ARLINGTON, Va., Oct. 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 third
quarter, ended September 30, 1998, was $25.8 million, an increase of 35.3%
over the Company's third quarter 1997. The Company's third quarter 1998 FFO
per share was $0.75, an increase of 8.7% over the third quarter of 1997, and
for the nine month period ended September 30, 1998, the Company's per share
FFO was $2.11, an increase of 10.5%, compared with the first nine months of
1997. (All per share amounts in this release are diluted shares.) The
Company's FFO increase was attributable to a combination of core portfolio
revenue growth of 4.8%, together with performance of acquired properties.
"We are pleased that our markets continue to show strong demand across the
board," said Ernest Gerardi, Jr., President of Charles E. Smith Residential
Realty, Inc. "This has enabled us to keep occupancies high at 97.8%, raise
rents, and produce superior core portfolio results. We expect this strong
demand to continue, driving our core portfolio performance, and reinforcing
our confidence in the success of our development program. We recently
announced pre-purchase agreements for three additional development projects
totaling 843 units. These projects are in strong submarkets consistent with
our urban franchise strategy -- two in northern Virginia and one in southeast
Florida. All three will be built and financed by experienced local developers,
with purchases scheduled to be completed in the years 2000 and 2001."
Mr. Gerardi continued, "We also just announced that we have negotiated a
new standby credit facility with Fannie Mae that will provide up to $300
million of long-term secured debt capacity. Together with $45 million of new
equity raised during the third quarter from ABKB/LaSalle Securities and Morgan
Stanley Investment Management, we continue to enhance our financial
flexibility -- one of our key strategic objectives. During the third quarter
we were also pleased to raise our dividend to $2.14 per share on an annualized
basis, an increase of six cents per share."
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 revenue from rental properties was $66.1
million for the third quarter of 1998, an increase of 30.0% over third quarter
1997, and total rental property revenue for the first nine months of 1998 was
$183.5 million, an increase of 26.5% over total rental revenue for the first
nine months of 1997.
The Operating Partnership's operating income from rental properties before
depreciation for the third quarter of 1998 was $38.3 million, up 30.0% over
the same quarter of the prior year, and for the first nine months of 1998 was
$108.3 million, up 29.0% over the same period in 1997.
The Company will hold a teleconference on Tuesday, October 27th, at 11:00
a.m. EST to review the information reported in this release. To participate,
please call 1-800-633-8680 shortly before 11:00 a.m. on that day, and identify
yourself as a participant in the Charles E. Smith Residential Realty
teleconference.
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 nearly 3,400 units under construction (including units
subject to pre-purchase agreement), and manages an additional 3,500+ units for
other owners. The total market capitalization of the Company -- Charles E.
Smith Residential Realty, including its Operating Partnership -- is
approximately $1.9 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 Nine Months Ended September 30, 1998 and 1997
(unaudited)
3 Months Ended Sept. 30, 9 Months Ended Sept. 30,
% Change % Change
From From
1998 1997 Last Year 1998 1997 Last Year
(dollars in
thousands,
except per
share data)
Revenue from the
Operating
Partnership $66,061 $50,829 30.0% $183,488 $145,088 26.5%
Funds From
Operations of
the Operating
Partnership 25,818 19,077 35.3% 70,838 50,087 41.4%
Funds From
Operations -
attributable to
shareholders 15,443 9,728 58.7% 41,161 24,749 66.3%
Per Share -
basic (a) $0.75 $0.69 8.7% $2.13 $1.92 10.9%
Per Share -
diluted $0.75 $0.69 8.7% $2.11 $1.91 10.5%
Net Income of
the Operating
Partnership $13,708 $13,783 -0.5% $45,297 $34,647 30.7%
Net Income -
attributable to
common
shareholders 5,406 6,630 -18.5% 18,382 16,736 9.8%
Per Common Share
- basic (a) $0.32 $0.50 -36.0% $1.16 $1.32 -12.1%
Per Common Share
- diluted $0.32 $0.49 -34.7% $1.15 $1.32 -12.9%
Dividends Declared
per Share $0.535 $0.520 2.9% $1.575 $1.530 2.9%
Total Assets $1,141,644 $865,506 31.9%
Debt Composition as of September 30, 1998
Average Average
Interest Dollars in % of Years to
Rate Thousands Total Maturity
Fixed Rate Debt
Long Term Mortgages 7.69% $472,185 62.9% 7.9
$83M Line of Credit 7.27% 30,000 4.0% 5.8
Sub-Total 7.67% 502,185 66.9% 7.5
Variable Rate Debt
Mortgages 6.68% 9,160 1.2% 0.2
Construction Loan 6.93% 25,572 3.4% 2.0
$275M Line of Credit 6.65% 214,500 28.5% 2.4
Sub-Total 6.68% 249,232 33.1% 2.5
Total Debt 7.34% $751,417 100.0% 6.3
As of As of As of As of As of
09/30/98 06/30/98 03/31/98 12/31/97 09/30/97
Debt to Total Market
Capitalization Ratio 40.4% 38.3% 34.7% 35.0% 37.2%
Market Capitalization
(in millions) $1,859 $1,810 $1,722 $1,746 $1,491
* Debt to Total Market Capitalization Ratio at 9/30/98 is based on
17,471,741 common shares, 3,614,258 convertible preferred shares, and
13,738,628 partnership units outstanding at a common stock price of
$30.375 and $50M of perpetual preferred stock.
(a) Weighted average shares and partnership units outstanding during the
periods were as follows (in 000's):
3 Months Ended 9 Months Ended
Sept. 30, Sept. 30,
1998 1997 1998 1997
Common Shares 16,877 13,350 15,870 12,657
Convertible Preferred Shares 3,764 739 3,496 252
Partnership Units 13,756 13,448 13,963 13,216
Total Shares and Partnership Units 34,397 27,537 33,329 26,125
Operating Summary
For the Three and Nine Months Ended September 30, 1998 and 1997
(unaudited)
(dollars in 3 Months Ended Sept. 30, 9 Months Ended Sept. 30,
thousands, % Change % Change
except per From From
share data) 1998 1997(b) Last Year 1998 1997(b) Last Year
RENTAL PROPERTIES (a)
Revenue $66,061 $50,829 30.0% $183,488 $145,088 26.5%
Operating Expenses (27,782) (21,394) 29.9% (75,204) (61,158) 23.0%
Depreciation
and Amortization (7,970) (5,294) 50.5% (21,445) (15,440) 38.9%
30,309 24,141 25.5% 86,839 68,490 26.8%
PROPERTY SERVICE
BUSINESSES (PSBs) 2,693 1,931 39.5% 5,584 3,636 53.6%
OTHER INCOME
AND EXPENSES
Corporate General
and Administrative
Expenses (2,177) (1,544) 41.0% (6,405) (4,583) 39.8%
Interest Expense,
net (12,194) (10,745) 13.5% (34,216) (32,896) 4.0%
Gain on sale
of property 0 0 N/A 3,120 0 N/A
Loss on unused
treasury lock (4,923) 0 N/A (4,923) 0 N/A
Extraordinary item
- loss on debt
extinguishment 0 0 N/A (4,702) 0 N/A
NET INCOME OF
THE OPERATING
PARTNERSHIP 13,708 13,783 -0.5% 45,297 34,647 30.7%
Minority Interest (5,434) (6,769) -19.7% (18,977) (17,527) 8.3%
Net Income 8,274 7,014 18.0% 26,320 17,120 53.7%
Less income
attributable
to preferred
shares (2,868) (384) -646.9% (7,938) (384) -1967.2%
Net Income
attributable
to Common Shares $5,406 $6,630 -18.5% $18,382 $16,736 9.8%
Net Income per
Common Share
- basic $0.32 $0.50 -36.0% $1.16 $1.32 -12.1%
Net Income per
Common Share
- diluted $0.32 $0.49 -34.7% $1.15 $1.32 -12.9%
NET INCOME OF
THE OPERATING
PARTNERSHIP $13,708 $13,783 -0.5% $45,297 $34,647 30.7%
Less: Perpetual
Preferred
Dividends (1,011) 0 N/A (2,637) 0 N/A
Gain on
sale of
property 0 0 N/A (3,120) 0 N/A
Add: Depreciation
of Real
Property 7,970 5,294 50.5% 21,445 15,440 38.9%
Amortization
of Goodwill 228 0 N/A 228 0 N/A
Loss on unused
treasury lock 4,923 0 N/A 4,923 0 N/A
Extraordinary
loss on debt
extinguishment 0 0 N/A 4,702 0 N/A
FFO OF THE OPERATING
PARTNERSHIP 25,818 19,077 35.3% 70,838 50,087 41.4%
Minority Interest (10,375) (9,349) 11.0% (29,677) (25,338) 17.1%
FFO attributable
to shareholders $15,443 $9,728 58.7% $41,161 $24,749 66.3%
Funds From
Operations
per Share
- basic $0.75 $0.69 8.7% $2.13 $1.92 10.9%
Funds From
Operations
per Share
- diluted $0.75 $0.69 8.7% $2.11 $1.91 10.5%
(a) Details are shown on the following page.
(b) Minority Interest and per share amounts have been restated based on
SFAS No. 128 "Earnings per Share".
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Rental Property Details
For the Three and Nine Months Ended September 30, 1998 and 1997
(unaudited)
3 Months Ended Sept 30, 9 Months Ended Sept 30,
% Change % Change
From From
1998 1997 (d) Last Year 1998 1997 (d) Last Year
(dollars in
thousands)
CORE RESIDENTIAL
PORTFOLIO (a)
Revenue $43,906 $41,891 4.8% $127,982 $122,569 4.4%
Operating
Expenses (18,900) (17,887) 5.7% (53,270) (52,107) 2.2%
25,006 24,004 4.2% 74,712 70,462 6.0%
ACQUISITION
PORTFOLIO (b)
Revenue 19,325 6,306 N/A 47,726 15,037 N/A
Operating Expenses (7,859) (2,648) N/A (18,872) (6,457) N/A
11,466 3,658 N/A 28,854 8,580 N/A
DEVELOPMENT
PORTFOLIO (c)
Revenue 387 0 N/A 474 0 N/A
Operating
Expenses (261) (14) N/A (665) (14) N/A
126 (14) N/A (191) (14) N/A
RETAIL PORTFOLIO
Revenue 2,443 2,632 -7.2% 7,3O6 7,482 -2.4%
Operating Expenses (762) (845) -9.8% (2,397) (2,580) -7.1%
1,681 1,787 -5.9% 4,9O9 4,902 0.1%
TOTAL PORTFOLIO
Revenue 66,061 50,829 30.0% 183,488 145,088 26.5%
Operating Expenses (27,782) (21,394) 29.9% (75,204) (61,158) 23.0%
$38,279 $29,435 30.0% $108,284 $83,930 29.0%
(a) Includes 14,973 apartment units.
(b) Acquisition Portfolio: Units
1997 Properties
The Kenmore (NW Washington, D.C.) 376
Crystal Plaza (Northern VA) 540
Crystal Towers (Northern VA) 912
Lincoln Towers (Northern VA) 714
2000 Commonwealth (Boston) 188
One East Delaware (Chicago) 306
1998 Properties
Tunlaw Garden (NW Washington, D.C.) 167
Tunlaw Park (NW Washington, D.C) 120
Parc Vista (Northern VA) 299
McClurg Court (Chicago) 1,075
Cronin's Landing (Boston) 281
4,978
(c) Development Portfolio:**
Springfield Station (Northern VA) 630
Courthouse Place (Northern VA) 564
One Superior Place (Chicago) 809
The Park Connecticut (NW Washington, D.C.) 142
2,145
** 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.
Funds Available for Distribution (FAD) Calculation
For the Three and Nine Months Ended September 30, 1998 and 1997
(unaudited)
3 Months Ended Sept 30, 9 Months Ended Sept 30,
% Change % Change
From From
1998 1997 Last Year 1998 1997 Last Year
(dollars in
thousands, except
per share data)
NET INCOME OF THE
OPERATING
PARTNERSHIP $13,708 $13,783 -0.5% $45,297 $34,647 30.7%
Less: Perpetual
Preferred
Dividends (1,011) 0 N/A (2,637) 0 N/A
Gain on
sale of
property 0 0 N/A (3,120) 0 N/A
Add: Depreciation
of Real
Property 7,970 5,294 50.5% 21,445 15,440 38.9%
Amortization
of Goodwill 228 0 N/A 228 0 N/A
Loss on unused
treasury lock 4,923 0 N/A 4,923 0 N/A
Extraordinary
item - loss
on debt
extinguishment 0 0 N/A 4,702 0 N/A
FFO OF THE
OPERATING
PARTNERSHIP $25,818 $19,077 35.3% $70,838 $50,087 41.4%
Add: Amortization
of Deferred
Financing
Costs 378 536 -29.5% 1,312 1,754 -25.2%
Amortization
of Unit
Grants 78 141 -44.7% 460 417 10.3%
Less: Additions
to Rental
Property (a) (4,322) (3,725) 16.0% (13,170) (8,177) 61.1%
Principal
Curtailments
on Mortgage
Debt (420) (258) 62.8% (1,078) (888) 21.4%
Straight-
Lining of Retail
Rents (83) (156) -46.8% (341) (307) 11.1%
FAD OF THE OPERATING
PARTNERSHIP 21,449 15,615 37.4% 58,021 42,886 35.3%
Minority
Interest (8,628) (7,634) 13.0% (24,308) (21,695) 12.0%
FAD attributable
to shareholders $12,821 $7,981 60.6% $33,713 $21,191 59.1%
Funds Available
for Distribution
per Share -
basic $0.62 $0.57 8.8% $1.74 $1.64 6.1%
Dividend Declared
per Share $0.535 $0.520 2.9% $1.575 $1.530 2.9%
Payout Ratios
As a Percentage
of FFO 71% 75% 74% 80%
As a Percentage
of FAD 86% 91% 91% 93%
(a) Additions to Rental Property consist of the following:
Core
Residential
Portfolio $3,741 $3,280 $10,862 $7,375
Retail
Portfolio 6 13 44 66
Acquisition
Portfolio 575 432 2,264 736
Total
Additions
to Rental
Property $4,322 $3,725 $13,170 $8,177
SOURCE Charles E. Smith Residential Realty, Inc.
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Related links:
www.smithreit.com
CONTACT:
Media: John Kurtz, 703-769-1153; Investors:
Greg Samay, 703-769-1029, both of Charles E. Smith Residential
Realty, Inc.
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