ARLINGTON, Va., April 29 /PRNewswire/ -- Charles E. Smith Residential
Realty, Inc. (NYSE: SRW) announced today that Funds from Operations (FFO) for
the Company's first quarter, ended March 31, 1997, was $13.6 million, or $0.57
per share, an increase of 11.8% over the Company's FFO per share for first
quarter 1996. Rental property revenue increases, contributions from
acquisition and development properties, and a milder winter than the previous
year all contributed to the FFO increase. FFO is generally regarded as the
best measure of a REIT's performance.
During the first quarter Company also raised $88 million in new equity
through the sale of 3.1 million shares of stock. In conjunction with this
offering, the Company acquired three multifamily high rise properties totaling
1,828 apartment units.
Ernest Gerardi, Jr., President of Charles E. Smith Residential Realty,
Inc. commented, "We had an exceptionally active and successful first quarter,
which gets us off to a great start for the year. In addition to strong FFO
growth, marked by a 7.9% same store NOI increase, we accomplished all of the
key objectives outlined at the time of our February stock offering. We
completed the three property acquisitions, all of which were accomplished with
Operating Partnership equity exchanges and assumption of debt. Our successful
stock offering lowers our debt ratio and provides financial flexibility to
continue our acquisition and development growth. We have also lowered our
short-term borrowing costs by approximately 50 basis points. In addition, to
augment our growth we have expanded our acquisition team by adding John
Guinee, our new Chief Investment Officer, who will head our program to
diversify through expansion into other geographic markets. The combination of
all of these actions puts us in an excellent position to expand portfolio
growth and achieve double digit FFO increases."
Revenue from rental properties was $44.8 million in the first quarter of
1997, an increase of 15.3% over the first quarter of l996. First quarter l997
operating income, including income from rental properties before depreciation
and equity in the income of property service businesses, was $26.2 million, up
16.5% over first quarter 1996. First quarter earnings before interest, taxes,
depreciation and amortization (EBITDA) was $25.4 million, an increase of 16.2%
over first quarter 1996.
The three multifamily properties acquired by the Company total 1,828
apartment units. Two of these properties are luxury high-rises in Crystal
City, Virginia, and were originally developed and have always been managed by
the Charles E. Smith organization. The third property is a high rise located
on upper Connecticut Avenue in northwest Washington, D.C.
The Company will hold a teleconference on April 30, 1997, at 11:00 a.m.
EDT, to review the information reported in this release. To participate,
please call 1-800-759-6338 shortly before 11:00 a.m. 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 multifamily
residential properties for its own account, and provide real estate services
to other property owners. The Company owns a portfolio of over 17,000
apartment units and has a total market capitalization, including its Operating
Partnership, of approximately $1.3 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's "Company 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 Months Ended March 31, 1997 and 1996
3 Months Ended March 31,
% Change
From
(dollars in thousands except per share data) 1997 1996 last year
Funds From Operations of the Operating
Partnership $13,647 $11,088 23.1%
Funds From Operations - attributable to
shareholders 6,490 4,982 30.3%
Per Share(a) $0.57 $0.51 11.8%
Net Income of the Operating Partnership $8,796 $6,696 31.4%
Net Income - attributable to shareholders 4,183 741 464.5%
Per Share(a) $0.36 $0.08 350.0%
Dividends Declared per Share $0.505 $0.490 3.1%
EBITDA of the Operating Partnership $25,436 $21,895 16.2%
Debt Composition as of 3/31/97
Average Average
Interest Dollars in % of Years to
Rate Thousands Total Maturity
Fixed Rate Debt
Long Term Mortgages 8.10% $479,579 87.9% 7.0
$83M Line of Credit 7.27% 30,000 5.5% 7.3
Sub-Total 8.05% 509,579 93.4% 7.0
Variable Rate Debt
Short Term Mortgages 7.20% 8,199 1.5% 0.2
$100M Line of Credit 7.38% 27,650 5.1% 0.2
Sub-Total 7.33% 35,849 6.6% 0.2
Total Debt 8.00% $545,428 100.0% 6.6
* As of 3/31/97, the Company's Debt to Total Market Capitalization Ratio
was 42.9%, based on 13,232,953 shares and 13,545,099 partnership units
outstanding at a stock price of $27.125.
* The Company's Debt Coverage Ratio for the 3 months ended 3/31/97 was
2.36:1.
(a) Weighted average shares, partnership units, and equivalents
outstanding during the periods were as follows:
Shares and equivalents 11,477,925 9,822,256
Partnership Units 12,656,874 12,037,970
Total Shares and Partnership Units 24,134,799 21,860,226
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Balance Sheet
As of March 31, 1997 and December 31, 1996
March 31, December 31,
(dollars in thousands) 1997 1996
ASSETS
Rental property, at predecessor cost, net(a) $265,261 $267,658
Rental property, acquired and developed, net (b) 330,847 202,435
Cash and cash equivalents 1,221 3,898
Tenants' security deposits 3,515 3,521
Escrow funds 8,761 6,087
Investment in and advances to Property Service
Business and other 16,099 10,756
Deferred charges, net 17,268 17,646
Other assets 9,310 10,210
Total assets $652,282 $522,211
LIABILITIES AND EQUITY
Liabilities
Mortgage loans $487,778 $416,808
Notes payable 57,650 129,736
Accounts payable and accrued expenses 12,772 9,525
Tenants' security deposits 3,515 3,521
Due to related parties 0 0
Total liabilities 561,715 559,590
Minority Interest 45,633 0
Shareholders' equity
Common stock - $0.01 par value; 95,000,000 shares
authorized; 13,232,953 and 9,969,607 shares
issued and outstanding at March 31, 1997 and
December 31, 1996, respectively 133 100
Additional paid-in capital - includes contributed
deficit of $244,208(a) 51,512 (23,852)
Retained deficit (6,711) (13,627)
Total shareholders' equity 44,934 (37,379)
Total liabilities and equity $652,282 $522,211
(a) At the formation of the company, all rental properties were recorded
at the predecessor partners' historical cost basis, which is significantly
less than current value, and therefore, results in dilution of shareholders'
book value.
(b) During the first quarter of 1997, the following properties were
acquired:
Number of
Acquisition Apartment Total
Date Units Cost
Crystal Plaza 02/20/97 540 $43,065
Crystal Towers 02/20/97 912 69,781
The Kenmore 03/01/97 376 16,279
1,828 $129,125
CHARLES E. SMITH REALTY, INC.
Operating Summary
For the Three Months Ended March 31, 1997 and 1996
3 Months Ended March 31,
% Change
From
(dollars in thousands except per share data) 1997 1996(b) Last Year
RENTAL PROPERTIES(a)
Revenue $44,776 $38,837 15.3%
Operating Expenses (19,351) (17,868) 8.3%
25,425 20,969 21.3%
PROPERTY SERVICE BUSINESSES
Engineering and Technical Services 1,028 653 57.4%
Property Management Services 157 915 -82.8%
Financing Services (243) 382 -163.6%
Interior Construction and Renovation Services 128 (136) 194.1%
Operating Income 1,070 1,814 -41.0%
Depreciation and Amortization - PSBs (261) (266) -1.9%
Equity Interest in Income of the PSBs 809 1,548 -47.7%
26,234 22,517 16.5%
OTHER INCOME AND EXPENSES
Interest Income 231 269 -14.1%
General and Administrative Expenses (1,391) (1,287) 8.1%
Interest Expense (including amort. of
financing costs) (11,427) (10,411) 9.8%
Depreciation of Real Property (4,851) (4,392) 10.5%
NET INCOME OF THE OPERATING PARTNERSHIP 8,796 6,696 31.4%
Minority Interest (4,613) (3,687) 25.1%
Distributions in Excess of Earnings Allocated
to Minority Interest(d) 0 (2,268) -100.0%
Net Income Attributable to Shareholders $4,183 $741 464.5%
Net Income per Share(c) $0.36 $0.08 350.0%
NET INCOME OF THE OPERATING PARTNERSHIP $8,796 $6,696 31.4%
Add: Depreciation of Real Property 4,851 4,392 10.5%
FFO OF THE OPERATING PARTNERSHIP 13,647 11,088 23.1%
Minority Interest (7,157) (6,106) 17.2%
FFO Attributable to Shareholders $6,490 $4,982 30.3%
Funds From Operations per Share(c) $0.57 $0.51 11.8%
(a) Details are shown below.
(b) Certain amounts have been reclassified to conform with the current
year presentation.
(c) Weighted average shares, partnership units, and equivalents
outstanding during the periods were as follows:
Shares and equivalents 11,477,925 9,822,256
Partnership Units 12,656,874 12,037,970
Total Shares and Partnership Units 24,134,799 21,860,226
(d) Minority Interest balances were restored in connection with the
follow-on offering, therefore there are no charges in 1997.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Rental Property Details
For the Three Months Ended March 31, 1997 and 1996
3 Months Ended March 31,
% Change
From
(dollars in thousands) 1997 1996(b) Last Year
CORE RESIDENTIAL PORTFOLIO(a)
Revenue $37,210 $36,298 2.5%
Operating Expenses (16,265) (16,882) -3.7%
20,945 19,416 7.9%
RETAIL PORTFOLIO
Revenue 2,442 2,442 0.0%
Operating Expenses (848) (948) -10.5%
1,594 1,494 6.7%
SUB-TOTAL CORE PORTFOLIO
Revenue 39,652 38,740 2.4%
Operating Expenses (17,113) (17,830) -4.0%
22,539 20,910 7.8%
ACQUISITION PORTFOLIO
Revenue 5,124 97 N/A
Operating Expenses (2,238) (38) N/A
2,886 59 N/A
TOTAL PORTFOLIO
Revenue 44,776 38,837 15.3%
Operating Expenses (19,351) (17,868) 8.3%
$25,425 $20,969 21.3%
(a) The following properties are included in the Core Residential
portfolio:
Number of
Apartment
Units
Original Core 11,385
Potomac View 192 Acquired 8/94
The Manor 435 Acquired 8/94
Suburban Tower 172 Acquired 1/95
Boulevard of Old Town I/II 159 Acquired 4/95, 3/96
The Westerly 320 Opened 5/95
Connecticut Heights 519 Acquired 6/95
The Bennington 348 Acquired 9/95
Oakwood 218 Acquired 12/95
Total Number of Core Apartment Units 14,198
(b) 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 Months Ended March 31, 1997 and 1996
3 Months Ended March 31,
% Change
From
(dollars in thousands except per share data) 1997 1996 Last Year
NET INCOME OF THE OPERATING PARTNERSHIP $8,796 $6,696 31.4%
Add: Depreciation of Real Property 4,851 4,392 10.5%
FFO OF THE OPERATING PARTNERSHIP $13,647 $11,088 23.1%
Add: Amortization of Deferred Financing Costs 644 627 2.7%
Amortization of Unit Grants 134 143 -6.3%
Less: Additions to Rental Property(a) (1,696) (824) 105.8%
Principal Curtailments on Mortgage Debt (144) (174) -17.2%
Straight-Lining of Retail Rents 24 (250) -109.6%
FAD OF THE OPERATING PARTNERSHIP 12,609 10,610 18.8%
Minority Interest (6,612) (5,843) 13.2%
FAD Attributable to Shareholders $5,997 $4,767 25.8%
Funds Available for Distribution per Share(b) $0.52 $0.49 6.1%
Dividend Declared per Share $0.505 $0.490 3.1%
Payout Ratios
As a Percentage of FAD 97% 100%
As a Percentage of FFO 89% 96%
(a) Additions to Rental Property consist of the following:
Core Residential Portfolio $1,504 $746
Retail Portfolio 45 71
Acquisition Portfolio 147 7
Total Additions to Rental Property $1,696 $824
(b) Weighted average shares, partnership units, and equivalents
outstanding during the periods were as follows:
Shares and equivalents 11,477,925 9,822,256
Partnership Units 12,656,874 12,037,970
Total Shares and Partnership Units 24,134,799 21,860,226
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
Residential Portfolio Statistics for the Three Months Ended March 31, 1997
Number of Average Monthly Average
Property Type/ Property Year Apartment Sq. Ft. Revenue Economic
Property Name Type Built Units Per Unit Per Unit Occupancy
Core Residential
Portfolio
NW Washington, D.C.
Albermarle High-
rise 1959 235 1,097 $1,131 98.4%
Calvert-Woodley High-
rise 1954 136 1,001 1,065 99.5%
Cleveland House High-
rise 1955 216 894 1,030 98.6%
Connecticut High-
Heights rise 1920s/74 519 536 790 94.3%
Corcoran House High-
rise 1961 138 464 746 98.7%
Statesman High-
rise 1961 281 593 742 98.1%
2501 Porter High-
Street rise 1988 202 760 1,371 98.6%
Total 1,727 723 945 97.4%
Crystal City
The Bennington High-
rise 1982 348 804 994 96.9%
Crystal House I High-
rise 1964 426 917 957 96.1%
Crystal House II High-
rise 1965 402 938 926 95.8%
Crystal Square High-
rise 1973/75 378 1,121 1,091 97.4%
Crystal Place High-
rise 1987 180 894 1,248 98.7%
Gateway Place High-
rise 1987 162 826 1,247 76.4%
Water Park High-
Towers rise 1988/89 360 881 1,395 96.8%
Total 2,256 923 1,093 95.2%
NE & SE
Washington, D.C.
Car Barn Garden 1981/87 196 1,311 810 98.8%
Fort Chaplin Garden 1963/65 549 983 613 96.5%
Marbury Plaza High-
rise 1966 672 997 635 97.8%
Oxford Manor Garden 1968 227 1,005 556 92.7%
Total 1,644 1,031 638 96.9%
Other Northern
Virginia-Inside
Beltway
Bedford
Village Garden 1967 752 1,070 832 94.1%
Berkeley Mid-
rise 1960 138 891 703 96.3%
Boulevard of
Old Town I/II Garden 1941 159 603 785 95.0%
Columbia
Crossing Garden 1990/91 247 976 1,053 94.3%
Columbian Mid-
Stratford rise 1959 227 942 718 96.4%
Concord
Village Garden 1968 531 1,025 762 95.1%
Courthouse High-
Plaza rise 1988/90 396 772 1,148 96.8%
Executives Mid-
rise 1959/61 711 877 744 96.4%
Newport
Village Garden 1969/71 937 1,115 871 97.8%
Orleans
Village Garden 1965/67 851 1,061 794 96.3%
Patriot
Village Garden 1973-77 1,065 1,162 854 95.8%
Skyline High-
Towers rise 1970/72 940 1,221 932 95.5%
Windsor Mid-
Towers rise 1965 280 1,025 769 97.7%
Total 7,234 1,047 851 96.0%
Other Northern
Virginia-
Outside Beltway
Oakwood Garden 1980 218 968 956 96.4%
Potomac View Garden 1978 192 965 724 97.4%
Westerly at
Worldgate Garden 1995 320 921 972 87.9%
Total 730 947 902 92.5%
Suburban Maryland
The Manor Garden 1969 435 999 718 95.1%
Suburban High-
Tower rise 1960 172 677 772 95.7%
Sub-Total/
Average 607 908 733 95.3%
Sub-Total/
Average 14,198 975 874 95.9%
Acquisition
Portfolio
Charter Oak
(acquired
3/96) Garden 1970 262 1,097 892 98.6%
Van Ness
South
(acquired High-
7/96) rise 1970 625 956 1,007 98.2%
1841 Columbia
Road
(acquired High-
8/96) rise 1923 115 634 593 97.6%
Crystal Plaza
(acquired High-
2/97) rise 1967 540 1,129 N/A N/A
Crystal Towers
(acquired High-
2/97) rise 1967 912 1,107 N/A N/A
The Kenmore
(acquired High-
3/97) rise 1950 376 725 N/A N/A
Sub-Total/
Average 2,830 1,007 929 98.2%
All Residential
Properties 17,028 980 $877 96.0%
SOURCE Charles E. Smith Residential Realty, Inc.
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CONTACT:
For investors, Bruce Snyder, 703-769-1029, or
for media, John Kurtz, 703-769-1153, both of Charles E. Smith
Residential Realty
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