BINGHAM FARMS, Mich., Nov. 17 /PRNewswire-FirstCall/ -- Malan Realty
Investors, Inc. (NYSE: MAL), a self-administered real estate investment trust
(REIT), announced that net assets in liquidation for the third quarter ended
September 30, 2003 increased by $366,000 to $29.0 million from the second
quarter ended June 30, 2003.
As a result of the approval of a plan of complete liquidation by its
shareholders, the company adopted the liquidation basis of accounting for all
periods beginning after September 30, 2002. On September 30, 2002, in
accordance with the liquidation basis of accounting, assets were adjusted to
estimated net realizable value and liabilities were adjusted to estimated
settlement amounts, including estimated costs associated with carrying out the
liquidation. Accordingly, Malan no longer reports net income or funds from
operations.
For the third quarter of 2003, operating income, including income from
properties and interest expense on corporate and property specific debt, was
approximately $2.5 million. The estimated fair value on the remaining
properties held for sale increased $1.4 million, based on executed contracts
for sale. The realized loss from the sale of assets was approximately
$720,000, and the reserve for estimated liquidation costs increased
approximately $276,000, primarily due to increases in actual legal fees over
what was previously projected. A distribution of $2.6 million to shareholders
was made September 30, 2003.
Malan closed on the sales of nine properties during the quarter and four
additional properties subsequent to September 30, 2003, at contract prices
totaling $71.4 million. The company currently has seven operating properties
and one vacant land parcel under contract for $29.3 million and 17 properties
under letters of intent for $51.8 million. Certain letters of intent and
options to purchase announced previously were terminated or expired without
proceeding to contract.
Malan continues to reduce debt in 2003. During the third quarter, the
company retired its $27 million Secured Convertible Notes, paid off its loans
with JDI Loans and Cohen Financial and extended its loan with Salomon Brothers
Realty Corp for twelve months. The company also entered into a two-year,
$20.5 million loan with UBS Warburg Real Estate Investments, collateralized by
Bricktown Square in Chicago. Proceeds of the loan were utilized to retire the
Convertible Notes. In October 2003, Malan redeemed $10.0 million of its 9.5%
Convertible Subordinated Debentures due July 15, 2004. The aggregate
principal balance of the Debentures is currently $32.6 million. Subsequent to
the end of the quarter, the company announced it is calling $13.0 million in
Convertible Subordinated Debentures in December 2003.
Malan Realty Investors, Inc. owns and manages properties that are leased
primarily to national and regional retail companies. In August 2002, the
company's shareholders approved a plan of complete liquidation. The company
owns a portfolio of 30 properties located in eight states that contains an
aggregate of approximately 2.5 million square feet of gross leasable area.
Safe Harbor Statement: This news release may contain forward-looking
statements. Although the company believes that the statements and projections
are based on reasonable assumptions, actual results may differ from those
projected. Key factors that could cause actual results to differ materially
include uncertainties regarding the length of time required to sell the
company's properties and execute its plan of liquidation and expenses incurred
during the liquidation period, changing market conditions affecting the sales
price of the company's properties, the disproportionate effect of changes in
proceeds from property sales on liquidating distributions due to the company's
capital structure, the cost of litigation in which the company is involved,
bankruptcies and other financial difficulties of tenants, the cost of
addressing environmental concerns, unforeseen contingent liabilities, and
other risks associated with the commercial real estate business, as detailed
in the company's filings from time to time with the Securities and Exchange
Commission. Many of these factors are beyond the control of the company.
Malan does not undertake to update these forward-looking statements.
News releases for Malan Realty Investors are available on the company's
Web site at http://www.malanreit.com or in the Company News section on the
PR Newswire Web site at http://www.prnewswire.com .
SOURCE Malan Realty Investors, Inc.
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Related links:
http://www.malanreit.com
CONTACT:
John Roberson, Media Relations of Malan
Realty Investors, +1-248-644-7110, or Fred Nachman of Marjan
Communications Inc., +1-312-867-1771
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