NORTHBROOK, Ill., Nov. 4 /PRNewswire/ -- Bradley Real Estate, Inc.
(NYSE: BTR) today reported third-quarter funds from operations (FFO) of $10.46
million compared with $8.28 million in the prior-year third quarter. FFO per
share increased 9.1 percent to $0.48 per share, from $0.44 per share a year
ago.
Net income for the quarter totaled $6.56 million, or $0.30 per share,
compared with $4.89 million, or $0.26 per share, for the comparable quarter
last year. Weighted average shares outstanding for the quarter increased to
21,676,427 from 18,667,241 in the year-ago period.
Nine-Month Results
For the nine months ended September 30, 1997, funds from operations
totaled $29.96 million compared with $20.73 million, a year earlier. FFO per
share increased 10.4 percent, to $1.38 per share compared with $1.25 per share
for the same period last year. Net income was $20.51 million, or $0.95 per
share, compared with $21.11 million, or $1.27 per share, in the year-ago
period. Results for 1996 include a gain of $9.38 million on the sale of the
company's interest in land under 501-529 Nicollet Avenue located in
Minneapolis, Minnesota in March 1996. The 1997 results include a $3.07
million gain on the sale of Hood Commons, located in Derry, New Hampshire, and
a $1.3 million loss on the sale of Meadows Town Mall, located in Rolling
Meadows, Illinois. Weighted average shares outstanding for the nine-month
period totaled 21,671,144 compared with 16,629,648 in the prior-year
period.
The company's total assets at September 30, 1997, increased 18.9 percent
to $577.9 million compared with $486.0 million a year earlier. Total debt
outstanding at September 30, 1997, was $250.5 million, of which $128.7 million
was fixed-rate mortgage debt at a weighted average interest rate for the
quarter of 7.58 percent, and $121.8 million was floating rate debt under the
company's unsecured line of credit facility, which had a weighted average
interest rate for the quarter of 7.47 percent.
Review of Operations
During the quarter, the company signed 28 new leases totaling 107,300
square feet, bringing the year-to-date total to 78 new leases totaling 372,300
square feet at an average base rent of $8.54 per square foot. In addition,
the company renewed 17 leases totaling 49,000 square feet, bringing the year-
to-date total to 47 lease renewals totaling 176,200 square feet at an
average base rent of $10.64 per square foot, representing an average increase
of 7 percent over the prior base rent. Portfolio occupancy increased to 93
percent at September 30, 1997, from 90 percent at June 30, 1997.
Commenting on the results, Thomas P. D'Arcy, president and chief executive
officer stated, "We are pleased with the company's third-quarter and year-to-
date results, which reflect the continued solid performance of our core
portfolio and the impact of the company's acquisition efforts. We continue to
make progress in implementing our strategic plan of furthering our franchise
in our Midwest markets, maintaining a strong and flexible capital structure
and aggressively growing our portfolio."
Review of Acquisition/Disposition Activity
During the third quarter, the company closed on approximately $69.3
million in new acquisitions. Subsequent to the quarter, the company purchased
Westchester Square, a 165,000-square-foot community shopping center, located
in Lenexa, Kansas. The center was purchased for approximately $13.1 million
and represents the company's third property in the Kansas City Metropolitan
Statistical Area (MSA). The center is anchored by a 63,000-square-foot Hy-Vee
grocery store. Over the past 10 months, the company has closed on a total of
$118 million in community shopping centers having an average first-year yield
of 10.6 percent. These acquisitions are located in key MSAs throughout
the Midwest and are consistent with the company's strategic focus on grocery-
anchored community shopping centers in this region. The company continues to
have an active pipeline of product and anticipates meeting or exceeding its
acquisition target of $150 million for 1997.
In keeping with its Midwest focus, Bradley has sold two of its New England
assets and has the remaining New England property under contract for sale,
which it anticipates closing by year-end. Also during the third quarter, the
company completed the sale of its Meadows Town Mall property, a center in
Chicago that was not in keeping with its core strategy.
Capital Structure Update
The company has made significant progress in improving its capital
structure during 1997. Subsequent to September 30, the company provided
notice to the Indenture Trustee of its intent to repay its $100 million REMIC
obligation on November 26, 1997. The company's objective is to fund the
prepayment using the proceeds from an unsecured, rated offering of public
debt. Should it not be practicable to complete such offering by the
prepayment date, the company has obtained a stand-by commitment from a
commercial bank sufficient to fund the prepayment. Following repayment of the
REMIC, the company would have $28.5 million of secured debt with approximately
93 percent of its property net operating income unencumbered. In addition to
prepaying its REMIC, the company is also renegotiating its bank line of credit
in order to lower the rate and extend the maturity.
With respect to the equity component of its capital structure, during
October, the company received a six-month forward equity commitment from
PaineWebber which provides the company the ability to de-lever its balance
sheet while match-funding pending and future acquisitions through the issuance
of common stock.
Commenting on the company's capital structure activities, Irving E. Lingo,
Jr., chief financial officer stated, "Our goal at the beginning of the year
was to significantly increase the flexibility of our capital structure. Our
forward equity commitment from PaineWebber, combined with the scheduled
prepayment of the REMIC represent major progress toward achieving this
objective."
Bradley Real Estate, Inc. is the nation's oldest real estate investment
trust (REIT) and a leading owner and operator of neighborhood and community
shopping centers located in the Midwest region of the United States. The
company owns 44 properties in 11 states aggregating 8.6 million square feet.
The company has paid 145 consecutive quarterly distributions to its share
owners, one of the longest records of distributions among publicly traded
REITs.
The preceding information contains forward-looking statements of the
company's plans, objectives and expectations, which are dependent upon a
number of factors including the strength of the Midwestern United States
retail climate and the continuing availability of retail center acquisitions.
Reference is made to the Company's 1996 form 10-K report, which includes a
discussion of certain other factors that could cause actual results to
differ materially from those in forward-looking statements.
BRADLEY REAL ESTATE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Three months ended Nine months ended
Sept. 30, Sept. 30,
1997 1996 1997 1996
Income:
Rental income $24,033 $21,442 $69,922 $54,643
Other income 451 441 1,093 996
Total 24,484 21,883 71,015 55,639
Expenses:
Operations, maintenance
and management 3,479 3,485 10,478 9,277
Real estate taxes 4,025 4,375 13,652 12,063
Mortgage and other interest 4,362 4,106 11,593 9,660
Administrative and general 1,536 944 3,795 2,387
Corporate office relocation -- 409 -- 409
Write-off of deferred
financing and
acquisition costs -- -- -- 344
Depreciation and
amortization 4,244 3,597 12,099 9,573
Total 17,646 16,916 51,617 43,713
Income before gain on sale
and provision for loss
on real estate investments 6,838 4,967 19,398 11,926
Gain on sale of property -- -- 3,073 9,379
Provision for loss on
real estate investment -- -- (1,300) --
Income before allocation to
minority interest 6,838 4,967 21,171 21,305
Income allocated to
minority interest (277) (82) (658) (193)
Net income $6,561 $4,885 $20,513 $21,112
Weighted average
shares outstanding 21,676,427 18,667,241 21,671,144 16,629,648
Net income per share $0.30 $0.26 $0.95 $1.27
Funds From Operations:
Net income $6,561 $4,885 $20,513 $21,112
Company's portion of:
Net gain on sale of property -- -- (2,991) (9,379)
Provision for loss on real
estate investment -- -- 1,265 --
Depreciation of real estate
assets & amortization of
tenant improvements 3,264 2,804 9,333 7,396
Amortization of deferred
leasing commissions 348 276 969 664
Other amortization including
deferred finance & non
real estate related costs 463 517 1,419 1,764
Amortization of deferred
finance & non real estate
related costs (177) (206) (552) (828)
Funds From Operations $10,459 $8,276 $29,956 $20,729
Per share data:
Funds From Operations $0.48 $0.44 $1.38 $1.25
BRADLEY REAL ESTATE, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
September 30, December 31,
1997 1996
(audited)
Assets
Real estate investments, at cost $575,599 $490,133
Accumulated depreciation and amortization (38,533) (30,670)
Net real estate investments 537,066 459,463
Real estate investments held for sale 10,005 10,285
Cash and cash equivalents 4,404 7,462
Rents and other receivables, net of allowances
for doubtful accounts of $2,437 and
$1,636, respectively 12,249 9,543
Deferred charges, net and other assets 14,146 15,531
Total assets $577,870 $502,284
Liabilities and Share Owners' Equity
Mortgage loans $128,711 $125,394
Line of credit 121,800 63,500
Accounts payable, accrued expenses and
other liabilities 19,898 19,505
Total liabilities 270,409 208,399
Minority interest 14,472 4,160
Share Owners' equity:
Shares of common stock, par value $.01
per share; authorized 80,000,000 shares;
issued and outstanding, 21,681,156 and
21,658,790, respectively 217 217
Additional paid-in capital 303,080 298,875
Distributions in excess of accumulated earnings (10,308) (9,367)
Total share owners' equity 292,989 289,725
Total liabilities and share owners' equity $577,870 $502,284
SOURCE Bradley Real Estate, Inc.
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CONTACT:
Thomas P. D'Arcy, President and CEO, of
Bradley Real Estate, 847-272-9800; or Jenifer Estabrook of The
Financial Relations Board, 312-640-6787
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