Company Declares Second Quarter 2011 Cash
Dividend
FFO Per Share Increased 19%
to $0.44 Compared to First Quarter 2010
Winthrop Realty Trust (NYSE:FUR), a leading real estate value
investor, today announced financial and operating results for the
first quarter ended March 31, 2011. All per share amounts are on a
diluted basis.
First Quarter 2011 Financial Results
Net income applicable to Common Shares for the quarter ended
March 31, 2011 was $7.1 million, or $0.26 per Common Share,
compared with net income of $4.1 million, or $0.20 per Common Share
for the quarter ended March 31, 2010.
For the quarter ended March 31, 2011, the Company reported Funds
from Operations (FFO) applicable to Common Shares of $12.0 million,
or $0.44 FFO per Common Share, compared with FFO of $7.9 million,
or $0.37 per Common Share, for the quarter ended March 31,
2010.
"We started 2011 with strong momentum. We have executed on $34.2
million of acquisitions and a number of our investments have
realized full accretion or return of capital with gains. These
activities have significantly contributed to a 19% increase in our
year over year FFO per share," stated Michael L. Ashner, Winthrop's
Chairman and Chief Executive Officer. "In addition, the Company
further strengthened its capital structure, adding capacity to our
credit facility and raising over $61 million of equity in the
second quarter. Our expanded capital base and robust pipeline of
opportunities will enable Winthrop to execute on our deep investing
value strategy."
2011 First Quarter Investment Activity
- Entered into a contract with a venture in which Winthrop will
hold a 50% interest to acquire the collateral management agreements
with respect to three real estate CDOs that hold approximately $1.8
billion in loans and loan securities. The acquisition of the
collateral management agreements is subject to the satisfaction of
certain conditions precedent, including required third party
consents.
- Executed an agreement to purchase a 75% interest in a joint
venture for $25.2 million. The venture owns the general partnership
interests in developer fees and advances receivable from
partnerships owning 26 multifamily and senior housing properties.
This investment is comprised of approximately 4,400 units located
primarily in the Pacific Northwest and California. The first stage
of the transaction closed in March 2011 pursuant to which we
acquired for $7.0 million certain of the receivables owned by the
underlying partnerships. The balance of the transaction is expected
to close in the second quarter of 2011.
- Formed a 50/50 joint venture to acquire a first mortgage
secured by a lien on a recently constructed, 26-story, 66-room
boutique hotel located on 46th Street between 5th and Madison
Avenues in New York, New York. The performing loan, which was
purchased for $15.6 million at a 4.3% discount to its face value of
$16.3 million, bears interest at a rate of 9.33%.
- Formed a 50/50 joint venture to acquire two non-performing
first mortgage loans secured by two retail centers located in
Riverside County, California. The loans, purchased for an aggregate
of $35.6 million, are in maturity default and upon acquisition,
foreclosure proceedings were initiated.
- Restructured a $30.1 million 5.88% interest rate performing
first mortgage loan secured by a 276 unit Class A apartment
community in Tempe, Arizona into a $15.2 million 4.85% interest
senior participation, which was issued at par and retained a $15.7
million junior participation with an effective current yield of
9.1% and a yield to maturity of 14.7%.
- Reached an agreement with the first mortgage lender on Newbury
Apartments pursuant to which the lender waived all defaulted
interest, modified the payments to interest only and extended the
maturity date to February 1, 2014.
- Financed the Plantation, Florida property with an $11.0 million
first mortgage loan bearing interest at 6.483% and maturing on
April 1, 2018.
- Entered into an agreement to sell at par a $10.0 million
sub-participation interest secured by the Beverly Hills Hilton
Hotel that we acquired in December 2009 for $5.25 million. The
purchaser has the right to close at any time up to July 9, 2011.
- Entered into contracts to sell two of the vacant Kroger
properties located in St. Louis, Missouri and Knoxville, Tennessee
for an aggregate purchase price of $3.9 million, subject to the
purchasers' due diligence.
Second Quarter 2011 Investment Activity
- Our Metropolitan Tower B Note and rake bond receivable, which
were acquired for an aggregate purchase price of $11.75 million,
were satisfied at par for approximately $23.75 million.
- Winthrop began to receive funds previously held in escrow of
$2.3 million related to a Delaware Supreme Court unanimously
affirming a Delaware Chancery Court's prior ruling that the notes
issued by Concord CDO, a debt platform in which Winthrop holds a
one-third interest, were validly delivered for cancellation.
- Provided a $2.0 million secured bridge loan to the owners of a
leasehold interest in a property located at 450 West 14th Street,
New York, New York.
- Acquired an ownership interest in an entity that holds an
approximately $2.5 million non-performing junior mezzanine loan
indirectly secured by a 194 unit apartment complex located in
Jacksonville, Florida. The loan matured on March 30, 2011 and the
venture has commenced foreclosure on its collateral.
Capital Markets Activities
- Increased the Company's credit facility to $50.0 million from
$35 million, with an expansion option of up to $150.0 million, and
extended its maturity date to March 2014.
- Closed a public offering of 5.75 million Common Shares at a
price of $11.25 per Common Share (before underwriter's discounts)
resulting in net proceeds of approximately $61.6 million.
Supplemental Financial Information
Further details regarding financial results, properties and
tenants can be accessed at www.winthropreit.com in the Investor
Relations section.
Second Quarter 2011 Dividend Declaration
The Company's Board of Trustees declared a dividend for the
second quarter of 2011 of $0.1625 per Common Share payable on July
15, 2011 to common shareholders of record on June 30, 2011.
The Company also has declared the regular quarterly cash
dividend of $0.40625 per Series B-1 Preferred Share and per Series
C Preferred Share which is payable on August 1, 2011 to the holders
of Series B-1 Preferred Shares or Series C Preferred Shares, as
applicable, of record on June 30, 2011.
Conference Call Information
The Company will host a conference call to discuss its first
quarter 2011 results today, Thursday, May 5, 2011 at 12:00 pm
Eastern Time. Interested parties may access the live call by
dialing (877) 407-9205 or (201) 689-8054, or via the Internet at
www.winthropreit.com within the News and Events section. A replay
of the call will be available through June 6, 2011 by dialing (877)
660-6853; account #286, confirmation #368936. An online replay will
also be available through June 6, 2011.
About Winthrop Realty Trust
Winthrop Realty Trust, headquartered in Boston, Massachusetts,
is a NYSE-listed real estate investment trust (REIT) focused on
acquiring, owning, operating and investing in real property as well
as real estate financial instruments including CMBS, Bonds, REIT
Preferred and common stock. For more information please visit our
web-site at www.winthropreit.com.
Forward-Looking Statements
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995. The statements in this release state the
Company's and management's hopes, intentions, beliefs, expectations
or projections of the future and are forward-looking statements for
which the Company claims the protections of the safe harbor for
forward-looking statements under the Private Securities Litigation
Reform Act of 1995. It is important to note that future events and
the Company's actual results could differ materially from those
described in or contemplated by such forward-looking statements.
Factors that could cause actual results to differ materially from
current expectations include, but are not limited to, (i) general
economic conditions, (ii) the inability of major tenants to
continue paying their rent obligations due to bankruptcy,
insolvency or general downturn in their business, (iii) local real
estate conditions, (iv) increases in interest rates, (v) increases
in operating costs and real estate taxes, (vi) changes in
accessibility of debt and equity capital markets and (vii) defaults
by borrowers on loans. Additional information concerning factors
that could cause actual results to differ materially from those
forward-looking statements is contained from time to time in the
Company's filings with the Securities and Exchange Commission,
copies of which may be obtained from the Company or the Securities
and Exchange Commission. The Company refers you to the documents
filed by the Company from time to time with the Securities and
Exchange Commission, specifically the section titled "Risk Factors"
in the Company's most recent Annual Report on Form 10-K, as may be
updated or supplemented in the Company's Form 10-Q filings, which
discuss these and other factors that could adversely affect the
Company's results.
Financial Results
Financial results for the three months ended March 31, 2011 and
2010 are as follows (in thousands except per share amounts):
|
|
|
|
Three Months
Ended March 31, |
|
2011 |
2010 |
|
(Unaudited) |
(Unaudited) |
|
|
|
Revenue |
|
|
Rents and reimbursements |
$10,986 |
$9,320 |
Interest, dividends and discount
accretion |
9,672 |
3,209 |
|
20,658 |
12,529 |
|
|
|
Expenses |
|
|
Property operating |
4,045 |
1,949 |
Real estate taxes |
1,255 |
720 |
Depreciation and amortization |
3,481 |
2,300 |
Interest |
4,613 |
3,651 |
General and administrative |
2,524 |
1,907 |
State and local taxes |
29 |
14 |
|
15,947 |
10,541 |
|
|
|
Other income (loss) |
|
|
Earnings from preferred equity
investments |
83 |
83 |
Equity in loss of equity investments |
(1,355) |
(527) |
Realized gain on sale of securities
carried at fair value |
124 |
695 |
Unrealized gain on securities carried at
fair value |
886 |
2,540 |
Unrealized gain (loss) on loan securities
carried at fair value |
2,813 |
(613) |
Interest income |
93 |
37 |
|
2,644 |
2,215 |
|
|
|
Income from continuing operations |
7,355 |
4,203 |
|
|
|
Discontinued operations |
|
|
Income from discontinued operations |
47 |
247 |
|
|
|
Consolidated net
income |
7,402 |
4,450 |
Income attributable to non-controlling
interest |
(204) |
(245) |
Net income attributable to Winthrop
Realty Trust |
7,198 |
4,205 |
Income attributable to non-controlling
redeemable preferred interest |
(59) |
(113) |
Net income attributable to Common
Shares |
$7,139 |
$4,092 |
|
|
|
Comprehensive
income |
|
|
Consolidated net income |
$7,402 |
$4,450 |
Change in unrealized gain on available
for sale securities |
-- |
7 |
Change in unrealized gain on interest
rate derivative |
63 |
40 |
Comprehensive
income |
$7,465 |
$4,497 |
|
|
|
Per Common Share Data –
Basic: |
|
|
Income from continuing operations |
$0.26 |
$0.19 |
Income from discontinued operations |
-- |
0.01 |
Net income attributable to Winthrop Realty
Trust |
$0.26 |
$0.20 |
|
|
|
Per Common Share Data –
Diluted: |
|
|
Income from continuing operations |
$0.26 |
$0.19 |
Income from discontinued
operations |
-- |
0.01 |
Net income attributable to Winthrop Realty
Trust |
$0.26 |
$0.20 |
|
|
|
Basic Weighted-Average Common
Shares |
27,079 |
20,598 |
Diluted Weighted-Average Common
Shares |
27,081 |
21,389 |
|
Funds From Operations:
The following presents a reconciliation of net income to funds
from operations for the three months ended March 31, 2011 and 2010
(in thousands, except per share amounts):
|
|
|
|
Three Months Ended March
31, |
|
2011 |
2010 |
|
(unaudited) |
(unaudited) |
|
|
|
Basic |
|
|
|
|
|
Net income attributable to Winthrop Realty
Trust |
$7,198 |
$4,205 |
Real estate depreciation |
2,118 |
1,506 |
Amortization of capitalized leasing
costs |
1,365 |
825 |
Real estate depreciation and amortization of
unconsolidated interests |
2,263 |
2,134 |
Less: Non-controlling interest share of
depreciation and amortization |
(792) |
(785) |
|
|
|
Funds from operations |
12,152 |
7,885 |
|
|
|
Series C Preferred Share dividends |
(59) |
(113) |
Allocation of earnings to Series B-1
Preferred Shares |
(72) |
(5) |
Allocation of earnings to Series C Preferred
Shares |
(55) |
(114) |
|
|
|
Funds from operations applicable to Common
Shares - Basic |
$11,966 |
$7,653 |
|
|
|
Weighted-average Common Shares |
27,079 |
20,598 |
|
|
|
Fund from operations per Common Share -
Basic |
$0.44 |
$0.37 |
|
|
|
Diluted |
|
|
|
|
|
Funds from operations |
12,152 |
7,885 |
|
|
|
Series C Preferred Share dividends |
(59) |
-- |
Allocation of earnings to Series B-1
Preferred Shares |
(72) |
(5) |
Allocation of earnings to Series C Preferred
Shares |
(55) |
-- |
|
|
|
Funds from operations applicable to Common
Shares - Diluted |
$11,966 |
$7,880 |
|
|
|
Basic weighted-average Common Shares |
27,079 |
20,598 |
Stock options (1) |
2 |
2 |
Series B-1 Preferred Shares (2) |
-- |
-- |
Series C Preferred Shares (3) |
-- |
789 |
Diluted weighted-average Common Shares |
27,081 |
21,389 |
|
|
|
Fund from operations per Common Share -
Diluted |
$0.44 |
$0.37 |
|
(1) The Trust's stock
options were dilutive for the three months ended March 31, 2011 and
2010. |
(2) The Trust's Series B-1
Preferred Shares were anti-dilutive for the three months ended
March 31, 2011 and 2010. |
(3) The Trust's Series C
Preferred Shares were anti-dilutive for the three months ended
March 31, 2011 and dilutive for the three months ended March 31,
2010. |
FFO is computed in accordance with the definition adopted by the
Board of Governors of the National Association of Real Estate
Investment Trusts ("NAREIT"). NAREIT defines FFO as net
income or loss determined in accordance with Generally Accepted
Accounting Principles ("GAAP"), excluding extraordinary items as
defined under GAAP and gains or losses from sales of previously
depreciated operating real estate assets, plus specified non-cash
items, such as real estate asset depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint
ventures. FFO and FFO per diluted share are used by
management, investors and industry analysts as supplemental
measures of operating performance of equity REITs. FFO and FFO per
diluted share should be evaluated along with GAAP net income and
income per diluted share (the most directly comparable GAAP
measures), as well as cash flow from operating activities,
investing activities and financing activities, in evaluating the
operating performance of equity REITs. FFO and FFO per
diluted share exclude the effect of depreciation, amortization and
gains or losses from sales of real estate, all of which are based
on historical costs which implicitly assumes that the value of real
estate diminishes predictably over time. Since real estate
values instead have historically risen or fallen with market
conditions, these non-GAAP measures can facilitate comparisons of
operating performance between periods and among other equity REITs.
FFO does not represent cash generated from operating activities in
accordance with GAAP and is not necessarily indicative of cash
available to fund cash needs as disclosed in the Company's
Consolidated Statements of Cash Flows. FFO should not be
considered as an alternative to net income as an indicator of the
Company's operating performance or as an alternative to cash flows
as a measure of liquidity. In addition to FFO, the Company
also discloses FFO before certain items that affect comparability.
Although this non-GAAP measure clearly differs from NAREIT's
definition of FFO, the Company believes it provides a meaningful
presentation of operating performance. A reconciliation of
net income to FFO is provided above. In addition, a
reconciliation of FFO to FFO before certain items that affect
comparability is provided above in this press release.
Consolidated Balance
Sheets: |
|
|
(in thousands, except share
data) |
|
|
|
|
|
|
March 31, 2011 |
December 31, 2010 |
|
(Unaudited) |
(Unaudited) |
ASSETS |
|
|
Investments in real estate, at cost |
|
|
Land |
$36,495 |
$37,142 |
Buildings and improvements |
273,071 |
271,357 |
|
309,566 |
308,499 |
Less: accumulated depreciation |
(38,084) |
(36,232) |
Investments in real estate, net |
271,482 |
272,267 |
|
|
|
Cash and cash equivalents |
21,240 |
45,257 |
Restricted cash held in escrows |
30,648 |
8,593 |
Loans receivable, net |
105,390 |
110,395 |
Accounts receivable, net of allowances of
$378 and $262, respectively |
12,534 |
12,402 |
Securities carried at fair value |
14,695 |
33,032 |
Loan securities carried at fair
value |
14,132 |
11,981 |
Preferred equity investment |
4,034 |
4,010 |
Equity investments |
106,606 |
81,937 |
Other receivables, net |
8,459 |
-- |
Lease intangibles, net |
25,651 |
26,821 |
Deferred financing costs, net |
1,479 |
1,158 |
Assets held for sale |
3,710 |
2,275 |
TOTAL ASSETS |
$620,060 |
$610,128 |
|
|
|
LIABILITIES |
|
|
Mortgage loans payable |
$212,155 |
$230,443 |
Series B-1 Cumulative Convertible
Redeemable |
|
|
Preferred Shares, $25 per share
liquidation preference; 852,000 shares authorized and outstanding
at March 31, 2011 and December 31, 2010, respectively |
21,300 |
21,300 |
Secured financing |
15,150 |
-- |
Revolving line of credit |
33,875 |
25,450 |
Accounts payable and accrued
liabilities |
11,982 |
12,557 |
Dividends payable |
4,441 |
4,431 |
Deferred income |
1,206 |
150 |
Below market lease intangibles, net |
2,503 |
2,696 |
Liabilities of held for sale assets |
537 |
33 |
TOTAL LIABILITIES |
303,149 |
297,060 |
|
|
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
NON-CONTROLLING REDEEMABLE PREFERRED
INTEREST |
|
|
Series C Cumulative Convertible Redeemable
Preferred Shares, $25 per share liquidation preference, 144,000
shares authorized and outstanding at March 31, 2011 and December
31, 2010, respectively |
3,221 |
3,221 |
Total non-controlling redeemable preferred
interest |
3,221 |
3,221 |
|
|
|
EQUITY |
|
|
Winthrop Realty Trust Shareholders'
Equity: |
|
|
Common Shares, $1 par, unlimited shares
authorized; 27,088,347 and 27,030,186 issued and outstanding at
March 31, 2011 and December 31, 2010, respectively |
27,088 |
27,030 |
Additional paid-in capital |
570,208 |
569,586 |
Accumulated distributions in excess of
net income |
(298,045) |
(300,782) |
Accumulated other comprehensive loss |
-- |
(63) |
Total Winthrop Realty Trust Shareholders'
Equity |
299,251 |
295,771 |
Non-controlling interests |
14,439 |
14,076 |
Total Equity |
313,690 |
309,847 |
TOTAL LIABILITIES AND
EQUITY |
$620,060 |
$610,128 |
|
Further details regarding the Company's results of operations,
properties, joint ventures and tenants are available in the
Company's Form 10-Q for the quarter ended March 31, 2011 which will
be filed with the Securities and Exchange Commission and will be
available for download at the Company's website
www.winthropreit.com or at the Securities and Exchange Commission
website www.sec.gov.
CONTACT: AT THE COMPANY
Thomas Staples
Chief Financial Officer
(617) 570-4614
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