Capital Structure Positions Cabot Well in Current Environment
Highlights include:
* Quarterly FFO per share of $0.46, 19% debt to market capitalization
9.4 x Interest Coverage; quarterly dividend of $0.325 per share
* Portfolio occupancy rises to 97%; 7.0% rental growth on rollover of
leases
* Capital structure provides for consistent growth in cash flow without
adding to common equity until 2001
* $135 million in new investments during quarter; nearly $400 million
acquired in 1998
BOSTON, Oct. 28 /PRNewswire/ -- Cabot Industrial Trust (NYSE: CTR) today
reported funds from operations (FFO) per share of $0.46 for the quarter ended
September 30, 1998. Cabot Industrial Trust completed its initial public
offering on February 4, 1998 and therefore comparative results for last year
are not available.
Ferdinand Colloredo-Mansfeld, CEO and Chairman of Cabot Industrial Trust,
reported, "We are seeing tremendous opportunities in this unsettled market
environment. The uncertainty in the capital markets is improving our
investment opportunities and we believe we'll soon see a marked slow-down in
new speculative starts. We remain focused on value and investment
opportunities where we can achieve high risk adjusted rates of return on our
capital.
"Moreover, we went public with a clean balance sheet; our ability to add
unsecured and secured debt as well as preferred stock provides us with many
financing opportunities. This capital structure provides us with the ability
to consistently grow our FFO per share over a long period of time without
diluting our common equity shareholders."
$135 Million in New Investments During Quarter Ended September 30; $400
Million Acquired in 1998
Over the course of the third quarter, Cabot acquired 31 properties in 14
separate transactions, increasing its presence in 7 of its target markets,
including Los Angeles, Chicago, Orlando, Phoenix, Atlanta, Cincinnati and
Baltimore/Washington, D.C. The acquired properties include a total of
3.2 million square feet of which 21% is bulk distribution, 57% is multi-tenant
and 22% is workspace. The properties are currently 94% occupied by 90
tenants. "These transactions are consistent with our growth strategy of
focusing on smaller acquisitions within each of our three targeted industrial
property segments throughout the United States," said Mr. Colloredo-Mansfeld.
Over the past three quarters Cabot has acquired 80 properties totaling
9.1 million square feet, $400 million in acquisitions in 37 separate
transactions in eleven target markets throughout the United States at
stabilized yields of 9.6%.
$78 Million Development Pipeline Across 10 Target Submarkets
Robert Patterson, the Company's President, reported, "Cabot is undertaking
development in diverse markets across the country, and we added $23 million in
new commitments during the quarter. Each project is targeted toward high-
margin opportunities where we see strong demand based upon our leasing
activity in that market. Our approach toward development is to carefully
control risk by diversifying across different markets and property types. Our
total development pipeline now totals $78 million, but this is spread over 10
projects in 10 different submarkets. We expect these projects will yield
10.5% or better."
Portfolio Occupancy Rises to 97%
Over the course of the third quarter Cabot leased 1.2 million square feet,
bringing occupancy to 97% across the portfolio. Occupancy levels are
consistently high across the country. Across all five of Cabot's regional
markets, occupancy ranged from 99.8% in the Northeast to 94.6% in the
Southeast. New leases or renewals were 7.0% higher over the period. New
leases or lease renewals for work space in particular increased by 9.6%.
"This leasing activity confirms to us the continued strong demand across our
nationally diversified portfolio," said Mr. Patterson. "The fundamentals of
our business remain very strong."
Cabot Industrial Trust is a fully integrated real estate company with
offices in Boston, Chicago, Los Angeles, Dallas, Orlando and Cincinnati, that
specializes in the ownership, acquisition and development of industrial
properties with 202 properties containing 28 million square feet in 22 states.
The Company also manages 10 million square feet of property for investment
advisory accounts. Cabot Industrial Trust focuses on a broad spectrum of
industrial property types nationwide including large bulk distribution
facilities, multi-tenant distribution facilities and workspace properties.
In addition to historical information, this press release contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based on management's
current expectations about the industry and the markets in which the Company
operates. Such forward-looking statements are not guarantees of future
performance and involve known and unknown risks, uncertainties or other
factors which may cause actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Actual
operating results may be affected by various factors including, without
limitation, changes in national and local economic conditions, competitive
market conditions, uncertainties and cost related to, and the imposition of
conditions on, receipt of governmental approvals and costs of material and
labor, all of which may cause such actual results to differ materially from
what is expressed or forecast in this press release.
CABOT INDUSTRIAL TRUST
SUMMARY UNAUDITED QUARTERLY RESULTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Quarter ended Period from
September 30, 1998 February 4, 1998
(Inception)
through
September 30, 1998
Rental Revenues $28,417 $69,309
Net income available to common
shareholders (A) $6,001 $15,560
Weighted average common shares
outstanding:
Basic 18,587 18,587
Diluted 18,587 18,587
Net income per common share:
Basic $0.32 $0.84
Diluted $0.32 $0.83
Funds from operations (B) $19,905 $50,509
Average shares outstanding (C)
Basic 43,515 43,490
Diluted 43,516 43,706
Funds from operations per share (C)
Basic $0.46 $1.16
Diluted $0.46 $1.16
Occupancy Rates September 30, 1998
Bulk Distribution Properties 96.1%
Multi-tenant Distribution Properties 97.2%
Workspace Properties 97.3%
Weighted average total 96.7%
(A) Net income after minority interest
(B) Calculated before minority interest
(C) Calculated based on weighted average shares outstanding assuming
conversion of all partnership units outstanding
CABOT INDUSTRIAL TRUST
CONSOLIDATED BALANCE SHEET
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE DATA)
September 30, 1998
ASSETS
Rental Properties $1,051,650
Less: Accumulated Depreciation (11,836)
Development Projects 11,522
Net Real Estate Investments $1,051,336
Cash and Cash Equivalents $4,864
Rents and Other Receivables 1,159
Deferred Rent Receivable 1,738
Lease Acquisition Costs, net 15,435
Deferred Financing Costs, net 1,360
Other Assets 1,745
TOTAL ASSETS $1,077,637
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Mortgage Debt $48,648
Line of Credit Borrowings 169,000
Accounts Payable and Accrued
Real Estate Taxes 8,582
Tenant Security Deposits and
Prepaid Rent 3,672
Other Liabilities 15,848
Total Liabilities $245,750
MINORITY INTEREST $476,671
SHAREHOLDERS' EQUITY
Common Stock, $.01 par value, 150,000,000
shares authorized, 18,586,764 shares
issued and outstanding $186
Additional paid-in capital 349,264
Retained earnings 5,766
Total Shareholders' Equity $355,216
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,077,637
CABOT INDUSTRIAL TRUST
STATEMENT OF OPERATIONS
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE DATA)
Quarter Ended Period from
September 30, 1998 February 4, 1998
(Inception)
through
September 30, 1998
REVENUES
Rental Income $24,914 $60,569
Tenant Reimbursements 3,503 8,740
Interest and Other Income 392 1,114
Total Revenues 28,809 70,423
EXPENSES
Property Operating 1,563 4,079
Real Estate Taxes 3,240 7,982
General and Administrative 1,724 4,514
Interest Expense 2,365 3,317
Depreciation and Amortization 5,862 14,108
Total Expenses 14,754 34,000
Income Before Minority Interest Expense 14,055 36,423
Minority Interest Expense (8,054) (20,863)
Net Income $6,001 $15,560
Weighted Average Shares Outstanding:
Basic 18,587 18,587
Diluted 18,587 18,587
Income per Common Share:
Basic $0.32 $0.84
Diluted $0.32 $0.83
CABOT INDUSTRIAL TRUST
FUNDS FROM OPERATIONS
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE DATA)
Period from
Quarter Ended February 4, 1998 (Inception)
September 30, 1998 through September 30, 1998
Net Income $6,001 $15,560
Add:
Minority Interest 8,054 20,863
Real Estate Related Depreciation
and Amortization 5,850 14,086
Funds from Operations $19,905 $50,509
Weighted Average Shares Outstanding (A)
Basic 43,515 43,490
Diluted 43,516 43,706
Funds from Operations per Share (A)
Basic $0.46 $1.16
Diluted $0.46 $1.16
CABOT INDUSTRIAL TRUST
FUNDS AVAILABLE FOR DISTRIBUTION
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE DATA)
Period from
Quarter Ended February 4, 1998 (Inception)
September 30, 1998 through September 30, 1998
Funds from Operations $19,905 $50,509
Adjustments:
Straightline Rental Income (648) (1,738)
Amortization of Deferred
Financing Costs 168 314
Leasing Commissions and Tenant
Improvements (1,322) (2,428)
Building Improvements (222) (973)
Funds Available for Distribution $17,881 $45,684
Funds Available for Distribution
per Share (A)
Basic $0.41 $1.05
Diluted $0.41 $1.05
(A) Calculated based on weighted average shares outstanding assuming
conversion of all partnership units outstanding
SOURCE Cabot Industrial Trust
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CONTACT:
Franz Colloredo-Mansfeld, Chief Financial
Officer of Cabot Industrial Trust, 617-723-0900; or General
Info., Michael Lawson, or Analyst Info., Pamela King, both of The
Financial Relations Board, 212-661-8030
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