Cedar Realty Trust, Inc. Reports Third Quarter 2012 Results
PORT WASHINGTON, N.Y.,
Nov. 8, 2012 /PRNewswire/ -- Cedar Realty Trust, Inc.
(NYSE: CDR) today reported its financial results for the third
quarter ended September 30, 2012.
Highlights
- Third quarter operating FFO of $0.11 per diluted share
- Increased low end of 2012 Operating FFO guidance to an updated
range of $0.48 to $0.50 per diluted
share
- Reduced cost of capital with additional issuance of 7.25%
Series B Preferred Stock and redemption of 8.875% Series A
Preferred Stock
- Exited from joint ventures with RioCan and Homburg
Bruce Schanzer, President and CEO
of Cedar, commented, "On this, the first anniversary of the
introduction of the new Cedar Realty Trust, we are gratified by the
progress we have made in executing our near-term strategic
objectives. We have meaningfully lowered our cost of capital
and leverage. We have only two improved assets and three
small land parcels remaining to be placed under contract from the
original 50 assets we identified for divestiture. We have
exited from both our RioCan and Homburg joint ventures, retaining
three attractive wholly-owned shopping centers with significant
upside. Lastly, we have reduced our overhead, thereby
positioning ourselves to operate more efficiently in the coming
years. We have achieved all this while maintaining our
earnings and improving operations. We look to the future with
great confidence, as we continue executing on value-creation
opportunities within our high-quality primarily grocer-anchored
Washington, DC to Boston shopping center portfolio and
underwriting select capital recycling opportunities that improve
our average asset quality."
Financial Results
Operating FFO for third quarter 2012 was $8.3 million or $0.11 per diluted share, compared to $8.2 million or $0.12 per diluted share for the same period in
2011. Operating FFO for nine months ended September 30, 2012 was $27.4 million or $0.38 per diluted share, compared to $25.6 million or $0.37 per diluted share for the same period in
2011. Operating FFO for the nine months ended September 30, 2012 included $3.4 million of income ($3.0 million termination fee and $0.4 million accelerated amortization of an
intangible lease liability) in connection with replacing the dark
anchor at the Company's Oakland Commons center in Bristol, Connecticut.
Net loss attributable to common shareholders for third quarter
2012 was $(4.3) million or
$(0.07) per diluted share, compared
to a net loss of $(70.1) million or
$(1.05) per diluted share in 2011.
Net loss attributable to common shareholders for nine months ended
September 30, 2012 was $(12.4) million or $(0.19) per diluted share, compared to a net loss
of $(110.1) million or $(1.67) per diluted share in 2011. Net loss for
third quarter and nine months ended September 30, 2012 included $1.1 million of management transition charges and
employee termination costs. Further, net loss for nine months ended
September 30, 2012 included a
$2.6 million accelerated write-off of
deferred financing costs in connection with the Company obtaining a
new credit facility, and was reduced by $3.4
million of income related to replacing the dark anchor at
Oakland Commons. Net loss for third quarter and nine months ended
September 30, 2011 included
impairment charges, management transition charges and employee
termination costs, and the write-off of a joint venture interest,
aggregating $68.6 million and
$105.6 million, respectively.
Portfolio Results
Leasing
In the third quarter 2012, the Company signed 27 renewal leases
for approximately 153,000 square feet with an average increase in
base rents of 8.5% on a cash basis. The Company also signed 10 new
leases for approximately 31,000 square feet at an average base rent
of $16.45 per square foot. The
average base rent on new leases was $4.81 per square foot above the $11.64 average rent per square foot in the
Company's consolidated portfolio.
Occupancy
At September 30, 2012, the
Company's consolidated portfolio was 92.1% leased and 90.9%
occupied. This compares to occupancy of 90.2% at June 30, 2012 and 91.2% at September 30, 2011. Occupancy for the Company's
same-center portfolio was 92.5% at September
30, 2012 compared to 92.5% at June
30, 2012 and 93.1% at September 30,
2011. The decreases in occupancy from September 30, 2011 reflect the termination of the
dark anchor at Oakland Commons to prepare for the opening of a
Walmart Neighborhood Market.
Same-Property Results
Same-property cash NOI for the third quarter 2012 compared to
the third quarter 2011 increased 1.2% excluding the timing impact
of replacing the dark anchor at Oakland Commons. Including
the down time impact prior to Walmart Neighborhood Market taking
possession of this dark anchor space, cash NOI increased 0.1%.
Preferred Stock
In September 2012, the Company
completed a public offering of an additional 4.8 million shares of
its 7.25% Series B Cumulative Redeemable Preferred Stock (including
0.6 million shares related to the exercise of the underwriters'
overallotment option). The issue was priced at $23.9366 per share resulting in gross proceeds of
approximately $115.6 million.
In addition, in October 2012, the
Company redeemed an additional 4.5 million shares of its 8.875%
Series A Cumulative Redeemable Preferred Stock at the stated
$25.00 redemption price for a total
cash outlay of approximately $114.1
million.
Exit From Joint Venture With RioCan
On October 10, 2012, the Company
exited from its 22 property joint venture with RioCan Real Estate
Investment Trust ("RioCan"). Pursuant to the terms of the
transaction, the Company exchanged its 20% interest in the joint
venture for a 100% ownership interest in Franklin Village, located
in Franklin, Massachusetts, and
approximately $40.0 million in cash.
The Company will continue to manage the properties acquired by
RioCan until January 31, 2013.
After initially reducing the outstanding balance under its
Credit facility, the Company plans to use the approximate
$40.0 million of proceeds to prepay,
during the latter part of 2012 through February 1, 2013, certain property-specific
mortgage loans. Such property-specific loans have a
weighted-average interest rate of 6.5% per annum and can be prepaid
without penalty.
In advance of the termination of the management of the
RioCan-owned properties, the Company has proactively begun
implementing certain cost reduction measures. Such measures include
employee headcount reductions of approximately $1.5 million per year, which will be effective
beginning in the fourth quarter of 2012. Additionally, the Company
has identified approximately $0.5 million to
$1.0 million per year of other overhead reductions, which
will become effective over the first half of 2013.
Other Subsequent Events
On October 12, 2012, the Company
concluded the previously-disclosed buy/sell arrangements applicable
to its joint venture with Homburg Invest Inc. ("HII") that owned
nine retail properties. Pursuant to the terms of the transaction,
the Company acquired HII's 80% ownerships in Meadows Marketplace,
located in Hershey, Pennsylvania,
and Fieldstone Marketplace, located in New Bedford, Massachusetts, and sold to HII
its 20% ownership interests in the remaining seven joint venture
properties. The Company's property management agreements for the
sold properties terminated upon closing.
On October 19, 2012, the Company
placed a first mortgage on The Point Shopping Center and realized
net proceeds of approximately $30
million, which was utilized to reduce the outstanding
balance under its Credit Facility. The loan is due in November 2022, bears interest at 4.5% per annum,
and has principal payments based on a 30-year amortization
schedule.
After applying the net proceeds from RioCan and the mortgage
financing at The Point Shopping Center, less the funding of the
Series A Preferred Stock redemptions, the Company had availability
under its Credit Facility of approximately $100 million.
2012 Guidance
The Company has increased the low end of its 2012 Operating FFO
guidance to an updated range of $0.48 to
$0.50 per diluted share.
Funds From Operations Reconciliation
The Company reports FFO in accordance with the standards
established by the National Association of Real Estate Investment
Trusts ("NAREIT"). FFO is a widely-recognized non-GAAP financial
measure for REITs that the Company believes, when considered with
financial statements prepared in accordance with GAAP, is useful to
investors in understanding financial performance and providing a
relevant basis for comparison among REITs. The Company's
computation of FFO, as detailed in the attached schedule, is in
accordance with NAREIT's pronouncements. The Company also presents
"Operating FFO", which excludes certain items that are not
indicative of the results provided by the Company's consolidated
portfolio and that affect the comparability of the Company's
period-over-period performance, as also detailed in the attached
schedule.
Supplemental Financial Information Package
The Company has issued "Supplemental Financial Information" for
the period ended September 30, 2012.
Such information has been filed today as an exhibit to Form 8-K and
will also be available on the Company's website at
www.cedarrealtytrust.com.
Investor Conference Call
The Company will host a conference call today, November 8, 2012, at 5:00
PM (ET) to discuss the third quarter results. The conference
call can be accessed by dialing (877) 705-6003 or (1)
(201) 493-6725 for international participants. A live webcast
of the conference call will be available online on the Company's
website at www.cedarrealtytrust.com.
A replay of the call will be available from 8:00 PM (ET) on
November 8, 2012, until midnight (ET)
on November 22, 2012. The replay
dial-in numbers are (877) 870-5176 or (1) (858) 384-5517
for international callers. Please use passcode 403187 for the
telephonic replay. A replay of the Company's webcast will be
available on the Company's website for a limited time.
About Cedar Realty Trust
Cedar Realty Trust, Inc. is a fully-integrated real estate
investment trust which focuses on the ownership and operation of
primarily grocery-anchored shopping centers straddling the
Washington DC to Boston corridor. The Company's portfolio
(excluding properties treated as "held for sale") is comprised of
68 properties, with approximately 10 million square feet of
GLA.
For additional financial and descriptive information on the
Company, its operations and its portfolio, please refer to the
Company's website at www.cedarrealtytrust.com.
Reference to Form 10-Q
For further details, interested parties are urged to review the
Form 10-Q for the quarter ended September
30, 2012 filed today with the Securities and Exchange
Commission. The Form 10-Q will also be available on the Company's
website at www.cedarrealtytrust.com.
Forward-Looking Statements
Statements made or incorporated by reference in this press
release may include certain "forward-looking statements", which are
based on certain assumptions and describe the Company's future
plans, strategies and expectations and, as such, may involve known
and unknown risks, uncertainties and other factors which may cause
the Company's actual results, performance or achievements to be
materially different from future results, performance or
achievements expressed or implied by such forward-looking
statements. Factors which could have a material adverse effect on
the operations and future prospects of the Company include, but are
not limited to, those set forth under the heading "Risk Factors" in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2011. Accordingly, the information contained
herein should be read in conjunction with that report.
The following is a reconciliation of net (loss) attributable to
common shareholders to FFO and Operating FFO for the three and nine
months ended September 30, 2012 and 2011:
CEDAR
REALTY TRUST, INC.
|
Reconciliation of Net (Loss) Attributable to
Common Shareholders to Funds From Operations
|
and
Operating Funds From Operations
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine
months ended
September 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
Net
(loss) attributable to common shareholders
|
$
(4,299,000)
|
|
$
(70,105,000)
|
|
$
(12,403,000)
|
|
$
(110,082,000)
|
Real
estate depreciation and amortization
|
9,185,000
|
|
11,380,000
|
|
34,577,000
|
|
32,729,000
|
Limited
partners' interest
|
(17,000)
|
|
(1,455,000)
|
|
(114,000)
|
|
(2,294,000)
|
Impairment
charges/ (reversals)
|
-
|
|
72,114,000
|
|
(1,138,000)
|
|
102,647,000
|
Gain on
sales
|
(402,000)
|
|
-
|
|
(1,231,000)
|
|
(502,000)
|
Consolidated minority interest:
|
|
|
|
|
|
|
|
Share of
income (loss)
|
2,564,000
|
|
(3,285,000)
|
|
4,272,000
|
|
(3,332,000)
|
Share of
FFO
|
(1,287,000)
|
|
(1,462,000)
|
|
(4,078,000)
|
|
(4,442,000)
|
Unconsolidated joint ventures:
|
|
|
|
|
|
|
|
Share of
income
|
(411,000)
|
|
(327,000)
|
|
(1,432,000)
|
|
(1,152,000)
|
Share of
FFO
|
1,433,000
|
|
1,374,000
|
|
4,488,000
|
|
4,438,000
|
Funds
From Operations ("FFO")
|
6,766,000
|
|
8,234,000
|
|
22,941,000
|
|
18,010,000
|
Adjustments for items affecting
comparability:
|
|
|
|
|
|
|
|
Management
transition charges and employee termination costs
|
1,131,000
|
|
-
|
|
1,131,000
|
|
6,875,000
|
Accelerated write-off of deferred financing
costs
|
-
|
|
-
|
|
2,607,000
|
|
-
|
Share-based compensation mark-to-market
adjustments
|
-
|
|
(39,000)
|
|
10,000
|
|
(740,000)
|
Preferred
stock redemption costs
|
173,000
|
|
-
|
|
555,000
|
|
-
|
Acquisition transaction costs and terminated
projects, including
|
|
|
|
|
|
|
|
Company
share from the Cedar/RioCan joint venture
|
193,000
|
|
11,000
|
|
193,000
|
|
1,498,000
|
Operating Funds From Operations ("Operating
FFO")
|
$
8,263,000
|
|
$
8,206,000
|
|
$
27,437,000
|
|
$
25,643,000
|
|
|
|
|
|
|
|
|
FFO per
diluted share:
|
$
0.09
|
|
$
0.12
|
|
$
0.32
|
|
$
0.26
|
|
|
|
|
|
|
|
|
Operating FFO per diluted share:
|
$
0.11
|
|
$
0.12
|
|
$
0.38
|
|
$
0.37
|
|
|
|
|
|
|
|
|
Weighted average number of diluted common
shares:
|
|
|
|
|
|
|
|
Common
shares
|
71,793,000
|
|
69,759,000
|
|
71,161,000
|
|
68,368,000
|
OP
Units
|
281,000
|
|
1,415,000
|
|
518,000
|
|
1,415,000
|
|
72,074,000
|
|
71,174,000
|
|
71,679,000
|
|
69,783,000
|
|
|
|
|
|
|
|
|
SOURCE Cedar Realty Trust, Inc.