Wellsford Real Properties, Inc. (AMEX: "WRP") reported third
quarter 2005 revenues of $4,231,164 and net income of $3,776,753,
or $0.58 per basic and diluted share. For the corresponding quarter
in 2004, WRP reported revenues of $8,253,519 and a net loss of
$(12,677,924), or $(1.96) per basic and diluted share. For the nine
months ended September 30, 2005, WRP reported revenues of
$12,569,984 and net income of $3,954,913, or $0.61 per basic and
diluted share. For the corresponding period in 2004, WRP reported
revenues of $22,960,326 and a net loss of $(22,510,387), or $(3.48)
per basic and diluted share. Business Unit Activities - During the
Third Quarter of 2005 and Subsequent Commercial Property Activities
In September 2005, WRP ceased its Commercial Property Activities
when its 35.21% equity interest in Wellsford/Whitehall, a joint
venture by and among WRP, various entities affiliated with the
Whitehall Funds and private real estate funds sponsored by The
Goldman Sachs Group, Inc., was redeemed for approximately
$8,300,000. WRP realized a gain of $5,846,000 on the redemption.
WRP's share of the income (loss) from Wellsford/Whitehall was
approximately $5,473,000 and $(2,149,000) for the three months
ended September 30, 2005 and 2004, respectively and $11,007,000 and
$(2,616,000) for the nine months ended September 30, 2005 and 2004,
respectively. Debt and Equity Activities At September 30, 2005, WRP
had the following investments in its Debt and Equity Activities
SBU: (i) an equity investment of approximately $687,000 in
Clairborne Fordham, a company initially organized to provide
$34,000,000 of mezzanine construction financing for a high-rise
condominium project in Chicago, which currently owns and is selling
the remaining unsold components of this project; (ii) approximately
$6,791,000 invested in Reis, Inc., a real estate information and
database company; and (iii) a $630,000 investment in Wellsford
Mantua, a company organized to purchase land parcels for rezoning,
subdivision and creation of environmental mitigation credits.
Residential Activities Palomino Park WRP is the developer and
managing owner of Palomino Park, a five phase, 1,707 unit
multifamily residential development in Highlands Ranch, a southern
suburb of Denver, Colorado. Three phases (Blue Ridge, Red Canyon
and Green River) aggregating 1,184 units are operated as rental
property. In March 2005, WRP's Board of Directors (the "Board")
authorized the sale of these three phases and in the second quarter
of 2005, WRP engaged a broker to market these phases. The 264 unit
Silver Mesa phase has been converted into condominiums and through
September 30, 2005, WRP had sold all 264 units. The Gold Peak phase
is under construction as a 259 unit for-sale condominium project
and as of September 30, 2005, there were 73 Gold Peak units under
contract. At September 30, 2005, the Company had an 85.85% interest
in Palomino Park and a subsidiary of EQR owned the remaining 14.15%
interest. With respect to EQR's 14.15% interest in the corporation
that owns Palomino Park, there existed a put/call option between
the Company and EQR related to one-half of such interest (7.075%).
In February 2005, the Company informed EQR of its intent to
exercise this option at a purchase price of approximately
$2,087,000. This transaction was completed on October 13, 2005. Any
transaction for the remaining half of EQR's interest would be
subject to negotiation between the Company and EQR. In August 2005,
WRP entered into an agreement to sell the three residential rental
phases of its Palomino Park project for $176,000,000. The sale is
subject to approval of the Plan of Liquidation (the "Plan") (see
below) by WRP's stockholders on November 17, 2005. Other
Developments At September 30, 2005, the Company's other development
projects include: (i) a venture which owns 101 single family home
lots situated on 139 acres of land in East Lyme, Connecticut upon
which it is constructing houses for sale ("East Lyme"); (ii) a
joint venture that owns approximately 300 acres, currently zoned
for 13 single family home lots, in Claverack, New York; and (iii)
interests in a 10 acre parcel in Beekman, New York which is owned
by the Company and a contract to acquire a contiguous 14 acre
parcel, the acquisition of which is conditioned upon site plan
approval to build a minimum of 60 residential condominium units.
The Company's $300,000 deposit in connection with the contract is
secured by a first mortgage lien on the property. WRP has a
contingent purchase option from the seller of the East Lyme land on
a contiguous parcel of land which could be used to develop an
additional 60 single family homes. Such right was exercised during
April 2005; however, the seller at that time could not deliver the
parcel in accordance with the terms and conditions of the
agreement. The seller is currently attempting to remedy this
situation. The purchase price for this land is approximately
$3,700,000. Corporate On November 17, 2005, WRP will hold its 2005
annual meeting of stockholders. At this meeting, the stockholders
will vote on the Plan, which was previously approved by the Board
in May 2005. Under the Plan, WRP intends to sell its assets, to pay
or provide for its liabilities, and to distribute its remaining
cash to its stockholders. It is anticipated that the liquidation
would occur over a 12 to 36 month period and result in a total
distribution of between $18.50 and $21.00 per share. The Board
anticipates that the initial distribution will be $14.00 per share,
which is at the high end of the previously anticipated range of
between $12.00 and $14.00 per share. The initial distribution is
anticipated to be made within 30 days after the completion of the
sale of the three rental phases of Palomino Park. The closing of
the sale is expected to be completed by the end of November 2005 if
the Plan is approved by the stockholders. Mr. Jeffrey Lynford,
Chairman and CEO stated, "Assuming that the Plan is approved by the
stockholders and the sale of the Palomino Park rental phases closes
before the end of November, we intend to make the initial $14.00
per share distribution to stockholders as early in December as
possible." Wellsford Real Properties, Inc. is a real estate
merchant banking firm headquartered in New York City which
acquires, develops, finances and operates real properties,
constructs for-sale single family home and condominium developments
and organizes and invests in private and public real estate
companies. This press release, together with other statements and
information publicly disseminated by WRP, contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of WRP or industry results to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include,
among others, the following, which are discussed in greater detail
in the "Risk Factors" section of WRP's registration statement on
Form S-3 (file No. 333-73874) filed with the Securities and
Exchange Commission ("SEC") on December 14, 2001, as may be
amended, and the Definitive Proxy Statement dated October 10, 2005
and filed with the SEC on October 11, 2005, which are incorporated
herein by reference: general and local economic and business
conditions; future impairment charges as a result of possible
declines in the expected values and cash flows of residential
development projects and investments or changes in the intent with
regards to such projects and investments; competition; risks of
real estate acquisition, development, construction and renovation
including construction delays and cost overruns; inability to
comply with zoning and other laws and obtain governmental
approvals; the risk of inflation in development costs (including
construction materials); the availability of insurance coverages;
the inability to obtain or replace construction financing for its
development projects; adverse consequences of debt financing
including, without limitation, the necessity of future financings
to repay maturing debt obligations; inability to meet financial and
valuation covenants contained in loan agreements; inability to
repay financings; exposure to variable rate based financings; risk
of foreclosure on collateral; risks of leverage; risks associated
with equity investments in and with third parties; risks associated
with our reliance on joint venture partners including, but not
limited to, the inability to obtain consent from partners for
certain business decisions, reliance on partners who are solely
responsible for the books, records and financial statements of such
ventures, the potential risk that our partners may become bankrupt,
have economic or other business interests and objectives which may
be inconsistent with those of WRP and our partners being in a
position to take action contrary to our instructions or requests;
inability and/or unwillingness of partners to provide their share
of any future capital requirements; availability and cost of
financing; interest rate risks; demand by prospective buyers of
condominiums and single family homes; inability to realize gains
from sales of condominiums and single family homes; lower than
anticipated sales prices; inability to close on sales of
properties; inability or failure of the purchaser of the
residential phases of Palomino Park to close; the risks of
seasonality and increasing interest rates on WRP's ability to sell
condominium units and single family homes; increases in energy
costs, construction materials and interest could adversely impact
our home building business as homes become more expensive to build
and profit margins could deteriorate; inability to raise sale
prices to maintain profit margins; the negative impact from a
continuing rise in energy costs and interest rates on our marketing
efforts and the ability for buyers to afford our homes at any price
level, which could result in the inability to meet targeted sales
prices or cause sales price reductions; environmental risks;
failure of the stockholders to approve the Plan; the Board could
abandon the Plan even after it is approved by the stockholders;
failure to achieve proceeds from the sales of assets to meet the
estimated ranges of initial and total distributions to stockholders
under the Plan; the uncertainty as to the timing of sales of assets
and the impact on the timing of distributions to stockholders;
illiquidity of real estate assets and joint venture investments;
increases in expenses which would negatively impact the amount of
distributions pursuant to the Plan; unknown claims and liabilities
which would negatively impact the amount of distributions pursuant
to the Plan; the sale of undeveloped land, rather than the
construction and sale, in the normal course of business, of single
family homes or condominium units which would negatively impact the
amount of distributions pursuant to the Plan; and other risks
listed from time to time in WRP's reports filed with the SEC.
Therefore, actual results could differ materially from those
projected in such statements. -0- *T Wellsford Real Properties,
Inc. Financial Highlights (Unaudited) For the Three Months Ended
For the Nine Months Ended September 30, September 30,
------------------------------------------------ 2005 2004 2005
2004 ---------- ---------- ----------- ----------- REVENUES Rental
revenue $3,419,873 $3,330,548 $10,315,055 $10,107,727 Revenue from
sales of residential units 209,900 4,408,154 488,075 11,352,348
Interest revenue 438,541 307,325 1,248,854 798,023 Fee revenue
162,850 207,492 518,000 702,228 ---------- ---------- -----------
----------- Total revenues 4,231,164 8,253,519 12,569,984
22,960,326 ---------- ---------- ----------- ----------- COSTS AND
EXPENSES Cost of sales of residential units 166,513 3,614,456
385,631 9,384,829 Property operating and maintenance 1,272,956
1,239,490 3,824,377 3,517,197 Real estate taxes 279,346 350,696
846,549 1,078,341 Depreciation and amortization 1,106,417 1,183,195
3,315,601 3,458,914 Property management 91,378 71,032 275,502
237,084 Interest: Mortgage notes payable 1,239,174 1,478,903
3,855,366 4,767,074 Debentures -- 524,954 823,643 1,574,861 General
and administrative 1,933,158 2,143,520 6,842,237 5,742,346
---------- ---------- ----------- ----------- Total costs and
expenses 6,088,942 10,606,246 20,168,906 29,760,646 ----------
---------- ----------- ----------- Income (loss) from joint
ventures 5,601,729 (10,277,532) 11,514,752 (16,383,563) ----------
---------- ----------- ----------- Income (loss) before minority
interest, income taxes and discontinued operations 3,743,951
(12,630,259) 3,915,830 (23,183,883) Minority interest benefit
(expense) 42,802 (3,665) 109,083 40,182 ---------- ----------
----------- ----------- Income (loss) before income taxes and
discontinued operations 3,786,753 (12,633,924) 4,024,913
(23,143,701) Income tax expense 10,000 44,000 70,000 143,000
---------- ---------- ----------- ----------- Income (loss) from
continuing operations 3,776,753 (12,677,924) 3,954,913 (23,286,701)
Income from discontinued operations, net of income tax expense of
$17,000 during the nine months ended September 30, 2004 -- -- --
776,314 ---------- ---------- ----------- ----------- Net income
(loss) $3,776,753 $(12,677,924)$ 3,954,913 $(22,510,387) ==========
============ =========== ============ Per share amounts, basic and
diluted: Income (loss) from continuing operations $ 0.58 $ (1.96) $
0.61 $ (3.60) Income from discontinued operations -- -- -- 0.12
---------- ---------- ----------- ----------- Net income (loss) $
0.58 $ (1.96) $ 0.61 $ (3.48) ========== ========== ===========
=========== Weighted average number of common shares outstanding:
Basic 6,467,639 6,460,770 6,467,639 6,459,352 ========== ==========
=========== =========== Diluted 6,476,698 6,460,770 6,470,949
6,459,352 ========== ========== =========== =========== *T -0- *T
Wellsford Real Properties, Inc. Financial Highlights (continued)
September 30, December 31, Summary of Consolidated Balance Sheet
Data 2005 2004 ------------------------------------------
-------------------------- (unaudited) (audited) Real estate, net
$142,914,298 $130,243,971 Notes receivable $ 157,500 $ 1,189,500
Investment in joint ventures $ 7,478,437 $ 13,984,968 Cash and cash
equivalents $ 64,107,263 $ 65,863,790 U.S. Government securities $
5,050,467 $ 27,551,254 Total assets $235,772,083 $254,637,310
Mortgage notes payable $107,438,504 $108,852,625 Convertible junior
subordinated debentures $ -- $ 25,775,000 Total shareholders'
equity $102,754,182 $ 98,783,269 Other information: Common shares
outstanding 6,467,639 6,466,523 Book value per share (unaudited) $
15.89 $ 15.28 *T
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