total Maturity
Fixed Rate Debt
Long Term Mortgages 7.31% $ 1,038,545 92.6% 9.5
Variable Rate Debt
Construction Loans 7.81% 76,414 6.9% 0.8
$300M Revolver 7.25% 6,000 0.5% 9.7
$100M Revolver N/A 0 0.0% 0.4
$50M Revolver N/A 0 0.0% 0.4
Sub-Total 7.77% 82,414 7.4% 1.5
Total Debt 7.34% $ 1,120,959 100.0% 8.9
Scheduled principal payments:
Oct. 2000 - Dec. 2000 $ 1,362
Year Ending December 31,
2001 115,720
2002 16,433
2003 5,415
2004 33,188
2005 6,159
Thereafter 942,682
$1,120,959
As of As of As of As of As of
9/30/00 6/30/00 3/31/00 12/31/99 9/30/99
Debt to Total
Market
Capitalization
Ratio 36.1% 39.5% 40.5% 38.6% 38.8%
Market
Capitalization
(in millions) $3,106 $2,730 $2,644 $2,509 $2,308
Stock Price $45.375 $38.000 $36.125 $35.375 $34.188
*Debt to Total Market Capitalization Ratio at 9/30/00 is based on
21,808,230 common shares, 7,232,949 convertible preferred shares/units,
and 13,599,855 partnership units outstanding at a common stock price of
$45.375, plus $50M of perpetual preferred shares.
SOURCE Charles E. Smith Residential Realty, Inc.
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Related links:
http://www.charlesesmith.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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