On Target for Record FFO for Full Year 1998
Estimates 1999 FFO
Banyan Strategic Realty Trust Highlights*
-- Third Quarter Funds From Operations (FFO) of $2.7 million, or $0.19 per
share, up more than 74 percent from same period last year
-- Revenues of $10.6 million, an increase of 34 percent from year earlier
period
-- EBITDA of $5.6 million, up 46 percent from a year ago
-- $18 million in new acquisitions during quarter, increases portfolio
nine percent
-- Average occupancy of portfolio 94 percent at September 30, 1998
-- Quarterly cash distribution of $0.12 per share declared
-- On target for 1998 FFO of $0.75 to $0.76 per share
-- Estimates 1999 FFO of $0.82 to $0.83 per share
*per share data presented on diluted basis
CHICAGO, Nov. 10 /PRNewswire/ -- Banyan Strategic Realty Trust
(Nasdaq: BSRTS) a real estate investment trust, today announced third quarter
1998 funds from operations (FFO) of $2.7 million, or $0.19 per share, a more
than 74 percent increase in total FFO from the previous year's third quarter.
Income before net gain on disposition of investments in real estate was
$1.4 million, compared to $0.7 million in the previous year's third quarter.
Earnings per share before net gains were $0.10 per share in the recent third
quarter, compared with $0.06 per share in the third quarter last year. Banyan
also reported significantly improved earnings and EBITDA for both the third
quarter and first nine months period, reflecting its portfolio growth since
1996 and the ongoing strong portfolio performance of its office and
flex/industrial properties in the mid-west and southeastern areas of the U.S.
Weighted average occupancy rates at the Trust's 32 properties as of September
30, 1998 was 94 percent.
During the third quarter, Banyan acquired one office property and one
flex/industrial property, bringing the total amount invested in new
acquisitions in 1998 to approximately $60 million, or 834,600 net rentable
square feet, representing a 29 percent increase in square footage from
year-end 1997.
Consolidated Financial Results
For the third quarter, total revenue grew 34 percent to $10.6 million,
compared with $7.9 million during the 1997 third quarter. FFO of
$2.7 million, or $0.19 per share, increased more than 74 percent from FFO of
$1.5 million, or $0.145 per share a year ago.
For the first nine months of 1998, the Trust reported a 40 percent
increase in revenues to $28.8 million, compared with revenues of $20.5 million
during the same period the previous year. Total FFO doubled in the first nine
months period to $7.6 million, or $0.55 per share, from FFO of $3.8 million,
or $0.37 per share during the same period a year ago. Net income for the
first nine months was $4.0 million, or $0.29 per share compared to net income
of $2.6 million or $0.24 per share for the first same period of 1997.
"We are very pleased with the Trust's continued growth in FFO, driven by
our acquisitions since 1996 and the overall improved financial and operating
results from a year ago, and consistently high occupancy rates throughout our
portfolio," said Leonard G. Levine, President of Banyan. "Our same store net
operating income grew 4.1 percent during the last nine months compared with
the same period last year. Rental increases for lease expirations in the
first nine months of this year averaged 6.5 percent, indicative of the strong
economies in which we operate."
"Our acquisitions in the quarter bring our total acquisitions for the year
to approximately $60 million based on purchase price. With our current
portfolio, we are confident in delivering on our targets for the year of FFO
between $0.75 and $0.76 share. Meanwhile, as opportunities present
themselves, we will continue to seek value-added, accretive acquisitions in
the niche markets Banyan has carved out in the office and flex/industrial
sectors located in economically strong mid-size cities and metropolitan
suburban areas," he added.
Two New Acquisitions Announced in Third Quarter
During the third quarter, Banyan further increased its presence in two
submarkets of Atlanta with the acquisition of one office and one
flex/industrial property, for a total consideration of $18.2 million,
including closing costs and other related expenses. The properties, known as
Technology Park and John's Creek and Industrial Park consist of five buildings
located in the Northeast suburbs of Atlanta in an area known as Peachtree
Corners -- a favored location for high technology companies.
Portfolio Performance -- Third Quarter Rental Income Up 32 Percent
Rental income from the Trust's portfolio increased 32 percent to
$9.1 million, compared with $6.9 million during the same period a year ago,
reflecting the addition of eleven properties acquired since the end of last
year's third quarter. Total property operating expenses as a percent of total
revenue decreased to 35 percent in the third quarter of 1998 from 38 percent
for the same period the previous year. Total net operating income increased
41.8 percent to $6.9 million compared to the same period last year.
Balance Sheet
At September 30, 1998, total assets at net book value were approximately
$222 million. The debt to total market capitalization ratio was 63.6 percent,
based on a total market capitalization of $236.1 million based on a September
30, 1998 share price of $6.437. EBITDA (earnings before interest, tax,
depreciation and amortization) was $5.6 million, up 46.2 percent from the
previous year's third quarter. EBITDA coverage ratio through September 30,
1998 was 2.12. The Trust had $150.2 million of total debt outstanding as of
September 30, 1998.
Quarterly Cash Distribution and Funds Available for Distribution (FAD)
On October 6, Banyan declared a quarterly cash distribution of $0.12 per
share for the third quarter ended September 30, 1998. The distribution is
payable November 20, 1998 to shareholders of record as of October 20, 1998.
In the first quarter of 1998, the distribution was increased from the previous
quarterly distributions of $0.10 per share, based on the Trust's increased
levels of FFO.
Funds Available for Distribution (FAD) totaled $2.2 million for the three
months ended September 30, 1998, or $0.16 per share. FAD is calculated by
adjusting FFO for straight-line rents, lease commissions paid and normalized
reserves for capital improvements. The capital reserve is $0.075 per square
foot for flex/industrial properties, $0.10 per square foot for office
properties, $0.15 per square foot for retail property and $200 per residential
unit.
Outlook
Mr. Levine added, "With the strength we have experienced in terms of
portfolio growth, we believe we are well on target to meet our FFO goal for
this year. As we move ahead, we are initially targeting 1999 FFO of between
$0.82 and $0.83 per share. We feel comfortable in meeting these expectations
as we continue to focus on internal growth via favorable leasing transactions
and we remain optimistic regarding value-added acquisitions. Additionally,
during the third quarter we completed our conversion to an UPREIT format,
giving us added flexibility in structuring capital alternatives in the
future."
Banyan Strategic Realty Trust is an equity Real Estate Investment Trust
(REIT) that owns and acquires primarily office and flex/industrial properties.
The properties are located in certain major metropolitan areas of Atlanta, Ga.
and Chicago, Ill. and smaller markets such as Huntsville, Ala.; Louisville,
Ky.; Memphis, Tenn.; and Orlando, Fla. located in the Midwestern and
Southeastern United States. The Trust's current portfolio consists of
32 properties totaling 3.7 million rentable square feet and 864 apartment
units. As of this date, the Trust has 13,349,528 shares of beneficial
interest outstanding.
Some of the statements contained in the foregoing are forward-looking
statements. Words such as "believes," "intends," "anticipates," "expects,"
and similar expressions are intended to identify forward-looking statements
which are subject to a number of risks and uncertainties, including, among
other things, general real estate investment risks, lack of operating history
associated with recent acquisitions, ability to raise capital either equity or
debt, potential inability to repay or finance indebtedness at maturity,
increases in interest rates, competition for property acquisitions, adverse
consequences of failure to qualify as a REIT, and possible environmental
liabilities. Actual results could differ materially from those projected in
these forward-looking statements. Reference is made to the annual report on
Form 10-K filed by the Trust, specifically under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Factors Affecting the Trust's Business Plan" for a more complete discussion of
these risk factors. The Trust undertakes no obligation to publicly release
the result of any revisions to these forward-looking statements that may be
made to reflect any future events or circumstances.
See Banyan's Website at http://www.banyanreit.com.
BANYAN STRATEGIC REALTY TRUST
SELECTED FINANCIAL DATA
(Dollars in Thousands, except per share data)
Three Months Ended Year Ended
9/30/98 9/30/97 12/31/97
Total revenue $10,552 $7,875 $28,785
Recovery of losses on loans,
notes and interest receivable -- -- 161
Operating expenses (9,044) (7,051) (25,664)
Operating income 1,508 824 3,282
Minority interest in
consolidated partnerships (151) (152) (590)
Income (loss) of real
estate ventures -- (14) 37
Net gain on disposition of
investments in real estate - 1,072 881
Extraordinary item, net of
minority interest - - (64)
Net income $1,357 $1,730 $3,546
Earnings per share of
Beneficial Interest --
Basic and Diluted: Income
before Net Gains and
Extraordinary Item $0.10 $0.06 $0.24
Net Income $0.10 $0.16 $0.32
Funds from Operations
Net income $1,357 $1,730 $3,546
Plus:
Depreciation expense 1,271 897 3,277
Depreciation included in
operations of real estate ventures -- -- 15
Lease commission amortization 122 49 208
Less:
Minority interest share
of depreciation expense (75) (68) (254)
Minority interest share of lease
commission amortization (7) (5) (21)
Recovery of losses on loans, notes
and interest receivable -- -- (161)
Net gain on disposition
of investments in real estate -- (1,072) (881)
Extraordinary item,
net of minority interest -- -- 64
Funds from operations $2,668 $1,531 $5,793
BANYAN STRATEGIC REALTY TRUST
PORTFOLIO SUMMARY
Location Square Footage Occupancy %
FLEX/INDUSTRIAL
Milwaukee Industrial
Portfolio Milwaukee, Wisconsin 235,800 86%
Elmhurst Metro Court Elmhurst, Illinois 140,800 66%
Willowbrook Court Willowbrook, Illinois 84,300 100%
Quantum Business Centre Louisville, Kentucky 182,300 81%
6901 Riverport Drive Louisville, Kentucky 322,100 100%
Lexington Business Center Lexington, Kentucky 308,800 95%
Newtown Business Center Lexington, Kentucky 87,100 100%
Avalon Ridge Business Park Norcross, Georgia 57,400 100%
Metric Plaza Winter Park, Florida 32,000 100%
Park Center Orlando, Florida 47,400 85%
University Corporate Center Winter Park, Florida 127,800 98%
Tower Lane Business park Bensenville, Illinois 95,900 90%
Johns Creek Office and
Industrial Park Duluth and Suwanee, Georgia 119,300 100%
Sub-Total 1,841,000 92%
Scheduled Lease Expirations
10/1-
12/31
1998 1999 2000 After
2000
FLEX/INDUSTRIAL
Milwaukee Industrial Portfolio 13% 11% 15% 47%
Elmhurst Metro Court 12% 34% 3% 17%
Willowbrook Court 17% 40% 11% 32%
Quantum Business Centre 12% 15% 22% 32%
6901 Riverport Drive 0% 0% 100% 0%
Lexington Business Center 55% 3% 15% 22%
Newtown Business Center 40% 33% 4% 23%
Avalon Ridge Business Park 0% 0% 0% 100%
Metric Plaza 0% 0% 0% 100%
Park Center 14% 6% 7% 58%
University Corporate Center 0% 28% 46% 24%
Tower Lane Business park 0% 34% 26% 30%
Johns Creek Office and Industrial Park 0% 0% 0% 100%
Sub-Total 16% 13% 30% 33%
Location Square Footage Occupancy %
OFFICE
Colonial Penn Insurance Tampa, Florida 79,200 100%
Florida Power & Light Sarasota, Florida 81,100 100%
Woodcrest Office Park Tallahassee, Florida 264,900 81%
Midwest Office Center Oakbrook Terrace, Illinois 77,000 100%
Phoenix Business Park Atlanta, Georgia 110,600 94%
Butterfield Office Plaza Oak Brook, Illinois 200,800 95%
Southlake Corporate Center Morrow, Georgia 56,200 95%
University Square
Business Center Huntsville, Alabama 184,700 92%
Technology Center Huntsville, Alabama 48,500 100%
Airways Plaza Office Center Memphis, Tennessee 87,800 97%
Peachtree Pointe Office ParkNorcross, Georgia 71,700 92%
Avalon Center Office Park Norcross, Georgia 53,300 96%
Sand Lake Tech Center Orlando, Florida 84,100 97%
Technology Park Norcross, Georgia 145,700 100%
Sub-Total 1,545,600 94%
Scheduled Lease Expirations
10/1-
12/31
1998 1999 2000 After
2000
OFFICE
Colonial Penn Insurance 0% 0% 100% 0%
Florida Power & Light 0% 0% 0% 100%
Woodcrest Office Park 3% 16% 21% 41%
Midwest Office Center 12% 20% 32% 36%
Phoenix Business Park 0% 11% 26% 57%
Butterfield Office Plaza 4% 16% 27% 48%
Southlake Corporate Center 2% 4% 13% 76%
University Square Business Center 16% 25% 12% 39%
Technology Center 0% 0% 100% 0%
Airways Plaza Office Center 3% 93% 0% 1%
Peachtree Pointe Office Park 5% 33% 18% 36%
Avalon Center Office Park 0% 0% 0% 96%
Sand Lake Tech Center 23% 0% 0% 74%
Technology Park 1% 26% 9% 64%
Sub-Total 5% 19% 22% 48%
Location Square Footage Occupancy %
RETAIL
Northlake Tower Festival
Shopping Center Atlanta, Georgia 321,600 99%
Total 3,708,200 93%
Scheduled Lease Expirations
10/1-
12/31
1998 1999 2000 After
2000
RETAIL
Northlake Tower Festival
Shopping Center 0% 5% 18% 76%
Total 10% 15% 26% 42%
RESIDENTIAL
Residential Units Occupancy %
Country Creek Oklahoma City, Oklahoma 320 95%
Willowpark Lawton, Oklahoma 160 94%
Winchester Run Oklahoma City, Oklahoma 192 96%
Woodrun Village Oklahoma City, Oklahoma 192 97%
Total 864 95%
PORTFOLIO TOTAL 94%
SOURCE Banyan Strategic Realty Trust
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Related links:
http://www.banyanreit.com
CONTACT:
Karen Dickelman, Director-Investor Relations
of Banyan Strategic Realty Trust, 312-683-3671; or Tony Ebersole,
General, 312-640-6728, Laura Kuhlmann, Media, 312-640-6727, or
Georganne Palffy, Analysts, 312-640-6768, all of The Financial
Relations Board for Banyan Strategic Realty Trust
NOTE TO EDITORS: For further information regarding Banyan free of
charge via fax, dial 800-PRO-INFO and enter "BSRTS."
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