BRE Properties Reports Third Quarter Results; Per Share Funds From Operations Increase 14.6%; Results Driven by Property Performance in California and the Pacific Northwest.SAN FRANCISCO--(BUSINESS WIRE)--Oct. 8, 1997--BRE Properties, Inc. (NYSE NYSE See: New York Stock Exchange :BRE (Business Rules Engine) Software that automates policies and procedures within an organization, whether legal, internal or operational. The use of a rules engine (BRE) requires placing the company rules in an external repository that can be easily reviewed rather than ) today reported 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. (FFO FFO See: Funds from operations ) of $17.3 million, or $.47 per share, for the quarter ended September 30, 1997, a per share increase of 14.6% over FFO of $13.4 million, or $.41, per share for the same period last year. On a year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. basis, the company reported FFO of $48.2 million, or $1.39 per share, for the nine months ended September 30, 1997, a per share increase of 13.9% over FFO of $36.4 million for the same period in the prior year. "BRE's FFO performance in the third quarter reflects the continued strength of the apartment demand fundamentals at work in our Western markets," said Frank C. McDowell Mc·Dow·ell , Ephraim 1771-1830. American surgeon who performed (1809) the first recorded ovariotomy. , BRE's president and chief executive officer. "The momentum in our markets, as well as the company's continuous improvements in operating capabilities Noun 1. operating capability - the capability of a technological system to perform as intended performance capability capability, capableness - the quality of being capable -- physically or intellectually or legally; "he worked to the limits of his , produced a 10% increase in same-store net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics ) for the quarter ended September 30, 1997. This growth was primarily generated by a 7% increase in scheduled gross rents and improvement in occupancy to 97% from 96% a year ago." The company defines "same store" for the third quarter ended September 30, 1997 as apartment properties owned by the company at both July 1, 1996 and July 1, 1997. For the third quarter, the number of same-store apartment units totaled 9,644 of the 13,543 currently owned by BRE. "In a quarter marked by substantial strategic advancements in acquisitions, dispositions and balance sheet management, we retained our sharp focus on internal growth through solid property operations," said McDowell. "Notably, we achieved significant growth from our California and Pacific Northwest properties -- assets which currently generate about 78% of the company's NOI. Employment and multifamily household formations in these markets continue to deliver growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. that exceed national averages. As such, we experienced strong rental rate growth and occupancies resulting in third quarter same-store revenue growth of 7% throughout our California markets and 8% in our Pacific Northwest communities." "Our third quarter acquisitions totaled $57.8 million, reflecting BRE's investment focus on what we consider to be the supply constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. coastal apartment markets of California and the Pacific Northwest," said Jay W. Pauly, BRE's chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . During the quarter, BRE acquired the 280-unit Park at Dashpoint in metropolitan Seattle for $15.3 million and the 308-unit Lakeshore Landing apartments in the San Francisco Bay Area “Bay Area” redirects here. For other uses, see Bay Area (disambiguation). The San Francisco Bay Area, colloquially known as the Bay Area or The Bay for $42.5 million. "On an individual transaction basis, our acquisition activity for 1997 now totals approximately $142.7 million and is on a pace for roughly $200 million in total closings by year end," Pauly said. "We have placed a significant amount of our 1997 acquisition focus on strategic portfolios," said McDowell. On September 30, 1997, BRE Properties announced a $600 million transaction in which it will acquire the assets and operations of Trammell Crow F. Trammell Crow (born June 11, 1914, in Dallas, Texas) is an American property developer who created several famous projects, including Dallas Market Center, Peachtree Center (Atlanta, Georgia), and San Francisco's Embarcadero Center. Residential in the Western United States Noun 1. western United States - the region of the United States lying to the west of the Mississippi River West Santa Fe Trail - a trail that extends from Missouri to New Mexico; an important route for settlers moving west in the 19th century (TCR-West). The business combination is expected to close in November, 1997 and will expand BRE's multifamily portfolio to more than 21,000 apartment homes in 12 major markets of the West. It also expands BRE's operations to include development, construction and third-party management capabilities. "Approximately 25% of the apartment units to be acquired in the TCR-West portfolio will be added to BRE's California markets," said Pauly. "Another 35% of the existing and pipeline development units added in the TCR-West transaction will be in BRE's Mountain State markets of Phoenix, Tucson and Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. . In addition to increasing our operating scale, we believe apartment demand fundamentals in these markets are improving. Collectively, these markets -- which represent 22% of BRE's current NOI -- produced same store revenue gains of 5% in the third quarter, compared with 4% last quarter." During the third quarter, BRE achieved other advancements to its business plan, including the substantial completion of its non-core asset disposition program and the repricing Repricing To change the price of an asset. In derivatives, it sometimes refers to the exchange of options of with different strike prices. repricing of its lines of credit. Third quarter non-apartment property sales totaled approximately $24.1 million. Over the last 24 months, BRE has redeployed 27 non-strategic assets with total sales proceeds of approximately $230 million for reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. in apartment properties. "We have a market value of approximately $20 million in non-apartment assets remaining in the portfolio," said Pauly. "We would expect to reposition those assets into apartment investments over the next several quarters." As part of its ongoing balance sheet management activities, BRE renewed and extended its $150 million lines of credit on more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms during the quarter. The lines now carry an interest rate of .80% over LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). with expiration dates Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. in the year 2000. In other operating and financial highlights, BRE's total revenue for the third quarter of 1997 was $33.9 million versus $26.3 million in the third quarter last year. Rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time from the company's multifamily portfolio represented 90% of total revenue in the third quarter of 1997 compared with 81% for the same period in the prior year. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the apartment portfolio increased to 65.2% of multifamily revenues in the third quarter from 61.5% in the prior year's quarter. At the corporate level, the ratio of general and administrative expenses as a percent of total revenues declined to 3.2% in the year-to-date ended September 30, 1997 versus 4.4% for the comparable period a year ago. BRE Properties, Inc., headquartered in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden , is a self-administered, self-managed and fully integrated equity real estate investment trust focusing on the acquisition and management of multifamily properties in the Western United States. Today, the company owns 56 apartment communities totaling 13,543 units in nine major markets in California, Arizona, Washington, Oregon and Nevada. Additional information about BRE can be found on the company's web site (http://breproperties.com). Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Except for the historical information contained herein, this news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. regarding Company and property performance, and is based on the Company's current expectations and judgment. Actual results could vary materially depending on risks and uncertainties inherent to general and local real estate conditions, competitive factors specific to markets in which BRE operates, legislative or other regulatory decisions, future interest rate levels or capital markets conditions. The Company assumes no liability to update this information. For more details, please refer to the Company's SEC filings, including its most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and quarterly reports on Form 10-Q Form 10-Q See 10-Q. . -0-
BRE Properties, Inc.
Financial Summary
September 30, 1997
Balance Sheets (unaudited)
(Dollar amounts in thousands)
Sept. 30, Dec. 31,
1997 1996
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Assets
---------------------------------------------------------------------
Investments in rental properties:
Multifamily $853,762 $710,240
Commercial and retail 12,169 103,528
Less: accumulated depreciation and
amortization (44,627) (49,690)
--------------------
821,304 764,078
Investments in limited partnerships 2,687 2,621
--------------------
Real estate portfolio 823,991 766,699
--------------------
Mortgage loans, net 14,294 9,716
Cash and short-term investments 875 184
Other 26,923 7,115
--------------------
Total assets $866,083 $783,714
====================
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Liabilities and Shareholders' equity
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Liabilities
Mortgage loans $112,710 $114,985
Unsecured senior notes 123,000 73,000
Unsecured lines of credit 34,000 124,000
Accounts payable and accrued expenses 10,671 7,615
--------------------
Total liabilities 280,381 319,600
Shareholders' equity
Common stock 370 329
Additional paid-in capital 585,332 463,785
--------------------
Total shareholders' equity 585,702 464,114
--------------------
Total liabilities and shareholders' equity $866,083 $783,714
====================
BRE Properties, Inc.
Financial Summary
September 30, 1997
Statements of Operations (unaudited)
(In thousands, except per share data)
Quarter Quarter Nine months Nine months
ended ended ended ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1997 1996 1997 1996
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REVENUE
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Rental income:
Multifamily $30,577 $21,308 $86,174 $53,240
Commercial and retail 1,115 2,969 5,370 11,796
Other income 2,186 1,992(a) 6,267 6,907
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Total revenue 33,878 26,269 97,811 71,943
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EXPENSES
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Real estate expenses:
Multifamily 11,016 8,316 30,723 20,202
Commercial and retail 60 (815)(a) 392 973
Depreciation and amortization 4,339 3,654 12,635 9,379
Interest expense 4,605 4,307 15,344 11,219
General and administrative 872 1,040 3,114 3,167
----------------- ---------------
Total expenses 20,892 16,502 62,208 44,940
Net income before gains on
sales of real estate
investments 12,986 9,767 35,603 27,003
Gains on sales of real estate
investments 2,557 49,352 28,160 49,578
----------------- ---------------
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NET INCOME $15,543 $59,119 $63,763 $76,581
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Net income per outstanding
share: Net income before
gains on sales of real estate
investments $0.35 $0.30 $1.02 $0.91
Gains on sales of real
estate investments $0.07 $1.50 $0.81 $1.67
----------------- ---------------
Net income per share : $0.42 $1.80 $1.83 $2.58
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Funds from operations $17,325 $13,421 48,238 $36,382
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Per share funds from
operations $0.47 $0.41 $1.39 $1.22
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Weighted average shares
outstanding 37,020 32,810 34,790 29,740
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(a) Includes the effect of a reclassification for reimbursed
expenses in retail assets, included as an offset to revenues received.
CONTACT: BRE Properties, Inc. Lauren L. Barr, 415/445-6523 |
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