AMB Property Corporation Announces Results for First Full Quarter; Increases FFO Per Share 13%; Adds Over 6.8 Million Square Feet.SAN FRANCISCO--(BUSINESS WIRE)--April 28, 1998--AMB Property Corporation (NYSE NYSE See: New York Stock Exchange :AMB AMB Ambient AMB Ambassador AMB Amber AMB Ambulance AMB Associação Médica Brasileira (Brazil) AMB Ambulatory AMB Advanced Memory Buffer (FBDIMM control unit on DRAM) ) today reported results for the first quarter ended March 31, 1998. The following is a summary of first quarter results and investment activity: -0-
-- Generated funds from operations ("FFO") of $0.45 per diluted
share, an increase of 13% from pro forma first quarter 1997.
-- Continued to expand in targeted markets, investing a total of
$323.4 million in acquisitions and new developments.
-- Initiated three new development projects, with an aggregate total
expected investment of $88.3 million, including a 205,000 square
foot air cargo facility at the Dallas/Fort Worth Airport and two
community retail centers in South Florida totaling 508,300 square
feet.
-- Increased the total owned portfolio to 50.8 million square feet
in 28 markets, and total operated portfolio to 55.7 million
square feet.
-- Advanced the Company's strategy through three of its Strategic
Alliance Programs, adding four significant new alliance partners
in its Development, Management, and Institutional Alliance
Programs.
-- Expanded the firm's growth capacity by completing its first two
UPREIT transactions valued at $100.4 million, adding 3.2 million
square feet to the portfolio.
-- Following the end of the first quarter, the Company filed a
registration statement with the SEC for the issuance of $350
million of senior unsecured notes and received a senior unsecured
debt rating of Baa1 from Moody's Investors Service.
Increase in FFO and Net Income. Funds from operations for the
quarter totaled $40.3 million, or $0.45 per diluted share, on revenues
of $75.8 million, as compared to pro forma FFO for the AMB
predecessors for the same period in 1997 of $35.5 million or $0.40 per
diluted share, on revenues of $68.6 million. First quarter FFO per
diluted share increased 13% from 1997 to 1998 and total revenues
increased 10% for the period. Net income totaled $27.9 million for the
first quarter 1998, as compared to $23.3 million for the same period
in 1997. The weighted average number of shares and units outstanding
totaled 88.8 million for the first quarter.
Core Portfolio Growth. Same-store net operating income for the
first quarter of 1998 increased 8.3% as compared to the first quarter
of 1997. During the quarter, AMB successfully retained 78% of tenants
with expiring space and increased rents an average of 16% on space
that was either renewed or re-tenanted. Occupancy was 94.6% as of
March 31, 1998.
Acquisition Activity. Total acquisition volume for the quarter
was $323.4 million including investment in existing properties, new
development projects, and co-investments. During the quarter AMB
invested $235.1 million in existing properties, including $37 million
for AMB's share of co-investments with its Institutional Alliance
Partners. In addition, AMB initiated three new development projects
representing an investment of $88.3 million.
The Company added 56 industrial buildings and two community
shopping centers, aggregating over 6.8 million square feet, to its
portfolio. In addition, it entered two new markets; Portland, Oregon,
and Memphis, Tennessee. At March 31, AMB owned and operated a total of
452 buildings totaling 50.8 million square feet in 28 markets
nationwide. In addition, AMB operated 4.9 million square feet of
property on behalf of investment management clients. Total assets
operated for its owned portfolio and for investment management clients
at quarter end was 55.7 million square feet.
Hamid Moghadam, President and CEO, commented, "In our first full
quarter of operations as a public company we achieved tremendous
progress. We believe these results speak to the effectiveness of our
Strategic Alliance Programs in providing access to quality
investments, the success of our Management Alliance Program through
which our regional managers have been able to retain tenants and
increase rental income, and the success of our Development Alliance
Program which contributed significantly to the ten projects underway
at quarter end."
Moghadam stated further, "During the quarter we also positioned
the firm for continued growth by expanding our presence in key target
markets and establishing a significant presence in new markets. The
strategic alliances established with premier firms like Campanelli
Companies, The LEFMARK Group, and Trammell Crow Company, greatly
expanded our capabilities for growth through acquisition, development
and renovation in our target markets nationwide."
Increased Presence in Key Markets. AMB continued to execute its
research-based target market strategy by expanding its presence in key
markets nationwide and initiating significant investments in two newly
targeted markets. Major markets targeted by AMB research for
significant expansion during the quarter included the following:
-- Boston: AMB more than tripled its presence in this key market
through its $85.7 million investment in 22 industrial buildings
comprising 2.9 million square feet in three transactions. Since
entering the Boston market approximately six months ago, AMB has
grown its local portfolio to 35 industrial buildings aggregating
4.2 million square feet. The first quarter acquisitions included
a transaction structured through AMB's UPREIT Alliance Program,
allowing the seller, the Campanelli Companies, to exchange
properties for equity interests in AMB while continuing with
management and leasing responsibilities.
-- Orlando: AMB expanded its portfolio in this targeted market to
become a leading property owner in the broader industrial market
with a total of 17 buildings totaling over 1.5 million square
feet. During the quarter, the Company invested $30.3 million to
purchase 11 industrial warehouse buildings totaling 791,386
square feet, located in the Orlando Central Park ("OCP"). AMB is
now the largest owner in OCP, the dominant industrial park in the
Orlando market.
-- Northern New Jersey: AMB expanded in this targeted national
distribution market to six buildings aggregating 1.8 million
square feet. Through a co-investment transaction in its
Institutional Alliance Program, AMB invested $23.4 million during
the quarter for a 50% interest in three industrial buildings
comprising 821,712 square feet.
-- Further investments were made in existing AMB markets including
$26.0 million invested in a 290,204 square foot community
shopping center in Seattle, $15.0 million in a 312,106 square
foot industrial investment in Minneapolis, and $6.0 million in a
113,700 square foot industrial investment in Atlanta.
Expansion into New Target Markets. During the quarter AMB
research targeted two new industrial markets where it intends to
establish a significant presence:
-- Portland: AMB invested $29.3 million in its entry into this key
regional distribution market, in two industrial portfolios
comprising five industrial buildings totaling 676,104 square
feet. AMB, together with its Alliance Partner, Trammell Crow,
will manage and lease the properties. AMB research targeted
Portland for its strong economic growth, diversification and
Pacific Rim location.
-- Memphis: AMB invested $13.6 million in its entry to this key
distribution market, with the purchase of a 50% interest in seven
buildings comprising 858,322 square feet through a co-investment
with an Institutional Alliance Partner. The Company's research
group targeted Memphis as a growth market with a prime location
in a critical industrial distribution state.
Development Activity.
-- Miami: AMB joined with Development Alliance Partner, The LEFMARK
Group, on two community shopping center projects in South
Florida. The first is the planned 248,900 Springs Gate Retail
Center, a community shopping center to be built in Coral Springs
and anchored by Regal Cinema, one of the largest theater chains
in the country. The project is currently 60% pre-leased, and
completion is anticipated for May 1999. The second is the
renovation of the 259,400 square foot Northridge Shopping Center
located in North Broward County. The center will be renovated and
re-configured and is expected to be completed in September 2000.
The property is currently 90% leased to tenants including
Walgreens, Publix, and Target.
-- Dallas/Fort Worth: The Company commenced construction on an $18.3
million, 205,000 square foot air cargo facility at the
Dallas/Fort Worth Airport with its Strategic Alliance Partner,
Trammell Crow Company, with whom AMB will develop and manage the
project. This transaction represents the last parcel of land
available at the airport for an air cargo facility, and the
property is expected to be 100% pre-leased in the near future.
Strategic Alliances. During the quarter, AMB continued to
position itself for future growth through its Strategic Alliance
Program. The Company added four new alliance partners: the Campanelli
Companies, a prominent Boston developer, for the acquisition and
development of industrial properties in greater Boston; The LEFMARK
Group, for continued renovation and development of community shopping
centers in South Florida; Trammell Crow Company, for development,
management and leasing of industrial properties in five selected major
distribution markets and near major airports nationwide; and a
prominent national insurance company, for co-investment in retail and
industrial properties nationwide.
The Company's strategy for its UPREIT Alliance Program is to use
operating partnership units as currency for transactions that will
provide additional growth for the portfolio. AMB completed its first
two UPREIT transactions during the quarter totaling $100.4 million and
adding 3.2 million square feet to the portfolio.
Capital Market Activity. AMB reported that as of March 31, 1998,
total debt to total market capitalization was 30% and the ratio of
EBITDA to interest expense was 4.5 to 1. Subsequent to quarter end, on
April 2, 1998, AMB filed a registration statement with the Securities
and Exchange Commission for the issuance of $350 million of senior
unsecured notes. In April, the Company received a senior unsecured
debt rating of Baa1 from Moody's Investors Service.
According to Dave Carniglia, AMB's Chief Financial Officer,
"Having received a debt rating so soon after the Company's initial
public offering speaks to the strength of our balance sheet and
experience in the debt capital markets. We continue to have
substantial capacity to fund attractive investment opportunities in a
timely manner. In addition, the strength of our credit will further
reduce our cost of capital."
Management Additions. AMB continued to build the strength of its
management team with two significant additions during and immediately
following the quarter end. John R. Roberts joined the Retail Division
as Senior Vice President, Retail Development. He was formerly Director
of Real Estate for The Home Depot where his primary responsibility was
managing the significant growth of the Southeast Division, the
company's largest. David Fries will join AMB as a Managing Director
and General Counsel on May 1. He was formerly a real estate partner
with Orrick, Herrington & Sutcliffe and with Morrison & Foerster in
San Francisco. His practice has focused on the real estate,
securities, and financing issues presented by publicly traded REITs,
and his responsibilities will include general corporate issues and the
structuring of complex transactions.
AMB Property Corporation, one of the largest public REITs in the
country, is a national real estate operating company focusing on
industrial properties and community shopping centers. AMB owns and
operates 452 buildings totaling over 50 million square feet located in
28 markets nationwide, including: Boston, Chicago, San Francisco Bay
Area, Dallas/Fort Worth, Los Angeles, Minneapolis, Atlanta, Seattle,
Miami and Northern New Jersey. The Company operates a total of 55.7
million square feet, including 4.9 million square feet operated on
behalf of investment management clients. The Company completed an
initial public offering on November 21, 1997, and at quarter end had
89.5 million shares and units outstanding.
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 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 Registration Statement on
form S-11, as amended, filed with the Securities and Exchange
Commission and declared effective on November 20, 1997.
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AMB PROPERTY CORPORATION CONSOLIDATED BALANCE SHEETS consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. (dollars in thousands) As of March 31, 1998 December December: see month. 31, 1997 ---------- ---------- ASSETS Investments in real estate, net $2,740,048 $2,438,846 Cash and cash equivalents 28,584 39,968 Other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. 29,558 27,441 ---------- ---------- Total assets $2,798,190 $2,506,255 ========== ========== LIABILITIES & SHAREHOLDERS' EQUITY Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. Unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. credit facility $ 312,000 $ 150,000 Secured debt 610,111 535,652 Other liabilities other liabilities Small and relatively insignificant liabilities. For financial reporting purposes, firms often combine small liabilities into this single category rather than listing each liability separately. 81,611 87,421 ---------- ---------- Total liabilities 1,003,722 773,073 Minority interests 123,763 65,152 Shareholders' equity 1,670,705 1,668,030 ---------- ---------- Total liabilities and shareholders' equity $2,798,190 $2,506,255 ========== ========== AMB PROPERTY CORPORATION CONSOLIDATED con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: STATEMENTS OF OPERATIONS (dollars in thousands, except share data) For the Quarter Ended March 31, 1998 1997 (a) ---- ----- REVENUES $ 75,785 $ 68,622 OPERATING EXPENSES Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. Property operating 20,252 19,306 Interest, including amortization 11,841 11,339 Depreciation and amortization 11,786 11,766 General, administrative and other 2,718 1,884 ------------ ------------ Total expenses 46,597 44,295 ------------ ------------ Income from operations 29,188 24,327 Minority interests (1,282) (985) ------------ ------------ Net income $ 27,906 $ 23,342 ============ ============ Net income per share: Basic $0.33 $0.27 ============ ============ Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. $ 0.32 $0.27 ============ ============ Weighted average shares: Basic 85,874,513 85,874,513 ============ ============ Diluted 86,284,736 85,874,513 ============ ============ Note: (a) Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma to reflect the formation transactions, IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. , and 1997 acquisitions. AMB PROPERTY CORPORATION CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. (dollars in thousands, except share data) For the Quarter ended March 31, 1998 1997 (a) Income from operations $ 29,188 $ 24,327 Real estate related depreciation and amortization: Total depreciation and amortization 11,786 11,766 FF&E depreciation (104) (43) Minority interests in joint ventures (b) (575) (551) ---------- --------- Funds from operations $ 40,295 $ 35,499 ========== ========= FFO FFO See: Funds from operations per share: Basic $ 0.46 $ 0.40 Diluted $ 0.45 $ 0.40 Weighted average shares and units: Basic 88,428,969 88,416,676 Diluted (c) 88,839,192 88,416,676 Notes: (a) Pro forma to reflect the formation transactions, IPO, and 1997 acquisitions. (b) Represents FFO allocated to minority interests in consolidated joint ventures whose interests are not exchangeable into common stock. (c) Includes the dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of stock options amounting to 410,223 shares in 1998. CONTACT: AMB Property Corporation Jean Collier Hurley Hurley has become the English version of at least three distinct original Irish names: the Ó hUirthile, part of the Dál gCais tribal group, based in Clare and North Tipperary; the Ó Muirthile, based around Kilbritain in west Cork; and the OhIarlatha, from the district of , 415/394-9000 www.amb.com |
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