Chambers Street - Second Quarter 2013 Financial Results
Chambers Street - Second Quarter 2013 Financial Results
Core FFO per Diluted Share Increases 23.1% to $0.16 Compared to the Same Period Last Year
PRINCETON, N.J.--(BUSINESS WIRE)-- Chambers Street Properties (NYS: CSG) ("Chambers Street" or the "Company"), a real estate investment trust focused on acquiring, owning and managing net leased industrial and office properties, today reported its financial results for the three-month period ended June 30, 2013.
"Our portfolio produced solid operating results in the second quarter 2013, with strong leasing activity and recent acquisitions driving Core Funds from Operations to $0.16 per diluted share," stated Jack A. Cuneo, President and Chief Executive Officer of Chambers Street. "In May, we completed the listing of our shares on the New York Stock Exchange, which we believe will provide us access to additional capital sources, enabling us to continue to execute our long-term strategies. We remain committed to our long-standing, disciplined approach of growing the Company and increasing cash flows, while maintaining a strong balance sheet to ensure our financial flexibility to take advantage of opportunities that align with our goals."
Operational and Financial Highlights Second Quarter 2013
Core Funds from Operations ("Core FFO") of $0.16 per diluted share, a 23.1% increase compared to $0.13 per diluted share for the quarter ended June 30, 2012.
Funds from Operations ("FFO"), as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), of $0.13 per diluted share, an 8.3% increase compared to $0.12 per diluted share for the quarter ended June 30, 2012.
Net loss of $3.6 million, or $0.01 per diluted share, as compared to a net loss of $1.9 million, or $0.01 per diluted share, for the quarter ended June 30, 2012.
Portfolio occupancy and percentage leased of 95.5% at quarter end.
Executed over 1,345,000 square feet of new, renewal and expansion leases in the first six months of 2013.
Completed the listing of the Company's common shares on the New York Stock Exchange under the ticker symbol "CSG".
Financial Results for the Three Months Ended June 30, 2013
Core FFO for the second quarter of 2013 was $40.9 million, or $0.16 per diluted share, compared to $31.6 million, or $0.13 per diluted share, for the second quarter of 2012. The increase in our Core FFO was driven by the acquisition of the minority interest in 17 properties previously owned in the Company's Duke joint venture, and the completion and rent commencement of the 1400 Atwater Drive build-to-suit project located in Malvern, Pennsylvania.
FFO as defined by NAREIT for the second quarter 2013 was $33.0 million, or $0.13 per diluted share, as compared to $29.2 million, or $0.12 per diluted share, for the second quarter of 2012. The increase in our FFO was driven by the same factors that increased our Core FFO offset by higher non-recurring listing and transition expenses.
Net loss for the second quarter 2013 totaled $3.6 million, or $0.01 per diluted share, as compared to a net loss of $1.9 million, or $0.01 per diluted share, for the second quarter of 2012.
Financing and Capital Transactions
In May, the Company listed its common shares on the New York Stock Exchange under the ticker symbol "CSG". Simultaneously with the listing, the Company executed a modified "Dutch Auction" tender offer, through which it purchased and retired approximately 12.38 million common shares, for $10.10 per share. At June 30, 2013, the Company had approximately 236.95 million common shares outstanding.
Common Share Dividend
On April 26, 2013, the board of trustees approved a quarterly distribution to shareholders of $0.125 per common share for the third quarter of 2013. The distribution will be paid on October 11, 2013 to shareholders of record on September 26, 2013. On August 4, 2013, the board of trustees decided that, beginning in the fourth quarter 2013, the Company will pay its dividend on a monthly basis.
2013 Guidance
The Company is providing full year 2013 guidance for Core FFO of $0.57 to $0.62 per diluted share, based on management's expectations as of the date of this release, representing an increase of at least 18.8% over its Core FFO for 2012 of $0.48 per share. The guidance presented does not include the effects of property acquisitions, dispositions, or capital transaction activity completed subsequent to June 30, 2013, except those previously announced and completed. The foregoing estimates are forward-looking and reflect management's view of current and future market conditions, including leasing activity, rental rates, occupancy levels, interest rates and the amount and timing of acquisitions. The Company may change its guidance as actual and anticipated results vary from management's assumptions.
Supplemental Information
The Company released supplemental information, available at http://www.chambersstreet.com under the Investors Relations section, with additional detail, including a description of non-GAAP financial measures and reconciliation to GAAP measures.
Investor Conference Webcast and Conference Call
The Company will host a webcast and conference call at 10:00 a.m. Eastern Daylight Time on Thursday, August 8, 2013, to discuss second quarter 2013 results. The number to call is 1-877-407-9039 (domestic) and 1-201-689-8470 (international). The live webcast will be available at http://www.chambersstreet.com under the Investor Relations section. A replay of the conference call will be available through August 22, 2013, by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and entering the passcode 418251.
About Chambers Street Properties (NYSE: CSG)
Chambers Street is a net lease industrial and office real estate investment trust that focuses on acquiring, owning, and managing income-producing industrial (primarily warehouse/distribution) and office properties leased to creditworthy tenants on a net leased basis. As of June 30, 2013, Chambers Street owned or had a majority interest in 129 properties located across 22 U.S. states, Germany, and the United Kingdom encompassing approximately 34.2 million rentable square feet.
For more information, please visit: www.chambersstreet.com
CHAMBERS STREET PROPERTIES | ||||||
Consolidated Balance Sheets | ||||||
As of June 30, 2013 and December 31, 2012 | ||||||
(In Thousands, Except Share Data) | ||||||
June 30, | December 31, | |||||
2013 | 2012 | |||||
(unaudited) | ||||||
ASSETS | ||||||
Investments in Real Estate: | ||||||
Land | $ | 442,600 | $ | 378,806 | ||
Building and Improvements | 1,458,710 | 1,091,639 | ||||
Tenant Improvements | 135,317 | 80,679 | ||||
2,241,361 | 1,732,940 | |||||
Less: Accumulated Depreciation and Amortization | (162,401) | (132,129) | ||||
Net Investment in Real Estate | 2,078,960 | 1,600,811 | ||||
Investment in Unconsolidated Entities | 361,004 | 515,829 | ||||
Construction in Progress and Other Assets - Variable Interest Entity | - | 76,826 | ||||
Cash and Cash Equivalents | 87,861 | 107,355 | ||||
Restricted Cash | 15,655 | 10,998 | ||||
Accounts and Other Receivables, Net | 9,830 | 6,675 | ||||
Deferred Rent | 29,715 | 25,210 | ||||
Acquired Above-Market Leases, Net | 47,322 | 31,855 | ||||
Acquired In-Place Lease Value, Net | 214,648 | 162,558 | ||||
Deferred Financing Costs, Net | 8,837 | 8,322 | ||||
Lease Commissions, Net | 4,462 | 4,645 | ||||
Other Assets | 7,111 | 3,778 | ||||
Interest Rate Swaps at Fair Value - Qualifying Hedge | 4,343 | - | ||||
Total Assets | $ | 2,869,748 | $ | 2,554,862 | ||
LIABILITIES, NON-CONTROLLING INTEREST AND SHAREHOLDERS' EQUITY | ||||||
LIABILITIES | ||||||
Notes Payable, Net | $ | 689,797 | $ | 492,944 | ||
Notes Payable at Fair Value | 8,753 | 9,288 | ||||
Loan Payable | 510,044 | 265,000 | ||||
Security Deposits | 2,122 | 1,811 | ||||
Accounts Payable, Accrued Expenses and Other Liabilities | 55,614 | 24,531 | ||||
Accounts Payable, Accrued Expenses and Prepaid Rent- Variable Interest Entity | - | 24,531 | ||||
Acquired Below-Market Leases, Net | 33,687 | 24,582 | ||||
Above-Market Ground Lease Obligation, Net | 1,376 | 1,412 | ||||
Property Management Fee Payable to Related Party | 124 | 384 | ||||
Investment Management Fee Payable to Related Party | - | 10,700 | ||||
Distributions Payable | 35,486 | 37,418 | ||||
Interest Rate Swaps at Fair Value - Non-Qualifying Hedge | 83 | 423 | ||||
Interest Rate Swaps at Fair Value - Qualifying Hedge | 1,396 | 1,015 | ||||
Total Liabilities | 1,338,482 | 894,039 | ||||
COMMITMENTS AND CONTINGENCIES | ||||||
NON-CONTROLLING INTEREST | ||||||
Operating Partnership Units | 2,464 | 2,464 | ||||
Class B Operating Partnership Unit | 200 | 200 | ||||
Non-Controlling Interest - Variable Interest Entity | - | 826 | ||||
SHAREHOLDERS' EQUITY | ||||||
Common Shares of Beneficial Interest, $.01 par value, 990,000,000 shares authorized; 236,948,214 and 249,664,156 issued and outstanding as of June 30, 2013 and December 31, 2012, respectively | 2,365 | 2,494 | ||||
Additional Paid-in-Capital | 2,072,930 | 2,203,888 | ||||
Accumulated Deficit | (534,849) | (540,462) | ||||
Accumulated Other Comprehensive Loss | (11,844) | (8,587) | ||||
Total Shareholders' Equity | 1,528,602 | 1,657,333 | ||||
Total Liabilities, Non-Controlling Interest and Shareholders' Equity | $ | 2,869,748 | $ | 2,554,862 | ||
CHAMBERS STREET PROPERTIES | ||||||||||||
Consolidated Statements of Operations | ||||||||||||
For the Three and Six Months Ended June 30, 2013 and 2012 (unaudited) | ||||||||||||
(In Thousands, Except Share Data) | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
REVENUES | ||||||||||||
Rental | $ | 51,110 | $ | 36,568 | $ | 95,150 | $ | 71,887 | ||||
Tenant Reimbursements | 16,000 | 8,318 | 25,912 | 16,398 | ||||||||
Total Revenues | 67,110 | 44,886 | 121,062 | 88,285 | ||||||||
EXPENSES | ||||||||||||
Operating and Maintenance | 7,298 | 4,833 | 13,084 | 9,941 | ||||||||
Property Taxes | 11,307 | 5,410 | 18,781 | 10,786 | ||||||||
Interest | 10,482 | 8,711 | 19,786 | 17,467 | ||||||||
General and Administrative | 7,576 | 2,269 | 12,710 | 4,434 | ||||||||
Property Management Fee to Related Party | 286 | 390 | 520 | 772 | ||||||||
Investment Management Fee to Related Party | (11) | 6,150 | 489 | 12,111 | ||||||||
Acquisition | 162 | 31 | 2,004 | 1,409 | ||||||||
Depreciation and Amortization | 26,770 | 17,985 | 48,774 | 35,961 | ||||||||
Transition Costs | 693 | 1,936 | 728 | 1,936 | ||||||||
Listing | 10,506 | - | 10,506 | - | ||||||||
Total Expenses | 75,069 | 47,715 | 127,382 | 94,817 | ||||||||
OTHER INCOME AND EXPENSES | ||||||||||||
Interest and Other Income | 280 | 485 | 487 | 1,545 | ||||||||
Net Settlement Payments on Interest Rate Swaps | (704) | (164) | (1,047) | (324) | ||||||||
Gain on Interest Rate Swaps | 2,383 | 122 | 1,466 | 246 | ||||||||
Loss on Notes Payable at Fair Value | (32) | (25) | (57) | (60) | ||||||||
Total Other Income | 1,927 | 418 | 849 | 1,407 | ||||||||
LOSS BEFORE PROVISION FOR INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED ENTITIES | (6,032) | (2,411) | (5,471) | (5,125) | ||||||||
Provision for Income Taxes | (151) | (160) | (220) | (142) | ||||||||
Equity In Income of Unconsolidated Entities | 2,575 | 1,087 | 6,939 | 1,629 | ||||||||
(Loss) Gain On Conversion of Equity Interest to Controlling Interest | (32) | - | 77,202 | - | ||||||||
NET (LOSS) INCOME FROM CONTINUING OPERATIONS | (3,640) | (1,484) | 78,450 | (3,638) | ||||||||
DISCONTINUED OPERATIONS | ||||||||||||
Loss on Write Down to Net Sales Value | - | (415) | - | (415) | ||||||||
LOSS FROM DISCONTINUED OPERATIONS | - | (415) | - | (415) | ||||||||
NET (LOSS) INCOME | (3,640) | (1,899) | 78,450 | (4,053) | ||||||||
Net Loss (Income) Attributable to Non-Controlling Operating Partnership Units | 4 | - | (79) | 2 | ||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (3,636) | $ | (1,899) | $ | 78,371 | $ | (4,051) | ||||
Basic and Diluted Net (Loss) Income per Share-Attributable to Common Shareholders | $ | (0.01) | $ | (0.01) | $ | 0.32 | $ | (0.02) | ||||
Weighted Average Common Shares Outstanding-Basic & Diluted | 248,224,851 | 249,117,722 | 248,350,481 | 246,983,416 | ||||||||
Dividends Declared Per Share | $ | 0.15 | $ | 0.15 | $ | 0.30 | $ | 0.30 | ||||
CHAMBERS STREET PROPERTIES | ||||||||||||
Reconciliation of Net (Loss) Income to FFO, Core FFO, and AFFO | ||||||||||||
For the Three and Six Months Ended June 30, 2013 and 2012 (unaudited) | ||||||||||||
(In Thousands, Except Share Data) | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Net (Loss) Income | $ | (3,640) | $ | (1,899) | $ | 78,450 | $ | (4,053) | ||||
Adjustments: | ||||||||||||
Real Estate Depreciation and Amortization | 26,770 | 17,985 | 48,774 | 35,961 | ||||||||
Loss (Gain) on Conversion of Equity Interest to Controlling Interest | 32 | - | (77,202) | - | ||||||||
Loss on Write Down to Net Sales Value | - | 415 | - | 415 | ||||||||
Net Effect of FFO Adjustment from Unconsolidated Entities (1) | 9,828 | 12,719 | 20,151 | 25,788 | ||||||||
Funds from Operations | 32,990 | 29,220 | ||||||||||
