Bay Apartment Communities reports nine percent growth in FFO.SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--Nov. 1, 1995--Bay Apartment Communities (NYSE NYSE See: New York Stock Exchange :BYA) announced today that 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 ) for the third quarter of 1995 was $5,509,000, or $.48 per share, a nine percent increase over FFO of $5,050,000, or $.44 per share, for the same period a year ago. On an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis, FFO for the quarter would have been $22,036,000, or $1.91 per share. Based on the new NAREIT NAREIT National Association of Real Estate Investment Trusts definition, FFO would have been $5,287,000, or $.46 per share. Based on the revised NAREIT definition, FFO would have been $21,148,000, or $1.83 per share, on an annualized basis. Funds Available for Distribution (FAD FAD - ["FAD, A Simple and Powerful Database Language", F. Bancilon et al, Proc 13th Intl Conf on VLDB, Brighton, England, Sep 1987]. ) for the quarter was $5,258,000, or $.46 per share. On an annualized basis, FAD per share was $1.82. Net income for the quarter ended Sept. 30, 1995, was $2,121,000, or $.18 per share, on revenues of $13,624,000. For the first nine months of fiscal 1995, FFO was $15,997,000, or $1.39 per share, on revenues of $40,733,000. Based on the new NAREIT definition, FFO would have been $15,352,000, or $1.33 per share. Net income was $8,460,000, or $.73 per share. The company's portfolio-wide physical occupancy at Sept. 30, 1995 was 97.3 percent, compared with 95.9 percent at June June: see month. 30, 1995. The Sept. 30, 1995 occupancy rate Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) excludes Sea Ridge Apartments (formerly known as Kimberly Kimberly may refer to:
Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. expenditures (excluding planned rehabilitation rehabilitation: see physical therapy. costs) were $29 per apartment home for the third quarter or $116 on an annualized basis. Third quarter capitalized expenditures represented less than three percent of same period FFO. "Our more than nine percent growth in FFO on an annualized basis versus the same quarter a year ago reflects the impact of rental activity from our two newest communities, Carriage Square and Canyon Creek and Bay's ability to continue to generate internal growth in our existing portfolio," said Gilbert M. Meyer Mey·er , Annie Florance Nathan 1867-1951. American writer and a founder of Barnard College at Columbia University (1889). Her plays include The Dominant Sex (1911) and Black Souls (1932). , chairman and chief executive officer. Meyer said that Carriage Square, a 324-apartment home community in San Jose, and Canyon Creek, a 348-apartment home community in Campbell Campbell, city, United States Campbell, city (1990 pop. 36,048), Santa Clara co., W Calif., in the fertile Santa Clara valley; founded 1885, inc. 1952. , Calif., are now completed and 98 percent occupied. The company expects Carriage Square to earn a return on cost of approximately 9.6 percent in 1996 or roughly 10.5 percent after consideration of the sponsor's land contribution to the company at Bay's initial public offering. Canyon Creek is expected to earn a return on cost of roughly 9.9 percent during the same period, despite being fully financed with tax-exempt bonds Tax-exempt bond A bond usually issued by municipal, county, or state governments whose interest payments are not subject to federal and, in some cases, state and local income tax. tax-exempt bond See municipal bond. . In addition, Meyer said the company's $5.8 million repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. program at Sea Ridge, a 220-apartment home community in Pacifica, Calif., is on schedule and the first series of refurbished apartments are now being leased and occupied at market rents approximately 30 percent higher than those prior to the reconstruction program. The company expects to complete the repositioning program at Sea Ridge, located some 15-20 minutes south of San Francisco's financial district, in the spring of 1996. On Oct. 19, 1995, the company announced the beginning of construction of Rosewalk at Waterford Park, a 300-apartment home community in San Jose, Calif. The company expects that development and construction of the community will cost $30.4 million. It is expected to be available for occupancy in June, 1996, and to have reached stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. occupancy in 1997. Bay expects the community will generate a cash return on cost of approximately 10 percent in the first calendar year following stabilized occupancy. "This new community, which offers high quality apartment living and resident amenities, is located near the intersection intersection /in·ter·sec·tion/ (-sek´shun) a site at which one structure crosses another. intersection a site at which one structure crosses another. of two major highways and less than 10 minutes south of downtown San Jose Downtown San Jose is the central business district of San Jose, California, United States. The area is generally located north of Interstate 280 and east of Guadalupe Parkway, which roughly parallels Guadalupe River. ," Meyer said. "In addition, it is adjacent to a new major neighborhood shopping center shopping center, a concentration of retail, service, and entertainment enterprises designed to serve the surrounding region. The modern shopping center differs from its antecedents—bazaars and marketplaces—in that the shops are usually amalgamated into currently under construction and within walking distance of a Santa Clara Santa Clara, city, Cuba Santa Clara (sän`tä klä`rä), city (1994 est. pop. 217,000), capital of Villa Clara prov., central Cuba. County Light Rail Station," he noted. The company also announced two acquisitions in October. On Oct. 19, 1995, Bay acquired City Heights Apartments, a 185-apartment home community 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 , near Union Square. Bay paid $15.7 million for the community, which was built in 1990 at a cost of at least $21.5 million. Bay expects the community, which is currently earning an unleveraged return on cost of 7.6 percent, will be earning a substantially improved return on cost within a year following the acquisition even after consideration of acquisition and reconstruction costs. As part of the transaction, Bay is also acquiring the right to issue approximately $20.8 million in tax-exempt bond financing at some future date. In addition, Bay plans to spend $1.1 million to refurbish re·fur·bish tr.v. re·fur·bished, re·fur·bish·ing, re·fur·bish·es To make clean, bright, or fresh again; renovate. re·fur the community, including a new leasing office, fitness center, lobby and common areas. A week later, Bay acquired The Promenade promenade Public place where people walk (or, in the past, rode) at leisure for pleasure, exercise, or display. Promenades are pedestrian avenues pleasingly landscaped or commanding a view, often located along waterfronts and in parks. Vehicular traffic may or may not be restricted. Apartments, a 220-apartment home community in Sunnyvale, Calif., for approximately $18.2 million. The community, which was built in 1986, is located near two major streets in the heart of Silicon Valley and is currently 95 percent occupied. Bay expects to invest approximately $900,000 to refurbish the leasing and fitness facilities and building exteriors. Promenade is currently earning a cash return on cost of approximately nine percent. Bay expects to substantially improve the return on cost by 1997 even after consideration of acquisition and reconstruction costs. "These two communities, both of which were purchased at levels significantly below replacement cost, represent our ability to enhance the value of strategically located apartment communities through our construction, financing, marketing and management skills, enhancing their value to our shareholders," Meyer noted. Meyer also noted that an agreement to sell approximately $49.2 million of newly issued convertible Series Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. to an institutional investor Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. had closed on Oct. 2, 1995. The approximately 2.3 million shares of preferred stock were issued at a price of $21.33 per share, which is the average closing price of Bay's common stock during the 10 trading days In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. preceding Sept. 18, 1995, the day the agreement was finalized See finalization. . "The proceeds generated from this transaction were used to strengthen our balance sheet, as well as fund acquisition and redevelopment activities," Meyer said. Bay Apartment Communities is a fully integrated, multi-family real estate investment trust focused on the acquisition, development and reconstruction and management of high-quality apartment communities in Northern California Northern California, sometimes referred to as NorCal, is the northern portion of the U.S. state of California. The region contains the San Francisco Bay Area, the state capital, Sacramento; as well as the substantial natural beauty of the redwood forests, the northern . The company owns 24 apartment communities containing more than 6,150 apartment homes 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 and Northern California. -0-
BAY APARTMENT COMMUNITIES, INC.
FINANCIAL AND OPERATIONAL DATA
(UNAUDITED)
Quarter ended
9/30 6/30 3/31 12/31 9/30
1995 1995 1995 1994 1994
Dollars in thousands,
expect per share and
per unit
Revenues:
Rental revenues $13,284 $12,544 $11,434 $10,786 $10,263
Other revenues 340 303 416 241 253
Gain on sale 2,412
----------------------------------------------
Total revenues 13,624 15,259 11,850 11,027 10,516
Expenses:
Property operating 3,375 2,858 2,728 2,598 2,376
Property taxes 1,065 1,073 963 950 856
General and
administrative 711 612 494 497 553
Interest and financing 2,958 2,991 2,482 1,860 1,676
Depreciation and
amortization 3,388 3,301 3,260 2,708 2,754
----------------------------------------------
Total Expenses 11,497 10,835 9,927 8,613 8,215
Minority interest 6 5 3 0 5 Net income $2,121 $ 4,419 $ 1,920 $ 2,414 $ 2,296 Net income per share $ .18 $ .38 $ .17 $ .21 $ .20 Funds from operations(1) $5,509 $ 5,308 $ 5,180 $ 5,122 $ 5,050
Funds from operations
per share $ .48 $ .46 $ .45 $ .44 $ .44
Funds from operations per share annualized $ 1.91 $ 1.84 $ 1.79 $ 1.77 $ 1.75 Funds available for distribution(2) $5,258 $ 5,083 $ 4,977 $ 4,928 $ 4,945 Funds available for distribution per share $ .46 $ .44 $ .43 $ .43 $ .43 Funds available for distribution per share annualized $ 1.82 $ 1.76 $ 1.72 $ 1.71 $ 1.71 Funds from operations - revised definition(3) $5,287 $ 5,095 $ 4,970 $ 4,968 $ 4,912 revised definition per share $ .46 $ .44 $ .43 $ .43 $ .43
revised definition per
share annualized $ 1.83 $ 1.77 $ 1.72 $ 1.72 $ 1.70
Dividends declared per share $ .39 $ .39 $ .38 $ .38 $ .38 Dividends as a percentage of funds from operations 81.7% 84.8% 84.7% 85.6% 86.9% Dividends as a percentage of funds from operations; revised definition 85.2% 88.4% 88.3% 88.3% 89.3% Dividends as a percentage of funds available for distribution 85.6% 88.6% 88.1% 89.0% 88.7% Capital expenditure per unit(4) $ 29 $ 32 $ 29 $ 57 $ 34 Capital expenditure per unit annualized $ 116 $ 127 $ 116 $ 227 $ 135 Occupancy at end 97.3% 95.9% 95.0% 96.3% 94.8% of period Average rent at end of period $ 854 $ 843 $ 827 $ 823 $ 821 Average rent at end of period - same store(5) $ 814 $ 802 $ 799 $ 795 $ 785 Number of units 5,689 5,461 5,196 4,844 4,542 Gross real estate assets $433,723 $424,681 $420,332 $398,333 $370,168 Total gross assets $448,443 $437,807 $432,318 $412,566 $389,739
Debt:
Fixed(6) $120,176 $120,270 $96,186 $96,211 $87,380
Variable 42,130 35,730 63,893 42,501 38,811
----------------------------------------------
Subtotal 162,306 156,000 160,079 138,712 126,191
Construction debt 51,283 50,633 41,932 43,019 30,976
----------------------------------------------
Total debt $213,589 $206,633 $202,011 $181,731 $157,167
Weighted average interest rate(7) 6.60% 6.66% 6.82% 6.56% 6.11% Total debt to total capitalization at market 46.40% 47.86% 48.78% 43.89% 39.05% Total debt to book capitalization(8) 47.60% 47.20% 46.73% 44.05% 40.42% Debt service coverage 2.77x 2.71x 3.01x 3.64x 3.96x Fixed debt as a percentage of total debt 56.3% 58.2% 47.6% 52.9% 55.6% Fixed debt as a percentage of total debt, excluding construction debt 74.0% 77.1% 60.1% 69.4% 69.2% Share price, end of period $21.375 $ 19.500 $ 18.375 $ 20.125 $ 21.250 Shares outstanding 11,544,287 11,544,287 11,544,287 11,544,287 11,544,287 -0-
Notes:
(1) Funds from operations ("FFO") represents net income plus
depreciation and amortization.
(2) Funds available for distribution represents the definition
of funds from operations, prior to the revision discussed
below, less capital expenditures and loan principal payments.
(3) Funds from operations - revised definition represents the
definition of FFO adopted in 1995 by the NAREIT Board of
Governors and excludes recurring amortization and depreciation
on non-real estate assets.
(4) Capitalized expenditures per unit exclude planned major
rehabilitation costs. These costs are considered part of the
acquisition cost.
(5) Average rent on a same-store basis is calculated for all
properties owned by the company for all five quarters presented.
(6) Fixed debt includes floating rate debt swapped to a long-term
fixed rate.
(7) Weighted average interest rate excludes construction debt
interest, the bulk of which is capitalized.
(8) Book capitalization excludes accumulated depreciation.
BAY APARTMENT COMMUNITIES, INC.
DEBT ANALYSIS
SEPTEMBER 30, 1995
Balance Matures Rate Interest rate
Details protection
Tax-exempt variable
rate under interest
rate swap $32,796 November, 6.48%(a) Interest rate
2022-June, is fixed until
2025 June, 2010
Tax-exempt variable
rate under interest
rate swap 87,380 November, 5.88%(b) Interest rate
2007-March, is fixed until
2017 March, 2004
--------
Subtotal 120,176
Line of credit 42,130 December, Libor +
1996 2.25%(c)
Construction debt:
Construction line 14,500 March, Libor +
1996 2.25%(c)
Construction loan 22,930 April, Libor +
1996 2.25%(d)
Construction loan 13,853 April, Prime +
1996 .50%(e)
-------
Subtotal 51,283(f)
Total $213,589
-0- (a) The 6.48% represents an all-in financing cost including amortization of deferred financing costs. All other interest rates are presented net of deferred financing amortization. (b) The 5.88% rate excludes the amortization of financing costs paid by the sponsor prior to the 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. ; if such costs were included, the all-inclusive effective rate would be 6.30%. (c) The rate excludes the amortization of deferred financing costs of approximately $600,000 per annum Per annum Yearly. . (d) The interest on this construction loan was converted to Libor + 1.75% in October, 1995. (e) This construction loan was paid off on Oct. 2, 1995. (f) The construction loans exclude $56.4 million of new bond debt issued on June 23, 1995. These bonds are currently fully cash collateralized in a FNMA FNMA abbr. Federal National Mortgage Association Noun 1. FNMA - a federally chartered corporation that purchases mortgages Fannie Mae, Federal National Mortgage Association controlled escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. account. This cash will be released by FNMA to the company to retire construction debt when construction and lease-up at the Canyon Creek and Sea Ridge apartment communities are completed. When the cash is released to retire the construction debt, the $56.4 million in new bond debt will be recognized by the company. CONTACT: Bay Apartment Communities, San Jose Gilbert M. Meyer, 408/983-1500 |
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