PORT WASHINGTON, N.Y.,
Aug. 2, 2018 /PRNewswire/ -- Cedar
Realty Trust, Inc. (NYSE:CDR – the "Company") today reported
results for the second quarter ended June
30, 2018. Net income attributable to common shareholders was
$0.08 per diluted share compared with
net loss ($0.10) per diluted share
for the comparable 2017 period. Other highlights include:
Highlights
- NAREIT-defined funds from operations (FFO) and Operating funds
from operations (Operating FFO) of $0.19 per diluted share (includes $5.2 million of lease termination related
income)
- Same-property net operating income (NOI) increased 0.7%
compared to the same period in 2017
- Signed 35 new and renewal leases for 267,200 square feet in the
quarter
- Total portfolio 91.7% leased and same-property portfolio 92.0%
leased at quarter-end
- On July 24, 2018, closed on a new
$75.0 million seven-year unsecured
term loan with proceeds to be drawn by October 24, 2018.
"Our successful financing transaction and focus on everyday
operating excellence, along with our advancing urban mixed-use
redevelopment projects continue to serve as sources of value
creation and protection for our shareholders. These efforts
and results are a credit to all of Team Cedar," commented
Bruce Schanzer, CEO.
Financial Results
Net income attributable to common shareholders for the second
quarter of 2018 was $7.1 million or
$0.08 per diluted share, compared to
net loss of ($8.1) million or
($0.10) per diluted share for the
same period in 2017. The principal differences in the comparative
three-month results are lease termination income in 2018 and
impairment charges related to properties held for sale 2017. Net
loss attributable to common shareholders for the six months ended
June 30, 2018 was ($15.9) million or ($0.19) per diluted share, compared to net income
of $0.1 million or $0.00 per diluted share for the same period in
2017. The principal differences in the comparative six-month
results are lease termination income, impairment charges related to
properties held for sale and preferred stock redemption costs in
2018, and gain on sale of an outparcel building and impairment
charges in 2017.
NAREIT-defined FFO for the second quarter of 2018 was
$17.6 million or $0.19 per diluted share, compared to $11.7 million or $0.14 per diluted share for the same period in
2017. NAREIT-defined FFO for the six months ended June 30, 2018 was $26.0
million or $0.28 per diluted
share, compared to $23.2 million or
$0.27 per diluted share for the same
period in 2017. Operating FFO for the second quarter of 2018 was
$17.6 million or $0.19 per diluted share, compared to $11.7 million or $0.14 per diluted share for the same period in
2017. Operating FFO for the six-month period ended June 30, 2018 was $29.5
million or $0.32 per diluted
share, compared to $23.4 million or
$0.27 per diluted share for the same
period in 2017. The principal difference in the comparative three
and six-month results is lease termination income. The principal
difference between Operating FFO and NAREIT-defined FFO is
preferred stock redemption costs.
Portfolio Update
During the second quarter of 2018, the Company signed 35 leases
for 267,200 square feet. On a comparable space basis, the Company
leased 244,100 square feet at a positive lease spread of 1.8% on a
cash basis (new leases decreased 23.8% and renewals increased
8.1%). During the six months ended June 30,
2018, the Company signed 83 leases for 845,900 square feet.
On a comparable space basis, the Company leased 822,800 square feet
at a negative lease spread of 4.8% on a cash basis (new leases
decreased 11.3% and renewals decreased 4.0%).
Excluding six strategic leases, comparable lease spread for the
six months ended June 30, 2018 would
have been 4.7% (new leases increased 0.7% and renewals increased
5.4%). These six strategic leases consisted of (a) five anchor
renewals in the first quarter of 2018 totaling 303,000 square feet
at reduced or flat base rental rates that the Company proactively
renewed with extended rental terms, and (b) a new lease in the
second quarter of 2018 for 29,000 square feet of unconventional
retail space in the rear of a shopping center at a significantly
reduced rental rate. These anchor tenants have good credit and
generate high foot traffic at their respective properties.
Same-property NOI for the second quarter of 2018 increased 0.7%
excluding redevelopments and increased 0.6% including
redevelopments, compared to the same period of 2017. Same property
NOI for six-month period increased 0.4% excluding redevelopments
and 0.5% including redevelopments, compared to the same period of
2017.
The Company's total portfolio, excluding properties held for
sale, was 91.7% leased at June 30,
2018, compared to 92.6% at March 31,
2018 and 92.4% at June 30,
2017. The Company's same-property portfolio was 92.0% leased
at June 30, 2018, compared to 93.1%
at March 31, 2018 and 93.6% at
June 30, 2017. The Company's total
portfolio and same-property portfolio leased percentages at
June 30, 2018 were negatively
impacted 134 basis points and 155 basis points, respectively, as a
result of the recent Bon-Ton bankruptcy which resulted in two
anchor vacancies in April 2018 within
the Company's portfolio.
In April 2018, the Company
accepted a cash payment of $4.3
million in consideration for permitting a dark anchor tenant
to terminate its lease prior to the contractual expiration. This
anchor tenant was located at a property held for sale, and while
paying its contractual rent prior to lease termination, it had
closed and ceased retail operations at the property. This
termination increased NAREIT-defined FFO and Operating FFO by
approximately $5.2 million, after
GAAP adjustments for amortization of intangible lease liabilities
and straight-line rents, offset by foregone rental payments.
As of June 30, 2018, Carll's
Corner, located in Bridgeton, New
Jersey, Maxatawny Marketplace, located in Maxatawny, Pennsylvania, and West Bridgewater
Plaza, located in West Bridgewater,
Massachusetts, have been classified as "real estate held for
sale". The Company recorded impairment charges of $21.4 million in connection with these properties
during the quarter ended March 31,
2018.
Balance Sheet
As of June 30, 2018, the Company
had $109.2 million available under
its revolving credit facility and reported net debt to earnings
before interest, taxes, depreciations, and amortization for real
estate (EBITDAre) of 7.7 times.
On July 24, 2018, the Company
closed a new $75.0 million unsecured
term loan maturing on July 24, 2025
(none of which was borrowed at closing). Proceeds from the term
loan can be drawn at any time from closing until October 24, 2018, and are expected to be used
primarily to repay mortgages maturing through November 2022.
Interest on borrowings under the term loan can range from LIBOR
plus 170 to 225 basis points based on the Company's leverage ratio.
Additionally, the Company entered into forward interest rate swap
agreements which will convert the LIBOR rate to a fixed rate
through its maturity. As a result, the effective interest rate once
the full $75.0 million unsecured term
loan is borrowed will be 4.6%, based on the Company's current
leverage ratio.
2018 Guidance
The Company updates its previously-announced 2018 guidance as
follows:
|
|
Revised
Guidance
|
Net (loss)
attributable to common shareholders per diluted share
|
|
($0.24) -
($0.23)
|
NAREIT-defined FFO
per diluted share
|
|
$0.48 -
$0.49
|
Operating FFO per
diluted share
|
|
$0.58 -
$0.59
|
The guidance is based, in part, on the following:
- 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
- Lease termination income impact for permitting a dark anchor
tenant to terminate its lease, net of foregone rental payments, of
approximately $0.05 per share
- Early extinguishment of debt costs of $0.06 per share and preferred stock redemption
costs of $0.04 per share
- Disposition range of $15 million
to $30 million in the second half of
2018
- No acquisitions included in guidance; guidance range will be
updated quarterly for any closed acquisitions
The principal difference between NAREIT-defined FFO and
Operating FFO is early extinguishment of debt and preferred stock
redemption costs.
Non-GAAP Financial Measures
NAREIT-defined FFO is a widely recognized supplemental non-GAAP
measure utilized to evaluate the financial performance of a REIT.
The Company considers NAREIT-defined 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.
NAREIT-defined 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 NAREIT-defined FFO
and Operating FFO for the three and six months ended June, 2018 and
2017 is detailed in the attached schedule.
EBITDAre is a recognized supplemental non-GAAP financial
measure. The Company presents EBITDAre in accordance with the
definition adopted by NAREIT, which generally defines EBITDAre as
net income plus interest expense, income tax expense, depreciation,
amortization, and impairment write-downs of depreciated property,
plus or minus losses and gains on the disposition of depreciated
property, and adjustments to reflect the Company's share of
EBITDAre of unconsolidated affiliates. The Company believes
EBITDAre provides additional information with respect to the
Company's performance and ability to meet its future debt service
requirements. The Company also considers Adjusted EBITDAre 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 and redevelopment costs. The Company believes Adjusted
EBITDAre further assists in comparing the Company's performance
across reporting periods on a consistent basis by excluding such
items. EBITDAre and Adjusted EBITDAre should be reviewed with GAAP
net income, the most directly comparable GAAP financial measure,
when trying to understand the Company's operating performance.
EBITDAre and Adjusted EBITDAre do not represent cash generated from
operating activities and should not be considered as an alternative
to income from continuing operations or to cash flow from operating
activities. The Company's computation of Adjusted EBITDAre may
differ from the computations utilized by other companies and,
accordingly, may not be comparable to such companies.
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 June 30, 2018. 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, August 2, 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
August 2, 2018, until midnight (ET)
on August 16, 2018. The replay
dial-in numbers are (844) 512-2921 or
(1) (412) 317-6671 for international callers. Please use
passcode 13680312 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 58 properties, with approximately 8.7 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, 2017, 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)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2018
|
|
2017
|
ASSETS
|
|
|
|
|
Real estate, at
cost
|
|
$
1,501,996,000
|
|
$
1,534,599,000
|
Less accumulated
depreciation
|
|
(348,587,000)
|
|
(341,943,000)
|
Real estate,
net
|
|
1,153,409,000
|
|
1,192,656,000
|
Real estate held for
sale
|
|
13,833,000
|
|
-
|
Cash and cash
equivalents
|
|
1,625,000
|
|
3,702,000
|
Restricted
cash
|
|
5,030,000
|
|
3,517,000
|
Receivables
|
|
17,503,000
|
|
17,193,000
|
Other assets and
deferred charges, net
|
|
41,258,000
|
|
35,350,000
|
TOTAL
ASSETS
|
|
$
1,232,658,000
|
|
$
1,252,418,000
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Liabilities:
|
|
|
|
|
Mortgage loans
payable
|
|
$
126,453,000
|
|
$
127,969,000
|
Unsecured revolving
credit facility
|
|
104,500,000
|
|
55,000,000
|
Unsecured term
loans
|
|
397,462,000
|
|
397,156,000
|
Accounts payable and
accrued liabilities
|
|
21,791,000
|
|
24,519,000
|
Unamortized
intangible lease liabilities
|
|
14,696,000
|
|
17,663,000
|
Total
liabilities
|
|
664,902,000
|
|
622,307,000
|
|
|
|
|
|
Equity:
|
|
|
|
|
Preferred
stock
|
|
159,541,000
|
|
207,508,000
|
Common stock and
other shareholders' equity
|
|
406,406,000
|
|
420,828,000
|
Noncontrolling
interests
|
|
1,809,000
|
|
1,775,000
|
Total
equity
|
|
567,756,000
|
|
630,111,000
|
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
$
1,232,658,000
|
|
$
1,252,418,000
|
CEDAR REALTY
TRUST, INC.
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
PROPERTY
REVENUES
|
|
|
|
|
|
|
|
|
Rents
|
|
$
29,451,000
|
|
$
28,205,000
|
|
$
57,612,000
|
|
$
56,428,000
|
Expense
recoveries
|
|
7,767,000
|
|
7,012,000
|
|
17,053,000
|
|
15,360,000
|
Other
|
|
4,132,000
|
|
482,000
|
|
4,253,000
|
|
685,000
|
Total property
revenues
|
|
41,350,000
|
|
35,699,000
|
|
78,918,000
|
|
72,473,000
|
PROPERTY OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Operating,
maintenance and management
|
|
5,994,000
|
|
5,462,000
|
|
13,788,000
|
|
12,506,000
|
Real estate and other
property-related taxes
|
|
5,056,000
|
|
4,921,000
|
|
10,135,000
|
|
9,666,000
|
Total property
operating expenses
|
|
11,050,000
|
|
10,383,000
|
|
23,923,000
|
|
22,172,000
|
|
|
|
|
|
|
|
|
|
PROPERTY OPERATING
INCOME
|
|
30,300,000
|
|
25,316,000
|
|
54,995,000
|
|
50,301,000
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSES AND
INCOME
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
4,276,000
|
|
4,237,000
|
|
8,770,000
|
|
8,373,000
|
Acquisition pursuit
costs
|
|
-
|
|
-
|
|
-
|
|
156,000
|
Depreciation and
amortization
|
|
10,541,000
|
|
9,953,000
|
|
20,595,000
|
|
20,371,000
|
Gain on
sale
|
|
-
|
|
-
|
|
-
|
|
(7,099,000)
|
Impairment
charges
|
|
-
|
|
9,850,000
|
|
21,396,000
|
|
9,850,000
|
Total other expenses
and income
|
|
14,817,000
|
|
24,040,000
|
|
50,761,000
|
|
31,651,000
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
15,483,000
|
|
1,276,000
|
|
4,234,000
|
|
18,650,000
|
|
|
|
|
|
|
|
|
|
NON-OPERATING
INCOME AND EXPENSES
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(5,546,000)
|
|
(5,665,000)
|
|
(10,917,000)
|
|
(11,094,000)
|
Total non-operating
income and expense
|
|
(5,546,000)
|
|
(5,665,000)
|
|
(10,917,000)
|
|
(11,094,000)
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
|
9,937,000
|
|
(4,389,000)
|
|
(6,683,000)
|
|
7,556,000
|
|
|
|
|
|
|
|
|
|
Attributable to
noncontrolling interests
|
|
(160,000)
|
|
(85,000)
|
|
(208,000)
|
|
(254,000)
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CEDAR REALTY TRUST, INC.
|
|
9,777,000
|
|
(4,474,000)
|
|
(6,891,000)
|
|
7,302,000
|
|
|
|
|
|
|
|
|
|
Preferred stock
dividends
|
|
(2,688,000)
|
|
(3,602,000)
|
|
(5,487,000)
|
|
(7,204,000)
|
Preferred stock
redemption costs
|
|
-
|
|
-
|
|
(3,507,000)
|
|
-
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
|
$
7,089,000
|
|
$
(8,076,000)
|
|
$
(15,885,000)
|
|
$
98,000
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
PER COMMON SHARE ATTRIBUTABLE TO COMMON
SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.08
|
|
$
(0.10)
|
|
$
(0.19)
|
|
$
(0.00)
|
Diluted
|
|
$
0.08
|
|
$
(0.10)
|
|
$
(0.19)
|
|
$
(0.00)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
88,011,000
|
|
81,771,000
|
|
87,817,000
|
|
81,753,000
|
Diluted
|
|
88,166,000
|
|
81,771,000
|
|
87,895,000
|
|
81,753,000
|
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
June 30,
|
|
Six months ended
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income (loss)
attributable to common shareholders
|
|
$
7,089,000
|
|
$
(8,076,000)
|
|
$
(15,885,000)
|
|
$
98,000
|
Real estate
depreciation and amortization
|
|
10,490,000
|
|
9,905,000
|
|
20,494,000
|
|
20,280,000
|
Limited partners'
interest
|
|
27,000
|
|
(33,000)
|
|
(60,000)
|
|
(1,000)
|
Gain on
sales
|
|
-
|
|
-
|
|
-
|
|
(7,099,000)
|
Impairment
charges
|
|
-
|
|
9,850,000
|
|
21,396,000
|
|
9,850,000
|
Consolidated minority
interests:
|
|
|
|
|
|
|
|
|
Share of
income
|
|
133,000
|
|
118,000
|
|
268,000
|
|
255,000
|
Share of
FFO
|
|
(120,000)
|
|
(92,000)
|
|
(244,000)
|
|
(197,000)
|
Funds From
Operations ("FFO") applicable to diluted common
shares
|
|
17,619,000
|
|
11,672,000
|
|
25,969,000
|
|
23,186,000
|
Adjustments for items
affecting comparability:
|
|
|
|
|
|
|
|
|
Preferred stock
redemption costs
|
|
-
|
|
-
|
|
3,507,000
|
|
-
|
Acquisition pursuit
costs
|
|
-
|
|
-
|
|
-
|
|
156,000
|
Redevelopment
costs
|
|
-
|
|
37,000
|
|
-
|
|
37,000
|
Operating Funds
From Operations ("Operating FFO") applicable to diluted
common shares
|
|
$
17,619,000
|
|
$
11,709,000
|
|
$
29,476,000
|
|
$
23,379,000
|
|
|
|
|
|
|
|
|
|
FFO per diluted
common share:
|
|
$
0.19
|
|
$
0.14
|
|
$
0.28
|
|
$
0.27
|
|
|
|
|
|
|
|
|
|
Operating FFO per
diluted common share:
|
|
$
0.19
|
|
$
0.14
|
|
$
0.32
|
|
$
0.27
|
|
|
|
|
|
|
|
|
|
Weighted average
number of diluted common shares:
|
|
|
|
|
|
|
|
|
Common shares and
equivalents
|
|
91,929,000
|
|
85,568,000
|
|
91,788,000
|
|
85,520,000
|
OP Units
|
|
347,000
|
|
351,000
|
|
347,000
|
|
351,000
|
|
|
92,276,000
|
|
85,919,000
|
|
92,135,000
|
|
85,871,000
|
View original
content:http://www.prnewswire.com/news-releases/cedar-realty-trust-reports-second-quarter-2018-results-300691272.html
SOURCE Cedar Realty Trust, Inc.