DCT Industrial Trust Inc.® Reports First Quarter 2013 Results
DCT Industrial Trust Inc.®Reports First Quarter 2013 Results
Same-Store NOI Growth of 8.0 Percent on a Cash Basis and 5.3 Percent on a GAAP Basis in Q1; Average Same-Store Occupancy Increased 210 Basis Points Year-over-Year to 92.1 Percent
Consolidated Operating Occupancy Increased 40 Basis Points to 92.7 Percent in Q1
Rental Rates Increased 6.0 Percent on a GAAP Basis in Q1
Under Agreement to Acquire 7 Buildings, Totaling 1.9 Million Square Feet from a JV Partner
Pre-leased 610,000 Square Foot Slover Logistics Center II
FFO of $0.11 per Share in Q1
Company Raises FFO Guidance
"2013 is off to a great start, building on the positive momentum created in 2012. We are making excellent progress across all elements of our business plan - leasing, acquisitions, development, asset sales and balance sheet management," said Phil Hawkins, Chief Executive Officer of DCT Industrial. "Rents continue to improve and leasing activity remains steady across our markets. Additionally, our teams continue to execute with respect to external growth - our acquisitions and developments are creating significant value and further improving the quality and cash-flow growth potential of our portfolio."
Funds from Operations, as adjusted, attributable to common stockholders and unitholders ("FFO") for Q1 2013 totaled $33.3 million, or $0.11 per diluted share, compared with $29.0 million, or $0.11 per diluted share, for Q1 2012. These results exclude $0.4 million and $0.2 million of acquisition costs for the quarters ending March 31, 2013 and 2012, respectively.
Net income attributable to common stockholders for Q1 2013 was $1.3 million, or $0.00 per diluted share, compared with a net loss attributable to common stockholders of $6.0 million, or $0.03 per diluted share, reported for Q1 2012.
Property Results and Leasing Activity
As of March 31, 2013, DCT Industrial owned 406 consolidated operating properties, totaling 59.2 million square feet, with occupancy of 92.7 percent up from 92.3 percent as of December 31, 2012 and up 260 basis points from March 31, 2012. Including development and redevelopment, total consolidated occupancy was 91.3 percent as of March 31, 2013, compared to 90.4 percent as of December 31, 2012 and 90.1 percent as of March 31, 2012. In addition, 0.2 million square feet, or 0.4 percent of DCT Industrial's total consolidated portfolio, was leased but not yet occupied.
Net operating income ("NOI") was $52.5 million in Q1 2013, compared with $44.2 million in Q1 2012. In Q1 2013, same-store NOI, excluding revenue from lease terminations, increased 8.0 percent on a cash basis and 5.3 percent on a GAAP basis, when compared to the same period of 2012. Same-store occupancy averaged 92.1 percent in Q1 2013, an increase of 210 basis points over Q1 2012. Same-store occupancy, as of March 31, 2013, was 92.3 percent.
In Q1 2013, the Company signed leases totaling 1.4 million square feet. Rental rates on signed leases increased 6.0 percent on a GAAP basis and decreased 1.9 percent on a cash basis compared to the corresponding expiring leases. Over the previous four quarters, rental rates on signed leases increased 5.2 percent on a GAAP basis and decreased 2.5 percent on a cash basis. The Company's tenant retention rate was 46.0 percent in Q1 2013.
Joint Venture Acquisition
The Company has entered into a binding agreement to purchase its joint venture partner's 96.4 percent interest in seven buildings owned by TRT-DCT Industrial JV I Fund, for an incremental investment of $85.9 million. The acquisition is expected to close mid-May.
The buildings total 1.9 million square feet and are currently 71.2 percent occupied. The portfolio has an expected year-one weighted-average cash yield of 6.0 percent and a weighted-average projected stabilized cash yield of 7.4 percent.
|Chicago, IL||I-55 Corridor||189,000||100.0%|
Since entering into the purchase and sale agreement, DCT has negotiated a lease for all of the 503,000 square foot building in Lehigh Valley, with occupancy expected in July. This lease will bring the portfolio's occupancy to 97.5 percent.
Since January 1, 2013, DCT Industrial acquired six buildings at a total cost of $44.4 million. The buildings total 771,000 square feet and were 96.3 percent occupied at the time of acquisition. The Company expects a year-one weighted-average cash yield of 5.7 percent and a weighted-average projected stabilized cash yield of 6.3 percent on these assets.
The table below represents a summary of the acquisitions that have closed since January 1, 2013:
|Market||Submarket||Square Feet||Occupancy||Closed||Anticipated Yield*|
|Southern California||Inland Empire West||125,000||100.0%||Mar-13||5.9%|
|Southern California (2 buildings)||Mid-Counties||221,000||100.0%||Mar-13||5.5%|
|Atlanta, GA (2 buildings)||Airport||154,000||81.3%||Mar-13||7.2%|
*Anticipated yield represents year-one cash yield for stabilized acquisitions and projected stabilized cash yield for value-add acquisitions
Two development projects, Northwest 8 Distribution Center in Houston and Dulles Summit Distribution Building E were stabilized during the first quarter. These projects total 343,000 square feet with expected development costs of $20.4 million and an anticipated yield of 9.4 percent on a GAAP basis. Since July 2012, DCT Industrial has stabilized four development projects totaling 549,000 square feet with development costs of $39.4 million and an anticipated yield of 9.0 percent on a GAAP basis.
Other development activities since January 1, 2013:
- Announced the pre-lease of all of Slover Logistics Center II, a 610,000 square foot building located in the Inland Empire West submarket of Southern California. Building construction expected to start in Q3 2013 and complete in Q1 2014.
- Completed construction of DCT Commerce Center at Pan American West Building A, a 168,000 square foot building in the Airport West submarket of Miami. The building is currently 89 percent occupied.
- Commenced construction of DCT Airtex Industrial Center, a 267,000 square foot building in North Houston, located along Interstate 45. The building is slated for completion in Q3 2013.
- Commenced construction of DCT Beltway Tanner Business Park, a 136,000 square foot building in the Northwest submarket of Houston. The building is slated for completion in Q3 2013.
- Commenced construction on the 225,000 square foot expansion of Rockdale Distribution Center in the Wilson County submarket of Nashville. The pre-leased project is slated for completion in Q3 2013.
As previously announced, in Q1 2013, the Company completed three dispositions in Atlanta, Louisville and Memphis. The dispositions generated gross proceeds of $50.5 million and have a year-one weighted-average cash yield of 7.2 percent.
|Atlanta, GA||Henry County||578,000||76.2%||Jan-13|
Capital Markets Activity
Since January 1, 2013, DCT Industrial raised $75.2 million in net proceeds from the sale of common stock through its "at the market" equity offering. The Company issued approximately 10.4 million shares at an average price of $7.33 per share. The proceeds were, or will be, used to fund acquisitions and development costs.
In February 2013, DCT Industrial entered into an amendment with its syndicated bank group in which the Company increased its existing $175.0 million senior unsecured term loan to $225.0 million and extended it for a period of five years, extended its existing $300.0 million senior unsecured line of credit for a period of four years and received a commitment for an additional $175.0 million of senior unsecured debt. DCT closed on the additional $175.0 million in March 2013, which was used to refinance a scheduled June 2013 maturity of $175.0 million of other senior unsecured debt.
DCT Industrial's Board of Directors has declared a $0.07 per share quarterly cash dividend, payable on July 17, 2013 to stockholders of record as of July 5, 2013.
The Company has increased 2013 FFO guidance, as adjusted, to $0.41 to $0.46 per diluted share, up from $0.40 to $0.45. Additionally, net loss attributable to common stockholders and unitholders is expected to be between $(0.07) and $(0.02) per diluted share.
The Company's FFO guidance excludes acquisition costs.
Conference Call Information
DCT Industrial will host a conference call to discuss Q1 2013 results on Friday, May 3, 2013 at 11:00 a.m. Eastern Time. Stockholders and interested parties may listen to a live broadcast of the conference call by dialing (888) 317-6016 or (412) 317-6016. A telephone replay will be available through Thursday, May 16, 2013 and can be accessed by dialing (877) 344-7529 or (412) 317-0088 and entering the passcode 10027047. A live webcast of the conference call will be available in the Investors section of the DCT Industrial website at www.dctindustrial.com. A webcast replay will also be available shortly following the call until May 3, 2014.
Supplemental information is available in the Investors section of the Company's website at www.dctindustrial.com or by e-mail request at firstname.lastname@example.org. Interested parties may also obtain supplemental information from the SEC's website at www.sec.gov.
About DCT Industrial Trust Inc.®
DCT Industrial Trust Inc. is a leading industrial real estate company specializing in the acquisition, development, leasing and management of bulk distribution and light industrial properties in high-volume distribution markets in the U.S. and Mexico. As of March 31, 2013, the Company owned interests in approximately 74.5 million square feet of properties leased to approximately 880 customers, including 14.2 million square feet operated on behalf of four institutional capital management partners. Additional information is available at www.dctindustrial.com.
|DCT INDUSTRIAL TRUST INC. AND SUBSIDIARIES|
|Consolidated Balance Sheets|
|(in thousands, except share information)|
|March 31,||December 31,|
|Buildings and improvements||2,519,914||2,481,206|
|Intangible lease assets||79,539||78,467|
|Construction in progress||42,716||45,619|
|Total investment in properties||3,437,252||3,385,527|
|Less accumulated depreciation and amortization||(631,986||)||(605,888||)|
|Net investment in properties||2,805,266||2,779,639|
|Investments in and advances to unconsolidated joint ventures||129,415||130,974|
|Net investment in real estate||2,934,681||2,910,613|
|Cash and cash equivalents||19,498||12,696|
|Deferred loan costs, net||9,313||6,838|
|Straight-line rent and other receivables, net of allowance for doubtful accounts of $1,395 and $1,251, respectively||51,493||51,179|
|Other assets, net||12,672||12,945|
|Assets held for sale||11,350||52,852|
|LIABILITIES AND EQUITY|
|Accounts payable and accrued expenses||$||49,571||$||57,501|
|Tenant prepaids and security deposits||22,288||24,395|
|Intangible lease liability, net||19,795||20,148|
|Line of credit||50,000||110,000|
|Senior unsecured notes||1,075,000||1,025,000|
|Liabilities related to assets held for sale||400||940|
|Preferred stock, $0.01 par value, 50,000,000 shares authorized, none outstanding||-||-|
|Shares-in-trust, $0.01 par value, 100,000,000 shares authorized, none outstanding||-||-|
|Common stock, $0.01 par value, 500,000,000 shares authorized 284,695,132 and 280,310,488 shares issued and outstanding as of March 31, 2013 and December 31, 2012, respectively||2,847||2,803|
|Additional paid-in capital||2,262,631||2,232,682|
|Distributions in excess of earnings||(890,503||)||(871,655||)|
|Accumulated other comprehensive loss||(33,766||)||(34,766||)|
|Total stockholders' equity||1,341,209||1,329,064|
|Total liabilities and equity||$||3,044,092||$||3,057,199|
|DCT INDUSTRIAL TRUST INC. AND SUBSIDIARIES|
|Consolidated Statements of Operations|
|(unaudited, in thousands, except per share information)|
Three Months Ended
|Institutional capital management and other fees||812||1,055|
|Real estate taxes||11,079||9,625|
|Real estate related depreciation and amortization||32,615||29,602|
|General and administrative||6,420||5,784|
|Total operating expenses||58,919||52,506|
|OTHER INCOME AND EXPENSE:|
|Equity in earnings (loss) of unconsolidated joint ventures, net||391||(854||)|
|Interest and other income (expense)||162||197|
|Income tax benefit (expense) and other taxes||(109||)||(268||)|
|Loss from continuing operations||(1,859||)||(7,890||)|
|Income from discontinued operations||3,495||1,060|
|Consolidated net income (loss) of DCT Industrial Trust Inc.||1,636||(6,830||)|
|Net (income) loss attributable to noncontrolling interests||(357||)||826|
|Net income (loss) attributable to common stockholders||1,279||(6,004||)|
|Distributed and undistributed earnings allocated to participating securities||(173||)||(128||)|
|Adjusted net income (loss) attributable to common stockholders||$||1,106||$||(6,132||)|
|EARNINGS PER COMMON SHARE - BASIC AND DILUTED:|
|Loss from continuing operations||$||(0.01||)||$||(0.03||)|
|Income from discontinued operations||0.01||0.00|
|Net income (loss) attributable to common stockholders||$||0.00||$||(0.03||)|
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:|
|Basic and diluted||281,063||246,367|
|Distributions declared per common share||$||0.07||$||0.07|