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Prentiss Properties Trust Announces Funds From Operations; Pursues Growth Through Acquisition & Development

DALLAS, Nov. 26 /PRNewswire/ -- Prentiss Properties Trust, a national office and industrial real estate investment trust, today reported Funds from Operations (FFO) and revenues for the third quarter and nine months 1996. Results were driven by strong demand for its office properties, continued high occupancy across the portfolio, and increased rents. Having recently completed its October 17th initial public offering, with an over-allotment, Prentiss Properties today also announced an acquisition and a major development project.

Prentiss Properties reported pro forma FFO of $11.1 million ($0.47 per share) on revenues of $16.6 million for the third quarter ended September 30, 1996. For the nine months, pro forma FFO was $32.5 million ($1.38 per share) on revenue of $49.5 million. Pro forma adjustments for 1996 reflect the interest savings from the IPO and exercise of the over-allotment. Due to the IPO, and change in ownership and capital structure, 1995 results for the predecessor company are not directly comparable. "We are pleased with our strong financial results," said Chairman and CEO Mike Prentiss, "and that the numbers were in line with analysts' expectations."

Prentiss Properties also announced the acquisition, for the Trust's portfolio, of three industrial buildings in suburban Chicago totaling 226,076 square feet. These distribution facilities were purchased for $8.8 million. The buildings are fully leased and will produce a weighted average initial cash-on-cash yield of approximately 10.1%.

In addition to this acquisition, Prentiss also commenced construction of an industrial warehouse and distribution facility in Atlanta, Georgia. The 284,000 square foot building is located in the Atlanta Tradeport near Hartsfield International Airport, and will be fully leased to Fed Ex Corporation for approximately 15 years. Total construction cost is expected to be $18 million with completion expected in November 1997. The initial cash-on-cash yield will be approximately 10.0%, and will increase annually based on contracted increases in the lease.

"The acquisitions of the industrial projects in Chicago are the first of what should be a significant increase in our presence in that market," said Mike Prentiss. "And the Fed Ex transaction expands our relationship with a significant client, and showcases our development expertise."

Finally, Prentiss announced its dividend policy. Dividends will be declared during the third week of the last month of the quarter. The dividend record date will be 10 days subsequent to declaration and dividend payments will be made during the third week of the month following quarter-end. Also, Prentiss is in the process of establishing its Dividend Reinvestment Program which will allow shareholders to directly reinvest dividends or purchase shares through the Company. This plan should be effective in January.

"The Prentiss Dividend Reinvestment Program is being established to give our investors the opportunity to reinvest with us on a very cost-effective basis," said PPT President Tom August.

Prentiss Properties Trust is a self-administered and self-managed real estate investment trust ("REIT") formed to continue and expand the national office and industrial property acquisition, ownership, management, leasing, development and construction businesses of the Prentiss Group. It owns interests in 90 office and industrial properties in 10 national markets, with approximately 9.1 million net rentable square feet. The Trust is one of the 20 largest managers of office and industrial properties in the U.S., managing approximately 39 million square feet in 342 office and industrial properties owned by the Prentiss Group, its affiliates and third parties.

Prentiss Properties operates out of headquarters in Dallas, Texas, and has regional management offices in Los Angeles, Dallas, Chicago, Washington, D.C., and Atlanta. The Company is a full service real estate company with approximately 600 employees, with in-house expertise in areas including acquisition, development, facilities management, management and leasing.
 Prentiss Properties
 Pro forma funds from operations

Six months ended June 30, 1996
 per final prospectus 19,666

Interest expense savings from
 exercise of over-allotment(a) 1,739

Six month ended June 30, 1996
 subsequent to over-allotment 21,405

Nine months ended September 30,
 1996 per 10-Q 32,506
 Third quarter funds from operations 11,101
 Total share and units outstanding 23,547,963
 Third quarter FFO/share $ 0.47
 Debt pay-down with proceeds from over-allotment
 (in thousands, except interest data)
 Debt balance Debt balance Decrease in
 per after outstanding Interest Interest
 prospectus over-allotment debt rate savings


Properties in

Kansas City, MO

 Milwaukee, WI $40,000 $11,000 $29,000 8.00% $2,320,000

Park West E1
 and E2 $16,200 -- $16,200 7.15% $1,158,300

Total annual

 savings -- -- -- $3,478,300

(a) Total six

month interest
 savings -- -- -- 1,739,150

SOURCE Prentiss Properties Trust
 -0- 11/26/96

/NOTE TO EDITORS: For more information on Prentiss Properties Trust, simply dial 1-800-PRO-INFO and enter the company ticker: PP/

/CONTACT: Thomas August of Prentiss Properties, 214-654-5709, or George Zagoudis, General Information, 312-640-6663, Bess Gallanis, Media, 312-640-6737, or Stephanie Mishra, Analysts, 703-960-7255, all of The Financial Relations Board/


CO: Prentiss Properties Trust ST: Texas IN: FIN SU: ERN TNM

JS-CS -- CLTU005 -- 4194 11/26/96 08:31 EST
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Publication:PR Newswire
Date:Nov 26, 1996
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