PR Newswire
HOUSTON, May 8, 2017
HOUSTON, May 8, 2017 /PRNewswire/ -- Parkway, Inc. (NYSE: PKY) today announced results for its first quarter ended March 31, 2017.
Highlights for First Quarter 2017 and Subsequent Events
"Parkway's first quarter performance is a result of hard work from our leasing and operations team during a challenging time in the Houston market," stated James R. Heistand, President and Chief Executive Officer of Parkway. "Houston office fundamentals remain under significant pressure, but we are using our operational expertise and efficiencies within our portfolio to improve leasing velocity and retain as many tenants as possible at reasonable economics. We also completed the previously announced sale of a 49% interest in Greenway Plaza and Phoenix Tower, which helps to mitigate risk in a large asset while providing proceeds that can be used to strengthen our balance sheet and pursue opportunities that we believe will be accretive for our stockholders."
For the first quarter 2017, net loss for Parkway, Inc. ("Parkway" or the "Company") attributable to common stockholders was $12.5 million, or $0.26 per basic and diluted share. For the first quarter 2017, funds from operations ("FFO") was $26.0 million, or $0.52 per diluted share.
Operational Results
Occupancy at the end of the first quarter 2017 was 85.9%. Including leases that have been signed but have yet to commence, the Company's leased percentage at the end of the first quarter 2017 was 87.6%.
Leasing Activity
During the first quarter 2017, Parkway signed approximately 167,000 square feet of leases at an average net rent per square foot of $20.40 and at an average cost of $6.78 per square foot per year. All leasing statistics for first quarter 2017 exclude the execution of an 89,000 square foot, 20-year new lease with an affiliate of Life Time Fitness, Inc. ("Life Time") at Greenway Plaza, which the Company recognizes as a retail lease and accordingly excludes from leasing totals. The Life Time lease will replace the Houston City Club lease, which is set to expire on June 30, 2017.
New & Expansion Leasing – During the first quarter 2017, Parkway signed approximately 30,000 square feet of new leases at an average net rent per square foot of $20.84 and at an average cost of $7.38 per square foot per year.
Expansion leases during the first quarter 2017 totaled 23,000 square feet at an average net rent per square foot of $19.70 and at an average cost of $8.52 per square foot per year.
Renewal Leasing – Customer retention during the first quarter 2017 was 84.8%. Parkway signed approximately 114,000 square feet of renewal leases at an average net rent per square foot of $20.43, representing a 15.1% rate increase from the expiring rate. The average cost of renewal leases was $6.11 per square foot per year.
Capital Structure
At March 31, 2017, Parkway had no outstanding debt under its revolving credit facility, $350.0 million outstanding under its term loan and held $174.4 million in cash and cash equivalents. Parkway's secured debt totaled $447.3 million at March 31, 2017.
At March 31, 2017, the Company's net debt plus preferred stock to adjusted EBITDA – annualized multiple was 4.4x. A reconciliation of net income (loss) to adjusted EBITDA and adjusted EBITDA – annualized is presented in the tables attached to this press release.
Common Dividend
The Company's previously announced first quarter cash dividend of $0.10 per share, which represents an annualized dividend of $0.40 per share, was paid on March 30, 2017 to stockholders of record as of March 16, 2017.
Subsequent Events
On April 20, 2017, Parkway completed a joint venture with respect to Greenway Plaza and Phoenix Tower (collectively, the "Greenway Portfolio") by selling a 49.0% interest in the properties for a gross purchase price of $512.1 million, or an implied $210 per square foot. The Greenway Portfolio is an approximately 5.0 million square foot campus consisting of 11 office properties located in the Greenway submarket of Houston, Texas. Parkway, through certain of its subsidiaries, formed the joint venture with TH Real Estate Global Asset Management, the real estate investment management arm of TIAA ("TH Real Estate"), Silverpeak Real Estate Partners ("Silverpeak") and Canada Pension Plan Investment Board ("CPPIB"). As part of the joint venture transaction, Parkway retained a 51% interest in the Greenway Portfolio, a partnership between TH Real Estate and Silverpeak acquired a 24.5% interest, and CPPIB acquired a 24.5% interest. Parkway, through certain of its subsidiaries, serves as the general partner and also provides property management and leasing services for the joint venture.
The joint venture assumed the existing mortgage debt secured by Phoenix Tower, which has an outstanding balance of approximately $75.9 million and matures on March 1, 2023. Additionally, the joint venture placed a new mortgage loan from Goldman Sachs Mortgage Company totaling $465.0 million (the "Loan") secured by the other properties in the Greenway Portfolio. The Loan has a fixed interest rate of 3.75% and matures on May 6, 2022. Parkway also terminated its existing revolver and term loan credit facility and prepaid the $350.0 million outstanding balance using proceeds from the Loan. Parkway expects to record a $7.6 million non-cash loss on extinguishment of debt in the second quarter of 2017 related to the termination of the credit facility.
Net proceeds to Parkway were approximately $322.4 million, $37.9 million of which is being held in lender reserves. The net proceeds amount includes the new debt placement and the payoff of the $350.0 million term loan credit facility. Parkway's net proceeds are also net of credits to the other joint venture partners related to outstanding contractual lease obligations for tenant improvements and rent concessions as well as certain capital expenditures for projects that are in process, all of which totaled approximately $32.8 million. Additionally, Parkway recorded an impairment loss of approximately $15.0 million in the first quarter of 2017 related to the joint venture transaction.
2017 Outlook
After considering the Company's year-to-date performance, including the timing of the closing of the Greenway Portfolio joint venture, and expected results for the remainder of the year, Parkway is updating its 2017 net loss outlook to a range of $(0.67) to $(0.53) per diluted share, its 2017 FFO outlook to a range of $1.37 to $1.47 per diluted share, and its 2017 recurring FFO outlook to a range of $1.52 to $1.62 per diluted share.
The reconciliation of projected earnings per share ("EPS") to projected FFO and recurring FFO per diluted share is as follows:
Outlook for 2017 | Range | ||
Fully diluted EPS | $(0.67) | - | $(0.53) |
Noncontrolling interest - unitholders | $(0.02) | - | $0.00 |
Parkway's share of depreciation and amortization | $1.76 | - | $1.70 |
Impairment loss on real estate | $0.30 | - | $0.30 |
FFO per diluted share | $1.37 | - | $1.47 |
Loss on extinguishment of debt | $0.15 | - | $0.15 |
Recurring FFO per diluted share | $1.52 | - | $1.62 |
The 2017 outlook is based on the core operating and financial assumptions outlined in the table below. These assumptions reflect the Company's expectations based on its knowledge of current market conditions and historical experience. All dollar amounts presented in this table are at Parkway's share and dollars and shares are in thousands.
2017 Core Operating Assumptions: | | Revised 2017 Outlook | | Previous 2017 Outlook | ||||
Recurring cash NOI | | $98,500 | - | $105,500 | | $97,000 | - | $104,000 |
| | | | | | | | |
Straight-line rent and amortization of | | $16,000 | - | $19,000 | | $16,000 | - | $19,000 |
| | | | | | | | |
Management fee after-tax net loss | | $(1,000) | - | $0 | | $(1,000) | - | $0 |
| | | | | | | | |
General and administrative ("G&A") expense | | $12,000 | - | $15,000 | | $12,000 | - | $15,000 |
| | | | | | | | |
Share based compensation expense included in G&A above | | $1,800 | - | $2,200 | | $1,800 | - | $2,200 Werbung Mehr Nachrichten zur Parkway Properties Aktie kostenlos abonnieren
E-Mail-Adresse
Bitte überprüfe deine die E-Mail-Adresse.
Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News |