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Preferred Apartment Communities, Inc. Reports Results for Third Quarter 2019

ATLANTA, Nov. 4, 2019 /PRNewswire/ -- Preferred Apartment Communities, Inc. (APTS) ("we," "our," the "Company" or "Preferred Apartment Communities") today reported results for the quarter ended September 30, 2019. Unless otherwise indicated, all per share results are reported based on the basic weighted average shares of Common Stock and Class A Units of the Company's operating partnership ("Class A Units") outstanding. See Definitions of Non-GAAP Measures.

Preferred Apartment Communities

"We had a strong quarter, up 10.7% on FFO over Q3 2018. We accomplished this despite incurring nearly $0.02/share in direct costs associated with our consideration of internalizing our external manager. We incurred additional indirect internalization related costs as we built up cash reserves to fund portions of an internalization if required. These extraordinary costs will have a significant impact on our year end numbers and we now expect that when these expenses are added back to FFO we will perform at the low end of our previously provided guidance range," said Daniel M. DuPree, Preferred Apartment Communities' Chairman and Chief Executive Officer.

Financial Highlights

Our operating results are presented below.

















Three months ended September 30,




Nine months ended September 30,






2019


2018


% change


2019


2018


% change

















Revenues (in thousands)

$

120,203



$

104,232



15.3

%


$

345,561



$

290,991



18.8

%

















Per share data:














Net income (loss) (1)

$

(0.71)



$

(0.35)





$

(2.02)



$

(1.16)




















FFO (2)

$

0.31



$

0.28



10.7

%


$

1.06



$

1.03



2.9

%

















AFFO (2)

$

0.12



$

0.21



(42.9)

%


$

0.66



$

0.84



(21.4)

%

















Dividends (3)

$

0.2625



$

0.255



2.9

%


$

0.785



$

0.76



3.3

%
















 

(1) Per weighted average share of Common Stock outstanding for the periods indicated.

(2) FFO and AFFO results are presented per weighted average share of Common Stock and Class A Unit in our Operating Partnership outstanding for the periods indicated. See Reconciliations of FFO Attributable to Common Stockholders and Unitholders and AFFO to Net Income (Loss) Attributable to Common Stockholders and Definitions of Non-GAAP Measures.

(3)  Per share of Common Stock and Class A Unit outstanding.

           

  • For the third quarter 2019, our FFO payout ratio to Common Stockholders and Unitholders was approximately 85.0% and our FFO payout ratio (before the deduction of preferred dividends) to our preferred stockholders was approximately 67.5%. (A)
  • Our AFFO payout ratio to Common Stockholders and Unitholders was approximately 223.5% for the third quarter 2019 and 93.2% for the trailing twelve-month period ended September 30, 2019. Our AFFO payout ratio (before the deduction of preferred dividends) to our preferred stockholders was approximately 84.5% for the third quarter 2019 and 68.2% for the trailing twelve-month period ended September 30, 2019.  (B) We have $27.9 million of accrued but not yet paid interest on our real estate loan investment portfolio.
  • For the quarter ended September 30, 2019, our same-store rental revenues increased approximately 3.3% and our operating expenses increased 2.3%, resulting in an increase in net operating income of approximately 4.4% for our same-store multifamily communities as compared to the quarter ended September 30, 2018.(C) For the third quarter 2019, our average same-store multifamily communities' physical occupancy was 95.6%.
  • At September 30, 2019, the market value of our common stock was $14.45 per share. A hypothetical investment in our Common Stock in our initial public offering on April 5, 2011, assuming the reinvestment of all dividends and no transaction costs, would have resulted in an average annual return of approximately 17.4% through September 30, 2019.
  • As of September 30, 2019, the average age of our multifamily communities was approximately 5.4 years, which is the youngest in the public multifamily REIT industry.
  • As of September 30, 2019, approximately 91.6% of our permanent property-level mortgage debt has fixed interest rates and approximately 3.8% has variable interest rates which are capped. We believe we are well protected against potential increases in market interest rates. 
  • During the third quarter 2019, we refinanced six retail assets with new fixed-rate mortgage debt and on October 1, we repaid two other maturing mortgages on retail properties which remain unencumbered.
  • At September 30, 2019, our leverage, as measured by the ratio of our debt to the undepreciated book value of our total assets, was approximately 52.4%. Included in our total assets were our investments in the Series 2018-ML04 and Series 2019-ML05 from the Freddie Mac K program. Our leverage calculation excludes the gross assets of approximately $586 million and liabilities of approximately $586 million that are owned by other pool participants in the Freddie Mac K program that we consolidated under the VIE rules.
  • As of September 30, 2019, our total assets were approximately $5.3 billion compared to approximately $4.1 billion as of September 30, 2018, an increase of approximately $1.1 billion, or approximately 26.9%. This growth was driven by (i) the net acquisition of 12 real estate properties and (ii) the consolidation of the mortgage pools from the Freddie Mac K program. Excluding the VIE mortgage pool assets from other participants in the K Program, our total assets grew approximately $789 million, or 20.3% since September 30, 2018.
  • On July 29, 2019, we entered into a purchase and sale agreement to sell six of our student housing properties to a third party. A non-refundable earnest money deposit has been placed into an escrow account by the purchaser and we anticipate the sale to close in the near future. We expect to realize a book gain on the sale.
  • On August 16, 2019, we closed on a real estate loan investment of up to approximately $14.8 million in connection with the development of Kennesaw Crossing, a 250-unit multifamily community to be located in Kennesaw, Georgia.

 

(A) We calculate the FFO payout ratio to Common Stockholders as the ratio of Common Stock dividends and distributions to FFO Attributable to Common Stockholders and Unitholders. We calculate the FFO payout ratio to preferred stockholders as the ratio of Preferred Stock dividends to the sum of Preferred Stock dividends and FFO. Since our operations resulted in a net loss from continuing operations for the periods presented, a payout ratio based on net loss is not calculable.  See Definitions of Non-GAAP Measures.


(B) We calculate the AFFO payout ratio to Common Stockholders as the ratio of Common Stock dividends and distributions to AFFO. We calculate the AFFO payout ratio to preferred stockholders as the ratio of Preferred Stock dividends to the sum of Preferred Stock dividends and AFFO.


(C) Same store net operating income is a non-GAAP measure. See Definitions of Non-GAAP Measures.

 

Acquisitions of Properties

During the third quarter 2019, we acquired the following properties:










Property


Location (MSA)


Units / Leasable
square feet











Multifamily communities:








Artisan at Viera


Melbourne, FL


259

units



Five Oaks at Westchase


Tampa, FL


218

units











Office building:








CAPTRUST Tower


Raleigh, NC


300,000

LSF



251 Armour (1)


Atlanta, GA


35,000

LSF











Grocery-anchored shopping center:








Fairfield Shopping Center (2)


Virginia Beach, VA


231,829

LSF










(1) 251 Armour is  an additional building acquired within our Armour Yards office building complex in Atlanta, Georgia.

(2) Property is owned through a consolidated joint venture.

 

Real Estate Assets

 











Owned as of
September 30, 2019


Potential
additions from
real estate loan
investment
portfolio (1) (2)


Potential total



Multifamily communities:








Properties

34



8



42




Units

10,245



2,303



12,548




Grocery-anchored shopping centers:








Properties

50

(3)




50




Gross leasable area (square feet)

5,644,427





5,644,427




Student housing properties:








Properties

8



1



9




Units

2,011



175



2,186




Beds

6,095



543



6,638




Office buildings:








Properties

9



1



10




Rentable square feet

2,913,000



192,000



3,105,000












(1)  We evaluate each project individually and we make no assurance that we will acquire any of the underlying properties
from our real estate loan investment portfolio.


(2)  The Company has terminated various purchase option agreements in exchange for termination fees.  These properties
are excluded from the potential additions from our real estate loan investment portfolio.


(3) One property is owned through a consolidated joint venture.

 

Subsequent to Quarter End

Between October 1, 2019 and October 31, 2019, we issued 42,025 Units under the $1.5 Billion Unit Offering and collected net proceeds of approximately $37.8 million after commissions and fees and issued 7,463 shares of Series M Preferred Stock under the mShares offering and collected net proceeds of approximately $7.2 million after commissions and fees.

On October 11, 2019, we closed on a real estate loan investment of up to approximately $10.9 million in connection with the development of a 340-unit multifamily community to be located in Orlando, Florida.

On October 14, 2019, we announced that our Board of Directors had unanimously elected Joel T. Murphy as Chief Executive Officer, effective as of January 1, 2020. Mr. Murphy will continue as a member of the board, where he has served since May 2019. Mr. Murphy currently is, and has for the last five years been, the CEO of our New Market Properties subsidiary, and since June 2018 has been the chairman of the Company's investment committee. Mr. Murphy succeeds our current CEO and Chairman of the Board, Daniel M. DuPree, who will remain with us as Executive Chairman of the Board.

On October 16, 2019, the borrowers repaid all amounts due under the 464 Bishop real estate loan investment and the Newport Development Partners, LLC revolving line of credit held by us. On October 24, 2019, the borrower repaid all amounts due under the Park 35 on Clairmont real estate loan investment held by us. Included in the repayments were accrued interest amounts that totaled approximately $3.4 million.

On October 17, 2019, we closed on mortgage financing for our Five Oaks at Westchase multifamily community located in Tampa, Florida. The new mortgage has a principal amount of $31.5 million, bears interest at a fixed rate of 3.27% per annum and matures on November 1, 2031.

On October 30, 2019, we amended the purchase and sale agreement for the sale of six of our student housing properties to include the sale of our Haven 12 real estate loan investment that has an outstanding principal and accrued interest amount of approximately $7.3 million.

Same-Store Multifamily Communities Financial Data

The following chart presents same-store operating results for the Company's multifamily communities. We define our population of same-store multifamily communities as those that have achieved occupancy at or above 93% for all three consecutive months within a single quarter (stabilized) before the beginning of the prior year and that have been owned for at least 15 full months as of the end of the first quarter of the current year, enabling comparisons of the current year quarterly and annual reporting periods to the prior year comparative periods. The Company excludes the operating results of properties for which construction of adjacent phases has commenced and properties which are undergoing significant capital projects, have sustained significant casualty losses, or are being marketed for sale as of the end of the reporting period. For the periods presented, same-store operating results consist of the operating results of the following multifamily communities containing an aggregate 6,172 units:

 

Aster at Lely Resort


Avenues at Cypress


Avenues at Northpointe

Citi Lakes


Lenox Village


Retreat at Lenox Village

Summit Crossing I


Sorrel


Venue at Lakewood Ranch

Overton Rise


525 Avalon Park


Vineyards

Avenues at Creekside


Retreat at Greystone


City Vista

Citrus Village


Luxe at Lakewood Ranch


Adara at Overland Park

Founders Village


Summit Crossing II


Aldridge at Town Village

 

Same-store net operating income is a non-GAAP measure that is most directly comparable to net income (loss), as shown in the reconciliations below.

 

Reconciliation of Net Income (Loss) to Multifamily Communities' Same-Store Net Operating Income (NOI)








Three months ended:

(in thousands)


9/30/2019


9/30/2018






Net (loss) income


$

(2,137)



$

8,354


Add:





Equity stock compensation


305



796


Depreciation and amortization


46,239



44,499


Interest expense


28,799



25,657


Management fees


8,611



7,234


Insurance, professional fees and other expenses

1,945



715


Waived asset management and general and administrative expense fees


(3,081)



(1,934)


Loan loss allowance




3,029


Less:





Interest revenue on notes receivable


12,608



13,618


Interest revenue on related party notes receivable


2,546



3,671


Income from consolidated VIEs


591



131


Gain on sale of real estate




18,605


Loss on extinguishment of debt


(15)









Property net operating income


64,951



52,325


Less:





Non-same-store property revenues


(78,400)



(60,925)


Add:





Non-same-store property operating expenses

28,638



23,143






Same-store net operating income


$

15,189



$

14,543







 

Multifamily Communities' Same Store Net Operating Income












Three months ended:





(in thousands)


9/30/2019


9/30/2018


$ change


% change

Revenues:









Rental revenues


$

25,613



$

24,802



$

811



3.3

%

Other property revenues


1,036



944



92



9.7

%

Total revenues


26,649



25,746



903



3.5

%










Operating expenses:









Property operating and maintenance


3,503



3,566



(63)



(1.8)

%

Payroll


2,150



2,170



(20)



(0.9)

%

Property management fees


1,067



1,032



35



3.4

%

Real estate taxes


3,629



3,422



207



6.0

%

Other


1,111



1,013



98



9.7

%

Total operating expenses


11,460



11,203



257



2.3

%










Same-store net operating income


$

15,189



$

14,543



$

646



4.4

%










Same-store average physical occupancy


95.6

%


95.7

%





 

Reconciliation of Net Income (Loss) to Multifamily Communities' Same-Store Net Operating Income (NOI)








Nine months ended:

(in thousands)


9/30/2019


9/30/2018






Net (loss) income


$

(6,094)



$

17,339


Add:





Equity stock compensation


922



2,881


Depreciation and amortization


137,191



127,210


Interest expense


83,166



68,972


Management fees


24,649



20,096


Insurance, professional fees and other expenses

4,888



2,487


Loan loss allowance




3,029


Waived asset management and general and administrative expense fees


(8,505)



(4,583)


Less:





Interest revenue on notes receivable


35,989



37,576


Interest revenue on related party notes receivable


9,980



12,310


Income from consolidated VIEs


1,316



185


Miscellaneous revenues (1)


1,023




Loss on extinguishment of debt


(84)




Gain on sale of real estate loan investment


747




Gain on sale of real estate




38,961


Gain on sale of trading investment


4









Property net operating income


187,242



148,399


Less:





Non-same-store property revenues


(219,882)



(164,339)


Add:





Non-same-store property operating expenses

78,067



59,726






Same-store net operating income


$

45,427



$

43,786







(1) Revenue from a forfeited earnest money deposit from a prospective property purchaser.

 

Multifamily Communities' Same-Store Net Operating Income












Nine months ended:





(in thousands)


9/30/2019


9/30/2018


$ change


% change

Revenues:









Rental revenues


$

75,972



$

73,611



$

2,361



3.2

%

Other property revenues


2,715



2,770



(55)



(2.0)

%

Total revenues


78,687



76,381



2,306



3.0

%










Operating expenses:









Property operating and maintenance


9,744



10,036



(292)



(2.9)

%

Payroll


6,226



6,173



53



0.9

%

Property management fees


3,149



3,057



92



3.0

%

Real estate taxes


10,872



10,235



637



6.2

%

Other


3,269



3,094



175



5.7

%

Total operating expenses


33,260



32,595



665



2.0

%










Same-store net operating income


$

45,427



$

43,786



$

1,641



3.7

%

 

Capital Markets Activities

On September 27, 2019, our registration statement on Form S-3 (Registration No. 333-233576) (the "Series A1/M1 Registration Statement") was declared effective by the Securities and Exchange Commission (the "SEC"). The Series A1/M1 Registration Statement allows us to offer up to a maximum of 1,000,000 shares of Series A1 Redeemable Preferred Stock, Series M1 Redeemable Preferred Stock or a combination of both (the "Series A1/M1 Offering"). The stated price per share is $1,000, subject to adjustment under certain conditions. The shares are being offered by our affiliate, Preferred Capital Securities, LLC ("PCS"), on a "reasonable best efforts" basis and we intend to invest substantially all the net proceeds of the Series A1/M1 Offering in connection with the acquisition of multifamily communities, grocery-anchored shopping centers, office buildings, real estate loans and mortgages, other real estate-related investments and general working capital purposes.

During the third quarter 2019, we issued and sold an aggregate of 117,787 Units from our offering of up to 1,500,000 Units, with each Unit consisting of one share of Series A Redeemable Preferred Stock and one Warrant to purchase up to 20 shares of Common Stock (the "$1.5 Billion Series A Unit Offering"), resulting in net proceeds of approximately $106.0 million after commissions and other fees.

In addition, during the third quarter 2019, we issued 194,100 shares of Common Stock pursuant to the exercise of warrants issued under our Series A Preferred Stock offering, resulting in aggregate gross proceeds of approximately $2.5 million. We also issued  approximately 869,100 shares of Common Stock for redemptions of 15,601 shares of our Series A Redeemable Preferred Stock.

During the third quarter 2019, we issued and sold an aggregate of 17,156 shares of Series M Redeemable Preferred Stock ("mShares"), resulting in net proceeds of approximately $16.6 million after dealer manager fees.

Dividends

Quarterly Dividends on Common Stock and Class A OP Units

On August 1, 2019, we declared a quarterly dividend on our Common Stock of $0.2625 per share for the third quarter 2019. This represents a 2.9% increase in our common stock dividend from our third quarter 2018 common stock dividend of $0.255 per share, and an average annual dividend growth rate of 13.4% since June 30, 2011, the first quarter end following our initial public offering in April 2011. The third quarter dividend was paid on October 15, 2019 to all stockholders of record on September 13, 2019. In conjunction with the Common Stock dividend, the Company's operating partnership declared a distribution on its Class A Units of $0.2625 per unit for the third quarter 2019, which was paid on October 15, 2019 to all Class A Unit holders of record as of September 13, 2019.

Monthly Dividends on Preferred Stock

We declared monthly dividends of $5.00 per share on our Series A Redeemable Preferred Stock, which totaled approximately $28.1 million for the third quarter 2019 and represent a 6% annual yield. We declared dividends totaling approximately $1.3 million on our Series M Redeemable Preferred Stock, or mShares, for the third quarter 2019. The mShares have a dividend rate that escalates from 5.75% in year one of issuance to 7.50% in year eight and thereafter.

Conference Call and Supplemental Data

We will hold our quarterly conference call on Tuesday, November 5, 2019 at 11:00 a.m. Eastern Time to discuss our third quarter 2019 results. To participate in the conference call, please dial in to the following:

Live Conference Call Details
Domestic Dial-in Number: 1-844-890-1791
International Dial-in Number: 1-412-380-7408
Company: Preferred Apartment Communities, Inc.
Date: Tuesday, November 5, 2019
Time: 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time)

The live broadcast of our third quarter 2019 conference call will be available online, on a listen-only basis, at our website, www.pacapts.com, under "Investors" and then click on the "Upcoming Events" link. A replay of the call will be archived on under the Investors/Audio Archive section.

2019 Guidance:

Net income (loss) per shareWe are actively adding properties and real estate loan investments to our real estate portfolio and the specific timing of the closing of acquisitions is difficult to predict. Acquisition activity by its nature can cause material variation in our reported depreciation and amortization expense and interest income. Since net income (loss) per share is calculated net of depreciation and amortization expense, our net income (loss) results can fluctuate, possibly significantly, depending upon the timing of the closing of acquisitions. For this reason, we are unable to reasonably forecast this measure or provide a reconciliation of our projected FFO per share to this measure.

FFO per share  - Extraordinary internalization costs will have a significant impact on our year end numbers and we now expect that when these expenses are added back to FFO we will perform at the low end of our previously provided guidance range of $1.44 to $1.50 per share for the full year 2019.

AFFO and FFO are calculated after deductions for all preferred stock dividends. Reconciliations of net income (loss) attributable to common stockholders to FFO and AFFO for the three-month and nine-month periods ended September 30, 2019 and 2018 appear beginning in the attached report, as well as on our website using the following link:

http://investors.pacapts.com/download/3Q19_Earnings_and_Supplemental_Data.pdf

Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:  Estimates of future earnings, guidance, goals and performance are, by definition, and certain other statements in this Earnings Release and Supplemental Financial Data Report may constitute, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, achievements or transactions to be materially different from the results, guidance, goals, performance, achievements or transactions expressed or implied by the forward-looking statements. Factors that impact such forward-looking statements include, among others, our business and investment strategy; legislative or regulatory actions; the state of the U.S. economy generally or in specific geographic areas; economic trends and economic recoveries; changes in operating costs, including real estate taxes, utilities and insurance costs; our ability to obtain and maintain debt or equity financing; financing and advance rates for our target assets; our leverage level; changes in the values of our assets; the occurrence of natural or man-made disasters; availability of attractive investment opportunities in our target markets; our ability to maintain our qualification as a real estate investment trust, or REIT, for U.S. federal income tax purposes; our ability to maintain our exemption from registration under the Investment Company Act of 1940, as amended; availability of quality personnel; our understanding of our competition and market trends in our industry; and interest rates, real estate values, the debt securities markets and the general economy.

Except as otherwise required by the federal securities laws, we assume no liability to update the information in this Earnings Release and Supplemental Financial Data Report.

We refer you to the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2018 that was filed with the Securities and Exchange Commission, or SEC, on March 1, 2019, which discuss various factors that could adversely affect our financial results. Such risk factors and information may be updated or supplemented by our Form 10-K, Form 10-Q and Form 8-K filings and other documents filed from time to time with the SEC.

Additional Information

The SEC has declared effective the registration statement filed by the Company for each of the offerings to which this communication may relate. Before you invest, you should read the final prospectus, and any prospectus supplements, forming a part of the registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the offering to which this communication may relate. In particular, you should carefully read the risk factors described in the final prospectus and in any related prospectus supplement and in the documents incorporated by reference in the final prospectus and any related prospectus supplement to which this communication may relate. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the Company or its dealer manager, Preferred Capital Securities, LLC, will arrange to send you a prospectus with respect to any of the mShares Offering, the $1.5 Billion Unit Offering and the Series A1/M1 Offering upon request by contacting Leonard A. Silverstein at (770) 818-4100, 3284 Northside Parkway NW, Suite 150, Atlanta, Georgia 30327.

The final prospectus for the mShares Offering, dated January 19, 2017, can be accessed through the following link:

https://www.sec.gov/Archives/edgar/data/1481832/000148183217000008/a424prospectus-mshares1.htm

The final prospectus for the $1.5 Billion Unit Offering, dated March 16, 2017, can be accessed through the following link:

https://www.sec.gov/Archives/edgar/data/1481832/000148183217000061/a424prospectus-15bseriesar.htm

The final prospectus for the Series A1/M1 Offering, dated October 22, 2019, can be accessed through the following link:

https://www.sec.gov/Archives/edgar/data/1481832/000148183219000097/a424b5-2019seriesamshares.htm

 

 

Preferred Apartment Communities, Inc.

Consolidated Statements of Operations

(Unaudited)






Three months ended September 30,

(In thousands, except per-share figures)


2019


2018

Revenues:





Rental revenues


$

101,817



$

84,500


Other property revenues


3,232



2,443


Interest income on loans and notes receivable


12,608



13,618


Interest income from related parties


2,546



3,671







Total revenues


120,203



104,232







Operating expenses:





Property operating and maintenance


14,928



12,893


Property salary and benefits

5,360



4,911


Property management fees

3,534



2,998


Real estate taxes


12,870



10,597


General and administrative


1,898



2,221


Equity compensation to directors and executives

305



796


Depreciation and amortization


46,239



44,499


Asset management and general and administrative expense





fees to related party


8,611



7,234


Loan loss allowance




3,029


Insurance, professional fees, and other expenses


3,453



1,713







Total operating expenses


97,198



90,891


Waived asset management and general and administrative




expense fees

(3,081)



(1,934)







Net operating expenses


94,117



88,957


Operating income before (loss) gain on sales of





real estate


26,086



15,275


Gain on sale of real estate




18,605


Operating income


26,086



33,880







Interest expense


28,799



25,657


Change in fair value of net assets of consolidated





VIEs from mortgage-backed pools


591



131


Loss on extinguishment of debt


(15)









Net (loss) income


(2,137)



8,354


Consolidated net loss (income) attributable to non-controlling interests

59



(216)







Net (loss) income attributable to the Company


(2,078)



8,138







Dividends declared to preferred stockholders


(29,446)



(22,360)


Earnings attributable to unvested restricted stock


(5)



(5)







Net loss attributable to common stockholders


$

(31,529)



$

(14,227)







Net loss per share of Common Stock available to




 common stockholders, basic and diluted


$

(0.71)



$

(0.35)







Weighted average number of shares of Common Stock outstanding,




basic and diluted


44,703



40,300


 

 

 

Reconciliation of FFO Attributable to Common Stockholders and Unitholders and AFFO

to Net (Loss) Income Attributable to Common Stockholders (A)






Three months ended September 30,

(In thousands, except per-share figures)



2019


2018









Net loss attributable to common stockholders (See note 1)

$

(31,529)



$

(14,227)










Add:

Depreciation of real estate assets


37,381



33,037



Amortization of acquired real estate intangible assets and deferred leasing costs

8,386



11,058



Net loss attributable to non-controlling interests (See note 2)


(59)



216


Less:

(Gain) loss on sale of real estate




(18,605)


FFO attributable to common stockholders and unitholders

14,179



11,479










Add:

Loan cost amortization on acquisition term note

19



19



Amortization of loan coordination fees paid to the Manager (See note 3)

492



673



Payment of costs related to property refinancing

170





Weather-related property operating losses



161



Non-cash equity compensation to directors and executives

305



796



Amortization of loan closing costs (See note 4)


1,168



1,309



Depreciation/amortization of non-real estate assets


472



404



Net loan fees received (See note 5)


148



248



Accrued interest income received (See note 6)




4,298



Internalization costs (See note 7)


818





Loan loss allowance




3,029



Deemed dividends from cash redemptions of preferred stock


5



2



Amortization of lease inducements (See note 8)


435



387



Non-cash dividends on Preferred Stock


147



63


Less:

Non-cash loan interest income (See note 6)


(3,763)



(4,104)



Non-cash revenues from mortgage-backed securities


(281)



(131)



Cash paid for loan closing costs

(29)



(25)



Amortization of purchase option termination revenues (See note 9)

(1,283)



(4,478)



Amortization of acquired above and below market lease intangibles





and straight-line rental revenues (See note 10)


(4,293)



(3,353)



Amortization of deferred revenues (See note 11)


(940)



(680)



Normally recurring capital expenditures and leasing costs (See note 12)

(2,379)



(1,528)










AFFO

$

5,390



$

8,569








Common Stock dividends and distributions to Unitholders declared:





Common Stock dividends



$

11,823



$

10,377



Distributions to Unitholders (See note 2)


225



272



Total




$

12,048



$

10,649










Common Stock dividends and Unitholder distributions per share


$

0.2625



$

0.255










FFO per weighted average basic share of Common Stock and Unit outstanding

$

0.31



$

0.28


AFFO per weighted average basic share of Common Stock and Unit outstanding

$

0.12



$

0.21






Weighted average shares of Common Stock and Units outstanding: (A)





Basic:




44,703



40,300



Common Stock



868



1,069



Class A Units




45,571



41,369



Common Stock and Class A Units














Diluted Common Stock and Class A Units (B)


45,768



42,890










Actual shares of Common Stock outstanding, including 20 and 19 unvested shares




 of restricted Common Stock at September 30, 2019 and 2018, respectively.

45,355



40,804


Actual Class A Units outstanding at September 30, 2019 and 2018, respectively.

856



1,068



Total




46,211



41,872










(A) Units and Unitholders refer to Class A Units in our Operating Partnership (as defined in note 2), or Class A Units, and holders of Class A Units, respectively. Unitholders include recipients of awards of Class B Units in our Operating Partnership, or Class B Units, for annual service which became vested and earned and automatically converted to Class A Units. Unitholders also include the entity that contributed the Wade Green grocery-anchored shopping center. The Class A Units collectively represent an approximate 1.90% weighted average non-controlling interest in the Operating Partnership for the three-month period ended September 30, 2019.

(B) Since our FFO and AFFO results are positive for the periods reflected above, we are presenting recalculated diluted weighted average shares of Common Stock and Class A Units for these periods for purposes of this table, which includes the dilutive effect of common stock equivalents from grants of the Class B Units, warrants included in units of Series A Preferred Stock issued, as well as annual grants of restricted Common Stock. The weighted average shares of Common Stock outstanding presented on the Consolidated Statements of Operations are the same for basic and diluted for any period for which we recorded a net loss available to common stockholders.

 

See Notes to Reconciliation of FFO and AFFO to Net Income (Loss) Attributable to Common Stockholders.

 

null

Reconciliation of FFO Attributable to Common Stockholders and Unitholders and AFFO

to Net (Loss) Income Attributable to Common Stockholders (A)






Nine months ended September 30,

(In thousands, except per-share figures)



2019


2018









Net loss attributable to common stockholders (See note 1)

$

(88,497)



$

(45,931)










Add:

Depreciation of real estate assets


109,408



90,190



Amortization of acquired real estate intangible assets and deferred leasing costs

26,402



35,963



Net loss attributable to non-controlling interests (See note 2)


(138)



456


Less:

(Gain) loss on sale of real estate




(38,961)


FFO attributable to common stockholders and unitholders

47,175



41,717










Add:

Loan cost amortization on acquisition term note

58



63



Amortization of loan coordination fees paid to the Manager (See note 3)

1,433



1,780



Payment of costs related to property refinancing

594



61



Weather-related property operating losses



(33)



Non-cash equity compensation to directors and executives

922



2,881



Amortization of loan closing costs (See note 4)


3,458



3,567



Depreciation/amortization of non-real estate assets


1,381



1,057



Net loan fees received (See note 5)


674



1,459



Accrued interest income received (See note 6)


5,078



8,410



Internalization costs (See note 7)


1,143





Loan loss allowance