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PS Business Parks, Inc.
701 Western Avenue
Glendale, CA 91201-2349
|Date:||February 18, 2020|
|(818) 244-8080, Ext. 1649|
PS Business Parks, Inc. Reports Results for the Quarter and Year Ended December 31, 2019
GLENDALE, CaliforniaPS Business Parks, Inc. (NYSE:PSB) reported operating results for the quarter and year ended December 31, 2019. Net income allocable to common shareholders for the three months and year ended December 31, 2019 was $27.5 million, or $1.00 per diluted common share, and $108.7 million, or $3.95 per diluted common share, respectively.
We are extremely pleased to report strong operating results for the fourth quarter, a satisfying end to a great year of performance for PS Business Parks, said President and Chief Executive Officer Maria Hawthorne. Same Park cash NOI was up 6.6% in the fourth quarter and 5.5% for the full year 2019, and notably we were able to achieve this growth while maintaining our disciplined approach to managing capital expenses. For the year, we achieved total portfolio cash rental rate growth of 8.3% while containing transaction cost capital to just 5.6% of total rents, an extraordinary display of our dedicated in-house leasing and property management teams ability to execute throughout our markets.
We are also very pleased with our recent acquisitions, including a 1031 exchange that we wrapped up just after year end. We sold Metro Park IV, a government occupied single-tenant property in Montgomery County, Maryland, and redeployed the sale proceeds into two parks in California which are both bolt-on acquisitions to our existing portfolios. With this sale, we have completed the disposition of the three suburban Maryland parks that we announced early in 2019, and we are confident that the acquired parks will be great assets for us.
As we look ahead, we entered the year with positive momentum and are planning for another strong year in 2020. Fundamentals of our Same Park portfolio remain strong, our recent acquisitions are poised to stabilize favorably, and our fortress balance sheet remains positioned for growth as we continue to seek accretive acquisition opportunities in nearly all of our markets. Additionally, we intend to commence construction on the next phase of multifamily development at The Mile in Tysons, Virginia, in mid-2020, and we also intend to develop two multi-tenant industrial buildings on excess land parcels at existing parks in our Dallas and Seattle markets. On all fronts, 2020 is shaping up to be another terrific year for PSB.
Operating Results for the Three Months and Year Ended December 31, 2019
Net operating income (NOI) attributable to the Companys Same Park facilities was $70.3 million and $273.1 million for the three months and year ended December 31, 2019, respectively, an increase of 6.1% and 4.9% over the same periods in 2018, respectively. The increase in Same Park NOI for the three months ended December 31, 2019 was driven by a 6.6% increase in rental income, while the increase in Same Park NOI for the year ended December 31, 2019 was driven by a 4.9% increase in rental income. Cash rental rate changes for the three months and year ended December 31, 2019 were 6.4% and 8.3%, respectively.
Funds from Operations (FFO), Core FFO and Funds Available for Distribution (FAD)
FFO for the three months and year ended December 31, 2019 was $1.34 per share and $6.47 per share, respectively. 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 (i) real estate depreciation and amortization expense, (ii) gains or losses on sales of operating properties, and (iii) land and impairment charges on real estate assets.
Core FFO, which the Company defines as FFO excluding the impact of (i) charges related to the redemption of preferred stock and (ii) other nonrecurring income or expense items as appropriate, was $1.65 per share and $6.78 per share for the three months and year ended December 31, 2019, respectively. Core FFO for the three months ended December 31, 2019 included higher than typical preferred equity distributions due to the timing of the new issuance of the Companys Series Z preferred stock and the related redemption of its Series U and V preferred stock. The Company also incurred an $11.0 million non-cash charge related to the redemption of preferred stock (Series U and V) during the three months and year ended December 31, 2019, which was included in FFO but excluded for Core FFO purposes. Full year 2019 Core FFO of $6.78 per share represents a 5.0% increase over the same period in 2018.
The following information was filed by Ps Business Parks Incca (PSB) on Tuesday, February 18, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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