Columbia Property Trust (CXP) Raises Quarterly Dividend 5% to $0.21, 4.1% Yield; Announces Prelim. FY20 Plans

Columbia Property Trust (NYSE: CXP) declared a quarterly dividend of $0.21 per share, or $0.84 annualized. This is a 5% increase from the prior dividend of $0.20.

The dividend will be payable on January 7, 2019, to stockholders of record on December 16, 2019, with an ex-dividend date of December 13, 2019.

The annual yield on the dividend is 4.1 percent.

Announces Preliminary 2020 Plans

Columbia Property Trust, Inc. (NYSE: CXP) today announced that it is under contract to acquire 201 California Street, an office tower in San Francisco, for $239 million. Additionally, the company is proceeding with two planned dispositions expected to close in early 2020 that it anticipates will collectively provide $245 million to $265 million in gross sales proceeds: the Westinghouse campus in Cranberry Woods (Pittsburgh), Pennsylvania, which is now under contract, and Pasadena Corporate Park in suburban Los Angeles, for which the company has commenced marketing efforts. Yesterday, Columbia also closed on its previously announced acquisition of 250 Church Street in Manhattan for $205.5 million, through its joint venture with Normandy Real Estate Fund IV, LP (“Normandy Fund IV”).

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20191203006018/en/

[Columbia Property Trust provided preliminary 2020 guidance, raised its dividend, and announced several transactions, including being under contract to acquire 201 California Street in San Francisco. (Photo courtesy of Eastdil Secured).]

Columbia Property Trust provided preliminary 2020 guidance, raised its dividend, and announced several transactions, including being under contract to acquire 201 California Street in San Francisco. (Photo courtesy of Eastdil Secured).

In connection with the progress on these key real estate transactions, Columbia is providing preliminary guidance for its 2020 full year Net Income and Normalized Funds From Operations, which also reflects the company’s assumptions regarding the impact of its previously announced planned acquisition of Normandy Real Estate Management, LLC (“Normandy”). Columbia has also announced that its Board of Directors has declared a regular quarterly cash dividend that reflects a five percent increase over the company’s previous quarterly dividend rate.

“We now have greater clarity on the timing and execution of several significant transactions in our portfolio, which allows us to provide preliminary guidance for our earnings expectations for the year ahead,” said Nelson Mills, CEO of Columbia. “Our initial 2020 guidance also incorporates our assumptions regarding the financial impact from our acquisition of the Normandy platform, which we expect to close at or just after the end of the year. The Board’s decision to increase the dividend rate reflects our confidence in the company’s strength today and expectations for continued growth.”

Planned Acquisition of 201 California

Columbia is under contract to acquire 201 California Street, a 272,000-square-foot, Class-A office tower in San Francisco’s Financial District, from Beacon Capital Partners for $239 million, exclusive of closing costs. The acquisition is expected to close by year-end.

Located at the corner of California and Front Streets, the 17-story building has been substantially renovated and is 97 percent leased to multiple tenants, the largest of which are First Republic Bank, Dow Jones, and the law firm Cooper, White and Cooper. The building has substantial roll over the next five years, with in-place rents estimated to be at least 10 percent below market, giving Columbia an opportunity to take advantage of continued demand in the market and drive further growth in rental rates.

“We are very pleased to be putting the proceeds from our dispositions to work by adding another exceptional asset to our San Francisco portfolio,” Mills said. “With its highly desirable location, amenities and structural attributes, 201 California is positioned to perform in line with our other successful investments in the Bay Area, and we look forward to the opportunity to put our local knowledge and capability to work to improve rates even further at the property in the years ahead.”

Planned Dispositions in Pittsburgh and Los Angeles

Columbia is under contract to sell the three-building campus fully leased to Westinghouse Corporation in suburban Pittsburgh, Pennsylvania, that it has owned since 2010. The disposition, for which the buyer was not disclosed, is expected to close in early 2020. In 2017, Columbia secured a renewal with Westinghouse to retain its corporate headquarters in all 824,000 square feet at the campus until 2032.

Columbia has also commenced marketing efforts for Pasadena Corporate Park, a 262,000-square-foot property that comprises three office buildings in suburban Los Angeles, and expects to complete the disposition in the first quarter of 2020.

Completed Acquisition of 250 Church Street

Columbia has closed on its previously announced acquisition of 250 Church Street in Manhattan through its joint venture partnership with Normandy Fund IV. The joint venture acquired the 235,000-square-foot, 16-story office building in TriBeCa for $205.5 million and has commenced a full redevelopment of the property under a new address, 101 Franklin Street.

Progress on Normandy Transaction

Columbia is progressing toward the close of its acquisition of Normandy and expects to complete the transaction as planned by year-end or in early 2020, subject to satisfaction of previously disclosed closing conditions.

In a presentation posted today to the Investor Relations section of Columbia’s website, https://ir.columbia.reit, Columbia has provided more information on the expected financial impact from the Normandy transaction on its earnings outlook for 2020, including its assumptions regarding the related fee streams and its integration and use of the Normandy platform over the next one to three years.

Preliminary Guidance for 2020

For calendar year 2020, the Company expects to report Net Income Available to Common Stockholders in the range of $0.28 to $0.31 per diluted share, and Normalized Funds from Operations in a range of $1.46 to $1.51 per diluted share.

Our guidance for 2020 is based on the following assumptions:

The acquisition of 201 California Street in December 2019;
The disposition of the Westinghouse Campus and Pasadena Corporate Park in the first quarter of 2020;
The completion of the Normandy acquisition in late 2019 or early 2020; and
Same-store NOI growth of 8 to 11 percent.

“Our preliminary guidance for 2020 reflects the impact of several key transactions, as well as the benefit of the fee streams and synergies from our planned acquisition of Normandy,” said Jim Fleming, chief financial officer of Columbia. “We expect the integration of the Normandy team will enhance our ability to source and capitalize on value-creating projects, which should further support earnings growth in 2020 and beyond.”

These estimates reflect management’s view of current market conditions and incorporate certain economic and operational assumptions and projections. This annual guidance includes the continued enhancement of the portfolio based on the above assumptions. Actual results could differ from these estimates. Note that individual quarters may fluctuate on both a cash basis and a GAAP basis due to the timing of dispositions, lease commencements and expirations, the timing of repairs and maintenance, capital expenditures, capital markets activities, and one-time revenue or expense events. In addition, the Company’s guidance is based on information available to management as of the date of this release.

For a dividend history and other dividend-related data on Columbia Property Trust (CXP) click here.

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