PORT WASHINGTON, N.Y.,
Oct. 30, 2019 /PRNewswire/ -- Cedar
Realty Trust, Inc. (NYSE:CDR – the "Company") today reported
results for the third quarter ended September 30, 2019. Net income attributable to
common shareholders was $0.00 per
diluted share compared to net income of $0.04 per diluted share for the comparable 2018
period. Other highlights include:
Highlights
- Funds from operations (FFO) of $0.12 per diluted share
- Same-property net operating income (NOI) increased 0.7%
compared to the same period in 2018
- Signed 42 new and renewal leases for 579,400 square feet in the
quarter
- Comparable cash-basis lease spreads of 8.5%
- Total portfolio 92.3% leased and same-property portfolio 92.2%
leased at quarter-end
Financial Results
Net income attributable to common shareholders for the third
quarter of 2019 was $0.1 million or
$0.00 per diluted share, compared to
net income of $3.5 million or
$0.04 per diluted share for the same
period in 2018. The principal differences in the comparative
three-month results was an increase in general and administrative
expenses as a as a result of the adoption of the new lease
accounting standards in 2019, and a gain on a property sold, a
reversal of an impairment and early extinguishment of debt costs in
2018. Net income attributable to common shareholders for the
nine-month period ended September 30,
2019 was $3.0 million or
$0.03 per diluted share, compared to
net loss of ($12.4) million or
($0.15) per diluted share. The
principal differences in the comparative nine-month results are
gains on properties sold and an increase in general and
administrative expenses as a as a result of the adoption of the new
lease accounting standards in 2019, and a gain on a property sold,
impairment charges related to properties held for sale, lease
termination income, early extinguishment of debt costs and
preferred stock redemption costs in 2018.
NAREIT-defined FFO for the third quarter of 2019 was
$10.6 million or $0.12 per diluted share, compared to $7.5 million or $0.08 per diluted share for the same period in
2018. Operating FFO for the three-month period ended September 30, 2019 was $10.6 million or $0.12 per diluted share, compared to $12.4 million or $0.13 per diluted share for the same period in
2018. The difference between Operating FFO and NAREIT-defined FFO
was early extinguishment of debt costs in 2018. The principal
difference between the comparative three-months results was an
increase in in general and administrative expenses in 2019 as a
result of the adoption of the new lease accounting standards.
NAREIT-defined FFO for the nine-month period ended September 30, 2019 was $31.0 million or $0.34 per diluted share, compared to $33.5 million or $0.36 per diluted share for the same period in
2018. Operating FFO for the nine-month period ended September 30, 2019 was $31.0 million or $0.34 per diluted share, compared to $41.9 million or $0.45 per diluted share for the same period in
2018. The difference between Operating FFO and NAREIT-defined
FFO were preferred stock redemption costs and early extinguishment
of debt costs in 2018. The principal difference between the
comparative nine-month results was an increase in general and
administrative expenses in 2019 as a result of the adoption of the
new lease accounting standards and lease termination income in
2018.
Portfolio Update
During the third quarter of 2019, the Company signed 42 leases
for 579,400 square feet. On a comparable space basis, the Company
leased 576,200 square feet at a positive lease spread of 8.5% on a
cash basis (new leases increased 28.4% and renewals increased
0.9%). During the nine-month period ended September 30, 2019, the Company signed 121 leases
for 1,445,000 square feet. On a comparable space basis, the Company
leased 1,430,100 square feet at a positive lease spread of 2.3% on
a cash basis (new leases increased 18.6% and renewals decreased
0.7%). The negative renewal spreads were driven by two anchor
renewals executed to maintain high foot traffic at their respective
properties in the second quarter of 2019.
Same-property NOI for the third quarter of 2019 increased 0.7%
excluding redevelopments as compared to the same period in
2018.
The Company's total portfolio, excluding properties held for
sale, was 92.3% leased at September 30,
2019, compared to 91.0% at December
31, 2018 and 91.6% at September 30,
2018. The Company's same-property portfolio was 92.2% leased
at September 30, 2019, compared to
91.2% at December 31, 2018 and 92.2%
at September 30, 2018.
As of September 30, 2019, Carll's
Corner, located in Bridgeton, New
Jersey and Suffolk Plaza, located in Suffolk, Virginia, have been classified as
"real estate held for sale".
Balance Sheet
Debt
As of September 30, 2019, the
Company had $116.0 million available
under its revolving credit facility and reported net debt to
earnings before interest, taxes, depreciations, and amortization
for real estate (EBITDAre) of 8.1 times. Further, the Company has
no debt maturities until early 2021.
Equity
On December 18, 2018, the
Company's Board of Directors approved a stock repurchase program,
which authorized the purchase of up to $30.0
million of the Company's common stock in the open market or
through private transactions, subject to market conditions, from
time to time, through December 18,
2019. During the three months ended March 31, 2019, the Company repurchased 2,050,000
shares at a weighted average price per share of $3.34. There have been no repurchases subsequent
to March 31, 2019. Since approval of
the plan on December 18, 2018, the
Company has repurchased a total of 2,823,000 shares at a weighted
average price per share of $3.25.
2019 Guidance
The Company reaffirms its previously-announced 2019 guidance for
NAREIT-defined FFO and Operating FFO, and has updated its guidance
for net loss attributable to common shareholders. The guidance is
as follows:
|
|
Guidance
|
Net loss attributable
to common shareholders per diluted share
|
|
($0.05
-$0.04)
|
NAREIT-defined FFO
per diluted share
|
|
$0.43 -
$0.44
|
Operating FFO per
diluted share
|
|
$0.44 -
$0.45
|
The guidance is based, in part, on the following:
- Lease costs required to be expensed beginning in 2019 of
$2.5 to $3.0
million under new accounting standard
- Same-property NOI growth including redevelopment properties
relatively flat
- Development marketing and community outreach costs at urban
properties of $750,000 reflected in
redevelopment NOI
- Increase in general and administrative costs of $1.5 million from additional personnel related to
urban properties and legal expense in connection with the
termination of former Chief Operating Officer
- Decrease in amortization income from intangible lease
liabilities of $2.0 million
(inclusive of $1.5 million related to
terminating a dark anchor in 2018)
- Dispositions of approximately $25
million
The principal difference between NAREIT-defined FFO and
Operating FFO in the above for 2019 is related to
redevelopments.
The following table reconciles the Company's 2019 guidance from
net loss attributable to common shareholders per diluted share to
NAREIT-defined FFO per diluted share and Operating FFO per diluted
share:
|
|
Guidance
|
|
|
per diluted
share
|
|
|
Low
|
|
High
|
Net loss attributable
to common shareholders
|
|
($0.05)
|
|
($0.04)
|
Real estate
depreciation and amortization
|
|
$0.51
|
|
$0.51
|
Gain on
sales
|
|
($0.03)
|
|
($0.03)
|
NAREIT-defined
FFO
|
|
$0.43
|
|
$0.44
|
Redevelopment costs
expensed pursuant to GAAP
|
|
$0.01
|
|
$0.01
|
Operating
FFO
|
|
$0.44
|
|
$0.45
|
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 nine months ended September 30, 2019 and 2018 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 September 30, 2019.
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, October 30, 2019, 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
October 30, 2019, until midnight (ET)
on November 13, 2019. The replay
dial-in numbers are (844) 512-2921 or
(1) (412) 317-6671 for international callers. Please use
passcode 13695313 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 57 properties, with approximately 8.5 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, 2018, 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)
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
|
Real estate, at
cost
|
|
$
1,528,410,000
|
|
$
1,508,682,000
|
Less accumulated
depreciation
|
|
(385,152,000)
|
|
(361,969,000)
|
Real estate,
net
|
|
1,143,258,000
|
|
1,146,713,000
|
Real estate held for
sale
|
|
7,225,000
|
|
11,592,000
|
Cash and cash
equivalents
|
|
1,983,000
|
|
1,977,000
|
Receivables
|
|
23,810,000
|
|
21,977,000
|
Other assets and
deferred charges, net
|
|
46,509,000
|
|
40,642,000
|
TOTAL
ASSETS
|
|
$
1,222,785,000
|
|
$
1,222,901,000
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Liabilities:
|
|
|
|
|
Mortgage loan
payable
|
|
$
46,609,000
|
|
$
47,315,000
|
Capital lease
obligation
|
|
5,370,000
|
|
5,387,000
|
Unsecured revolving
credit facility
|
|
107,000,000
|
|
100,000,000
|
Unsecured term
loans
|
|
472,663,000
|
|
472,132,000
|
Accounts payable and
accrued liabilities
|
|
52,829,000
|
|
26,142,000
|
Unamortized
intangible lease liabilities
|
|
11,139,000
|
|
13,209,000
|
Total
liabilities
|
|
695,610,000
|
|
664,185,000
|
|
|
|
|
|
Equity:
|
|
|
|
|
Preferred
stock
|
|
159,541,000
|
|
159,541,000
|
Common stock and
other shareholders' equity
|
|
364,173,000
|
|
395,884,000
|
Noncontrolling
interests
|
|
3,461,000
|
|
3,291,000
|
Total
equity
|
|
527,175,000
|
|
558,716,000
|
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
$
1,222,785,000
|
|
$
1,222,901,000
|
CEDAR REALTY
TRUST, INC.
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
PROPERTY
REVENUES
|
|
|
|
|
|
|
|
|
Rental
revenues
|
|
$
35,490,000
|
|
$
35,867,000
|
|
$
107,391,000
|
|
$
110,532,000
|
Other
|
|
422,000
|
|
303,000
|
|
1,064,000
|
|
4,556,000
|
Total property
revenues
|
|
35,912,000
|
|
36,170,000
|
|
108,455,000
|
|
115,088,000
|
PROPERTY OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Operating,
maintenance and management
|
|
6,321,000
|
|
6,394,000
|
|
20,450,000
|
|
20,182,000
|
Real estate and other
property-related taxes
|
|
5,178,000
|
|
5,037,000
|
|
15,475,000
|
|
15,172,000
|
Total property
operating expenses
|
|
11,499,000
|
|
11,431,000
|
|
35,925,000
|
|
35,354,000
|
|
|
|
|
|
|
|
|
|
PROPERTY OPERATING
INCOME
|
|
24,413,000
|
|
24,739,000
|
|
72,530,000
|
|
79,734,000
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSES AND
INCOME
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
4,886,000
|
|
3,975,000
|
|
15,102,000
|
|
12,745,000
|
Depreciation and
amortization
|
|
10,547,000
|
|
9,650,000
|
|
31,022,000
|
|
30,245,000
|
Gain on
sales
|
|
-
|
|
(4,864,000)
|
|
(2,942,000)
|
|
(4,864,000)
|
Impairment
(reversal)/charges
|
|
-
|
|
(707,000)
|
|
-
|
|
20,689,000
|
Total other expenses
and income
|
|
15,433,000
|
|
8,054,000
|
|
43,182,000
|
|
58,815,000
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
8,980,000
|
|
16,685,000
|
|
29,348,000
|
|
20,919,000
|
|
|
|
|
|
|
|
|
|
NON-OPERATING
INCOME AND EXPENSES
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(6,033,000)
|
|
(5,551,000)
|
|
(17,868,000)
|
|
(16,468,000)
|
Early extinguishment
of debt costs
|
|
-
|
|
(4,829,000)
|
|
-
|
|
(4,829,000)
|
Total non-operating
income and expense
|
|
(6,033,000)
|
|
(10,380,000)
|
|
(17,868,000)
|
|
(21,297,000)
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
|
2,947,000
|
|
6,305,000
|
|
11,480,000
|
|
(378,000)
|
|
|
|
|
|
|
|
|
|
Attributable to
noncontrolling interests
|
|
(167,000)
|
|
(145,000)
|
|
(435,000)
|
|
(353,000)
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CEDAR REALTY
TRUST, INC.
|
|
2,780,000
|
|
6,160,000
|
|
11,045,000
|
|
(731,000)
|
|
|
|
|
|
|
|
|
|
Preferred stock
dividends
|
|
(2,688,000)
|
|
(2,688,000)
|
|
(8,064,000)
|
|
(8,175,000)
|
Preferred stock
redemption costs
|
|
-
|
|
-
|
|
-
|
|
(3,507,000)
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO COMMON
SHAREHOLDERS
|
|
$
92,000
|
|
$
3,472,000
|
|
$
2,981,000
|
|
$
(12,413,000)
|
|
|
|
|
|
|
|
|
|
NET (LOSS) INCOME
PER COMMON SHARE
ATTRIBUTABLE TO COMMON SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(0.00)
|
|
$
0.04
|
|
$
0.03
|
|
$
(0.15)
|
Diluted
|
|
$
(0.00)
|
|
$
0.04
|
|
$
0.03
|
|
$
(0.15)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
86,262,000
|
|
89,049,000
|
|
86,367,000
|
|
88,228,000
|
Diluted
|
|
86,262,000
|
|
89,875,000
|
|
86,367,000
|
|
88,228,000
|
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
September 30,
|
|
Nine months ended
September 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income (loss)
attributable to common shareholders
|
|
$
92,000
|
|
$
3,472,000
|
|
$
2,981,000
|
|
$
(12,413,000)
|
Real estate
depreciation and amortization
|
|
10,501,000
|
|
9,601,000
|
|
30,884,000
|
|
30,095,000
|
Limited partners'
interest
|
|
1,000
|
|
19,000
|
|
20,000
|
|
(41,000)
|
Gain on
sales
|
|
-
|
|
(4,864,000)
|
|
(2,942,000)
|
|
(4,864,000)
|
Impairment
(reversal)/charges
|
|
-
|
|
(707,000)
|
|
-
|
|
20,689,000
|
Consolidated minority
interests:
|
|
|
|
|
|
|
|
|
Share of
income
|
|
166,000
|
|
126,000
|
|
415,000
|
|
394,000
|
Share of
FFO
|
|
(130,000)
|
|
(99,000)
|
|
(316,000)
|
|
(343,000)
|
Funds From
Operations ("FFO") applicable to diluted common
shares
|
|
10,630,000
|
|
7,548,000
|
|
31,042,000
|
|
33,517,000
|
Adjustments for items
affecting comparability:
|
|
|
|
|
|
|
|
|
Financing
costs
|
|
-
|
|
4,829,000
|
|
-
|
|
4,829,000
|
Preferred stock
redemption costs
|
|
-
|
|
-
|
|
-
|
|
3,507,000
|
Operating Funds
From Operations ("Operating FFO") applicable to diluted
common shares
|
|
$
10,630,000
|
|
$
12,377,000
|
|
$
31,042,000
|
|
$
41,853,000
|
|
|
|
|
|
|
|
|
|
FFO per diluted
common share:
|
|
$
0.12
|
|
$
0.08
|
|
$
0.34
|
|
$
0.36
|
|
|
|
|
|
|
|
|
|
Operating FFO per
diluted common share:
|
|
$
0.12
|
|
$
0.13
|
|
$
0.34
|
|
$
0.45
|
|
|
|
|
|
|
|
|
|
Weighted average
number of diluted common shares:
|
|
|
|
|
|
|
|
|
Common shares and
equivalents
|
|
90,521,000
|
|
92,961,000
|
|
90,636,000
|
|
92,179,000
|
OP Units
|
|
544,000
|
|
469,000
|
|
550,000
|
|
388,000
|
|
|
91,065,000
|
|
93,430,000
|
|
91,186,000
|
|
92,567,000
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/cedar-realty-trust-reports-third-quarter-2019-results-300948305.html
SOURCE Cedar Realty Trust, Inc.