Silver Bay Realty Trust Corp. Reports Fourth Quarter 2012 Financial Results
Silver Bay Realty Trust Corp. Reports Fourth Quarter 2012 Financial Results
Completed Initial Public Offering and Formation Transactions, Acquired Portfolio of Over 3,400 Single-Family Properties
NEW YORK--(BUSINESS WIRE)-- Silver Bay Realty Trust Corp. (NYS: SBY) or "Silver Bay," or "the Company," a real estate investment trust that focuses on the acquisition, renovation, leasing and management of single-family properties, today announced its financial results for the quarter ended December 31, 2012.
Highlights
Completed an initial public offering, which resulted in net proceeds of approximately $263.3 million (including proceeds of approximately $34.8 million attributable to the exercise of the underwriters' overallotment option on January 7, 2013)
Managed portfolio of over 3,400 single-family properties located in ten markets across seven states as of December 31, 2012
Realized an average monthly rent per leased property of $1,148
Held cash and cash equivalents of $228.1 million and $19.7 million in escrow deposits
"We are proud to be the first publicly traded, single-family property REIT," said David N. Miller, Silver Bay's President and Chief Executive Officer. "Silver Bay is capitalizing on a generational opportunity to acquire undervalued single-family properties in markets with strong demographic and macroeconomic indicators. Additionally, we continue to build our institutional platform in order to grow our business and capture operational efficiencies."
Financial Results
Silver Bay reported fourth quarter 2012 total revenue of $2.8 million. Net loss attributable to common stockholders for the fourth quarter was $3.2 million, or ($0.04) per diluted share.
Formation and Financial Presentation
Concurrently with Silver Bay's initial public offering, the Company completed a series of merger and contribution transactions through which Silver Bay acquired Two Harbors Property Investment LLC (now Silver Bay Property Investment LLC), or its Predecessor, and entities managed by Provident Real Estate Advisors LLC, or the Provident Entities. Silver Bay's Predecessor is considered the acquiring or surviving entity for accounting purposes. Given Silver Bay's formation date of December 19, 2012, the financial results for the fourth quarter and full year of 2012 reflect an abbreviated operating period of twelve days for the Provident Entities in addition to the full year financial performance of its Predecessor.
The historical balances of Silver Bay's Predecessor have been reflected at carryover basis in Silver Bay's consolidated financial statements for 2012. The assets and liabilities of the Provident Entities' have been recorded at their fair value upon acquisition.
In the first quarter of 2012, Silver Bay's Predecessor began acquiring a portfolio of single-family properties. A substantial number of these properties did not generate revenue for the fourth quarter and full year of 2012 as they were still in the stabilization phase, or the period before a property becomes income producing.
Portfolio Summary and Operating Metrics
Silver Bay managed a portfolio of 3,405 single-family properties as of December 31, 2012. During the fourth quarter, Silver Bay and its Predecessor acquired 857 properties in the fourth quarter, exclusive of the acquisition of the 881 properties owned by the Provident Entities. The Company achieved an occupancy rate of 96% and an average monthly rent of $1,148 on 1,779 properties that were stabilized as of December 31, 2012. Silver Bay reported an occupancy rate of 83% and an average monthly rent of $1,143 on 1,583 properties that were owned for a minimum of six months. A total of 1,705 single-family properties of the aggregate portfolio were leased as of December 31, 2012, resulting in an occupancy rate of 50%. The occupancy rate of the aggregate portfolio is not indicative of the portfolio's expected performance due to the significant number of recently acquired properties and those still in the stabilization phase. A summary of Silver Bay's occupancy rates in addition to Silver Bay's supplementary definition of stabilized properties are included in the financial and operating tables accompanying this press release.
Public Stock Offerings
On December 19, 2012, Silver Bay completed an initial public offering of common stock. The offering resulted in the issuance of 13,250,000 shares of common stock for net proceeds of approximately $228.5 million. Subsequent to quarter end, Silver Bay issued an additional 1,987,500 shares of common stock pursuant to the underwriters' over-allotment option for net proceeds of approximately $34.8 million. Silver Bay intends to use the net proceeds from these offerings to purchase additional single-family properties, to renovate such properties for rental to residents and for working capital.
First Quarter 2012 Conference Schedule
The Company is scheduled to participate in an upcoming investor conference in New York City. On March 7, 2013, Silver Bay will attend the Goldman Sachs Equity Housing Conference at the Conrad New York. During the conference, the Silver Bay management team may discuss the current operating environment of the Company, as well as overall business strategy and property acquisitions.
Conference Call
Silver Bay will host a conference call on March 1, 2013 at 9:00 a.m. EST to discuss fourth quarter 2012 financial results and business highlights. To participate in the teleconference, please call toll-free (888) 317-6016 (or (412) 317-6016 for international callers and (855) 669-9657 for Canadian callers) approximately 10 minutes prior to the above start time. You may also listen to the teleconference live via the Internet on the Company's website at www.silverbayrealtytrustcorp.com in the Investor Relations section under the Events Calendar link. For those unable to attend, a telephone playback will be available beginning at 12:00 p.m. EST on March 1, 2013 through 9:00 p.m. EST on March 18, 2013. The playback can be accessed by calling (877) 344-7529 (or (412) 317-0088 for international callers) and providing Conference Number 10024964. The call will also be archived on the Company's website in the Investor Relations section under the Events Calendar link.
About Silver Bay Realty Trust Corp.
Silver Bay Realty Trust Corp. is a Maryland corporation focused on the acquisition, renovation, leasing and management of single-family properties for rental income and long-term capital appreciation. Silver Bay owns single-family properties in Arizona, California, Florida, Georgia, Nevada, North Carolina, Ohio and Texas. Silver Bay intends to elect and qualify to be taxed as a REIT.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Actual results may differ from expectations, estimates and projections and, consequently, readers should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "target," "assume," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believe," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. These forward looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Factors that could cause actual results to differ include: adverse economic or real estate developments in Silver Bay's target markets; defaults on, early terminations of or non-renewal of leases by residents; difficulties in identifying properties to acquire and completing acquisitions; increased time and/or expense to gain possession and renovate properties; Silver Bay's failure to successfully operate its properties; Silver Bay's ability to obtain financing arrangements; general volatility of the markets in which it participates; interest rates and the market value of Silver Bay's target assets; the impact of changes in governmental regulations, tax law and rates, and similar matters.
Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Silver Bay does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Additional information concerning these and other risk factors is contained in Silver Bay's most recent filings with the Securities and Exchange Commission. All subsequent written and oral forward looking statements concerning Silver Bay or matters attributable to Silver Bay or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.
Additional Information
Stockholders of Silver Bay, and other interested persons, may find additional information regarding the Company at the SEC's Internet site at www.sec.gov or by directing requests to: Silver Bay Realty Trust Corp., Attn: Investor Relations, 601 Carlson Parkway, Suite 250, Minnetonka, MN 55305, telephone (952) 358-4400.
SILVER BAY REALTY TRUST CORP. CONSOLIDATED BALANCE SHEET DECEMBER 31, 2012 (amounts in thousands except share data) | |||||
Assets | |||||
Investments in real estate: | (unaudited) | ||||
Land | $ | 82,310 | |||
Building and improvements | 338,252 | ||||
420,562 | |||||
Accumulated depreciation | (1,869 | ) | |||
Investments in real estate, net | 418,693 | ||||
Cash and cash equivalents | 228,139 | ||||
Escrow deposits | 19,727 | ||||
Resident security deposits | 2,266 | ||||
In-place lease and deferred lease costs, net | 2,363 | ||||
Other assets | 6,114 | ||||
Total Assets | $ | 677,302 | |||
Liabilities and Equity | |||||
Liabilities: | |||||
Accounts payable and accrued property expenses | $ | 4,550 | |||
Resident prepaid rent and security deposits | 2,713 | ||||
Amounts due to the manager and affiliates | 3,071 | ||||
Amounts due previous owners | 6,555 | ||||
Total liabilities | 16,889 | ||||
10% cumulative redeemable preferred stock, $.01 par; 50,000,000 authorized, 1,000 issued and outstanding | 1,000 | ||||
Equity: | |||||
Stockholders' Equity: | |||||
Common stock $.01 par; 450,000,000 shares authorized; 37,328,213 shares issued and outstanding | 372 | ||||
Additional paid-in capital | 664,146 | ||||
Cumulative deficit | (5,609 | ) | |||
Total Stockholders' Equity | 658,909 | ||||
Noncontrolling interests - Operating Partnership | 504 | ||||
Total Equity | 659,413 | ||||
Total Liabilities and Equity | $ | 677,302 | |||
SILVER BAY REALTY TRUST CORP. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2012 (amounts in thousands except share data) | ||||||||||
Three Months Ended | ||||||||||
December 31, 2012 | Year Ended 2012 | |||||||||
(unaudited) | (unaudited) | |||||||||
Revenue: | ||||||||||
Rental income | $ | 2,757 | $ | 3,584 | ||||||
Other income | 32 | 32 | ||||||||
Total revenue | 2,789 | 3,616 | ||||||||
Expenses: | ||||||||||
Property operating and maintenance | 1,195 | 1,971 | ||||||||
Real estate taxes | 747 | 1,273 | ||||||||
Homeowner's association fees | 229 | 391 | ||||||||
Property management | 395 | 459 | ||||||||
Depreciation and amortization | 1,528 | 2,003 | ||||||||
Advisory management fee - affiliates | 1,355 | 2,159 | ||||||||
General and administrative | 585 | 881 | ||||||||
Total expenses | 6,034 | 9,137 | ||||||||
Net loss | (3,245 | ) | (5,521 | ) | ||||||
Net loss attributable to noncontrolling interests - Operating Partnership | 4 | 4 | ||||||||
Net loss attributable to controlling interests | (3,241 | ) | (5,517 | ) | ||||||
Preferred stock distributions | (3 | ) | (3 | ) | ||||||
Net loss attributable to common stockholders | $ | (3,244 | ) | $ | (5,520 | ) | ||||
Loss per share - basic and diluted(1) | ||||||||||
Net loss attributable to common shares | $ | (0.04 | ) | $ | (0.04 | ) | ||||
Weighted average common shares outstanding | 37,328,213 | 37,328,213 | ||||||||
(1) | Silver Bay calculated the 2012 loss per share only for the period its common stock was outstanding during the year, referred to as the post-formation period. Prior to its initial public offering and formation transactions, Silver Bay did not have any publicly issued common stock. The formation transactions closed on December 19, 2012, therefore Silver Bay has defined the post-formation period to be the date of the formation transactions through December 31, 2012, or twelve days of activity. | ||
SILVER BAY REALTY TRUST CORP. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE QUARTER ENDED DECEMBER 31, 2012 (amounts in thousands except share data) (unaudited) | ||||||||||||||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||||
Noncontrolling | ||||||||||||||||||||||||||||||||||||||
Par | Additional | Total | Interests- | |||||||||||||||||||||||||||||||||||
Shares | Value | Paid-In | Cumulative | Stockholders' | Operating | Parent | Total | |||||||||||||||||||||||||||||||
Issued | Amount | Capital | Deficit | Equity | Partnership | Equity | Equity | |||||||||||||||||||||||||||||||
Balance at October 1, 2012 | $ | - | $ | - | $ | (2,367 | ) | $ | (2,367 | ) | $ | - | $ | 250 | $ | (2,117 | ) | |||||||||||||||||||||
Parent contributions through December 19, 2012 | - | 321,773 | 321,773 | |||||||||||||||||||||||||||||||||||
Net proceeds from Initial Public Offering | 13,250,000 | 133 | 228,384 | 228,517 | 228,517 | |||||||||||||||||||||||||||||||||
Formation Transactions | 23,917,642 | 239 | 435,713 | - | 435,952 | 508 | (322,023 | ) | 114,437 | |||||||||||||||||||||||||||||
Restricted stock issued | 160,571 | - | - | - | ||||||||||||||||||||||||||||||||||
Other | 49 | 49 | 49 | |||||||||||||||||||||||||||||||||||
Net loss | (3,242 | ) | (3,242 | ) | (4 | ) | (3,246 | ) | ||||||||||||||||||||||||||||||
Balance at December 31, 2012 | 37,328,213 | $ | 372 | $ | 664,146 | $ | (5,609 | ) | $ | 658,909 | $ | 504 | $ | - | $ | 659,413 | ||||||||||||||||||||||
SILVER BAY REALTY TRUST CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2012 (amounts in thousands) | |||||||||
Three Months Ended | |||||||||
December 31, 2012 | Year Ended 2012 | ||||||||
(unaudited) | (unaudited) | ||||||||
