Mission West Properties Announces Third Quarter 2009 Operating Results
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CUPERTINO, Calif., Oct. 14 /PRNewswire-FirstCall/ -- Mission West Properties, Inc. (Nasdaq: MSW) reported today that Funds From Operations ("FFO") for the quarter ended September 30, 2009 was approximately $17,604,000, or $0.17 per diluted common share, (considering the potential effect of all O.P. units being exchanged for shares of the Company's common stock) as compared to approximately $14,199,000, or $0.13 per diluted common share, for the same period in 2008. Unrealized gain from investment in marketable securities accounted for approximately $4,464,000, or $0.04 per diluted common share, for the quarter ended September 30, 2009. On a sequential quarter basis, FFO for the quarter ended June 30, 2009 was approximately $0.13 per diluted common share. For the nine months ended September 30, 2009, FFO increased to $43,863,000, or $0.42 per diluted common share, from FFO of $42,471,000, or $0.40 per diluted common share, for the same period in 2008. Net termination fees accounted for approximately $1,921,000, or $0.02 per diluted common share, for the nine months ended September 30, 2008.
Net income for the quarter ended September 30, 2009 was approximately $11,242,000 as compared to approximately $7,939,000 for the quarter ended September 30, 2008. Net income per diluted share to common stockholders was approximately $0.13 for the quarter ended September 30, 2009 compared to $0.08 for the quarter ended September 30, 2008, a per share increase of approximately 63%. Net income for the nine months ended September 30, 2009 was approximately $24,065,000 as compared to approximately $23,897,000 for the nine months ended September 30, 2008. For the nine months ended September 30, 2009, net income per diluted share to common stockholders was approximately $0.27, up from $0.25 a year ago, a per share increase of approximately 8%.
Company Profile
Mission West Properties, Inc. operates as a selfmanaged, selfadministered and fully integrated REIT engaged in the management, leasing, marketing, development and acquisition of commercial R&D properties, primarily located in the Silicon Valley portion of the San Francisco Bay Area. Currently, the Company manages 111 properties totaling approximately 8.0 million rentable square feet, which includes approximately 854,000 rentable square feet (or 16 buildings) that are in the process of being rezoned for residential development. For additional information, please contact Investor Relations at 408-725-0700.
The matters described herein contain forward-looking statements. Such statements can be identified by the use of forward-looking terminology such as "will," "anticipate," "estimate," "expect," "intends," or similar words. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the Company's control, which may cause material differences in actual results, performance or other expectations. These factors include, but are not limited to, the ability to complete acquisitions under the Berg Land Holdings Option Agreement with the Berg Group and other factors detailed in the Company's registration statements, and periodic filings with the Securities & Exchange Commission.
MISSION WEST PROPERTIES, INC.
SELECTED FINANCIAL DATA
(In thousands, except share, per share and property data amounts)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Sept 30, Sept 30, Sept 30, Sept 30,
2009 2008 2009 2008
---- ---- ---- ----
OPERATING REVENUES:
Rental revenue
from real estate $20,442 $20,256 $61,521 $58,612
Tenant reimbursements 4,566 4,607 13,681 11,900
Lease termination
and settlement income - - - 1,921
Other income 284 292 906 769
--- --- --- ---
Total operating
revenues 25,292 25,155 76,108 73,202
------ ------ ------ ------
OPERATING EXPENSES:
Operating and
maintenance 3,539 2,951 10,014 7,993
Real estate taxes 3,248 2,888 9,996 8,245
General and
administrative 589 605 1,743 1,951
Depreciation and
amortization of
real estate 5,921(1) 5,759(1) 18,200(1) 17,064(1)
-------- -------- --------- ---------
Total operating
expenses 13,297 12,203 39,953 35,253
------ ------ ------ ------
Operating income 11,995 12,952 36,155 37,949
OTHER INCOME (EXPENSES):
Equity in
earnings of
unconsolidated
joint venture 72 126 237 915
Interest and
dividend income 93 193 1,158 965
Unrealized gain
from investment 4,464 - 4,140 -
Interest expense (5,180) (5,023) (17,071) (14,907)
Interest expense
- related parties (202) (309) (554) (1,025)
---- ---- ---- ------
Net income 11,242 7,939 24,065 23,897
Net income
attributable to
noncontrolling
interests (8,476) (6,304) (18,083) (19,021)
------ ------ ------- -------
Net income
attributable to
common stockholders $2,766 $1,635 $5,982 $4,876
====== ====== ====== ======
Net income per
share to common
stockholders:
Basic $0.13 $0.08 $0.28 $0.25
===== ===== ===== =====
Diluted $0.13 $0.08 $0.27 $0.25
===== ===== ===== =====
Weighted average
shares of common
stock (basic) 21,770,211 19,745,141 21,717,713 19,703,066
========== ========== ========== ==========
Weighted average
shares of common
stock (diluted) 21,902,387 19,783,507 21,858,067 19,769,148
========== ========== ========== ==========
Weighted average
O.P. units
outstanding 83,504,965 85,527,739 83,557,463 85,528,787
========== ========== ========== ==========
FUNDS FROM OPERATIONS
Funds from operations $17,604 $14,199 $43,863 $42,471
======= ======= ======= =======
Funds from operations
per share (2) $0.17 $0.13 $0.42 $0.40
===== ===== ===== =====
Outstanding common
stock 21,770,211 19,748,211 21,770,211 19,748,211
========== ========== ========== ==========
Outstanding O.P.
units 83,504,965 85,526,965 83,504,965 85,526,965
========== ========== ========== ==========
Weighted average
O.P. units and
common stock
outstanding
(diluted) 105,407,352 105,311,246 105,415,530 105,297,934
=========== =========== =========== ===========
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
FUNDS FROM Sept 30, Sept 30, Sept 30, Sept 30,
OPERATIONS 2009 2008 2009 2008
CALCULATION ---- ---- ---- ----
Net income $11,242 $7,939 $24,065 $23,897
Add:
Depreciation and
amortization of
real estate 6,385 6,204 19,796 18,313
Depreciation and
amortization of
real estate
held in
unconsolidated
joint venture 60 189 179 568
Less:
Noncontrolling
interests in
joint ventures (83) (133) (177) (307)
--- ---- ---- ----
Funds from
operations $17,604 $14,199 $43,863 $42,471
======= ======= ======= =======
Funds From Operations ("FFO") is a non-GAAP financial measurement used by
real estate investment trusts ("REITs") to measure and compare operating
performance. As defined by NAREIT, FFO represents net income (loss)
(computed in accordance with GAAP, accounting principles generally
accepted in the United States of America), excluding gains (or losses)
from debt restructuring and sales of property, plus real estate related
depreciation and amortization (excluding amortization of deferred
financing costs and depreciation of non real estate assets) and after
adjustments for unconsolidated partnerships and joint ventures.
Management considers FFO to be an appropriate supplemental measure of the
Company's operating and financial performance because when compared year
over year, it reflects the impact to operations from trends in occupancy
rates, rental rates, operating costs, general and administrative expenses
and interest costs, providing a perspective not immediately apparent from
net income. In addition, management believes that FFO provides useful
information about the Company's financial performance when compared to
other REITs since FFO is generally recognized as the industry standard
for reporting the operations of REITs. FFO should neither be considered
as an alternative for net income as a measure of profitability nor is it
comparable to cash flows provided by operating activities determined in
accordance with GAAP. FFO is not comparable to similarly entitled items
reported by other REITs that do not define them exactly as we define FFO.
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Sept 30, Sept 30, Sept 30, Sept 30,
PROPERTY AND OTHER 2009 2008 2009 2008
DATA: ---- ---- ---- ----
Total properties,
end of period 111 111 111 111
Total square feet,
end of period 8,047,569 8,047,569 8,047,569 8,047,569
Average monthly
rental revenue per
square foot (3) $1.30 $1.25 $1.29 $1.24
Occupancy for leased
properties 65.7% 66.7% 65.7% 66.7%
Straight-line rent $115 $857 $675 $2,444
Leasing commissions $973 $606 $1,294 $1,241
Capital expenditures $156 $3,827 $156 $6,164
LEASE ROLLOVER SCHEDULE:
# of
Year Leases Rentable Square Feet 2009 Base Rent(5)
---- ------ -------------------- -----------------
2009 8 90,082(4) $1,811,171
2010 8 342,099 5,838,534
2011 16 838,692 12,333,272
2012 14 1,010,825 13,538,262
2013 6 397,215 5,081,754
2014 17 1,492,430 24,794,530
2015 6 485,036 8,784,081
2016 3 165,976 3,105,544
2017 5 349,949 3,510,351
Thereafter 1 119,756 2,608,286
- ------- ---------
Total 84 5,292,060 $81,405,785
== ========= ===========
BALANCE SHEETS
September 30, 2009 December 31, 2008
------------------ -----------------
Assets
Investments in real estate:
Land $320,911 $320,911
Buildings and improvements 799,627 799,471
Real estate related intangible assets 3,240 3,240
----- -----
Total investments in properties 1,123,778 1,123,622
Accumulated depreciation and
amortization (198,243) (180,043)
-------- --------
Net investments in properties 925,535 943,579
Investment in unconsolidated
joint venture 3,830 3,768
----- -----
Net investments in real estate 929,365 947,347
Cash and cash equivalents 576 -
Restricted cash 7,597 39,478
Restricted investment in
marketable securities 11,124 -
Investment in marketable
securities - 3,368
Deferred rent receivables 18,516 17,841
Other assets, net 31,408 26,251
------ ------
Total assets $998,586 $1,034,285
======== ==========
Liabilities and Equity
Liabilities:
Mortgage notes payable $321,907 $330,908
Mortgage note payable -
related parties 8,389 8,761
Note payable - related parties 5,057 -
Revolving line of credit 3,573 13,079
Interest payable 1,530 1,596
Security deposits 5,026 5,272
Deferred rental income 5,525 3,964
Dividends and distributions
payable 15,791 21,055
Accounts payable and accrued
expenses 29,283 17,747
------ ------
Total liabilities 396,081 402,382
------- -------
Commitments and contingencies.
Equity: (6)
Stockholders' equity:
Common stock, $.001 par value 22 20
Additional paid-in capital 169,790 154,412
Distributions in excess of
accumulated earnings (24,912) (20,014)
------- -------
Total stockholders' equity 144,900 134,418
Noncontrolling interests 457,605 497,485
------- -------
Total equity 602,505 631,903
------- -------
Total liabilities and equity $998,586 $1,034,285
======== ==========
(1) Includes approximately $159 in amortization expense for the three
months ended September 30, 2009 and 2008, and $478 and $441 in
amortization expense for the nine months ended September 30, 2009 and
2008, respectively, for the amortization of in-place lease value
intangible asset pursuant to the Business Combinations Topic of the
Financial Accounting Standards Board Accounting Standards Codification
("FASB ASC").
(2) Calculated on a fully diluted basis. Assumes conversion of O.P. units
outstanding into the Company's common stock.
(3) Average monthly rental revenue per square foot has been determined by
taking the cash base rent for the period divided by the number of months
in the period, and then divided by the average occupied square feet in
the period.
(4) Seven leases for approximately 90,000 rentable square feet are month
to month leases.
(5) Base rent reflects cash rent.
(6) Reflects adoption of the Consolidation Topic of the FASB ASC.
SOURCE Mission West Properties, Inc.
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