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 TACOMA, Wash., Nov. 1 /PRNewswire/ -- Holly Residential Properties, Inc. (NYSE: HLY) today reported third quarter 1993 funds from operations (FFO) of $3,215,000, or 44 cents per share, compared with pro forma FFO of $3,051,000, or 42 cents per share, for the same period last year. The Company also reported net income of $1,387,000, or 19 cents per share, on total revenues of $8,278,000 for the third quarter 1993 compared to pro forma net income of $1,226,000, or 17 cents per share, on pro forma total revenues of $7,997,000 for the same period last year.
 For the nine months of 1993, the Company reported pro forma FFO of $9,942,000, or $1.37 per share, compared with pro forma FFO of $8,762,000, or $1.21 per share, for the same period last year. The Company also reported pro forma net income of $4,196,000, or 58 cents per share, on pro forma total revenues of $24,690,0000 for the nine months of 1993 compared to pro forma net income of $3,160,000, or 44 cents per share, on pro forma total revenues of $23,114,000 for the same period last year.
 This is the first full quarter of operations since the Company's initial public offering in June 1993. The reported amounts for the periods prior to June 18, 1993 represent the pro forma combined results of operations for the predecessor company, Holly Corporation, Magnuson Management, Inc., a property management company, and the properties acquired by the Company in connection with the closing of the initial public offering. The pro forma results are presented as if the initial public offering and the acquisitions had occurred on the first day of the respective periods presented.
 The Company also reported that it will file a registration statement in conjunction with the previously announced direct placement of 750,000 shares of common stock to Cohen & Steers Capital Management, Inc. The registration statement contains a "resale prospectus" to be used by Cohen & Steers if, in the future, Cohen & Steers decides to sell any of the shares it is acquiring in the direct placement. Cohen & Steers has advised the Company that it intends to hold these shares it is acquiring in the direct placement. Cohen & Steers has advised the company that it intends to hold these shares for long-term investment and does not intend to immediately sell them i the market. The Company will use the proceeds form the Cohen & Steers transaction in conjunction with its lines of credit to acquire multifamily residential properties in the Northwest.
 The Company's total property revenues for the third quarter were $8,105,000. Average economic occupancy was approximately 92 percent for the
third quarter. The Company believes that occupancy has been temporarily impacted by increases in rents and the transition from third party ownership and management.
 Property management fee income for the third quarter was $173,000. Several management contracts were terminated or not renewed by certain third party properties. The Company doe not expect improvement in the near term.
 Property operating expenses for the third quarter were $2,270,000, and includes approximately $100,000 of costs which the company believes will decline over time as the Company brings all of its properties up to the same standards.
 General and administrative expenses for the third quarter were $570,000, which included approximately $50,000 of costs associated with becoming a public company. The Company believes these costs are non- recurring or will decline over time. Additionally, the Company has added personnel in anticipation of growth by acquisition and development.
 The Company believes that the results reported today are not indicative of continuing operations due to several non-recurring factors which have affected FFO. The Company plans to continue the regular quarterly dividend of 45 cents per share.
 Financial Highlights
 (in thousands except shares and per share data)
 Periods ended Three Months Nine Months
 Sept. 30 1993 1992 1993 1992
 pro forma pro forma pro forma
 Operating Results
 Total revenues $8,278 $7,997 $24,690 $23,114
 Net income 1,387 1,226 4,196 3,160
 Funds from operations 3,215 3,051 9,942 8,762
 Distributions declared 3,254 -- 3,688(a) --
 Per Share
 Net income $0.19 $0.17 $0.58 $0.44
 Funds from operations $0.44 $0.42 $1.37 $1.21
 Distributions declared $0.45 -- $0.51(a) --
 As of
 Sept. 30, 1993
 Balance Sheet Data
 Real estate owned, at cost $218,385
 Cash and cash equivalents 7,812
 Mortgage and notes payable 117,756
 Shareholders' equity 114,025
 Shares outstanding 7,231,224
 (a) For the twelve day period June 18, 1993 to June 30, 1993 and for the full third quarter.
 Construction is now completed on the 200 Roy Street Apartments in Seattle, WA, a property which the Company owns a 50 percent interest. The project is 50 percent leased. The Company also has commenced construction on its 149 unit Creekwood project.
 "The regional rental market remains good," said Daniel M. Kelley, President and CEO. "Even though the regional population base is nearly three million, there will be only 2,500 or so new units built in 1993 and there are no indications that new apartment construction will increase in 1994. We believe there are still opportunities for acquisitions and development."
 "Our first quarter has been dominated by the transition to direct ownership and direct management of our properties," Kelley added. "The Company has implemented a number of new programs which should result in increased portfolio net operating income in the quarters ahead. We're laying a solid foundation for future growth in 1994."
 Holly Residential Properties is a fully integrated, self- administered and self-managed equity real estate investment trust (REIT) that directly owns or holds interest in 32 multifamily residential properties totaling 4,897 units in the Seattle-Tacoma area.
 -0- 11/01/93
 /CONTACT: James R. Fuller, chief financial officer, or Daniel M. Kelley, president, both of Holly Residential Properties, 206-627-5800/
 (HLY) CO: Holly Residential Properties, Inc. ST: Washington IN: FIN SU: ERN

LG -- NY007 -- 8972 11/01/93 08:51 EST
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Publication:PR Newswire
Date:Nov 1, 1993

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