CEDAR REALTY TRUST PORT WASHINGTON, N.Y., Feb. 8, 2018 /PRNewswire/ -- Cedar Realty Trust, Inc. (NYSE: CDR – the "Company") today reported results for the fourth quarter and full year 2017. Net income (loss) attributable to common shareholders was $0.03 and $(0.04) per diluted share for the fourth quarter and full year 2017, respectively. Other highlights include:
Highlights
- NAREIT-defined funds from operations (FFO) of $0.13 per diluted share for the quarter and $0.45 for the year.
- Operating funds from operations (Operating FFO) of $0.14 per diluted share for the quarter and $0.55 for the year
- Signed 38 new and renewal leases for 271,500 square feet in the quarter and 139 new and renewal leases for 996,900 square feet for the year
- Comparable cash-basis lease spreads of 3.3% for the quarter and 5.4% for the year
- Excluding one lease for 2,300 square feet, the comparable cash-basis lease spreads would have been 7.7% for the quarter and 6.6% for the year
- Total portfolio 92.9% leased and same-property portfolio 93.4% leased at year-end
- Same-property net operating income (NOI) excluding redevelopment properties increased 0.1% for the quarter and decreased 1.3% for the year
Previously-Announced Events
- Concluded a public offering of 2,000,000 shares of 6 ½% Series C Preferred Stock on December 15, 2017
- Redeemed 2,000,000 shares of 7 ¼% Series B Preferred Stock on January 12, 2018
"We continue to effectively navigate the evolving retail landscape and forge ahead with our redevelopment strategy in densely-populated urban markets to enhance the quality and growth profile of our portfolio," commented Bruce Schanzer, CEO.
Financial Results
Net income attributable to common shareholders for the fourth quarter of 2017 was $2.6 million or $0.03 per diluted share, compared to net loss of $(0.5) million or $(0.01) per diluted share for the same period in 2016. Net loss attributable to common shareholders for the full year 2017 was $(2.4) million or $(0.04) per diluted share, compared to net loss of $(5.5) million or $(0.08) per diluted share for the same period in 2016. The principal differences in the comparative three-month results are early extinguishment of debt costs, impairment charges, and preferred stock dividends. The principal differences in the comparative full year results are impairment charges, acquisition pursuit, management transition, preferred stock redemption and early extinguishment of debt costs.
NAREIT-defined FFO for the fourth quarter of 2017 was $12.2 million or $0.13 per diluted share, compared to $9.3 million or $0.11 per diluted share for the same period in 2016. NAREIT-defined FFO for the full year 2017 was $40.0 million or $0.45 per diluted share, compared to $41.1 million or $0.48 per diluted share for the same period in 2016. Operating FFO for the fourth quarter of 2017 was $12.4 million or $0.14 per diluted share, compared to $12.1 million or $0.14 per diluted share for the same period in 2016. Operating FFO for the full year 2017 was $48.3 million or $0.55 per diluted share, compared to $49.2 million or $0.57 per diluted share for the same period in 2016. The principal differences between Operating FFO and FFO are acquisition pursuit, preferred stock redemption, redevelopment, management transition and early extinguishment of debt costs.
Portfolio Results
During the fourth quarter of 2017, the Company signed 38 leases for 271,500 square feet. On a comparable space basis, the Company leased 268,500 square feet at a positive lease spread of 3.3% on a cash basis (new leases increased 2.7% and renewals increased 3.9%). Excluding one lease for 2,300 square feet, on a comparable space basis the Company lease spread would have been 7.7% (new leases increased 11.6% and renewals increased 3.9%), During the full year 2017, the Company signed 139 leases for 996,900 square feet. On a comparable space basis, the Company leased 958,800 square feet at a positive lease spread of 5.4% on a cash basis (new leases increased 4.7% and renewals increased 5.7%). Excluding one lease for 2,300 square feet, on a comparable basis the Company's lease spread would have been 6.6% (new leases increased 9.0% and renewals increased 5.7%).
Same-property NOI for the fourth quarter of 2017 increased 0.1% excluding redevelopments and increased 0.5% including redevelopments, compared to the same period in 2016. Same property NOI for the year decreased (1.3)% excluding redevelopments and (0.9)% including redevelopments.
The Company's total portfolio, excluding properties held for sale, was 92.9% leased at December 31, 2017, compared to 92.7% at September 30, 2017 and 91.9% at December 31, 2016. The Company's same-property portfolio was 93.4% leased at December 31, 2017, compared to 93.4% at September 30, 2017 and 93.1% at December 31, 2016.
Balance Sheet
Debt
As of December 31, 2017, the Company had $177.2 million available under its revolving credit facility and reported net debt to earnings before interest, taxes, depreciations, and amortization (EBITDA) of 6.9 times. Reflecting the early January 2018 redemption of shares of Series B Preferred Stock, net debt to EBITDA would be 7.5 times.
Equity
On December 15, 2017, the Company concluded a public offering of 2,000,000 shares of Series C Preferred Stock at $25.00 per share and realized net proceeds, after offering expenses, of approximately $48.1 million.
On January 12, 2018, the Company redeemed 2,000,000 shares of Series B Preferred Stock at a price of $25.00 per share for an aggregate of $50.0 million, plus all accrued and unpaid dividends up to (but excluding) the redemption date.
2018 Guidance
The Company's initial 2018 guidance is as follows:
Net income attributable to common shareholders per diluted share | $0.04 to $0.06 |
NAREIT-defined FFO per diluted share | $0.48 to $0.50 |
Operating FFO per diluted share | $0.53 to $0.55 |
The guidance is based, in part, on the following assumptions:
- Same-property NOI excluding redevelopment properties will be relatively flat from 2017 to 2018.
- Bon-Ton bankruptcy impact of approximately $0.01 per share
- Incremental third-party fees related to shareholder activism and ongoing litigation in connection with the termination of the former Chief Operating Officer aggregating approximately $0.01 per share
- No acquisitions or dispositions included in guidance; guidance range will be updated quarterly for any closings
Non-GAAP Financial Measures
FFO is a widely recognized supplemental non-GAAP measure utilized to evaluate the financial performance of a REIT. The Company considers FFO to be an appropriate measure of its financial performance because it captures features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than other depreciable assets. The Company also considers Operating FFO to be an additional meaningful financial measure of financial performance because it excludes items the Company does not believe are indicative of its core operating performance, such as acquisition pursuit costs, amounts relating to early extinguishment of debt and preferred stock redemption costs, management transition costs and certain redevelopment costs. The Company believes Operating FFO further assists in comparing the Company's performance across reporting periods on a consistent basis by excluding such items. FFO and Operating FFO should be reviewed with GAAP net income attributable to common shareholders, the most directly comparable GAAP financial measure, when trying to understand the Company's operating performance. A reconciliation of net income (loss) attributable to common shareholders to FFO and Operating FFO for the three months and full years ended December 31, 2017 and 2016 is detailed in the attached schedule.
EBITDA is a widely recognized supplemental non-GAAP financial measure. The Company computes EBITDA as net income from continuing operations, plus interest expense (including early extinguishment of debt costs), depreciation and amortization, minority interests' share of consolidated joint venture EBITDA, and discontinued operations. The Company believes EBITDA provides additional information with respect to the Company's performance and ability to meet its future debt service requirements. The Company also considers Adjusted EBITDA to be an additional meaningful financial measure of financial performance because it excludes items the Company does not believe are indicative of its core operating performance, such as acquisition pursuit costs, gain on sales, impairment provisions and management transition costs. The Company believes Adjusted EBITDA further assists in comparing the Company's performance across reporting periods on a consistent basis by excluding such items. EBITDA and Adjusted EBITDA should be reviewed with GAAP net income from continuing operations, the most directly comparable GAAP financial measure, when trying to understand the Company's operating performance.
Same-property NOI is a widely recognized supplemental non-GAAP financial measure for REITs. Properties are included in same-property NOI if they are owned and operated for the entirety of both periods being compared, except for properties undergoing significant redevelopment and expansion until such properties have stabilized, and properties classified as held for sale. Consistent with the capital treatment of such costs under GAAP, tenant improvements, leasing commissions and other direct leasing costs are excluded from same-property NOI. The Company considers same-property NOI useful to investors as it provides an indication of the recurring cash generated by the Company's properties by excluding certain non-cash revenues and expenses, as well as other infrequent items such as lease termination income which tends to fluctuate more than rents from year to year. Same property NOI should be reviewed with consolidated operating income, the most directly comparable GAAP financial measure.
Supplemental Financial Information Package
The Company has issued "Supplemental Financial Information" for the period ended December 31, 2017. Such information has been filed today as an exhibit to Form 8-K and will also be available on the Company's website at www.cedarrealtytrust.com.
Investor Conference Call
The Company will host a conference call today, February 8, 2018, at 5:00 PM (ET) to discuss the quarterly results. The conference call can be accessed by dialing (877) 705-6003 or (1) (201) 493-6725 for international participants. A live webcast of the conference call will be available online on the Company's website at www.cedarrealtytrust.com.
A replay of the call will be available from 8:00 PM (ET) on February 8, 2018, until midnight (ET) on February 22, 2018. The replay dial-in numbers are (844) 512-2921 or (1) (412) 317-6671 for international callers. Please use passcode 13674810 for the telephonic replay. A replay of the Company's webcast will be available on the Company's website for a limited time.
About Cedar Realty Trust
Cedar Realty Trust, Inc. is a fully-integrated real estate investment trust which focuses on the ownership, operation and redevelopment of grocery-anchored shopping centers in high-density urban markets from Washington, D.C. to Boston. The Company's portfolio (excluding properties treated as "held for sale") comprises 61 properties, with approximately 9.0 million square feet of gross leasable area.
For additional financial and descriptive information on the Company, its operations and its portfolio, please refer to the Company's website at www.cedarrealtytrust.com.
Forward-Looking Statements
Statements made in this press release that are not strictly historical are "forward-looking" statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance and outcomes to differ materially from those expressed or implied in forward-looking statements. Factors which could cause actual results to differ materially from current expectations include, among others: adverse general economic conditions in the United States and uncertainty in the credit and retail markets; financing risks, such as the inability to obtain new financing or refinancing on favorable terms as the result of market volatility or instability; risks related to the market for retail space generally, including reductions in consumer spending, variability in retailer demand for leased space, tenant bankruptcies, adverse impact of internet sales demand, ongoing consolidation in the retail sector and changes in economic conditions and consumer confidence; risks endemic to real estate and the real estate industry generally; the impact of the Company's level of indebtedness on operating performance; inability of tenants to meet their rent and other lease obligations; adverse impact of new technology and e-commerce developments on the Company's tenants; competitive risk; risks related to the geographic concentration of the Company's properties in the Washington D.C. to Boston corridor; the effects of natural and other disasters; and the inability of the Company to realize anticipated returns from its redevelopment activities. Please refer to the documents filed by Cedar Realty Trust, Inc. with the SEC, specifically the Company's Annual Report on Form 10-K for the year ended December 31, 2016, as it may be updated or supplemented in the Company's Quarterly Reports on Form 10-Q and the Company's other filings with the SEC, which identify additional risk factors that could cause actual results to differ from those contained in forward-looking statements.
CEDAR REALTY TRUST, INC. | ||||
Condensed Consolidated Balance Sheets | ||||
(unaudited) | ||||
December 31, | ||||
2017 | 2016 | |||
ASSETS | ||||
Real estate, at cost | $ 1,534,599,000 | $ 1,496,429,000 | ||
Less accumulated depreciation | (341,943,000) | (313,070,000) | ||
Real estate, net | 1,192,656,000 | 1,183,359,000 | ||
Cash and cash equivalents | 3,702,000 | 2,882,000 | ||
Restricted cash | 3,517,000 | 2,880,000 | ||
Receivables | 17,193,000 | 14,894,000 | ||
Other assets and deferred charges, net | 35,350,000 | 29,506,000 | ||
TOTAL ASSETS | $ 1,252,418,000 | $ 1,233,521,000 | ||
LIABILITIES AND EQUITY | ||||
Liabilities: | ||||
Mortgage loans payable | $ 127,969,000 | $ 138,243,000 | ||
Unsecured revolving credit facility | 55,000,000 | 72,000,000 | ||
Unsecured term loans | 397,156,000 | 397,502,000 | ||
Accounts payable and accrued liabilities | 24,519,000 | 23,463,000 | ||
Unamortized intangible lease liabilities | 17,663,000 | 20,316,000 | ||
Total liabilities | 622,307,000 | 651,524,000 | ||
Equity: | ||||
Preferred stock | 207,508,000 | 190,661,000 | ||
Common stock and other shareholders' equity | 420,828,000 | 390,079,000 | ||
Noncontrolling interests | 1,775,000 | 1,257,000 | ||
Total equity | 630,111,000 | 581,997,000 | ||
TOTAL LIABILITIES AND EQUITY | $ 1,252,418,000 | $ 1,233,521,000 | ||
CEDAR REALTY TRUST, INC. | |||||||||
Condensed Consolidated Statements of Operations | |||||||||
(unaudited) | |||||||||
Three months ended December 31, | Years ended December 31, | ||||||||
2017 | 2016 | 2017 | 2016 | ||||||
PROPERTY REVENUES | |||||||||
Rents | $ 28,486,000 | $ 28,912,000 | $ 113,276,000 | $ 118,098,000 | |||||
Expense recoveries | 8,424,000 | 8,084,000 | 31,220,000 | 32,036,000 | |||||
Other | 227,000 | 174,000 | 1,512,000 | 952,000 | |||||
Total property revenues | 37,137,000 | 37,170,000 | 146,008,000 | 151,086,000 | |||||
PROPERTY OPERATING EXPENSES | |||||||||
Operating, maintenance and management | 6,668,000 | 6,552,000 | 24,752,000 | 24,898,000 | |||||
Real estate and other property-related taxes | 4,980,000 | 4,777,000 | 19,577,000 | 19,617,000 | |||||
Total property operating expenses | 11,648,000 | 11,329,000 | 44,329,000 | 44,515,000 | |||||
PROPERTY OPERATING INCOME | 25,489,000 | 25,841,000 | 101,679,000 | 106,571,000 | |||||
OTHER EXPENSES AND INCOME | |||||||||
General and administrative | 4,413,000 | 4,514,000 | 16,907,000 | 18,154,000 | |||||
Acquisition pursuit costs | - | 9,000 | 156,000 | 3,426,000 | |||||
Depreciation and amortization | 9,937,000 | 9,741,000 | 40,115,000 | 40,787,000 | |||||
Gain on sale | - | - | (7,099,000) | (59,000) | |||||
Impairment (reversals)/charges | (312,000) | 77,000 | 9,538,000 | 6,347,000 | |||||
Total other expenses and income | 14,038,000 | 14,341,000 | 59,617,000 | 68,655,000 | |||||
OPERATING INCOME | 11,451,000 | 11,500,000 | 42,062,000 | 37,916,000 | |||||
NON-OPERATING INCOME AND EXPENSES | |||||||||
Interest expense | (5,561,000) | (5,760,000) | (22,199,000) | (26,529,000) | |||||
Early extinguishment of debt costs | (210,000) | (2,586,000) | (210,000) | (2,623,000) | |||||
Total non-operating income and expense | (5,771,000) | (8,346,000) | (22,409,000) | (29,152,000) | |||||
NET INCOME | 5,680,000 | 3,154,000 | 19,653,000 | 8,764,000 | |||||
Attributable to noncontrolling interests | (139,000) | (75,000) | (510,000) | 179,000 | |||||
NET INCOME ATTRIBUTABLE TO CEDAR REALTY TRUST, INC. | 5,541,000 | 3,079,000 | 19,143,000 | 8,943,000 | |||||
Preferred stock dividends | (2,913,000) | (3,602,000) | (13,652,000) | (14,408,000) | |||||
Preferred stock redemption costs | - | - | (7,890,000) | - | |||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 2,628,000 | $ (523,000) | $ (2,399,000) | $ (5,465,000) | |||||
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO COMMON | $ 0.03 | $ (0.01) | $ (0.04) | $ (0.08) | |||||
Weighted average number of common shares - basic and diluted | 87,526,000 | 81,676,000 | 84,168,000 | 81,672,000 | |||||
CEDAR REALTY TRUST, INC. | ||||||||
Reconciliation of Net Income (Loss) Attributable to Common Shareholders to | ||||||||
Funds From Operations and Operating Funds From Operations | ||||||||
(unaudited) | ||||||||
Three months ended December 31, | Years ended December 31, | |||||||
2017 | 2016 | 2017 | 2016 | |||||
Net income (loss) attributable to common shareholders | $ 2,628,000 | $ (523,000) | $ (2,399,000) | $ (5,465,000) | ||||
Real estate depreciation and amortization | 9,886,000 | 9,698,000 | 39,922,000 | 40,616,000 | ||||
Limited partners' interest | 9,000 | (2,000) | (13,000) | (17,000) | ||||
Gain on sales | - | - | (7,099,000) | (59,000) | ||||
Impairment (reversals)/charges | (312,000) | 77,000 | 9,538,000 | 6,347,000 | ||||
Consolidated minority interests: | ||||||||
Share of income/(loss) | 130,000 | 77,000 | 523,000 | (162,000) | ||||
Share of FFO | (118,000) | (43,000) | (440,000) | (193,000) | ||||
Funds From Operations ("FFO") applicable to diluted common shares | 12,223,000 | 9,284,000 | 40,032,000 | 41,067,000 | ||||
Adjustments for items affecting comparability: | ||||||||
Acquisition pursuit costs (a) | - | 9,000 | 156,000 | 3,426,000 | ||||
Financing costs (b) | 210,000 | 2,586,000 | 210,000 | 2,623,000 | ||||
Redevelopment costs (c) | - | 187,000 | 37,000 | 698,000 | ||||
Management transition costs (d) | - | - | - | 1,427,000 | ||||
Preferred stock redemption costs | - | - | 7,890,000 | - | ||||
Operating Funds From Operations ("Operating FFO") applicable to diluted common | $ 12,433,000 | $ 12,066,000 | $ 48,325,000 | $ 49,241,000 | ||||
FFO per diluted common share: | $ 0.13 | $ 0.11 | $ 0.45 | $ 0.48 | ||||
Operating FFO per diluted common share: | $ 0.14 | $ 0.14 | $ 0.55 | $ 0.57 | ||||
Weighted average number of diluted common shares: | ||||||||
Common shares | 91,317,000 | 85,318,000 | 87,948,000 | 85,303,000 | ||||
OP Units | 348,000 | 352,000 | 350,000 | 352,000 | ||||
91,665,000 | 85,670,000 | 88,298,000 | 85,655,000 | |||||
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SOURCE Cedar Realty Trust, Inc.
