EASTGROUP. Sunport IV Orlando, FL. Sunport IV Orlando, FL. Supplemental Information September 30, 2004

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Supplemental Infor mation

September 30, 2004

Phone: 601/354-3555

Fax: 601/352-1441

www.eastgroup.net

300 One Jackson Place

188 East Capitol Street

Jackson, MS 39201-2195

P.O. Box 22728

Jackson, MS 39225-2728

Conference Call

800/362-0571

ID - EastGroup

October 19, 2004

2:00 p.m. Eastern

webcast available at

www.eastgroup.net

Sunport IV

Orlando, FL

Sunport IV

Orlando, FL

E

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P R

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Table of Contents

Balance Sheet ...3

Income Statement ...4

Reconciliations to Net Income ...5

Weighted Average Shares...6

Property Net Operating Income By Type...7

Debt-to-Total Market Capitalization ...8

Mortgage Debt Repayment ...9

Property Sales and Acquisitions ...10

Development Summary ...11

Additional Financial Information ...12

Leasing Statistics...13

Core Market Operating Statistics...14

Lease Expiration Summary ...15

Top Ten Tenants ...16

Financial Statistics...17

Glossary of REIT Terms ...18

In addition to historical information, certain statements in this release are forward-looking, such as those pertaining to the Company’s hopes, expectations, intentions, plans, beliefs, strategies regarding the future, the anticipated performance of development and acquisition properties, capital resources, profitability and portfolio performance. Forward-looking statements involve numerous risks and uncertainties. The following factors, among others discussed herein, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: defaults or nonrenewal of leases, increased interest rates and operating costs, failure to obtain necessary outside financing, difficulties in identifying properties to acquire and in effecting acquisitions, failure to qualify as a real estate investment trust under the Internal Revenue Code of 1986, as amended, environmental uncertainties, risks related to disasters and the costs of insurance to protect from such disasters, financial market fluctuations, changes in real estate and zoning laws, increases in real property tax rates and risks relating to the Company’s development program, including weather, delays in construction schedules, contractor’s failure to perform, increases in the price of construction materials or the unavailability of such materials, difficulty in obtaining necessary governmental approvals and other matters outside the Company’s control. The success of the Company also depends upon the trends of the economy, including interest rates and the effects to the economy from possible terrorism and related world events, income tax laws, governmental regulation, legislation, population changes and those risk factors discussed elsewhere in this release. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s analysis only as the date hereof. The Company assumes no obligation to update forward-looking statements. See also the Company’s reports to be filed from time to time with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.

(3)

Consolidated Balance Sheets

(In thousands, except for share and per share data)

(Unaudited)

September 30, 2004

September 30, 2003

ASSETS

Real estate properties

$

844,142

778,680

Development

33,244

45,654

877,386

824,334

Less accumulated depreciation

(167,650)

(139,822)

709,736

684,512

Real estate held for sale

1,375

1,375

Cash

857

2,357

Other assets

34,943

28,949

TOTAL ASSETS

$

746,911

717,193

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Mortgage notes payable

$

305,471

287,604

Notes payable to banks

56,952

55,852

Accounts payable & accrued expenses

18,335

16,583

Other liabilities

8,143

7,631

388,901

367,670

Minority interest in joint venture

1,853

1,800

STOCKHOLDERS' EQUITY

Series B 8.75% Cumulative Convertible Preferred Shares and

additional paid-in capital; $.0001 par value; 2,800,000 shares

authorized and 550,000 shares issued at September 30, 2003;

stated liquidation preference of $13,750 at September 30, 2003

-

13,196

Series C Preferred Shares; $.0001 par value; 600,000 shares

authorized; no shares issued

-

-Series D 7.95% Cumulative Redeemable Preferred Shares and

additional paid-in capital; $.0001 par value; 1,320,000 shares

authorized and issued; stated liquidation preference of $33,000

32,326

32,329

Common shares; $.0001 par value; 68,080,000 shares authorized

at September 30, 2004 and 65,280,000 at September 30, 2003;

21,045,520 shares issued and outstanding at September 30, 2004

and 19,369,471 at September 30, 2003

2

2

Excess shares; $.0001 par value; 30,000,000 shares

authorized; no shares issued

-

-Additional paid-in capital on common shares

356,468

314,584

Distributions in excess of earnings

(30,068)

(9,795)

Accumulated other comprehensive loss

(60)

(190)

Unearned compensation

(2,511)

(2,403)

356,157

347,723

(4)

Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

2004

2003

2004

2003

REVENUES

Income from real estate operations

$

29,163

27,154

84,680

79,890

Gain on involuntary conversion

154

-

154

-Gain on securities

-

-

-

389

Other

120

65

231

177

29,437

27,219

85,065

80,456

EXPENSES

Operating expenses from real estate operations

8,273

8,043

23,874

23,579

Interest

5,115

4,796

15,057

14,137

Depreciation and amortization

8,245

7,931

24,737

23,265

General and administrative

1,686

1,246

4,930

3,746

Minority interest in joint ventures

122

107

366

320

23,441

22,123

68,964

65,047

INCOME FROM CONTINUING OPERATIONS

5,996

5,096

16,101

15,409

DISCONTINUED OPERATIONS

Income from real estate operations

24

61

152

165

Gain on sale of real estate investments

1,389

6

1,450

112

INCOME FROM DISCONTINUED OPERATIONS

1,413

67

1,602

277

NET INCOME

7,409

5,163

17,703

15,686

Preferred dividends-Series A

-

76

-

2,016

Preferred dividends-Series B

-

300

-

2,598

Preferred dividends-Series D

656

649

1,968

649

Costs on redemption of Series A preferred

-

1,778

-

1,778

NET INCOME AVAILABLE TO COMMON STOCKHOLDERS

$

6,753

2,360

15,735

8,645

BASIC PER COMMON SHARE DATA

Income from continuing operations

$

0.25

0.12

0.68

0.49

Income from discontinued operations

0.07

0.01

0.08

0.02

Net income available to common stockholders

$

0.32

0.13

0.76

0.51

Weighted average shares outstanding

20,804

18,451

20,746

17,089

DILUTED PER COMMON SHARE DATA

Income from continuing operations

$

0.25

0.12

0.67

0.48

Income from discontinued operations

0.07

0.01

0.07

0.02

Net income available to common stockholders

$

0.32

0.13

0.74

0.50

Weighted average shares outstanding

21,180

18,818

21,145

17,453

Nine Months Ended

September 30,

September 30,

(5)

Reconciliations of Other Reporting

Measures to Net Income

(In thousands, except per share data) (Unaudited)

2004 2003 2004 2003

Income from real estate operations $ 29,163 27,154 84,680 79,890 Operating expenses from real estate operations (8,273) (8,043) (23,874) (23,579) PROPERTY NET OPERATING INCOME (PNOI) (A) 20,890 19,111 60,806 56,311

Gain on involuntary conversion 154 - 154 -Gain on securities - - - 389 Other income 120 65 231 177 General and administrative expense (1,686) (1,246) (4,930) (3,746) EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND

AMORTIZATION (EBITDA) 19,478 17,930 56,261 53,131

Income from discontinued operations (before depreciation and amortization) 25 108 246 309 Interest expense (B) (5,115) (4,796) (15,057) (14,137) Minority interest in earnings (before depreciation and amortization) (158) (141) (473) (430) Gain on sale of nondepreciable real estate - 6 - 6 Dividends on Series A preferred shares - (76) - (2,016) Dividends on Series D preferred shares (656) (649) (1,968) (649) Costs on redemption of Series A preferred - (1,778) - (1,778) FUNDS FROM OPERATIONS (FFO) AVAILABLE TO COMMON STOCKHOLDERS (A) 13,574 10,604 39,009 34,436

Depreciation and amortization from continuing operations (8,245) (7,931) (24,737) (23,265) Depreciation and amortization from discontinued operations (1) (47) (94) (144) Share of joint venture depreciation and amortization 36 34 107 110 Gain on sale of depreciable real estate investments 1,389 - 1,450 106 Dividends on Series B convertible preferred shares - (300) - (2,598) NET INCOME AVAILABLE TO COMMON STOCKHOLDERS 6,753 2,360 15,735 8,645

Dividends on preferred shares 656 1,025 1,968 5,263 Costs on redemption of Series A preferred - 1,778 - 1,778 NET INCOME $ 7,409 5,163 17,703 15,686

DILUTED PER COMMON SHARE DATA: (C)

Income from continuing operations $ 0.25 0.12 0.67 0.48

Income from discontinued operations 0.07 0.01 0.07 0.02

Net income available to common stockholders $ 0.32 0.13 0.74 0.50 Weighted average shares outstanding 21,180 18,818 21,145 17,453 Funds from operations available to common stockholders $ 0.64 0.53 1.84 1.74 Weighted average shares outstanding for FFO purposes 21,180 20,133 21,145 19,803

Nine Months Ended September 30,

RECONCILIATIONS OF OTHER REPORTING MEASURES TO NET INCOME:

Three Months Ended September 30,

(A) The Company’s chief decision makers use two primary measures of operating results in making decisions, such as allocating resources: property net operating income (PNOI), defined as income from real estate operations less property operating expenses (before interest expense and depreciation and amortization), and funds from operations (FFO). EastGroup defines FFO consistent with the National Association of Real Estate Investment Trusts’ definition, as net income (loss) (computed in accordance with accounting principles generally accepted in the United States of America (GAAP)), excluding gains or losses from sales of depreciable real estate property, plus real estate related depreciation and amortization, and after adjustments for

unconsolidated partnerships and joint ventures.

PNOI and FFO are supplemental industry reporting measurements used to evaluate the performance of the Company’s investments in real estate assets and its operating results. The Company believes that the exclusion of depreciation and amortization in the industry’s calculations of PNOI and FFO provide supplemental indicators of the properties’ performance since real estate values have historically risen or fallen with market conditions. PNOI and FFO as calculated by the Company may not be comparable to similarly titled but differently calculated measures for other REITs. Investors should be aware that items excluded from or added back to FFO are significant components in understanding and assessing the Company’s financial performance. (B) Net of capitalized interest of $365,000 and $518,000 for the three months ended September 30, 2004 and 2003, respectively; and $1,275,000 and $1,520,000 for the nine months ended September 30, 2004 and 2003, respectively.

(6)

Weighted Average Shares

(In thousands)

2004

2003

2004

2003

Weighted average common shares

20,804

18,451

20,746

17,089

BASIC SHARES FOR EARNINGS PER SHARE

20,804

18,451

20,746

17,089

Potential common shares:

Stock options

170

182

198

177

Nonvested restricted stock

206

185

201

187

DILUTED SHARES FOR EARNINGS PER SHARE

21,180

18,818

21,145

17,453

Potential common shares:

Convertible preferred stock

-

1,315

-

2,350

DILUTED SHARES FOR FUNDS FROM OPERATIONS

21,180

20,133

21,145

19,803

Nine Months Ended

September 30,

September 30,

(7)

Property Net Operating Income

By Type

(In thousands)

2004 2003 Variance 2004 2003 Variance Same Property $ 19,439 18,367 5.8% 55,848 54,498 2.5% 2004 Acquisitions 269 - 463 -2003 Acquisitions 245 12 1,084 202 2004 Development 264 (13) 610 5 2003 Development - - 365 -Other (16) - (35) (8)

TOTAL NOI BEFORE STRAIGHT-LINE RENTS 20,201 18,366 58,335 54,697

Straight-Line Rents 689 745 2,471 1,614

TOTAL PROPERTY NET OPERATING INCOME $ 20,890 19,111 60,806 56,311

SAME PROPERTY

Same Property Before Straight-Line Rents $ 19,439 18,367 5.8% 55,848 54,498 2.5% Same Property Straight-Line Rents 504 719 1,800 1,547

Total Same Property NOI $ 19,943 19,086 4.5% 57,648 56,045 2.9%

REAL ESTATE INCOME & EXPENSE

Real Estate Income $ 29,163 27,154 84,680 79,890

Real Estate Expense (8,273) (8,043) (23,874) (23,579)

PNOI BEFORE MINORITY INTEREST $ 20,890 19,111 60,806 56,311

EXPENSE TO REVENUE RATIO 28.4% 29.6% 28.2% 29.5%

September 30,

Three Months Ended Nine Months Ended

(8)

Debt-to-Total Market

Capitalization

Interest Maturity Balance @ Annualized Rate Date September 30, 2004 Interest BANK CREDIT FACILITIES

$12.5MM Line - Floating Rate 3.015% 12/31/04 $ 4,952,000 $ 149,000 $175MM Line - Floating Rate 3.061% 01/08/05 52,000,000 1,592,000

Total Bank Debt 56,952,000 1,741,000

MORTGAGE DEBT

Exchange Distribution Center I 8.375% 08/01/05 1,842,000 154,000 Westport Commerce Center 8.000% 08/01/05 2,443,000 195,000 LakePointe Business Park 8.125% 10/01/05 9,875,000 802,000 Jetport Commerce Park 8.125% 10/01/05 2,955,000 240,000 Huntwood Associates 7.990% 08/22/06 11,168,000 892,000 Wiegman Associates 7.990% 08/22/06 5,154,000 412,000 World Houston 1 and 2 7.770% 04/15/07 4,212,000 327,000 E. University I & II, Broadway VI, 55th Avenue and Ethan Allen 8.060% 06/26/07 11,015,000 888,000 Lamar Distribution Center II 6.900% 12/01/08 1,839,000 127,000 Dominguez, Kingsview, Walnut, Washington, Industry and Shaw 6.800% 03/01/09 39,627,000 2,695,000 Auburn Facility 8.875% 09/01/09 2,518,000 223,000 Tower Automotive Center (recourse) 5.300% 01/15/11 10,620,000 563,000 Interstate Warehouses, Venture, Stemmons, Glenmont I & II, West

Loop I & II, Butterfield, Founders, and Rojas 7.250% 05/01/11 42,593,000 3,088,000 America Plaza, Central Green, and World Houston 3-9 7.920% 05/10/11 25,340,000 2,007,000 University Business Center (120 & 130 Cremona) 6.430% 05/15/12 7,058,000 454,000 University Business Center (125 & 175 Cremona) 7.980% 06/01/12 10,766,000 859,000 Airport Distribution, Southpointe, Broadway I, III & IV, Southpark, 51st

Avenue, Chestnut, Main Street, Interchange Business Park, North

Stemmons I, and World Houston 12 and 13 6.860% 09/01/12 38,705,000 2,655,000 Broadway V, 35th Avenue, Sunbelt, Freeport, Lockwood, Northwest

Point, Techway Southwest I, World Houston 10, 11 & 14 4.750% 09/05/13 44,526,000 2,115,000 Kyrene Distribution Center I 9.000% 07/01/14 879,000 79,000 World Houston 17, Kirby Business Center, Americas Ten I,

Shady Trail Distribution Center, Palm River North I, II & III,

and Westlake Distribution Center I & II 5.680% 09/28/14 30,300,000 1,721,000 Blue Heron Distribution Center II 5.390% 03/01/20 2,036,000 110,000

Total Mortgage Debt 305,471,000 20,606,000

TOTAL DEBT $ 362,423,000 $ 22,347,000

MARKET EQUITY

Shares Outstanding - Common 21,045,520

Price per share $ 33.20

Total Market Equity - Common 698,711,000

Shares Outstanding - Preferred Series D 1,320,000

Liquidation price per share $ 25.00

Total Market Equity - Preferred Series D 33,000,000

TOTAL MARKET EQUITY $ 731,711,000

TOTAL DEBT + TOTAL MARKET EQUITY $ 1,094,134,000

TOTAL DEBT ÷ (TOTAL DEBT + TOTAL MARKET EQUITY) 33.1%

Weighted Average Interest Rate - Bank Debt 3.1%

Weighted Average Interest Rate - Mortgage Debt 6.7%

(9)

Mortgage Debt

Repayment Schedule

As of September 30, 2004

Amortization Balloon Payments Total

Weighted Average Weighted Average Weighted Average Year Repayments Interest Rate Repayments Interest Rate Repayments Interest Rate

2004 . . . .$ 1,791,000 6.99% $ - 0.00% $ 1,791,000 6.99% 2005 . . . 7,580,000 6.90% 16,548,000 8.13% 24,128,000 7.74% 2006 . . . 7,569,000 6.80% 15,385,000 7.99% 22,954,000 7.59% 2007 . . . 7,829,000 6.68% 14,191,000 7.98% 22,020,000 7.52% 2008 . . . 8,153,000 6.66% 1,481,000 6.90% 9,634,000 6.69% 2009 and beyond . . . 24,530,000 6.21% 200,414,000 6.51% 224,944,000 6.48%

(10)

Property Sales and Acquisitions Schedule

For the Nine Months Ended September 30, 2004

Accumulated Net Sales Depreciation/

Date Property Name Location Size Price (1) Cost Amortization Gain

1st Quarter Sales

NONE

2nd Quarter Sales

06/30/04 Getwell Distribution Center Memphis, TN 26,000 sf $ 746,000 883,000 (198,000) 61,000 3rd Quarter Sales

07/01/04 Sample 95 Business Park III Pompano Beach, FL 18,000 sf 1,994,000 903,000 (192,000) 1,283,000 08/20/04 Viscount Row Distribution Center Dallas, TX 104,000 sf 2,204,000 2,708,000 (610,000) 106,000 122,000 sf 4,198,000 3,611,000 (802,000) 1,389,000 Total Sales 148,000 sf 4,944,000 4,494,000 (1,000,000) 1,450,000

Date Property Name Location Size Cost (2)

1st Quarter Acquisitions

01/15/04 Blue Heron Distribution Center II West Palm Beach, FL 100,000 sf $ 5,690,000 01/15/04 Blue Heron Distribution Center III West Palm Beach, FL 1.56 acres 450,000 03/17/04 Kirby Business Center Houston, TX 125,000 sf 4,228,000 10,368,000

2nd Quarter Acquisitions NONE

3rd Quarter Acquisitions

07/01/04 Interstate Distribution Center IV Dallas, TX 46,000 sf 3,062,000 08/10/04 Alamo Downs Distribution Center San Antonio, TX 253,000 sf 8,464,000 09/10/04 Santan 10 Phase II Chandler, AZ 5.94 acres 1,088,000 12,614,000

7.5 acres

Total Acquisitions 524,000 sf $ 22,982,000

(1) Net sales price represents contract sales price less closing costs. (2) Cost represents acquisition price plus closing costs.

ACQUISITIONS SALES

(11)

Development Summary

As of September 30, 2004

(In thousands)

Costs Incurred Anticipated Projected

Size (SF) at For Quarter Cumulative Projected 3rd Qtr YTD Completion Conversion Stabilized % Leased % Leased Completion Ended 9/30/04 at 9/30/04 Total Costs 2004 9/30/2004 Date Date (2) Yield (3) 4Q 04 1Q 05 3Q 04 10/18/04 Lease-up:

Santan 10 Chandler, AZ 65 $ 162 3,115 3,800 01/04 01/05 10.2% 53% 100% 100% 100%

Total Lease-up 65 162 3,115 3,800 (8) (1)

Under Construction:

Palm River South I Tampa, FL 79 808 2,720 4,300 11/04 11/05 10.3% 0% 0% 0% 0%

Sunport Center V Orlando, FL 63 1,085 2,466 3,800 12/04 01/05 10.2% 0% 0% 100% 100%

World Houston 16 Houston, TX 94 1,311 2,162 5,100 12/04 12/05 10.0% 0% 0% 0% 0%

Executive Airport CC II Fort Lauderdale, FL 55 133 2,058 4,200 02/05 02/06 10.3% 0% 0% 0% 0%

Southridge I Orlando, FL 41 451 477 3,900 03/05 03/06 10.5% 0% 0% 0% 0%

Southridge V Orlando, FL 70 459 513 4,600 03/05 03/06 10.1% 0% 0% 0% 0%

Total Under Construction 402 4,247 10,396 25,900 -

-Prospective Development (Principally Land):

Phoenix, AZ 123 1,083 1,467 6,900 Tucson, AZ 70 - 326 3,500 Tampa, FL 80 99 1,293 4,500 Orlando, FL 729 (478) 6,764 56,800 Fort Lauderdale, FL 25 14 464 2,300 El Paso, TX 251 - 2,444 7,600 Houston, TX 692 112 6,394 35,800 Jackson, MS 32 - 581 1,900

Total Prospective Development 2,002 830 19,733 119,300 11 16 2,469

$ 5,239 33,244 149,000 3 15

Completed Development and Transferred to Real Estate Properties During 2004: 3rd Quarter Sunport IV Orlando, FL 63 $ 12 3,564 10.0% 86% 86% Techway SW II Houston, TX 94 57 4,239 10.0% 43% 43% 157 69 7,803 96 253 2nd Quarter

Executive Airport CC I & III Fort Lauderdale, FL 85 79 6,215 10.0% 71% 71%

Expressway Commerce Center Tampa, FL 103 4 6,269 10.0% 67% 67%

World Houston 17 Houston, TX 66 779 3,097 10.4% 100% 100%

World Houston 19 Houston, TX 66 7 2,796 10.0% 87% 87%

World Houston 20 Houston, TX 62 1 2,295 10.0% 0% 0%

382

870 20,672 243 613

1st Quarter

None

Total Transferred to Real Estate Properties 539 $ 939 28,475 339 866

(1) Computed with rents on a straight-line basis.

(2) Transferred from Development to the Portfolio--earlier of 80% occupied or one year after completion date. (3) Based on 100% occupancy and rents computed on a straight-line basis.

NOI (1) Projected Avg

(12)

Additional Financial Information

(In thousands)

2004

2003

2004

2003

Straight-Line Rent Income Net of Bad Debt Expense (1)

$

689

745

2,471

1,648

Stock-Based Compensation Expense

$

286

138

883

454

Amortization of Loan Costs

$

206

198

621

591

Estimated

Capital Expenditures

Useful Life

Upgrade on Acquisitions

40 Yrs

$

140

10

178

51

Tenant Improvements:

New Tenants

Lease Life

1,361

963

3,566

2,763

New Tenants (first generation) (2)

Lease Life

88

62

962

734

Renewal Tenants

Lease Life

455

371

1,004

1,636

Other

Building Improvements

5-40 Yrs

464

150

1,008

586

Roofs

5-15 Yrs

519

522

1,101

1,250

Parking Lots

3-5 Yrs

47

10

115

95

Other

5 Yrs

14

1

31

55

Total Capital Expenditures

$

3,088

2,089

7,965

7,170

Capital Leasing Costs (3)

Development

Lease Life

$

77

366

366

694

New Tenants

Lease Life

366

916

1,330

1,641

New Tenants (first generation) (2)

Lease Life

87

-

168

88

Renewal Tenants

Lease Life

333

325

962

829

Total Capital Leasing Costs

$

863

1,607

2,826

3,252

Amortization of Leasing Costs (4)

$

861

874

2,433

2,375

(1) Includes discontinued operations.

(2) First generation refers to space that has never been occupied under EastGroup's ownership.

(3) Included in Other Assets.

(4) Included in Depreciation and Amortization (includes discontinued operations).

September 30,

Three Months Ended

September 30,

(13)

2004 Leasing Statistics Summary

Based on Actual Occupancy

# of % of % of # of % of % of

Leases Expiring Total SF Expiring Leases Expiring Total SF Expiring

Total Square Feet Owned as of 09/30/04 20,175,352 20,175,352

Percentage Leased as of 09/30/04 93.5% 93.5%

Percentage Occupied as of 09/30/04 92.1% 92.1%

Beginning Vacancy 1,700,909 1,537,340

Additions:

Leases Expiring 55 762,960 3.78% of Total Portfolio 206 2,919,977 14.47%

New Development/Acquisition vacancy 188,207 398,657

Early Terminations/Bankruptcies 19,200 48,574

970,367

3,367,208

Deletions:

Leases Renewed 33 60% (479,626) 63% 124 60% (1,606,784) 55%

New Leases Commenced of Leases Expiring 9 (163,595) 21% 31 (503,772) 17%

New Leases Commenced of Beginning Vacancy 33 (386,103) 98 (1,215,255) (1,029,324)

(3,325,811)

Net Change in Month to Month Leases (56,969) 6,246

Other SF Adjustments (105) (105)

Ending Vacancy 1,584,878 1,584,878

Renewals on Leases Expiring after 09/30/04 28,958 New Leases on Leases Expiring after 09/3004 4,060 33,018

Average Term Average Rental in Years Lease Size Change (Cash)

New Leases (1) 3.59 13,088 -8.72% $ 2.21 psf $ 0.74 psf

Renewal Leases 2.82 14,534 0.59% $ 0.87 psf $ 0.58 psf

Average for New & Renewal (1) 3.25 13,724 -4.45% $ 1.59 psf $ 0.67 psf

Average Term Average Rental in Years Lease Size Change (Cash)

New Leases (1) 3.77 13,326 -10.41% $ 1.81 psf $ 0.80 psf

Renewal Leases 2.93 12,958 -3.42% $ 0.73 psf $ 0.55 psf

Average for New & Renewal (1) 3.36 13,146 -6.88% $ 1.29 psf $ 0.68 psf (1) Rental increase and amounts per square foot (psf) do not include development properties or 1st generation space on development properties.

(2) Includes straight-line rent adjustments.

Percentage Leased represents the percentage of total leasable square footage for which there is a signed lease, including month-to-month leases, as of the close of the

reporting period. Space is considered leased upon execution of the lease.

Percentage Occupied represents the percentage of total leasable square footage for which the lease term has commenced as of the close of the reporting period.

Nine Months Ended Three Months Ended

Rental Tenant Leasing

September 30, 2004 September 30, 2004 Commissions Rental Tenant Improvements Commissions -1.99% 1.49% 5.67% Change (2) -3.60% 2.69% -0.45%

Three Months Ended September 30, 2004

September 30, 2004

Leasing Change (2) Improvements

(14)

Core Market Operating Statistics

September 30, 2004

Total

% of Total

Square Feet

%

Base Rent

%

%

September 30, 2004

of Properties of Total

of Properties

Leased Occupied

QTR

YTD

QTR

YTD

2004

%

(2)

2005

%

(2)

Florida

Jacksonville

1,584,364

7.8%

7.0%

98.9%

98.5%

7.1%

9.3%

-8.8%

-10.7%

124,539

19.8%

222,088

5.9%

Orlando

1,082,270

5.4%

6.0%

98.5%

97.7%

13.3%

12.2%

-16.8%

-7.0%

19,157

3.1%

350,287

9.3%

Tampa

2,067,948

10.2%

12.0%

97.5%

97.3%

9.2%

7.8%

-9.9%

-3.4%

72,093

11.5%

276,780

7.4%

Ft. Lauderdale

861,974

4.3%

4.8%

92.2%

89.7%

-4.7%

-9.7%

-8.7%

-7.4%

14,300

2.3%

118,565

3.2%

5,596,556

27.7%

29.8%

97.3%

96.6%

7.5%

6.4%

-10.8%

-6.6%

230,089

36.7%

967,720

25.8%

Texas

Dallas

1,263,301

6.3%

4.1%

90.8%

88.4%

-7.1%

-5.5%

0.0%

-2.7%

40,493

6.4%

150,468

4.0%

Houston

3,066,103

15.2%

13.8%

92.7%

91.7%

16.8%

6.4%

-1.4%

-3.2%

80,150

12.8%

283,690

7.5%

El Paso

1,019,455

5.1%

4.0%

92.7%

89.8%

2.5%

-2.1%

-7.6%

-8.7%

11,895

1.9%

415,840

11.1%

San Antonio

252,765

1.2%

0.1%

52.1%

47.7%

NA

NA

NA

NA

11,156

1.8%

22,812

0.6%

5,601,624

27.8%

22.0%

90.4%

88.6%

9.1%

2.3%

-2.0%

-3.5%

143,694

22.9%

872,810

23.2%

California

San Francisco

960,204

4.8%

4.1%

87.1%

82.8%

-20.7%

-23.9%

NA

-2.9%

-

0.0%

40,000

1.1%

Los Angeles

1,850,940

9.2%

12.2%

100.0%

100.0%

13.9%

4.0%

3.4%

1.2%

22,313

3.5%

620,425

16.5%

Santa Barbara

230,412

1.1%

5.3%

100.0%

100.0%

7.7%

5.7%

NA

NA

-

0.0%

33,918

0.9%

Fresno

398,100

2.0%

1.4%

93.5%

93.5%

-7.6%

-10.6%

-23.5%

-24.3%

17,500

2.8%

84,248

2.2%

San Diego

191,158

0.9%

1.0%

100.0%

100.0%

58.3%

169.4%

-26.5%

-26.5%

33,548

5.4%

-

0.0%

3,630,814

18.0%

24.0%

95.9%

94.7%

4.5%

-0.3%

-5.4%

-5.8%

11.7%

73,361

778,591

20.7%

Arizona

Phoenix

1,615,717

8.0%

7.4%

95.6%

91.9%

10.2%

11.7%

-7.6%

-10.0%

151,644

24.2%

442,625

11.8%

Tucson

522,769

2.6%

2.0%

100.0%

100.0%

-3.8%

-18.2%

NA

NA

-

0.0%

162,478

4.3%

2,138,486

10.6%

9.4%

96.7%

93.9%

6.2%

2.8%

-7.6%

-10.0%

151,644

24.2%

605,103

16.1%

Total Core Markets

16,967,480

84.1%

85.2%

94.6%

93.2%

6.8%

2.9%

-6.0%

-6.1%

598,788

95.5%

3,224,224

85.8%

Total Other Markets

3,207,872

15.9%

14.8%

87.4%

86.4%

0.4%

0.0%

10.6%

-11.5%

4.5%

28,260

533,822

14.2%

Total Operating Properties

20,175,352

100.0%

100.0%

93.5%

92.1%

5.8%

2.5%

-4.5%

-6.9%

627,048

100.0%

3,758,046 100.0%

(1) Represents amounts before straight-line rent.

(2) Represents percentage of total portfolio lease expirations.

PNOI Change

New and Renewals

Lease Expirations in Square Feet

Same Store

(1)

Rental Change

(1)

(15)

Lease Expiration Summary

Total Square Feet Owned Based on

Leases Signed Through September 30, 2004

Annualized Current

% of Total

Square Footage of

% of

Base Rent of

Base Rent of

LEASE EXPIRATION

Leases Expiring

Total SF

Leases Expiring

Leases Expiring

Month-to-Month . . .

148,866

0.74%

$

548,872

0.61%

Vacant (1) . . . .

1,312,939

6.51%

-

0.00%

2004 . . .

627,048

3.11%

3,081,339

3.42%

2005 . . .

3,758,046

18.63%

17,861,228

19.82%

2006 . . .

2,050,664

10.16%

11,399,959

12.65%

2007 . . .

3,541,027

17.55%

16,571,210

18.39%

2008 and beyond . . .

8,736,762

43.30%

40,639,815

45.11%

TOTAL . . . .. . .

20,175,352

100.00%

$

90,102,423

100.00%

(1) Represents SF vacant as of 09/30/04 of 1,584,878 SF less new leases signed with lease terms commencing subsequent to 09/30/04 of 271,939 SF.

(16)

Top 10 Tenants by Square Footage

As of September 30, 2004

Total SF Owned as of 09/30/04 for Operating Properties 20,175,352 Total Base Rent for Nine Months Ended 09/30/04 for Operating Properties $ 65,644,555

# of Total SF % of Total Annualized % of Total Expiration Tenant Leases Location Leased Portfolio Base Rent (1) Base Rent (2) Date (3)

1 Premier Beverage 1 Jacksonville, FL 162,000 $ 413,160 04/31/18

1 Tampa, FL 222,000 825,050 08/31/09

1 Tampa, FL 47,796 172,066 11/30/08

2.14% 1.61%

2 Palmer Distribution 1 Houston, TX 392,291 1.94% 1,153,336 1.32% 12/31/09

3 U.S. Postal Service 1 Tampa, FL 53,950 376,571 08/31/09

1 Tampa, FL 44,800 263,424 06/30/09 1 Tampa, FL 46,180 346,350 11/30/07 1 Tampa, FL 5,200 42,120 09/30/04 1 New Orleans, LA 99,000 379,170 06/30/09 1 Houston, TX 110,000 499,992 06/30/09 1.78% 2.18%

4 Ethan Allen 1 Los Angeles, CA 300,300 1.49% 1,278,504 1.46% 01/31/10

5 International Paper 1 San Francisco, CA 125,700 543,024 10/31/08 1 San Francisco, CA 139,400 614,252 06/30/08

1.31% 1.32%

6 Price Transfer 1 Los Angeles, CA 261,500 1.30% 1,255,440 1.43% 01/31/09

7 Wal-Mart Stores 1 Tucson, AZ 162,478 639,774 03/31/05

1 Fresno, CA 20,000 60,000 12/31/04

1 New Orleans, LA 45,000 168,750 01/15/05

1.13% 0.99%

8 Tower Automotive 1 Jackson, MS 210,045 1.04% 1,370,710 1.57% 12/31/10

9 Rain Bird Corporation 1 Tucson, AZ 206,691 1.02% 621,793 0.71% 07/31/15

10 Biagi Brothers 1 Jacksonville, FL 134,700 343,485 08/31/07

1 Jacksonville, FL 50,000 127,500 08/31/07

0.92% 0.54%

21 2,839,031 14.07% $ 11,494,471 13.13%

(1) Based on the annualized base rent as of 09/30/04.

(2) Calculation: Tenant Base Rent / Total Base Rent for Nine Months Ended 09/30/04 * (9/12).

(17)

Financial Statistics

Quarter ended 9/30/2004 2003 2002 2001 2000 ASSETS/MARKET CAPITALIZATION Assets $ 746,911,000 729,267,000 703,737,000 684,062,000 666,414,000

Equity Market Capitalization 731,711,000 708,245,000 523,786,000 480,216,000 467,753,000

Total Market Capitalization (Debt + Equity) 1,094,134,000 1,046,517,000 846,086,000 771,288,000 738,462,000

Shares Outstanding - Common 21,045,520 20,853,780 16,104,356 15,912,060 15,849,318

Price per share 33.200 32.380 25.500 23.070 22.375

Shares Outstanding (Series A) - Preferred - - 1,725,000 1,725,000 1,725,000

Liquidation price per share - - 25.000 25.000 25.000

Shares Outstanding (Series B) - Preferred - - 2,800,000 2,800,000 2,800,000

Liquidation price per share - - 25.000 25.000 25.000

Shares Outstanding (Series D) - Preferred 1,320,000 1,320,000 - - -Liquidation price per share 25.00 25.00 - -

-FFO GROWTH RATES

FFO per diluted share 0.64 2.36 2.57 2.75 2.52

Growth rate 20.8% -8.2% -6.5% 9.1% 10.5%

COMMON DIVIDEND PAYOUT RATIO

Dividend Distribution 0.48 1.90 1.88 1.80 1.58

FFO per diluted share 0.64 2.36 2.57 2.75 2.52

Dividend Payout Ratio 75% 81% 73% 65% 63%

COMMON DIVIDEND YIELD

Dividend Distribution 0.48 1.90 1.88 1.80 1.58

Price Per Share 33.200 32.380 25.500 23.070 22.375

Dividend Yield 5.78% 5.87% 7.37% 7.80% 7.06%

FFO MULTIPLES

FFO per diluted share 0.64 2.36 2.57 2.75 2.52

Price 33.200 32.380 25.500 23.070 22.375

Multiple 12.97 13.72 9.92 8.39 8.88

INTEREST COVERAGE RATIO

EBITDA (1) 19,503,000 71,814,000 71,730,000 75,085,000 70,137,000

Interest expense 5,115,000 19,015,000 17,387,000 17,823,000 18,570,000

Interest coverage ratio 3.81 3.78 4.13 4.21 3.78

FIXED CHARGE COVERAGE RATIO

EBITDA (1) 19,503,000 71,814,000 71,730,000 75,085,000 70,137,000

Interest expense plus dividends 5,771,000 22,336,000 21,267,000 21,703,000 22,450,000

on nonconvertible preferred stock

Fixed charge coverage ratio 3.38 3.22 3.37 3.46 3.12

DEBT-TO-TOTAL MARKET CAPITALIZATION 33% 32% 38% 38% 37%

(1) EBITDA for ratio analysis includes discontinued operations.

(18)

Glossary of REIT Terms

Listed below are definitions of commonly used real estate investment trust (REIT) industry terms. For additional

information on REITs, please see the National Association of Real Estate Investment Trusts (NAREIT) web site at

www.nareit.com.

Real Estate Investment Trust: A company that owns and, in most cases, operates income-producing real estate such

as apartments, shopping centers, offices, hotels and warehouses. Some REITs also engage in financing real estate. The

shares of a REIT are freely traded, usually on a major stock exchange.

To qualify as a REIT, a company must distribute at least 90 percent of its taxable income to its shareholders annually. A

company that qualifies as a REIT is permitted to deduct dividends paid to its shareholders from its corporate taxable

income. As a result, most REITs remit at least 100 percent of their taxable income to their shareholders and therefore

owe no corporate federal income tax. Taxes are paid by shareholders on the dividends received and on any capital gains.

Most states honor this federal treatment and also do not require REITs to pay state income tax.

Industrial Properties: Generally consisting of four concrete walls tilted up on a slab of concrete with a roof that holds it

all together. An internal office component is then added. Business uses include warehousing, distribution, light

manufacturing and assembly, research and development, showroom, office, or a combination of some or all of the

aforementioned.

Property Net Operating Income (PNOI): Income from real estate operations less property operating expenses (before

interest expense and depreciation and amortization).

EBITDA: Earnings before interest, taxes, depreciation and amortization.

Funds From Operations (FFO): The most commonly accepted reporting measure of a REIT’s operating performance. It

is equal to a REIT’s net income (loss) (GAAP), excluding gains or losses from sales of depreciable property, adding back

real estate depreciation and amortization, and adjusting for unconsolidated partnerships and joint ventures.

Total Return: A stock’s dividend income plus capital appreciation over a specified period as a percentage of the stock

price at the beginning of the period.

Straight-Lining: The process of averaging the tenant’s rent payments over the life of the lease. Generally accepted

accounting principles require real estate companies to “straight-line” rents.

Debt-to-Total Market Capitalization Ratio: A ratio calculated by dividing a company’s debt by the total amount of a

company’s equity (at market value) and debt.

Percentage Leased: The percentage of total leasable square footage for which there is a signed lease, including

month-to-month leases, as of the close of the reporting period. Space is considered leased upon execution of the lease.

Percentage Occupied: The percentage of total leasable square footage for which the lease term has commenced as of

the close of the reporting period.

Same Store Properties: Operating properties owned during the entire current period and prior year reporting period.

Development properties are excluded until stabilized for both the current and prior year reporting period.

Business Distribution Facility: A warehouse building with a ceiling clear height of 18 to 24 feet, a depth of 200 feet or

Figure

Updating...

References

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