Mission West Properties Announces First Quarter 2011 Operating Results
Apr 13, 2011, 04:15 ET
CUPERTINO, Calif., April 13, 2011 /PRNewswire/ -- Mission West Properties, Inc. (NASDAQ: MSW) reported today that Funds From Operations ("FFO") for the quarter ended March 31, 2011 was approximately $16,240,000, or $0.15 per diluted common share, (considering the potential effect of all O.P. units being exchanged for shares of the Company's common stock) as compared to approximately $16,506,000, or $0.16 per diluted common share, for the same period in 2010. For the quarter ended March 31, 2010, unrealized holding gain from investment in marketable securities accounted for approximately $1,853,000, or $0.02 per diluted common share. On a sequential quarter basis, FFO for the quarter ended December 31, 2010, was approximately $0.11 per diluted common share.
Net income for the quarter ended March 31, 2011, was approximately $9,936,000 as compared to approximately $10,143,000 for the quarter ended March 31, 2010. Net income per diluted share available to common stockholders was approximately $0.11 for both quarters ended March 31, 2011 and 2010. For the quarter ended March 31, 2010, unrealized holding gain from investment in marketable securities of $1,853,000 accounted for approximately $0.02 per diluted common share.
In March 2011, the Company's board of directors approved management's recommendation to decrease the Company's quarterly dividend payment rate to common stockholders and O.P. unit holders from $0.15 to $0.13 per share effective the first quarter of 2011.
Company Profile
Mission West Properties, Inc. operates as a selfmanaged, selfadministered and fully integrated REIT engaged in the management, leasing, marketing, development and acquisition of commercial R&D properties, primarily located in the Silicon Valley portion of the San Francisco Bay Area. Currently, the Company manages 111 properties totaling approximately 8.0 million rentable square feet. For additional information, please contact Investor Relations at 408-725-0700.
The matters described herein contain forward-looking statements. Such statements can be identified by the use of forward-looking terminology such as "will," "anticipate," "estimate," "expect," "intend," or similar words. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the Company's control, which may cause material differences in actual results, performance or other expectations. These factors include, but are not limited to, the ability to complete acquisitions from the Berg Group and other factors detailed in the Company's registration statements, and periodic filings with the Securities & Exchange Commission.
MISSION WEST PROPERTIES, INC. SELECTED FINANCIAL DATA (In thousands, except share, per share and property data amounts) |
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Three Months Ended Mar 31, 2011 |
Three Months Ended Mar 31, 2010 |
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OPERATING REVENUES: |
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Rental income |
$21,777 (6) |
$20,814 |
||||||
Tenant reimbursements |
4,644 |
4,440 |
||||||
Other income |
1,101 |
658 |
||||||
Total operating revenues |
27,522 |
25,912 |
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OPERATING EXPENSES: |
||||||||
Operating and maintenance |
2,654 |
2,938 |
||||||
Real estate taxes |
3,205 |
3,212 |
||||||
General and administrative |
521 |
518 |
||||||
Depreciation and amortization |
5,827 (1) |
5,921 (1) |
||||||
Total operating expenses |
12,207 |
12,589 |
||||||
Operating income |
15,315 |
13,323 |
||||||
OTHER INCOME (EXPENSES): |
||||||||
Equity in (loss) earnings of unconsolidated joint venture |
(8) |
76 |
||||||
Interest and dividend income |
69 |
50 |
||||||
Unrealized gain from investment |
- |
1,853 |
||||||
Interest expense |
(5,279) |
(4,849) |
||||||
Interest expense – related parties |
(146) |
(297) |
||||||
Income from continuing operations |
9,951 |
10,156 |
||||||
Discontinued operations: |
||||||||
Loss from discontinued operations |
(15) |
(13) |
||||||
Net income |
9,936 |
10,143 |
||||||
Net income attributable to noncontrolling interests |
(7,536) |
(7,685) |
||||||
Net income available to common stockholders |
$2,400 |
$2,458 |
||||||
Income per share from continuing operations: |
||||||||
Basic |
$0.11 |
$0.11 |
||||||
Diluted |
$0.11 |
$0.11 |
||||||
Income per share from discontinued operations: |
||||||||
Basic |
- |
- |
||||||
Diluted |
- |
- |
||||||
Net income per share to common stockholders: |
||||||||
Basic |
$0.11 |
$0.11 |
||||||
Diluted |
$0.11 |
$0.11 |
||||||
Weighted average shares of common stock (basic) |
22,288,103 |
21,881,189 |
||||||
Weighted average shares of common stock (diluted) |
22,405,276 |
22,056,805 |
||||||
Weighted average O.P. units outstanding |
82,997,932 |
83,397,876 |
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FUNDS FROM OPERATIONS |
||||||||
Funds from operations |
$16,240 |
$16,506 |
||||||
Funds from operations per share (2) |
$0.15 |
$0.16 |
||||||
Outstanding common stock |
22,370,770 |
21,953,211 |
||||||
Outstanding O.P. units |
82,915,265 |
83,326,965 |
||||||
Weighted average O.P. units and common stock outstanding (diluted) |
105,403,208 |
105,454,681 |
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FUNDS FROM OPERATIONS CALCULATION |
Three Months Ended Mar 31, 2011 |
Three Months Ended Mar 31, 2010 |
||||||
Net income |
$9,936 |
$10,143 |
||||||
Add: |
||||||||
Depreciation and amortization |
6,351 |
6,406 |
||||||
Depreciation and amortization in unconsolidated joint venture |
60 |
60 |
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Less: |
||||||||
Noncontrolling interests in joint ventures |
(107) |
(103) |
||||||
Funds from operations |
$16,240 |
$16,506 |
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Funds From Operations (“FFO”) is a non-GAAP financial measurement used by real estate investment trusts (“REITs”) to measure and compare operating performance. As defined by NAREIT, FFO represents net income (loss) (computed in accordance with GAAP, accounting principles generally accepted in the United States of America), excluding gains (or losses) from debt restructuring and sales of property, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of nonreal estate assets) and after adjustments for unconsolidated partnerships and joint ventures. Management considers FFO to be an appropriate supplemental measure of the Company’s operating and financial performance because when compared year over year, it reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs, providing a perspective not immediately apparent from net income. In addition, management believes that FFO provides useful information about the Company’s financial performance when compared to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs. FFO should neither be considered as an alternative for net income as a measure of profitability nor is it comparable to cash flows provided by operating activities determined in accordance with GAAP. FFO is not comparable to similarly entitled items reported by other REITs that do not define them exactly as we define FFO. |
|
PROPERTY AND OTHER DATA: |
Three Months Ended Mar 31, 2011 |
Three Months Ended Mar 31, 2010 |
||||||
Total properties, end of period |
111 |
112 |
||||||
Total square feet, end of period |
8,011,026 |
8,088,923 |
||||||
Average monthly rental revenue per square foot (3) |
$1.39 (7) |
$1.33 |
||||||
Occupancy for leased properties |
68.5% |
65.1% |
||||||
Straight-line rent |
($635) |
($237) |
||||||
Leasing commissions |
$194 |
- |
||||||
Non-recurring capital expenditures |
$926 |
- |
||||||
LEASE ROLLOVER SCHEDULE: |
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Year |
# of Leases |
Rentable Square Feet |
2011 Base Rent (5) |
||||
2011 (4) |
10 |
441,970 |
$7,608,267 |
||||
2012 |
13 |
791,223 |
15,267,698 |
||||
2013 |
6 |
339,123 |
4,971,350 |
||||
2014 |
20 |
1,625,113 |
26,223,937 |
||||
2015 |
8 |
587,437 |
9,178,833 |
||||
2016 |
4 |
196,279 |
3,672,284 |
||||
2017 |
10 |
605,557 |
7,826,608 |
||||
2018 |
3 |
265,612 |
1,120,944 |
||||
2019 |
1 |
165,000 |
2,931,834 |
||||
Thereafter |
3 |
208,768 |
4,327,563 |
||||
Total |
78 |
5,226,082 |
$83,129,318 |
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BALANCE SHEETS |
||||||||
March 31, 2011 |
December 31, 2010 |
|||||||
Assets |
||||||||
Investments in real estate: |
||||||||
Land |
$322,076 |
$322,076 |
||||||
Buildings and improvements |
791,350 |
790,424 |
||||||
Real estate related intangible assets |
1,120 |
3,240 |
||||||
Total investments in properties |
1,114,546 |
1,115,740 |
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Accumulated depreciation and amortization |
(227,734) |
(224,027) |
||||||
Assets held for sale, net |
3,267 |
3,267 |
||||||
Net investments in properties |
890,079 |
894,980 |
||||||
Investment in unconsolidated joint venture |
3,747 |
3,830 |
||||||
Net investments in real estate |
893,826 |
898,810 |
||||||
Cash and cash equivalents |
2,108 |
3,988 |
||||||
Restricted cash |
6,820 |
6,892 |
||||||
Deferred rent |
17,306 |
17,941 |
||||||
Other assets, net |
40,903 |
40,653 |
||||||
Total assets |
$960,963 |
$968,284 |
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Liabilities and Equity |
||||||||
Liabilities: |
||||||||
Mortgage notes payable |
$342,182 |
$345,770 |
||||||
Mortgage note payable – related parties |
7,580 |
7,721 |
||||||
Interest payable |
1,642 |
1,659 |
||||||
Security deposits |
4,415 |
4,605 |
||||||
Prepaid rent |
4,768 |
6,526 |
||||||
Liability related to assets held for sale |
8 |
- |
||||||
Dividends and distributions payable |
13,832 |
15,793 |
||||||
Accounts payable and accrued expenses |
20,566 |
16,239 |
||||||
Total liabilities |
394,993 |
398,313 |
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Commitments and contingencies. |
||||||||
Equity: |
||||||||
Stockholders' equity: |
||||||||
Common stock, $.001 par value |
22 |
22 |
||||||
Additional paid-in capital |
174,186 |
172,568 |
||||||
Distributions in excess of accumulated earnings |
(31,028) |
(30,520) |
||||||
Total stockholders' equity |
143,180 |
142,070 |
||||||
Noncontrolling interests in operating partnerships |
422,790 |
427,901 |
||||||
Total equity |
565,970 |
569,971 |
||||||
Total liabilities and equity |
$960,963 |
$968,284 |
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(1) |
Includes approximately $124 and $159 in amortization expense for the three months ended March 31, 2011 and 2010, respectively, for the amortization of in-place lease value intangible asset pursuant to the Business Combinations Topic of the Financial Accounting Standards Board Accounting Standards Codification. |
|
(2) |
Calculated on a fully diluted basis. Assumes conversion of O.P. units outstanding into the Company's common stock. |
|
(3) |
Average monthly rental revenue per square foot has been determined by taking the cash base rent for the period divided by the number of months in the period, and then divided by the average occupied square feet in the period. |
|
(4) |
Excludes five month-to-month leases for approximately 86,000 rentable square feet and $63 in cash rent. |
|
(5) |
Base rent reflects cash rent. |
|
(6) |
Includes a one-time rent adjustment of approximately $1,638 from a tenant dispute resolution. |
|
(7) |
Includes a one-time rent adjustment of approximately $1,638. Excluding the adjustment, the average monthly rental revenue per square foot would have been $1.29. |
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SOURCE Mission West Properties, Inc.