Attached files
file | filename |
---|---|
8-K - FORM 8-K - PS BUSINESS PARKS, INC./MD | c23938e8vk.htm |
Exhibit 99.1
News Release
PS Business Parks, Inc.
701 Western Avenue
Glendale, CA 91201-2349
www.psbusinessparks.com
701 Western Avenue
Glendale, CA 91201-2349
www.psbusinessparks.com
For Release: | Immediately | |||
Date: | October 31, 2011 | |||
Contact: | Edward A. Stokx | |||
(818) 244-8080, Ext. 1649 |
PS Business Parks, Inc. Reports Results for the Third Quarter Ended September 30, 2011
GLENDALE, California PS Business Parks, Inc. (NYSE:PSB) reported operating results for the third
quarter ended September 30, 2011.
Funds from operations (FFO) allocable to common and dilutive shares were $38.8 million, or $1.21
per common and dilutive share for the three months ended September 30, 2011, a 15.2% per share
increase from the three months ended September 30, 2010 of $33.7 million, or $1.05 per common and
dilutive share. FFO allocable to common and dilutive shares were $117.0 million, or $3.64 per
common and dilutive share for the nine months ended September 30, 2011, a 26.0% per share increase
from the nine months ended September 30, 2010 of $92.7 million, or $2.89 per common and dilutive
share. The increase in FFO per common and dilutive share for the three and nine months ended
September 30, 2011 over the same periods in 2010 was primarily as a result of an increase in net
operating income from Non-Same Park facilities, lease buyout income of $2.9 million received during
the third quarter of 2011 and lower distributions resulting from redemptions and repurchases of
preferred equity.
The following table summarizes the impact of the gain on repurchase of preferred equity below par,
non-cash distributions related to the redemptions of preferred equity, lease buyout income and
acquisition transaction costs on the Companys FFO per common and dilutive share for the three and
nine months ended September 30, 2011 and 2010:
For The Three Months | For The Nine Months | |||||||||||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
FFO per common and dilutive
share, before non-cash and
other adjustments |
$ | 1.12 | $ | 1.06 | 5.7 | % | $ | 3.33 | $ | 3.04 | 9.5 | % | ||||||||||||
Lease buyout income |
0.09 | | 100.0 | % | 0.09 | | 100.0 | % | ||||||||||||||||
Gain on the repurchase of
preferred equity |
| | | 0.23 | | 100.0 | % | |||||||||||||||||
Non-cash distributions
related to the redemption of
preferred equity |
| | | | (0.08 | ) | (100.0 | %) | ||||||||||||||||
Acquisition transaction costs |
| (0.01 | ) | (100.0 | %) | (0.01 | ) | (0.07 | ) | (85.7 | %) | |||||||||||||
FFO per common and dilutive
share, as reported |
$ | 1.21 | $ | 1.05 | 15.2 | % | $ | 3.64 | $ | 2.89 | 26.0 | % | ||||||||||||
Rental income increased $6.8 million, or 9.7%, from $69.8 million for the three months ended
September 30, 2010 to $76.6 million for the three months ended September 30, 2011 as a result of a
$5.2 million increase in rental income from Non-Same Park facilities and a $1.6 million increase
from the Same Park portfolio. The increase in rental income from the Same Park portfolio was due to
lease buyout income of $2.9 million associated with a 53,000 square foot lease in Maryland which
terminated as of August 31, 2011. Excluding the lease buyout income, rental income from the Same
Park portfolio decreased $1.3 million due to decreases in rental and occupancy rates. Net income
allocable to common shareholders increased $5.8 million, or 60.7%, from $9.6 million, or $0.39 per
diluted share, for the three months ended September 30, 2010 to $15.4 million, or $0.63 per diluted
share, for the three months ended September 30, 2011. The increase in net income allocable to
common shareholders was primarily due to a net increase in net operating income, lower
distributions resulting from redemptions and repurchases of preferred equity and a gain on the sale
of a real estate facility.
Rental income increased $17.3 million, or 8.4%, from $205.9 million for the nine months ended
September 30, 2010 to $223.1 million for the nine months ended September 30, 2011 as a result of a
$20.5 million increase in rental income from Non-Same Park facilities partially offset by a $3.3
million decrease in rental income from the Same Park portfolio. The decrease in rental income from
the Same Park portfolio was due to decreases in rental and occupancy rates partially offset by the
lease buyout income. Excluding the lease buyout income, rental income from the Same Park portfolio
decreased $6.1 million. Net income allocable to common shareholders increased $12.8 million, or
41.9%, from $30.6 million, or $1.24 per diluted share, for the nine months ended September 30, 2010
to $43.4 million, or $1.75 per diluted share, for the nine months ended September 30, 2011. The
increase in net income allocable to common shareholders was primarily as a result of a net increase
in net operating income and the reduction in distributions resulting from redemptions and
repurchases of preferred equity, partially offset by the change in gain on the sale of a real
estate facility combined with an increase in depreciation expense primarily related to 2010
property acquisitions.
Property Operations
In order to evaluate the performance of the Companys overall portfolio over comparable periods,
management analyzes the operating performance of a consistent group of properties owned and
operated throughout both periods (herein referred to as Same Park). Operating properties that the
Company acquired subsequent to January 1, 2010 are referred to as Non-Same Park. For the three
and nine months ended September 30, 2011 and 2010, the Same Park facilities constitute 19.2 million
rentable square feet, which includes all assets in continuing operations that the Company owned
from January 1, 2010 through September 30, 2011, representing 88.3% of the total square footage of
the Companys portfolio as of September 30, 2011.
The Companys property operations account for substantially all of the net operating income earned
by the Company. The following table presents the operating results of the Companys properties for
the three and nine months ended September 30, 2011 and 2010 in addition to other income and expense
items affecting income from continuing operations (unaudited, in thousands, except per square foot
amounts):
For The Three Months | For The Nine Months | |||||||||||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Rental income: |
||||||||||||||||||||||||
Same Park (19.2 million rentable
square feet) (1) |
$ | 66,024 | $ | 64,425 | 2.5 | % | $ | 193,497 | $ | 196,757 | (1.7 | %) | ||||||||||||
Non-Same Park (2.6 million rentable
square feet) (2) |
10,538 | 5,348 | 97.0 | % | 29,630 | 9,096 | 225.7 | % | ||||||||||||||||
Total rental income |
76,562 | 69,773 | 9.7 | % | 223,127 | 205,853 | 8.4 | % | ||||||||||||||||
Cost of operations: |
||||||||||||||||||||||||
Same Park |
21,031 | 20,821 | 1.0 | % | 63,517 | 63,764 | (0.4 | %) | ||||||||||||||||
Non-Same Park |
3,853 | 1,922 | 100.5 | % | 11,288 | 3,196 | 253.2 | % | ||||||||||||||||
Total cost of operations |
24,884 | 22,743 | 9.4 | % | 74,805 | 66,960 | 11.7 | % | ||||||||||||||||
Net operating income (3): |
||||||||||||||||||||||||
Same Park (4) |
44,993 | 43,604 | 3.2 | % | 129,980 | 132,993 | (2.3 | %) | ||||||||||||||||
Non-Same Park |
6,685 | 3,426 | 95.1 | % | 18,342 | 5,900 | 210.9 | % | ||||||||||||||||
Total net operating income |
51,678 | 47,030 | 9.9 | % | 148,322 | 138,893 | 6.8 | % | ||||||||||||||||
Other income and expenses: |
||||||||||||||||||||||||
Facility management fees |
170 | 165 | 3.0 | % | 517 | 501 | 3.2 | % | ||||||||||||||||
Interest and other income |
37 | 60 | (38.3 | %) | 174 | 260 | (33.1 | %) | ||||||||||||||||
Interest expense |
(1,261 | ) | (875 | ) | 44.1 | % | (3,621 | ) | (2,586 | ) | 40.0 | % | ||||||||||||
Depreciation and amortization |
(21,423 | ) | (21,093 | ) | 1.6 | % | (63,200 | ) | (57,731 | ) | 9.5 | % | ||||||||||||
General and administrative |
(1,313 | ) | (1,426 | ) | (7.9 | %) | (4,412 | ) | (4,671 | ) | (5.5 | %) | ||||||||||||
Acquisition transaction costs |
(52 | ) | (405 | ) | (87.2 | %) | (270 | ) | (2,309 | ) | (88.3 | %) | ||||||||||||
Income from continuing operations |
$ | 27,836 | $ | 23,456 | 18.7 | % | $ | 77,510 | $ | 72,357 | 7.1 | % | ||||||||||||
Same Park gross margin (5) |
68.1 | % | 67.7 | % | 0.6 | % | 67.2 | % | 67.6 | % | (0.6 | %) | ||||||||||||
Same Park weighted average occupancy |
90.8 | % | 91.4 | % | (0.7 | %) | 90.9 | % | 91.6 | % | (0.8 | %) | ||||||||||||
Same Park annualized realized rent
per square foot (6) |
$ | 15.11 | $ | 14.65 | 3.1 | % | $ | 14.75 | $ | 14.88 | (0.9 | %) |
2
(1) | See above for a definition of Same Park. Excluding $2.9 million of lease buyout
income noted above, rental income from the Same Park portfolio decreased 2.0% and 3.1% for the
three and nine months ended September 30, 2011, respectively, over the same periods in 2010. |
|
(2) | See above for a definition of Non-Same Park. |
|
(3) | Net operating income (NOI) is an important measurement in the commercial real
estate industry for determining the value of the real estate generating the NOI. The Companys
calculation of NOI may not be comparable to those of other companies and should not be used as
an alternative to measures of performance in accordance with generally accepted accounting
principles (GAAP). |
|
(4) | Excluding $2.9 million of lease buyout income noted above, NOI from the Same Park
portfolio decreased 3.4% and 4.4% for the three and nine months ended September 30, 2011,
respectively, over the same periods in 2010. |
|
(5) | Same Park gross margin is computed by dividing Same Park NOI by Same Park rental
income. |
|
(6) | Same Park annualized realized rent per square foot represents the annualized Same
Park rental income earned per occupied square foot. Excluding $2.9 million of lease buyout
income noted above, Same Park annualized realized rent per square foot would have been $14.45
and $14.53 for the three and nine months ended September 30, 2011, respectively. |
Property Acquisitions
On October 13, 2011, the Company acquired an 80,000 square foot multi-tenant office building in Las
Colinas, Texas, for $2.8 million. The building, located within the Companys existing 715,000
square foot park in Las Colinas, Texas, which was 98.5% leased at September 30, 2011, is currently
vacant.
On August 19, 2011, the Company acquired a 46,000 square foot multi-tenant flex building located
within its Miami International Commerce Center in Miami, Florida, for $3.5 million.
The Company incurred and expensed acquisition transaction costs of $52,000 and $270,000 for the
three and nine months ended September 30, 2011, respectively.
Common Stock Repurchases
During the quarter ended September 30, 2011, the Company repurchased 591,500 shares of its common
stock at an aggregate cost of $30.3 million or an average cost per share of $51.14. Under existing
board authorizations, the Company can repurchase an additional 1.6 million shares.
Sale of Real Estate Facility
In August, 2011, the Company completed the sale of Westchase Corporate Park, a 177,000 square foot
flex park consisting of 13 buildings in Houston, Texas, for a gross sales price of $9.8 million,
resulting in a net gain of $2.7 million.
Financial Condition
The following are key financial ratios with respect to the Companys leverage at and for the three
months ended September 30, 2011:
Ratio of FFO to fixed charges (1) |
40.1 | x | ||
Ratio of FFO to fixed charges and preferred distributions (1) |
4.3 | x | ||
Debt and preferred equity to total market capitalization (based on
common stock price of $49.54 at September 30, 2011) |
33.9 | % | ||
Available balance under the $250.0 million unsecured credit facility at
September 30, 2011 |
$104.0 million |
(1) | Fixed charges include interest expense of $1.3 million. |
3
Distributions Declared
The Board of Directors declared a quarterly dividend of $0.44 per common share on October 31, 2011.
Distributions were also declared on the various series of depositary shares, each representing
1/1,000 of a share of preferred stock listed below. Distributions are payable December 29, 2011 to
shareholders of record on December 14, 2011.
Series | Dividend Rate | Dividend Declared | ||||||
Series H |
7.000 | % | $ | 0.437500 | ||||
Series I |
6.875 | % | $ | 0.429688 | ||||
Series M |
7.200 | % | $ | 0.450000 | ||||
Series O |
7.375 | % | $ | 0.460938 | ||||
Series P |
6.700 | % | $ | 0.418750 | ||||
Series R |
6.875 | % | $ | 0.429688 |
Company Information
PS Business Parks, Inc., a member of the S&P SmallCap 600, is a self-advised and self-managed
equity real estate investment trust (REIT) that acquires, develops, owns and operates commercial
properties, primarily multi-tenant flex, office and industrial space. The Company defines flex
space as buildings that are configured with a combination of office and warehouse space and can be
designed to fit a number of uses (including office, assembly, showroom, laboratory, light
manufacturing and warehouse space). As of September 30, 2011, PSB wholly owned 21.8 million
rentable square feet with approximately 4,100 customers located in eight states, concentrated in
California (5.8 million sq. ft.), Virginia (4.2 million sq. ft.), Florida (3.7 million sq. ft.),
Texas (3.2 million sq. ft.), Maryland (2.4 million sq. ft.), Oregon (1.3 million sq. ft.), Arizona
(0.7 million sq. ft.) and Washington (0.5 million sq. ft.).
Forward-Looking Statements
When used within this press release, the words may, believes, anticipates, plans,
expects, seeks, estimates, intends and similar expressions are intended to identify
forward-looking statements. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors, which may cause the actual results and performance of the Company
to be materially different from those expressed or implied in the forward-looking statements. Such
factors include the impact of competition from new and existing commercial facilities which could
impact rents and occupancy levels at the Companys facilities; the Companys ability to evaluate,
finance and integrate acquired and developed properties into the Companys existing operations; the
Companys ability to effectively compete in the markets that it does business in; the impact of the
regulatory environment as well as national, state and local laws and regulations including, without
limitation, those governing REITs; the impact of general economic conditions upon rental rates and
occupancy levels at the Companys facilities; the availability of permanent capital at attractive
rates, the outlook and actions of Rating Agencies and risks detailed from time to time in the
Companys SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K and annual
reports on Form 10-K.
Additional information about PS Business Parks, Inc., including more financial analysis of the
third quarter operating results, is available on the Internet. The Companys website is
www.psbusinessparks.com.
A conference call is scheduled for Tuesday, November 1, 2011, at 10:00 a.m. (PDT) to discuss the
third quarter results. The toll free number is (888) 299-3246; the conference ID is 19343828. The
call will also be available via a live webcast on the Companys website. A replay of the conference
call will be available through November 8, 2011 at (855) 859-2056. A replay of the conference call
will also be available on the Companys website.
Additional financial data attached.
4
PS BUSINESS PARKS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
September 30, | December 31, | |||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ | 3,761 | $ | 5,066 | ||||
Real estate facilities, at cost: |
||||||||
Land |
570,521 | 562,678 | ||||||
Buildings and equipment |
1,818,525 | 1,773,682 | ||||||
2,389,046 | 2,336,360 | |||||||
Accumulated depreciation |
(828,146 | ) | (772,407 | ) | ||||
1,560,900 | 1,563,953 | |||||||
Properties held for disposition, net |
| 6,671 | ||||||
Land held for development |
6,829 | 6,829 | ||||||
1,567,729 | 1,577,453 | |||||||
Rent receivable |
3,301 | 3,127 | ||||||
Deferred rent receivable |
22,819 | 22,277 | ||||||
Other assets |
14,087 | 13,134 | ||||||
Total assets |
$ | 1,611,697 | $ | 1,621,057 | ||||
LIABILITIES AND EQUITY |
||||||||
Accrued and other liabilities |
$ | 55,630 | $ | 53,421 | ||||
Credit facility |
146,000 | 93,000 | ||||||
Mortgage notes payable |
47,850 | 51,511 | ||||||
Total liabilities |
249,480 | 197,932 | ||||||
Commitments and contingencies |
||||||||
Equity: |
||||||||
PS Business Parks, Inc.s shareholders equity: |
||||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized,
23,942 shares issued and outstanding at
September 30, 2011 and December 31, 2010 |
598,546 | 598,546 | ||||||
Common stock, $0.01 par value, 100,000,000 shares authorized,
24,128,184 and 24,671,177 shares issued and outstanding at
September 30, 2011 and December 31, 2010, respectively |
240 | 246 | ||||||
Paid-in capital |
533,749 | 557,882 | ||||||
Cumulative net income |
859,455 | 784,616 | ||||||
Cumulative distributions |
(811,541 | ) | (747,762 | ) | ||||
Total PS Business Parks, Inc.s shareholders equity |
1,180,449 | 1,193,528 | ||||||
Noncontrolling interests: |
||||||||
Preferred units |
5,583 | 53,418 | ||||||
Common units |
176,185 | 176,179 | ||||||
Total noncontrolling interests |
181,768 | 229,597 | ||||||
Total equity |
1,362,217 | 1,423,125 | ||||||
Total liabilities and equity |
$ | 1,611,697 | $ | 1,621,057 | ||||
5
PS BUSINESS PARKS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except per share amounts)
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except per share amounts)
For The Three Months | For The Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues: |
||||||||||||||||
Rental income |
$ | 76,562 | $ | 69,773 | $ | 223,127 | $ | 205,853 | ||||||||
Facility management fees |
170 | 165 | 517 | 501 | ||||||||||||
Total operating revenues |
76,732 | 69,938 | 223,644 | 206,354 | ||||||||||||
Expenses: |
||||||||||||||||
Cost of operations |
24,884 | 22,743 | 74,805 | 66,960 | ||||||||||||
Depreciation and amortization |
21,423 | 21,093 | 63,200 | 57,731 | ||||||||||||
General and administrative |
1,365 | 1,831 | 4,683 | 6,980 | ||||||||||||
Total operating expenses |
47,672 | 45,667 | 142,688 | 131,671 | ||||||||||||
Other income and expenses: |
||||||||||||||||
Interest and other income |
37 | 60 | 174 | 260 | ||||||||||||
Interest expense |
(1,261 | ) | (875 | ) | (3,621 | ) | (2,586 | ) | ||||||||
Total other income and expenses |
(1,224 | ) | (815 | ) | (3,447 | ) | (2,326 | ) | ||||||||
Income from continuing operations |
27,836 | 23,456 | 77,509 | 72,357 | ||||||||||||
Discontinued operations: |
||||||||||||||||
Income from discontinued operations |
73 | 103 | 380 | 380 | ||||||||||||
Gain on sale of real estate facility |
2,717 | | 2,717 | 5,153 | ||||||||||||
Total discontinued operations |
2,790 | 103 | 3,097 | 5,533 | ||||||||||||
Net income |
$ | 30,626 | $ | 23,559 | $ | 80,606 | $ | 77,890 | ||||||||
Net income allocation: |
||||||||||||||||
Net income allocable to noncontrolling interests: |
||||||||||||||||
Noncontrolling interests common units |
$ | 4,597 | $ | 2,852 | $ | 12,858 | $ | 9,112 | ||||||||
Noncontrolling interests preferred units |
99 | 984 | (7,091 | ) | 4,118 | |||||||||||
Total net income allocable to noncontrolling interests |
4,696 | 3,836 | 5,767 | 13,230 | ||||||||||||
Net income allocable to PS Business Parks, Inc.: |
||||||||||||||||
Common shareholders |
15,444 | 9,608 | 43,382 | 30,583 | ||||||||||||
Preferred shareholders |
10,450 | 10,080 | 31,349 | 33,958 | ||||||||||||
Restricted stock unit holders |
36 | 35 | 108 | 119 | ||||||||||||
Total net income allocable to PS Business Parks, Inc. |
25,930 | 19,723 | 74,839 | 64,660 | ||||||||||||
$ | 30,626 | $ | 23,559 | $ | 80,606 | $ | 77,890 | |||||||||
Net income per common share basic: |
||||||||||||||||
Continuing operations |
$ | 0.54 | $ | 0.39 | $ | 1.66 | $ | 1.07 | ||||||||
Discontinued operations |
$ | 0.09 | $ | | $ | 0.10 | $ | 0.17 | ||||||||
Net income |
$ | 0.63 | $ | 0.39 | $ | 1.76 | $ | 1.25 | ||||||||
Net income per common share diluted: |
||||||||||||||||
Continuing operations |
$ | 0.54 | $ | 0.39 | $ | 1.66 | $ | 1.07 | ||||||||
Discontinued operations |
$ | 0.09 | $ | | $ | 0.10 | $ | 0.17 | ||||||||
Net income |
$ | 0.63 | $ | 0.39 | $ | 1.75 | $ | 1.24 | ||||||||
Weighted average common shares outstanding: |
||||||||||||||||
Basic |
24,543 | 24,610 | 24,647 | 24,517 | ||||||||||||
Diluted |
24,612 | 24,740 | 24,738 | 24,663 | ||||||||||||
6
PS BUSINESS PARKS, INC.
Computation of Diluted Funds from Operations (FFO) and Funds Available for Distribution (FAD)
(Unaudited, in thousands, except per share amounts)
Computation of Diluted Funds from Operations (FFO) and Funds Available for Distribution (FAD)
(Unaudited, in thousands, except per share amounts)
For The Three Months | For The Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Computation of Diluted Funds From Operations (FFO)
(1): |
||||||||||||||||
Net income allocable to common shareholders |
$ | 15,444 | $ | 9,608 | $ | 43,382 | $ | 30,583 | ||||||||
Adjustments: |
||||||||||||||||
Gain on sale of real estate facility |
(2,717 | ) | | (2,717 | ) | (5,153 | ) | |||||||||
Depreciation and amortization |
21,423 | 21,200 | 63,340 | 58,056 | ||||||||||||
Net income allocable to noncontrolling
interests common units |
4,597 | 2,852 | 12,858 | 9,112 | ||||||||||||
Net income allocable to restricted stock unit holders |
36 | 35 | 108 | 119 | ||||||||||||
FFO allocable to common and dilutive shares |
$ | 38,783 | $ | 33,695 | $ | 116,971 | $ | 92,717 | ||||||||
Weighted average common shares outstanding |
24,543 | 24,610 | 24,647 | 24,517 | ||||||||||||
Weighted average common OP units outstanding |
7,305 | 7,305 | 7,305 | 7,305 | ||||||||||||
Weighted average restricted stock units outstanding |
59 | 91 | 66 | 99 | ||||||||||||
Weighted average common share equivalents outstanding |
69 | 130 | 91 | 146 | ||||||||||||
Total common and dilutive shares |
31,976 | 32,136 | 32,109 | 32,067 | ||||||||||||
FFO per common and dilutive share |
$ | 1.21 | $ | 1.05 | $ | 3.64 | $ | 2.89 | ||||||||
Computation of Funds Available for Distribution (FAD)
(2): |
||||||||||||||||
FFO allocable to common and dilutive shares |
$ | 38,783 | $ | 33,695 | $ | 116,971 | $ | 92,717 | ||||||||
Adjustments: |
||||||||||||||||
Recurring capital improvements |
(3,029 | ) | (2,599 | ) | (5,343 | ) | (5,749 | ) | ||||||||
Tenant improvements |
(7,245 | ) | (4,167 | ) | (18,393 | ) | (10,374 | ) | ||||||||
Lease commissions |
(1,843 | ) | (1,141 | ) | (4,728 | ) | (3,204 | ) | ||||||||
Straight-line rent |
(276 | ) | (73 | ) | (659 | ) | (718 | ) | ||||||||
Stock compensation expense |
381 | 517 | 1,202 | 1,652 | ||||||||||||
In-place lease adjustment |
222 | 235 | 643 | 333 | ||||||||||||
Tenant improvement reimbursements, net of lease incentives |
(183 | ) | (126 | ) | (615 | ) | (391 | ) | ||||||||
Non-cash distributions related to the redemption of
preferred equity |
| | | 2,436 | ||||||||||||
Gain on repurchase of preferred equity, net of issuance costs |
| | (7,389 | ) | | |||||||||||
FAD |
$ | 26,810 | $ | 26,341 | $ | 81,689 | $ | 76,702 | ||||||||
Distributions to common and dilutive shares |
$ | 13,926 | $ | 14,081 | $ | 42,151 | $ | 42,159 | ||||||||
Distribution payout ratio |
51.9 | % | 53.5 | % | 51.6 | % | 55.0 | % | ||||||||
(1) | Funds From Operations (FFO) is computed in accordance with the White Paper on
FFO approved by the Board of Governors of the National Association of Real Estate Investment
Trusts (NAREIT). The White Paper defines FFO as net income, computed in accordance with
GAAP, before depreciation, amortization, gains or losses on asset dispositions and
nonrecurring items. FFO should be analyzed in conjunction with net income. However, FFO
should not be viewed as a substitute for net income as a measure of operating performance or
liquidity as it does not reflect depreciation and amortization costs or the level of capital
expenditure and leasing costs necessary to maintain the operating performance of the Companys
properties, which are significant economic costs and could materially impact the Companys
results from operations. Other REITs may use different methods for calculating FFO and,
accordingly, the Companys FFO may not be comparable to other real estate companies. |
|
(2) | Funds Available for Distribution (FAD) is computed by adjusting consolidated FFO
for recurring capital improvements, which the Company defines as those costs incurred to
maintain the assets value, tenant improvements, lease commissions, straight-line rent, stock
compensation expense, impairment charges, amortization of lease incentives and tenant
improvement reimbursements, in-place lease adjustment and the effect of redemption/repurchase
of preferred equity. Like FFO, the Company considers FAD to be a useful measure for investors
to evaluate the operations and cash flows of a REIT. FAD does not represent net income or
cash flow from operations as defined by GAAP. |
7