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 BOSTON, Jan. 6 /PRNewswire/ -- MGI Properties ("MGI") (NYSE: MGI), an equity real estate investment trust, today released the following letter to shareholders dated January 6, 1993:

Dear MGI Shareholder:
 "Since the Annual Report is not mailed until late February, we thought it appropriate to bring you up to date on certain developments. MGI released its audited results for 1992 today. Net income for 1992 was $7,248,000, or 77 cents per share, versus $6,178,000 in 1991, or 66 cents per share. Net gain recognition in 1992 was $1,644,000 equal to 17 cents per share. A copy of the press release is enclosed.
 Funds from operations for the fourth quarter were $3,097,000 or 33 cents per share. These results are positive when compared to the 31 cents earned in the third quarter and 30 cents earned in the second quarter of 1992. The improvement reflects the continued strength of occupancy levels, low interest rates on our modest level of floating rate debt and the benefit of property acquisitions made in the third and fourth quarters that are now contributing strong earnings to the portfolio.
 In our 1992 Third Quarterly Report to Shareholders we noted that we were endeavoring to convert our two remaining loans to properties owned or equity investments. We have now acquired the four St. Louis, Missouri industrial properties that previously secured our $6,600,000 loan for a price of approximately $225,000 over the mortgage. The properties, which aggregate 233,300 square feet, are 100 percent occupied and at that level should earn approximately 10 percent, similar to what the asset had been yielding as a loan.
 The final investment that was held in mortgage loan form is Posada del Rey, a 516-unit apartment complex in Metairie, Louisiana, one of New Orleans' stronger residential suburbs. Effective Nov. 30, 1992 MGI commenced to carry this investment as a property owned. We have taken this step because we believe the owner has no current equity in the complex and MGI, due to its mortgage position, effectively has the risks of ownership. The net carrying value of this loan was $13,056,000 after existing reserves. Based on a current independent appraisal we believe the property has a value in the range of $11,000,000 which approximates $21,300 per unit on the 516 units. In accordance with accounting requirements, we have recognized this value by taking a non-cash charge of $2,056,000 in the fourth quarter ended Nov. 30, 1992. When this non- cash charge is combined with the $3,700,000 gain recognized in the first quarter of 1992, the Trust recognized net gain income of $1,644,000 in fiscal 1992. For tax reporting, the Metairie investment will still be carried as a mortgage loan.
 The Metairie property is 98 percent occupied, tenant quality is good and projected operating income for this property in fiscal 1993 is $1,250,000, which would be an improvement over 1992 results. Income of $1,063,000 applicable to this asset in 1992 was recognized on a cash flow basis and is included in interest income. As a result we do not expect a negative earnings impact in fiscal 1993 and believe this property should realize increasing operating income levels in subsequent years. With Posada del Rey on our books as an equity property, the book value of the Trust for financial statement purposes, which is net of all debt and liabilities, will be approximately $15.48 per share.
 The Third Quarterly Report to shareholders also noted that our 191,900 square-foot warehouse in Charleston, S.C., formerly occupied by Michelin Tire, was vacant. We are pleased to announce that this property is now 100 percent leased to two separate tenents, each for a three-year term at rents approximating the amount previously paid by Michelin.
 In the fourth quarter we closed the $2,574,000 acquisition of our industrial building in Bedford, Mass. At closing the property was 68 percent occupied and subsequent to closing we are negotiating agreements for expansion with the two tenants which should bring the occupancy to 84 percent and our current yield close to 12 percent. We have also contracted with another insurance company to acquire a 109,400 square- foot industrial building in Wilmington, Mass. The contract price is $4,425,000. The property is fully occupied and should initially produce a current yield of 11 percent and possibly more.
 We believe recent and pending acquisitions should strengthen underlying earnings and the inherent value of the portfolio.
 As always, please don't hesitate to call if you have any questions.
 Sincerely, /s/W. Pearce Coues"
 -0- 1/6/92
 /CONTACT: Phillip C. Vitali, executive vice president and treasurer of MGI Properties, 617-330-5335.

CO: MGI Properties ST: Massachusetts IN: SU:

SJ -- NE012 -- 2395 01/06/93 17:23 EST
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Date:Jan 6, 1993

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