NEWPORT BEACH, Calif., Nov. 4 /PRNewswire/ -- Pacific Gulf Properties Inc.
(NYSE: PAG), an equity real estate investment trust (REIT) that owns, develops
and manages industrial and multifamily properties, including rental housing
for active seniors in the West, today reported operating results for the
period ended September 30, 1999. For the third quarter ended September 30,
1999, pro forma funds from operations (assuming the conversion of all
preferred shares and all remaining subordinated debentures) totaled
$14,560,000, or $.62 per share. This represents an increase of 13% per share
over the $12,992,000, or $0.55 per share, generated one year ago, due
primarily to increases in same-store rents.
For the nine months ended September 30, 1999, pro forma funds from
operations increased 14% per share to $43,226,000, or $1.84 per share, over
the $37,913,000, or $1.62 per share, for the same period a year-ago. This
increase was due to growth in same-store rents, and to acquisitions made in
1998.
Net operating income, or gross rental income less rental operating
expenses, for the third quarter of 1999 was $23,619,000 on revenues of
$31,557,000, versus $21,670,000 on revenues of $29,792,000 for the
one-year-ago period. This represents a 9% increase for the Company. Income
available to common shareholders was $7,677,000, or $.38 per diluted share,
compared with $12,441,000, or $.58 per diluted share, reported in the third
quarter of 1998. Income available to common shareholders before the gain on
sale of real estate was $6,449,000 for the third quarter of 1999, as compared
to 6,014,000 for the one-year-ago period.
Net operating income for the first nine months of 1999 was $68,983,000 on
revenues of $92,111,000, versus $60,640,000 on revenues of $82,909,000 a year
ago, representing a 14% increase. Income available to common shareholders
increased to $25,550,000, or $1.26 per diluted share, from $25,085,000, or
$1.24 per diluted share, a year ago. Income available to common shareholders
before the gain on sale of real estate was $19,698,000 for the first nine
months of 1999, as compared to $18,658,000 a year ago.
Commenting on the Company's performance, Pacific Gulf Properties' Chairman
and Chief Executive Officer, Glenn L. Carpenter, said, "I am very pleased with
the strong performance posted by the Company during this period. The
continuing increases in funds from operations, net income and other
performance benchmarks reflect overall strong Company fundamentals and steady
internal growth." Glenn noted that the Company would continue its focused
strategy of maximizing growth of the core portfolio of light industrial
facilities in the Western U.S., and also continue to build a portfolio of
multifamily housing for active seniors.
PROPERTY SALES
Gain on the sale of real estate for the nine months ended September 30,
1999 was $5,852,000 million, which includes gains from the sale of a 196-unit
multifamily community, gains from the sales of two non-core industrial
properties and realization of a deferred gain related to the Company's sale of
its Texas multifamily portfolio in 1995.
INDUSTRIAL PORTFOLIO
With its industrial portfolio, Pacific Gulf Properties completed leases
for one million square feet at its stabilized properties during the third
quarter, generating a 12% increase in effective rental rates over ending rates
on expired leases. Industrial properties generated 83% of the Company's total
net operating income for the third quarter ended September 30, 1999. For the
nine months ended September 30, 1999 industrial properties generated 82% of
the Company's total net operating income. During the first nine months of
1999, 3.5 million square feet were re-leased at the Company's stabilized
properties, reflecting a 12% increase in effective rental rates.
Same-store results for the 12.5 million square feet of industrial
properties owned during both the third quarter of 1999 and the third quarter
of 1998 reflect an increase in net operating income of 8%, due primarily to a
5% increase in rental revenues. For the first nine months of 1999, same-store
net operating income increased 10%, due to an 8% increase in rental revenues.
As of September 30, 1999 the occupancy rate in the Company's industrial
portfolio was 96%, which is the same as the occupancy rate at September 30,
1998.
MULTIFAMILY PORTFOLIO
Same-store net operating income in the multifamily operations increased
11% during the third quarter versus the same period one year ago, resulting
primarily from an 8% increase in rental revenues. For the first nine months
of 1999, same-store net operating income increased 8%, versus the one-year-ago
period, due to a 6% increase in revenues. Overall occupancy for the
multifamily portfolio at September 30 was 96% in 1999, compared with 97% in
1998.
At September 30, 1999, Pacific Gulf's multifamily portfolio was comprised
of 3,069 units, of which 1,438 were communities designed for active seniors
age 55 and older.
Third Quarter 1999 Highlights
-- Funds from operations (FFO) increased 13 percent
Industrial properties generated 83 percent of Company's total net
operating income
-- Company completed industrial facility leases totaling one million
square feet and generating 12 percent increase in effective rents over
ending rates on expired leases
-- Industrial same-store net operating income increased 8 percent from a
year ago
-- Multifamily same-store net operating income increased 11 percent from
a year ago
-- September 30, 1999 industrial occupancy rate: 96 percent
-- September 30, 1999 multifamily occupancy rate: 96 percent
-- Company acquired land for development of senior apartment property in
Southern California.
Pacific Gulf Properties is a real estate investment trust (REIT) that
owns, develops and manages a growing portfolio of industrial properties
targeting small to mid-size tenants in selected high-growth U. S. western
markets. The Company's industrial portfolio includes 72 properties
encompassing more than 15.5 million square feet of space. Pacific Gulf
Properties also maintains a smaller multifamily portfolio that includes eight
rental communities comprising almost 1,500 units designed for the burgeoning
population of active seniors age 55 and older. The Company is headquartered
in Newport Beach, California.
Forward-looking statements and comments in this press release are made
pursuant to the safe harbor provisions of Section 21E of the Securities
Exchange Act of 1934. Such statements relating to, among other things,
events, conditions, prospects and financial trends that may affect the
company's future plans of operations, business strategy, growth of operations
and financial position are not guarantees of future performance and are
necessarily subject to risks and uncertainties, some of which are significant
in scope and nature, including without limitation, increased competition,
adverse economic trends, increasing interest rates and other factors.
FINANCIAL TABLES FOLLOW
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
Sept 30, Dec. 31,
1999 1998
(Unaudited) (Audited)
ASSETS
Real estate assets
Land $232,126 $229,920
Buildings 649,700 633,268
881,826 863,188
Accumulated depreciation (66,882) (49,776)
814,944 813,412
Properties under development,
including land 44,418 39,926
859,362 853,338
Cash and cash equivalents 1,242 2,276
Accounts receivable 4,501 4,984
Other assets 16,368 14,529
$881,473 $875,127
LIABILITIES AND SHAREHOLDERS' EQUITY
Loans payable $407,405 $403,845
Accounts payable and accrued liabilities 18,423 15,828
Dividends payable 10,011 9,844
Convertible subordinated debentures 5,260 12,244
441,099 441,761
Minority interest in consolidated partnerships 18,124 17,812
Commitments and contingencies ___ ___
Shareholders' equity
Preferred shares, $.01 par value;
10,000,000 shares authorized;
2,763,116 shares Senior Cumulative Convertible
Class A outstanding at September 30, 1999 and
December 31, 1998, respectively 28 28
Preferred shares, $.01 par value; 300,000 shares
authorized; Class C Junior Participating
Cumulative Preferred Stock; no shares outstanding ___ ___
Common shares, $.01 par value; 100,000,000 shares
authorized; 20,406,020 and 20,017,814 shares
outstanding at September 30, 1999 and
December 31, 1998, respectively 204 201
Outstanding restricted stock (1,296) (1,203)
Additional paid-in capital 419,345 412,093
Retained earnings 3,969 4,435
422,250 415,554
$881,473 $875,127
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
(UNAUDITED)
Nine Months Ended Sept 30
1999 1998
REVENUES
Rental income
Industrial properties $72,812 $54,993
Multifamily properties 19,299 27,916
92,111 82,909
EXPENSES
Rental property expenses
Industrial properties 16,187 11,979
Multifamily properties 6,941 10,290
23,128 22,269
Depreciation 19,067 14,751
Interest (including amortization of debenture
discount and financing costs of $633 and
$896 respectively) 20,518 18,965
General and administrative expenses 5,026 3,912
Minority partners' interest in earnings of
consolidated partnerships 967 733
68,706 60,630
INCOME BEFORE GAIN ON SALE OF REAL ESTATE 23,405 22,279
Gain on sale of real estate 5,852 6,427
NET INCOME 29,257 28,706
Less preferred dividend requirements 3,707 3,621
INCOME AVAILABLE TO COMMON SHAREHOLDERS $25,550 $25,085
EARNINGS PER SHARE
Basic $ 1.28 $ 1.26
Diluted $ 1.26 $ 1.24
DIVIDENDS DECLARED PER COMMON SHARE $ 1.29 $ 1.26
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
(UNAUDITED)
Three Months Ended Sept 30
1999 1998
REVENUES
Rental income
Industrial properties $24,986 $20,334
Multifamily properties 6,571 9,458
31,557 29,792
EXPENSES
Rental property expenses
Industrial properties 5,496 4,447
Multifamily properties 2,442 3,675
7,938 8,122
Depreciation 6,688 5,479
Interest (including amortization of debenture
discount and financing costs of $210 and
$217 respectively) 6,965 7,117
General and administrative expenses 1,907 1,563
Minority partners' interest in earnings of
consolidated partnerships 374 290
23,872 22,571
INCOME BEFORE GAIN ON SALE OF REAL ESTATE 7,685 7,221
Gain on sale of real estate 1,228 6,427
NET INCOME 8,913 13,648
Less preferred dividend requirements 1,236 1,207
INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 7,677 $12,441
EARNINGS PER SHARE
Basic $ 0.38 $ 0.62
Diluted $ 0.38 $ 0.58
DIVIDENDS DECLARED PER COMMON SHARE $ 0.43 $ 0.42
FUNDS FROM OPERATIONS (a)
SUPPLEMENTAL TABLE
(In thousands except share data)
For the Three Months For the Nine Months
Ended Ended
Sept 30, Sept 30, Sept 30, Sept 30,
1999 1998 1999 1998
Income Available to Common
Shareholders $ 7,677 $12,441 $25,550 $25,085
Gain on Sale of Real Estate (1,228) (6,427) (5,852) (6,427)
Depreciation 6,688 5,479 19,067 14,751
Funds from Operations $13,137 $11,493 $38,765 $33,409
Weighted Average Common Shares
Outstanding 20,165 19,946 20,036 19,936
Funds from Operations per
Common Share $ .65 $ .58 $ 1.93 $ 1.68
(a) Industry analysts generally consider funds from operations ("FFO") an
appropriate measure of performance of a real estate investment trust
("REIT"). Funds from operations represent amounts available to common
shareholders and is defined as net income (computed in accordance with
generally accepted accounting principles), excluding gains (or losses)
from debt restructuring and sales of property, plus depreciation and
amortization (excluding amortization of deferred financing costs and
depreciation of non real estate assets), and after adjustments for
unconsolidated partnerships and joint ventures and preferred dividend
requirements.
PRO FORMA FUNDS FROM
OPERATIONS (b)
Funds from Operations $13,137 $11,493 $38,765 $33,409
Preferred Dividend Requirements 1,236 1,207 3,707 3,621
Interest Expense on Debentures 166 259 671 783
Amortization of Debenture
Discount and Costs 21 33 83 100
Pro Forma Funds from Operations $14,560 $12,992 $43,226 $37,913
Weighted Average Common Shares
Outstanding 20,165 19,946 20,036 19,936
Additional Shares Assuming
Conversion
Other (c) 135 102 134 99
Preferred Stock 2,763 2,763 2,763 2,763
Debentures 465 662 590 662
Pro Forma Weighted Average
Outstanding Shares 23,528 23,473 23,523 23,460
Pro Forma Funds from Operations
per Common Share $ .62 $ .55 $ 1.84 $ 1.62
(b) Pro Forma Funds from Operations Calculations -- Assumes the conversion
of Convertible Subordinated Debentures and Preferred Stock and excludes
the conversion of limited partnership units (consistent with the Company's
previous calculation methodology).
(c) Represents non-vested restricted stock and options as converted.
SOURCE Pacific Gulf Properties Inc.
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http://www.prnewswire.com/comp/671475.html or fax,
800-758-5804, ext. 671475
CONTACT:
Donald G. Herrman, Chief Financial Officer of
Pacific Gulf Properties Inc., 949-223-5000; or General
Information, Victoria J. Baker, 703-370-8652, for Pacific Gulf
Properties Inc.
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