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PRESS RELEASE from provider: Business Wire
This content is a press release from our partner Business Wire. The AP newsroom and editorial departments were not involved in its creation.

PS Business Parks, Inc. Reports Results for the Quarter and Year Ended December 31, 2018

February 21, 2019

GLENDALE, Calif.--(BUSINESS WIRE)--Feb 20, 2019--PS Business Parks, Inc. (NYSE:PSB) reported operating results for the quarter and year ended December 31, 2018.

Operating Results for the Three Months Ended December 31, 2018

Net income allocable to common shareholders was $31.5 million, or $1.15 per diluted common share, for the three months ended December 31, 2018, an increase of $10.3 million, or 48.9%, from $21.2 million, or $0.77 per diluted common share, for the same period in 2017. The increase was mainly due to the gain on the sale of an office park in Orange County, California, a charge related to the redemption of preferred stock incurred during the fourth quarter of 2017 that did not recur in the fourth quarter of 2018 and an increase in net operating income (“NOI”–described below) with respect to our real estate facilities. The increase in NOI includes a $2.7 million increase, or 4.0%, for our Same Park facilities (described below) driven by an increase in rental rates and occupancy combined with increased NOI from our non-Same Park and multifamily assets, partially offset by reduced NOI generated from facilities we sold in 2018.

Operating Results for the Year Ended December 31, 2018

Net income allocable to common shareholders was $172.9 million, or $6.31 per diluted common share, for the year ended December 31, 2018, an increase of $82.5 million, or 91.2%, from $90.4 million, or $3.30 per diluted common share, for the same period in 2017. The increase was mainly due to the gain on the sale of three office parks in Orange County, California, and an industrial park in Dallas, Texas, during 2018, charges related to the redemption of preferred stock incurred in 2017 that did not recur in 2018 and an increase in NOI with respect to our real estate facilities. The increase in NOI includes a $7.1 million increase, or 2.6%, for our Same Park facilities due primarily to an increase in rental rates and occupancy combined with increased NOI from our non-Same Park and multifamily assets, partially offset by reduced NOI generated from facilities we sold in 2018.

Funds from Operations (“FFO”), Core FFO per share and Funds Available for Distribution (“FAD”)

FFO per share was $1.65 for the three months ended December 31, 2018, as compared to $1.40 for the same period in 2017, an increase of 17.9%. FFO per share was $6.47 for the year ended December 31, 2018, as compared to $5.83 for the year ended December 31, 2017, an increase of 11.0%. FFO is a non-GAAP (generally accepted accounting principles) measure defined by the National Association of Real Estate Investment Trusts and generally represents GAAP net income before real estate depreciation and amortization expense, gains and losses from sales and impairment charges with respect to real estate assets.

Core FFO per share was $1.65 for the three months ended December 31, 2018, as compared to $1.52 for the same period in 2017, an increase of 8.6%. Core FFO per share was $6.47 for the year ended December 31, 2018, as compared to $6.13 for the year ended December 31, 2017, an increase of 5.5%. Core FFO per share is also a non-GAAP measure that represents FFO per share excluding the impact of (i) charges related to the redemption of preferred stock and (ii) compensatory arrangements related to the departure of a senior executive.

FAD was $45.9 million for the three months ended December 31, 2018, as compared to $43.0 million for the same period in 2017, an increase of 6.7%. FAD was $182.2 million for the year ended December 31, 2018, as compared to $164.4 million for the year ended December 31, 2017, an increase of 10.9%. FAD is a non-GAAP measure that represents Core FFO adjusted to (a) deduct capital expenditures that maintain the real estate values, tenant improvements and lease commissions and (b) eliminate certain non-cash expenses or income such as straight-line rent and non-cash stock compensation expense.

FFO, Core FFO per share and FAD are not substitutes for net income per share. Other real estate investment trusts (“REITs”) may compute these measures differently, and in the case of Core FFO and FAD, other REITs may not use the same terminology or may not present such a measure, so comparisons of these measures among REITs may not be comparable. We believe our presentations of FFO, Core FFO per share and FAD assist investors and analysts in analyzing and comparing our operating and financial performance between reporting periods.

Property Operations–Same Park Portfolio

The Company believes that evaluation of its Same Park portfolio, defined as all properties owned and operated as of December 31, 2018 that were acquired prior to January 1, 2016, provides an informative view of how the Company’s portfolio has performed over comparable periods. As of December 31, 2018, the Same Park facilities constitute 26.9 million rentable square feet, representing 95.4% of the 28.2 million rentable square feet in the Company’s total portfolio.

The following table presents the unaudited operating results of the Company’s Same Park facilities for the three months and years ended December 31, 2018 and 2017 (in thousands, except per square foot amounts):

The following table summarizes select unaudited quarterly financial data with respect to the Same Park facilities (in thousands, except per square foot amounts):

Distributions Declared

On February 20, 2019, the Board of Directors declared a quarterly dividend of $1.05 per common share. Distributions were also declared on the various series of depositary shares, each representing 1/1,000 of a share of preferred stock. Distributions are payable on March 28, 2019 to shareholders of record on March 13, 2019.

Company Information

PS Business Parks, Inc., a member of the S&P SmallCap 600, is a REIT that acquires, develops, owns and operates commercial properties, primarily multi-tenant industrial, flex and office space. As of December 31, 2018, the Company wholly owned 28.2 million rentable square feet with approximately 5,050 commercial customers in six states and held a 95.0% interest in a 395-unit apartment complex.

Forward-Looking Statements

When used within this press release, the words “may,” “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” “intends” and similar expressions are intended to identify “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results and performance of the Company to be materially different from those expressed or implied in the forward-looking statements. Such factors include the impact of competition from new and existing commercial facilities which could impact rents and occupancy levels at the Company’s facilities; the Company’s ability to evaluate, finance and integrate acquired and developed properties into the Company’s existing operations; the Company’s ability to effectively compete in the markets that it does business in; the impact of the regulatory environment as well as national, state and local laws and regulations including, without limitation, those governing REITs; the impact of general economic conditions upon rental rates and occupancy levels at the Company’s facilities; the availability of permanent capital at attractive rates, the outlook and actions of Rating Agencies and risks detailed from time to time in the Company’s SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K.

Additional information about PS Business Parks, Inc., including more financial analysis of the fourth quarter operating results, is available on the Company’s website at psbusinessparks.com.

A conference call is scheduled for Thursday, February 21, 2019, at 10:00 a.m. PST (1:00 p.m. EST) to discuss fourth quarter results. The toll free number is (800) 901-5382; the conference ID is PSBQ418. The call will also be available via a live webcast on the Company’s website. A replay of the conference call will be available through March 7, 2019 at (800) 753-9146, as well as via webcast on the Company’s website.

Additional financial data attached.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190220006019/en/

CONTACT: Jeff Hedges

(818) 244-8080, Ext. 1649

KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA

INDUSTRY KEYWORD: REIT CONSTRUCTION & PROPERTY COMMERCIAL BUILDING & REAL ESTATE RESIDENTIAL BUILDING & REAL ESTATE

SOURCE: PS Business Parks, Inc.

Copyright Business Wire 2019.

PUB: 02/20/2019 07:11 PM/DISC: 02/20/2019 07:11 PM

http://www.businesswire.com/news/home/20190220006019/en