Exhibit 99.2
Fourth Quarter 2014
Supplemental Operating and Financial Data
The Aventine Greenville
Greenville, SC
Trade Street Residential, Inc.
19950 W. Country Club Drive, Suite 800
Aventura, Florida 33180
786-248-5200
www.tradestreetresidential.com
| Trade Street Residential, Inc. | | |
| Fourth Quarter 2014 | | Supplemental Financial Information |
| Table of Contents | Page |
| | |
| Earnings Release | 3 |
| Operating Results | 9 |
| Funds From Operations (“FFO”), Core FFO and Adjusted FFO | 10 |
| Consolidated Balance Sheets | 11 |
| Operating Properties Table | 12 |
| Same Store Comparisons | 13 |
| Acquisitions, Pipeline, Dispositions and Held for Sale | 15 |
| NOI, Average Occupancy and Average Monthly Rent Summary | 16 |
| Debt Summary | 17 |
| Capitalized Cost Summary | 18 |
| Non-GAAP Financial Measures and Reconciliation | 19 |
| NOI Bridge | 21 |
Trade Street RESIDENTIAL RELEASES FOURTH QUARTER AND FULL YEAR 2014 RESULTS
– Same Store NOI Increases 14.2% for Fourth Quarter –
– Same Store Average Rent Increases 4.0% to $915 for Fourth Quarter –
– Reports Core FFO of $0.10 and AFFO of $0.08 Per Diluted Share for Fourth Quarter –
AVENTURA, FL, March 4, 2015 – Trade Street Residential, Inc. (NASDAQ: TSRE) (the “Company”), a vertically integrated and self-managed real estate investment trust ("REIT") focused on acquiring, owning, operating and managing high-quality, conveniently located, apartment communities in mid-sized cities and suburban submarkets of larger cities primarily in the southeastern United States and Texas, today announced consolidated results for the fourth quarter and full year ended December 31, 2014.
Operational and Financial Highlights for Fourth Quarter 2014
| · | Reported Core FFO of $4.0 million, or $0.10 per diluted share and Adjusted FFO, or AFFO, of $3.1 million, or $0.08 per diluted share. |
| · | Same store net operating income, or same store NOI, increased 14.2% compared to the same period in the prior year. Over the same period, same store revenue increased 5.7% and same store expenses decreased 3.3%. |
| · | Same store average occupancy was 96.6% at quarter end, a gain of 110 basis points compared to the same period last year. Stabilized non same store average occupancy was 95.2% at quarter end. |
| · | Same store average rent was $915 per unit, an increase of 4.0% compared to the same period last year. Stabilized non same store average rent was $1,089 per unit at quarter end. |
| · | On November 3, 2014, the Company announced that its Board of Directors initiated a comprehensive review of strategic alternatives, which continues to progress. |
“Our strong operating momentum throughout the fourth quarter of 2014 continues to demonstrate the quality of our portfolio, and the focus of our operating team,” stated Richard Ross, Chief Executive Officer of Trade Street Residential. “During the quarter, we generated higher rental rates and further improved our occupancies while actively managing expenses to deliver solid year over year growth in our same-store NOI and FFO metrics. As we enter 2015, we expect to continue to produce strong results as we focus on growing rents and capture improving efficiencies across our expanded platform. Additionally, the previously announced review of strategic alternatives by our Board of Directors continues, underscoring the strong commitment by our entire organization to maximize value for shareholders.”
Financial Results for the Three Months Ended December 31, 2014
Net income attributable to common stockholders for the fourth quarter of 2014 was $0.5 million, or $0.01 per diluted share, as compared to a net loss of ($9.7) million, or ($0.87) per diluted share, in the prior year period. The increase in net income was primarily the result of higher revenues, lower general and administrative expenses and $1.1 million gain on the sale of the Company’s interest in The Estates at Perimeter joint venture versus a one-time charge of $11.8 million associated with an impairment on land holdings the prior year quarter.
Funds from Operations, or FFO, for the fourth quarter of 2014 was $2.1 million, or $0.05 per diluted share, as compared to a deficit of ($0.8) million, or ($0.06) per diluted share in the prior year period. The increase in FFO is largely the result of the addition of six new operating properties since the fourth quarter of 2013. Core FFO for the fourth quarter of 2014 was $4.0 million, or $0.10 per diluted share, as compared to a deficit of ($0.1) million, or ($0.01) per diluted share in the prior year period. Adjusted FFO, which additionally deducts capital expenditures, for the fourth quarter of 2014 was $3.1 million, or $0.08 per diluted share, as compared to a deficit of ($0.6) million, or ($0.04) per diluted share, in the prior year period.
Financial Results for the Full Year Ended December 31, 2014
Net loss attributable to common stockholders for the full year of 2014 was a net loss of ($27.8) million, or ($0.79) per diluted share, as compared to a net loss of ($5.6) million, or ($0.64) per diluted share, in the prior year. The change in net income was primarily attributable to higher revenue which was more than offset by higher property and other expenses, including $10.0 million of management transition expense. The net loss in the full year of 2013 also included a one-time bargain purchase gain of $6.9 million on acquired assets.
FFO for the full year of 2014 was a deficit of ($4.6) million, or ($0.12) per diluted share, as compared to a deficit of ($5.8) million, or ($0.52) per diluted share in the prior year. Core FFO for the full year of 2014 was $10.7 million, or $0.28 per diluted share, as compared to a loss of ($0.8) million, or ($0.07) per diluted share in the prior year. Adjusted FFO for the full year of 2014 was $8.3 million, or $0.22 per diluted share, as compared to a deficit of ($2.5) million, or ($0.22) per diluted share, in the prior year.
Portfolio Performance
Same store NOI for the fourth quarter of 2014 was $3.0 million as compared to $2.7 million in the same period in the prior year. Same store NOI increased 14.2% compared to the fourth quarter of 2013, driven by a 5.7% increase in same store revenue and a 3.3% decrease in same store property expenses compared to the fourth quarter of 2013. The increase in same store revenue was primarily attributable to a 110 basis point increase in average occupancy to 96.6 %, and a 4.0% increase in average rent to $915 per month.
On a sequential quarter basis, fourth quarter 2014 same store revenue increased 1.6% compared to the third quarter of 2014, while same store property expenses decreased 0.6% resulting in a same store NOI increase of 3.4%.
For the full year of 2014, same store revenue increased 5.2%, same store property expenses increased 3.8%, and same store NOI increased 6.3%, compared to the full year of 2013.
Transaction Activity
In December 2014, the Company and its joint venture partner closed on the sale of The Estates at Perimeter, a non-core 240-unit apartment community located in Augusta, Georgia, for approximately $26.0 million. The Company owned a 50% interest in this apartment community through an unconsolidated joint venture and received gross proceeds of $3.4 million, based on the Company’s proportionate share of ownership interest in the joint venture. Upon completion of this transaction, the Company owned 19 properties comprising 4,889 units and with a weighted average age of 10.9 years as of December 31, 2014.
Redemption of Class A Preferred Stock
In October 2014, the Company redeemed all of the outstanding 309,130 Class A Preferred Stock of the Company. The Class A Preferred Stock, with a liquidation preference of $30.9 million, was redeemed on October 17, 2014 in exchange for four land parcels and approximately $5.0 million in cash. The cash portion of the consideration was funded with cash on hand.
Balance Sheet and Financing Activity
As of December 31, 2014, the Company had total debt outstanding of $344.8 million at a weighted average interest rate of 3.85% and a weighted average term-to-maturity of 6.98 years. Of the total debt outstanding, $297.8 million is fixed rate debt at a weighted average interest rate of 4.03% and a weighted average term-to-maturity of 7.75 years.
Strategic Alternatives Review
In November 2014, the Company’s Board of Directors announced a review of strategic alternatives to enhance stockholder value. Such review includes (among other alternatives): a sale, merger, acquisition or other form of business combination; sale or acquisition of assets; or a debt or equity recapitalization. The Company has not made a decision to pursue any specific strategic transaction or any other strategic alternative, and there is no set timetable for completion of this strategic review process. There can be no assurance that the exploration of strategic alternatives will result in the completion of any transaction or other alternative. The Board does not intend to disclose further developments regarding the evaluation of strategic alternatives until such time as the Board has determined the outcome of the process or otherwise has deemed that disclosure is appropriate.
The Company retained J.P. Morgan Securities LLC as its financial advisor and Morrison & Foerster LLP as its legal advisors to assist the Board in its evaluation of strategic alternatives.
Dividend
On December 15, 2014, Trade Street Residential’s Board of Directors announced a dividend of $0.095 per share and unit, payable to holders of record of common stock and common units of the operating partnership as of December 30, 2014, which was paid on January 15, 2015.
Conference Call and Webcast
The Company will host a webcast and conference call on Wednesday, March 4, 2015 at 11:00 a.m. Eastern Time to review fourth quarter results and discuss recent events. To participate in the call, please dial 877-705-6003 (domestic) or 201-493-6725 (international). The live webcast will be available at www.tradestreetresidential.com in the Investors section. A replay of the conference call will be available through April 4, 2015, by dialing 877-870-5176 (domestic) or 858-384-5517 (international) and entering the pass code 13600321. Supplemental financial information is available in the Investor Relations section of the Company’s website under Quarterly Results.
About Trade Street Residential, Inc.
Trade Street Residential, Inc. is a vertically integrated and self-managed real estate investment trust focused on acquiring, owning, operating and managing conveniently located, garden-style and mid-rise apartment communities in mid-sized cities and suburban submarkets of larger cities primarily in the southeastern United States and Texas.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws, including statements related to the offering and the expected use of the net proceeds therefrom, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases, which are predictions of or indicate future events or trends and which do not relate solely to historical matters. While forward-looking statements reflect the Company's good faith beliefs, assumptions and expectations, they are not guarantees of future performance. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes, except as may be required by law. For a further discussion of these and other factors that could impact the Company's future results, performance or transactions, see the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2013, which the Company filed with the Securities and Exchange Commission on March 26, 2014.
Non-GAAP Financial Measures
As defined by the National Association of Real Estate Investment Trusts, FFO represents net income (loss) (computed in accordance with U.S. generally accepted accounting principles ("GAAP")), excluding gains (or losses) from sales of property, bargain purchase gains, and recognized impairment of real estate assets, plus real estate-related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. The Company presents FFO attributable to common stockholders because management considers it to be an important supplemental measure of the Company’s operating performance, believes it assists in the comparison of the Company’s operating performance between periods to that of different REITs and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their operating results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income.
The Company also uses core funds from operations, or Core FFO, as an operating measure. Core FFO includes adjustments to exclude the impact of straight-line adjustments for ground leases, gains and losses from extinguishment of debt, transaction costs related to acquisitions and recapitalization, management transition costs and certain other non-cash items. The Company believes that these adjustments are appropriate in determining Core FFO as they are not indicative of the operating performance of the Company’s assets. In addition, the Company believes that Core FFO is a useful supplemental measure for the investing community to use in comparing the Company to other REITs as most REITs provide some form of adjusted or modified FFO.
The Company also uses adjusted funds from operations, or AFFO, as an operating measure, which is defined as FFO or, alternatively, Core FFO, depending on the existence of any non-cash, non-comparable items as described above, less recurring and non-recurring capital expenditures. The Company believes that AFFO is a relevant operating measure as it provides an indication as to whether a REIT can fund from its operating performance the capital expenditures necessary to maintain the condition of its operating real estate assets.
Management believes that net operating income (“NOI”) is a useful measure of our operating performance. We define NOI as total property revenues less total property operating expenses, excluding depreciation and amortization. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. We use NOI to evaluate our performance on a same store and non-same store basis. NOI allows us to evaluate the operating performance of our properties because it measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance and captures trends in rental housing and property operating expenses.
The Company defines same store communities as communities owned and stabilized for the entirety of both periods presented, excluding properties held for sale. Reconciliations of net income attributable to common stockholders to FFO, Core FFO, NOI, and same store NOI are included in the Supplemental Information posted on the Company’s website.
Investor Relations:
Stephen Swett
786-248-6099
ir@trade-street.com
Media Contact:
Jason Chudoba, ICR for Trade Street
646-277-1249
Jason.Chudoba@icrinc.com
| Trade Street Residential, Inc. | |
| 4th Quarter 2014 | Operating Results |
| (Unaudited) | |
| | | Three Months Ended December 31, | | | Twelve Months Ended December 31, | |
| in thousands, except per share data | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
| | | | | | | | | | | | | |
| Property revenues | | | | | | | | | | | | |
| Rental revenue | | $ | 14,042 | | | $ | 8,397 | | | $ | 51,372 | | | $ | 26,261 | |
| Other property revenues | | | 1,456 | | | | 811 | | | | 5,495 | | | | 2,696 | |
| Total property revenues | | | 15,498 | | | | 9,208 | | | | 56,867 | | | | 28,957 | |
| | | | | | | | | | | | | | | | | |
| Property expenses | | | | | | | | | | | | | | | | |
| Property operations and maintenance | | | 4,214 | | | | 2,944 | | | | 16,186 | | | | 9,243 | |
| Real estate taxes and insurance | | | 2,226 | | | | 1,274 | | | | 8,595 | | | | 3,942 | |
| Total property expenses | | | 6,440 | | | | 4,218 | | | | 24,781 | | | | 13,185 | |
| | | | | | | | | | | | | | | | | |
| Other expenses | | | | | | | | | | | | | | | | |
| General and administrative | | | 1,747 | | | | 2,188 | | | | 8,103 | | | | 8,683 | |
| Management transition expenses | | | 730 | | | | - | | | | 10,021 | | | | - | |
| Interest expense | | | 3,370 | | | | 2,837 | | | | 12,942 | | | | 8,947 | |
| Depreciation and amortization | | | 3,861 | | | | 3,439 | | | | 19,250 | | | | 11,918 | |
| Development and pursuit costs | | | 13 | | | | 164 | | | | 369 | | | | 180 | |
| Acquisition and recapitalization costs | | | 1,034 | | | | 3 | | | | 2,675 | | | | 919 | |
| Amortization of deferred financing cost | | | 234 | | | | 449 | | | | 1,022 | | | | 1,443 | |
| Loss on early extinguishment of debt | | | - | | | | - | | | | 1,629 | | | | 1,146 | |
| Total other expenses | | | 10,989 | | | | 9,080 | | | | 56,011 | | | | 33,236 | |
| | | | | | | | | | | | | | | | | |
| Other income | | | - | | | | 18 | | | | 45 | | | | 88 | |
| Income from unconsolidated joint venture | | | 85 | | | | 25 | | | | 106 | | | | 67 | |
| Impairment associated with land holdings | | | - | | | | (11,806 | ) | | | (7,962 | ) | | | (12,419 | ) |
| Gains on sales of real estate assets | | | 1,066 | | | | - | | | | 1,419 | | | | - | |
| Gain on bargain purchase | | | - | | | | - | | | | - | | | | 6,900 | |
| | | | | | | | | | | | | | | | | |
| LOSS FROM CONTINUING OPERATIONS | | | (780 | ) | | | (15,853 | ) | | | (30,317 | ) | | | (22,828 | ) |
| | | | | | | | | | | | | | | | | |
| Income from operation of discontinued rental property, including | | | | | | | | | | | | | | | | |
| gains/losses on disposals | | | - | | | | 4,576 | | | | - | | | | 6,272 | |
| | | | | | | | | | | | | | | | | |
| NET LOSS | | | (780 | ) | | | (11,277 | ) | | | (30,317 | ) | | | (16,556 | ) |
| Loss allocated to noncontrolling interest | | | 46 | | | | 1,551 | | | | 1,953 | | | | 2,462 | |
| Dividends declared and accreted on preferred stock and units | | | - | | | | (233 | ) | | | (693 | ) | | | (940 | ) |
| Dividends to restricted stockholders | | | - | | | | (23 | ) | | | - | | | | (52 | ) |
| Extinguishment of equity securities | | | 1,216 | | | | - | | | | 1,216 | | | | 11,716 | |
| Adjustments attributable to participating securities | | | - | | | | 250 | | | | 44 | | | | (2,241 | ) |
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 482 | | | $ | (9,732 | ) | | $ | (27,797 | ) | | $ | (5,611 | ) |
| | | | | | | | | | | | | | | | | |
| Earnings (loss) per common share - basic and diluted | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | 0.01 | | | $ | (1.28 | ) | | $ | (0.79 | ) | | $ | (1.36 | ) |
| Discontinued operations | | | - | | | | 0.41 | | | | - | | | | 0.72 | |
| Net earnings (loss) attributable to common stockholders | | $ | 0.01 | | | $ | (0.87 | ) | | $ | (0.79 | ) | | $ | (0.64 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average number of shares - basic | | | 36,500 | | | | 11,226 | | | | 35,325 | | | | 8,762 | |
| Weighted average number of shares - diluted | | | 38,844 | | | | 11,226 | | | | 35,325 | | | | 8,762 | |
| | | | | | | | | | | | | | | | | |
| Dividends declared per common share | | $ | 0.095 | | | $ | 0.095 | | | $ | 0.380 | | | $ | 0.433 | |
| Trade Street Residential, Inc. | |
| 4th Quarter 2014 | Funds From Operations ("FFO"), Core FFO and Adjusted FFO |
| (Unaudited) | |
| | | Three Months Ended December 31, | | | Twelve Months Ended December 31, | |
| in thousands, except per share data | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Net income (loss) attributable to common stockholders | | $ | 482 | | | $ | (9,732 | ) | | $ | (27,797 | ) | | $ | (5,611 | ) |
| | | | | | | | | | | | | | | | | |
| Net loss allocated to noncontrolling interest | | | (46 | ) | | | (1,551 | ) | | | (1,953 | ) | | | (2,462 | ) |
| Adjustments related to earnings per share computation (1) | | | (1,216 | ) | | | (250 | ) | | | (1,260 | ) | | | (9,475 | ) |
| Impairment associated with land holdings | | | - | | | | 11,806 | | | | 7,962 | | | | 12,419 | |
| Real estate depreciation and amortization - continuing operations | | | 3,935 | | | | 3,527 | | | | 19,589 | | | | 12,006 | |
| Real estate depreciation and amortization - discontinued operations | | | - | | | | 36 | | | | - | | | | 476 | |
| Real estate depreciation and amortization - unconsolidated joint venture | | | - | | | | 107 | | | | 302 | | | | 396 | |
| Gain on bargain purchase | | | - | | | | - | | | | - | | | | (6,900 | ) |
| Gains on sales of real estate assets(2) | | | (1,066 | ) | | | (4,739 | ) | | | (1,419 | ) | | | (6,685 | ) |
| | | | | | | | | | | | | | | | | |
| Funds from operations(3) | | $ | 2,089 | | | $ | (796 | ) | | $ | (4,576 | ) | | $ | (5,836 | ) |
| | | | | | | | | | | | | | | | | |
| Management transition expenses | | | 730 | | | | - | | | | 10,021 | | | | - | |
| Acquisition and recapitalization costs | | | 1,034 | | | | 3 | | | | 2,675 | | | | 919 | |
| Loss on early extinguishment of debt | | | - | | | | 404 | | | | 1,629 | | | | 1,558 | |
| Non-cash straight-line adjustment for ground lease expenses | | | - | | | | 93 | | | | - | | | | 401 | |
| Non-cash stock awards | | | 164 | | | | 31 | | | | 477 | | | | 1,471 | |
| Non-cash accretion of preferred stock and units | | | - | | | | 156 | | | | 462 | | | | 651 | |
| | | | | | | | | | | | | | | | | |
| Core funds from operations (3) | | $ | 4,017 | | | $ | (109 | ) | | $ | 10,688 | | | $ | (836 | ) |
| | | | | | | | | | | | | | | | | |
| Recurring capital expenditures | | | (352 | ) | | | (190 | ) | | | (1,212 | ) | | | (729 | ) |
| Non-recurring capital expenditures | | | (516 | ) | | | (270 | ) | | | (1,204 | ) | | | (902 | ) |
| | | | | | | | | | | | | | | | | |
| Adjusted funds from operations(3) | | $ | 3,149 | | | $ | (569 | ) | | $ | 8,272 | | | $ | (2,467 | ) |
| | | | | | | | | | | | | | | | | |
| Per share data | | | | | | | | | | | | | | | | |
| Funds from operations - diluted | | $ | 0.05 | | | $ | (0.06 | ) | | $ | (0.12 | ) | | $ | (0.52 | ) |
| Core funds from operations - diluted | | $ | 0.10 | | | $ | (0.01 | ) | | $ | 0.28 | | | $ | (0.07 | ) |
| Adjusted funds from operations - diluted | | $ | 0.08 | | | $ | (0.04 | ) | | $ | 0.22 | | | $ | (0.22 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding - diluted(4) | | | 36,707 | | | | 11,469 | | | | 35,525 | | | | 8,935 | |
| Weighted average common units outstanding - diluted | | | 2,344 | | | | 2,344 | | | | 2,344 | | | | 2,344 | |
| Weighted average common shares and common units outstanding - diluted(4) | | | 39,051 | | | | 13,813 | | | | 37,869 | | | | 11,279 | |
| 1 | See notes B, G, and M to consolidated financial statements as filed in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014. |
| 2 | Includes gains from sales of real estate assets reflected as part of continued and discontinued operations in the Company's statements of operations. |
| 3 | See page 19 for the Company's definition of these non-GAAP measures. Amounts reported for the three and twelve months ended December 31, 2013 have been reclassified to conform to the current year presentation and include results from discontinued operations where applicable. |
| 4 | Includes non-vested portion of restricted stock awards. |
| Trade Street Residential, Inc. | |
| 4th Quarter 2014 | Consolidated Balance Sheets |
| (Unaudited) | |
| in thousands | | December 31, 2014 | | | December 31, 2013 | |
| | | | | | | |
| ASSETS | | | | | | |
| Real estate assets | | | | | | |
| Land and improvements | | $ | 88,766 | | | $ | 58,560 | |
| Buildings and improvements | | | 464,002 | | | | 272,849 | |
| Furniture, fixtures, and equipment | | | 15,774 | | | | 9,016 | |
| | | | 568,542 | | | | 340,425 | |
| Less accumulated depreciation | | | (27,475 | ) | | | (14,369 | ) |
| Net investment in operating properties | | | 541,067 | | | | 326,056 | |
| | | | | | | | | |
| Land held for future development (including $0 and $1,477 of consolidated | | | | | | | | |
| variable interest entity, respectively) | | | - | | | | 31,963 | |
| Real estate assets held for sale | | | 3,492 | | | | - | |
| Net real estate assets | | | 544,559 | | | | 358,019 | |
| | | | | | | | | |
| | | | | | | | | |
| Investment in unconsolidated joint venture | | | - | | | | 2,421 | |
| Cash and cash equivalents (including $0 and $148 of consolidated variable | | | | | | | | |
| interest entity, respectively) | | | 13,308 | | | | 9,037 | |
| Restricted cash and lender reserves | | | 2,590 | | | | 3,203 | |
| Deferred financing costs, net | | | 4,599 | | | | 3,022 | |
| Intangible assets, net | | | 588 | | | | 1,571 | |
| Prepaid expenses and other assets | | | 2,475 | | | | 10,363 | |
| Assets related to real estate assets held for sale | | | 549 | | | | - | |
| | | | 24,109 | | | | 29,617 | |
| | | | | | | | | |
| TOTAL ASSETS | | $ | 568,668 | | | $ | 387,636 | |
| | | | | | | | | |
| LIABILITIES | | | | | | | | |
| Indebtedness | | $ | 344,756 | | | $ | 249,584 | |
| Accrued interest payable | | | 887 | | | | 840 | |
| Accounts payable and accrued expenses | | | 7,531 | | | | 6,119 | |
| Dividends payable | | | 3,709 | | | | 1,247 | |
| Security deposits, deferred rent and other liabilities | | | 1,783 | | | | 1,443 | |
| TOTAL LIABILITIES | | | 358,666 | | | | 259,233 | |
| | | | | | | | | |
| Commitments & contingencies | | | - | | | | - | |
| | | | | | | | | |
| STOCKHOLDERS' EQUITY | | | | | | | | |
| Class A preferred stock; $0.01 par value; 423 shares authorized, 0 and 309 shares | | | | | | | | |
| issued and outstanding at December 31, 2014 and 2013, respectively | | | - | | | | 3 | |
| Common stock, $0.01 par value per share; 1,000,000 authorized; 36,699 and 11,469 | | | | | | | | |
| shares issued and outstanding at December 31, 2014 and 2013, respectively | | | 367 | | | | 115 | |
| Additional paid-in capital | | | 274,733 | | | | 162,681 | |
| Accumulated deficit | | | (80,417 | ) | | | (52,053 | ) |
| TOTAL STOCKHOLDERS' EQUITY - TRADE STREET RESIDENTIAL, INC. | | | 194,683 | | | | 110,746 | |
| Noncontrolling interest | | | 15,319 | | | | 17,657 | |
| TOTAL STOCKHOLDERS' EQUITY | | | 210,002 | | | | 128,403 | |
| | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 568,668 | | | $ | 387,636 | |
| Trade Street Residential, Inc. | |
| 4th Quarter 2014 | Operating Properties Table |
| (Unaudited) | |
| | Property Name | | Location | | Year Built/
Renovated (1) | | Date Acquired | | Number of Units | | | Average Unit Size (Sq. Ft.) | | | Average Physical
Occupancy(2) | |
| | | | | | | | | | | | | | | | | |
| (3) | The Pointe at Canyon Ridge | | Sandy Springs, GA | | 1986/2007 | | 09/18/08 | | | 494 | | | | 920 | | | | 96.7 | % |
| | Arbors River Oaks | | Memphis, TN | | 1990/2010 | | 06/09/10 | | | 191 | | | | 1,136 | | | | 96.0 | % |
| | Lakeshore on the Hill | | Chattanooga, TN | | 1969/2005 | | 12/14/10 | | | 123 | | | | 1,168 | | | | 96.6 | % |
| | The Trails of Signal Mountain | | Chattanooga, TN | | 1975 | | 05/26/11 | | | 172 | | | | 1,185 | | | | 97.4 | % |
| | Mercé Apartments | | Addison, TX | | 1991/2007 | | 10/31/11 | | | 114 | | | | 653 | | | | 94.2 | % |
| | Fox Trails | | Plano, TX | | 1981 | | 12/06/11 | | | 286 | | | | 960 | | | | 96.9 | % |
| | Millenia 700 | | Orlando, FL | | 2012 | | 12/03/12 | | | 297 | | | | 952 | | | | 96.6 | % |
| | Westmont Commons | | Asheville, NC | | 2003&2008 | | 12/12/12 | | | 252 | | | | 1,009 | | | | 97.3 | % |
| | Bridge Pointe | | Huntsville, AL | | 2002 | | 03/04/13 | | | 178 | | | | 1,047 | | | | 98.2 | % |
| | St. James at Goose Creek | | Goose Creek, SC | | 2009 | | 05/16/13 | | | 244 | | | | 976 | | | | 96.2 | % |
| | Creekstone at RTP | | Durham, NC | | 2013 | | 05/17/13 | | | 256 | | | | 1,043 | | | | 94.4 | % |
| | Talison Row at Daniel Island | | Charleston, SC | | 2013 | | 08/26/13 | | | 274 | | | | 989 | | | | 93.2 | % |
| | Fountains Southend | | Charlotte, NC | | 2013 | | 09/24/13 | | | 208 | | | | 844 | | | | 97.5 | % |
| | The Estates at Wake Forest | | Wake Forest, NC | | 2013 | | 01/21/14 | | | 288 | | | | 1,047 | | | | 92.7 | % |
| | Miller Creek at Germantown | | Memphis, TN | | 2012/2013 | | 01/21/14 | | | 330 | | | | 1,049 | | | | 96.1 | % |
| | The Aventine Greenville | | Greenville, SC | | 2013 | | 02/06/14 | | | 346 | | | | 961 | | | | 93.6 | % |
| | Waterstone at Brier Creek | | Raleigh, NC | | 2013/2014 | | 03/10/14 | | | 232 | | | | 1,137 | | | | 93.8 | % |
| | Avenues at Craig Ranch | | McKinney, TX | | 2013 | | 03/18/14 | | | 334 | | | | 1,006 | | | | 94.4 | % |
| | Waterstone at Big Creek | | Alpharetta, GA | | 2013 | | 04/07/14 | | | 270 | | | | 1,131 | | | | 98.5 | % |
| | | | | | | | | | | | | | | | | | | | |
| | Total / Weighted average | | | | | | | | | 4,889 | | | | 1,008 | | | | 95.7 | % |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| | | | | | | |
| Total operating properties (end of period) | | | 19 | | | | 19 | |
| Total operating apartment units (end of period) | | | 4,889 | | | | 4,889 | |
| Total operating apartment units (weighted average) | | | 4,889 | | | | 4,632 | |
| 1 | The extent of the renovations included within the term “renovated” depends on the individual apartment community, but “renovated” generally refers to the replacement of siding, roof, wood, windows or boilers, updating of gutter systems, renovation of leasing centers and interior rehabilitation, including updated appliances, countertops, vinyl plank flooring, fixtures, fans and lighting, or some combination thereof. |
| 2 | Average physical occupancy for the three months ended December 31, 2014 represents the average occupancy of the total number of units occupied at each apartment community during the period divided by the total number of units at each apartment community. |
| 3 | On November 22, 2014, a 20-unit building at this community was destroyed by fire. The Company maintains insurance coverage on all of its properties and subsequently filed an insurance claim that is expected to cover the re-construction cost of this building, less the Company’s loss deductible, as well as loss of rents under a business interruption provision in the applicable insurance policy. Accordingly, for the period from the date of the fire through December 31, 2014, a recovery of lost rents relating to the 20 impacted units was recorded as additional rental income for this property. The Company anticipates that re-construction of this 20-unit building will be completed by the end of the second quarter of 2015. |
| Trade Street Residential, Inc. | |
| 4th Quarter 2014 | Same Store NOI Comparisons(1) |
| (Unaudited) | |
| | | Year-to Date Comparisons | |
| | | Twelve Months Ended December 31, | |
| in thousands, except per unit data | | 2014 | | | 2013 | | | % Change | |
| | | | | | | | | | |
| Revenues | | $ | 21,436 | | | $ | 20,386 | | | | 5.2 | % |
| Expenses | | | 9,766 | | | | 9,404 | | | | 3.8 | % |
| Net operating income (NOI) (2) | | $ | 11,670 | | | $ | 10,982 | | | | 6.3 | % |
| | | | | | | | | | | | | |
| Average physical occupancy (3) | | | 96.1 | % | | | 95.2 | % | | | 1.0 | % |
| | | | | | | | | | | | | |
| Average monthly rental rate (4) | | $ | 896 | | | $ | 867 | | | | 3.3 | % |
| | | | | | | | | | | | | |
| | | Quarter to Quarter Comparisons | |
| | | Three Months Ended December 31, | |
| | | 2014 | | | 2013 | | | % Change | |
| | | | | | | | | | |
| Revenues | | $ | 5,496 | | | $ | 5,202 | | | | 5.7 | % |
| Expenses | | | 2,461 | | | | 2,544 | | | | (3.3 | %) |
| Net operating income (NOI) (2) | | $ | 3,035 | | | $ | 2,658 | | | | 14.2 | % |
| | | | | | | | | | | | | |
| Average physical occupancy (3) | | | 96.6 | % | | | 95.5 | % | | | 1.2 | % |
| | | | | | | | | | | | | |
| Average monthly rental rate (4) | | $ | 915 | | | $ | 880 | | | | 4.0 | % |
| | | | | | | | | | | | | |
| | | Sequential Quarter Comparisons | |
| | | Three Months Ended | |
| | | December 31, 2014 | | | September 30, 2014 | | | % Change | |
| | | | | | | | | | |
| Revenues | | $ | 5,496 | | | $ | 5,410 | | | | 1.6 | % |
| Expenses | | | 2,461 | | | | 2,475 | | | | (0.6 | %) |
| Net operating income (NOI) (2) | | $ | 3,035 | | | $ | 2,935 | | | | 3.4 | % |
| | | | | | | | | | | | | |
| Average physical occupancy (3) | | | 96.6 | % | | | 96.1 | % | | | 0.5 | % |
| | | | | | | | | | | | | |
| Average monthly rental rate (4) | | $ | 915 | | | $ | 903 | | | | 1.3 | % |
| 1 | The Company defines “Same Store” as properties owned and stabilized since January 1, 2013 through December 31, 2014. For newly constructed or lease-up properties or properties undergoing significant redevelopment, we consider a property to be stabilized at the earlier of (i) attainment of 90% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment. No properties owned since January 1, 2013 were under construction or undergoing redevelopment and, as a result, no properties owned since January 1, 2013 were excluded from the same store portfolio. For the periods presented, "Same Store" properties are comprised of: The Pointe at Canyon Ridge, Arbor River Oaks, Lakeshore on the Hill, The Trails of Signal Mountain, Mercé Apartments, Fox Trails, Millenia 700, and Westmont Commons. |
| 2 | See page 19 for the Company's definition of this non-GAAP measure and page 21 for a reconciliation of this non-GAAP measure to net income (loss) attributable to common stockholders. |
| 3 | Average physical occupancy for the periods presented represent the average of the total number of units occupied at each apartment community during the respective period divided by the total number of units at each apartment community. |
| 4 | Average monthly rental rates for the periods presented are the Company’s market rents after “loss to lease” and concessions, but before vacancy, discounted employee units, model units, and bad debt for the respective periods. |
| Trade Street Residential, Inc. | |
| 4th Quarter 2014 | Same Store Operating Expense Comparisons |
| (Unaudited) | |
| | | Year-to Date Comparisons | |
| | | Twelve Months Ended December 31, | |
| in thousands | | 2014 | | | 2013 | | | $ Change | | | % Change | | | % of 2014 Actual | |
| | | | | | | | | | | | | | | | |
| Property taxes | | $ | 2,660 | | | $ | 2,537 | | | $ | 123 | | | | 4.8 | % | | | 27.2 | % |
| Salaries and benefits for on-site employees | | | 2,570 | | | | 2,535 | | | | 35 | | | | 1.4 | % | | | 26.3 | % |
| Utilities | | | 1,461 | | | | 1,380 | | | | 81 | | | | 5.9 | % | | | 15.0 | % |
| Repairs and maintenance | | | 699 | | | | 698 | | | | 1 | | | | 0.1 | % | | | 7.2 | % |
| Make ready/turnover | | | 574 | | | | 492 | | | | 82 | | | | 16.7 | % | | | 5.9 | % |
| Property insurance | | | 483 | | | | 484 | | | | (1 | ) | | | (0.2 | %) | | | 4.9 | % |
| Other | | | 1,319 | | | | 1,278 | | | | 41 | | | | 3.2 | % | | | 13.5 | % |
| Total same store | | $ | 9,766 | | | $ | 9,404 | | | $ | 362 | | | | 3.8 | % | | | 100.0 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | Quarter to Quarter Comparisons | |
| | | Three Months Ended December 31, | |
| | | 2014 | | | 2013 | | | $ Change | | | % Change | | | % of 2014 Actual | |
| | | | | | | | | | | | | | | | |
| Property taxes | | $ | 687 | | | $ | 752 | | | $ | (65 | ) | | | (8.6 | %) | | | 27.9 | % |
| Salaries and benefits for on-site employees | | | 619 | | | | 607 | | | | 12 | | | | 2.0 | % | | | 25.1 | % |
| Utilities | | | 366 | | | | 346 | | | | 20 | | | | 5.8 | % | | | 14.9 | % |
| Repairs and maintenance | | | 206 | | | | 195 | | | | 11 | | | | 5.6 | % | | | 8.4 | % |
| Make ready/turnover | | | 167 | | | | 143 | | | | 24 | | | | 16.8 | % | | | 6.8 | % |
| Property insurance | | | 109 | | | | 124 | | | | (15 | ) | | | (12.1 | %) | | | 4.4 | % |
| Other | | | 307 | | | | 377 | | | | (70 | ) | | | (18.6 | %) | | | 12.5 | % |
| Total same store | | $ | 2,461 | | | $ | 2,544 | | | $ | (83 | ) | | | (3.3 | %) | | | 100.0 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | Sequential Quarter Comparisons | |
| | | Three Months Ended | |
| | | December 31, 2014 | | | September 30, 2014 | | | $ Change | | | % Change | | | % of 2014 Actual | |
| | | | | | | | | | | | | | | | |
| Property taxes | | $ | 687 | | | $ | 668 | | | $ | 19 | | | | 2.8 | % | | | 27.9 | % |
| Salaries and benefits for on-site employees | | | 619 | | | | 652 | | | | (33 | ) | | | (5.1 | %) | | | 25.1 | % |
| Utilities | | | 366 | | | | 380 | | | | (14 | ) | | | (3.7 | %) | | | 14.9 | % |
| Repairs and maintenance | | | 206 | | | | 213 | | | | (7 | ) | | | (3.3 | %) | | | 8.4 | % |
| Make Ready/turnover | | | 167 | | | | 156 | | | | 11 | | | | 7.1 | % | | | 6.8 | % |
| Property insurance | | | 109 | | | | 103 | | | | 6 | | | | 5.8 | % | | | 4.4 | % |
| Other | | | 307 | | | | 303 | | | | 4 | | | | 1.3 | % | | | 12.5 | % |
| Total same store | | $ | 2,461 | | | $ | 2,475 | | | $ | (14 | ) | | | (0.6 | %) | | | 100.0 | % |
| Trade Street Residential, Inc. | |
| 4th Quarter 2014 | Acquisitions, Pipeline, Dispositions, and Held for Sale |
| (Unaudited) | |
| in thousands, except unit data | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Acquisitions: | | | | | | | Percent Leased at | | | Date | | Gross | | | Debt Balance at | |
| Property | | Location | | Units | | | December 31, 2014 | | | Acquired | | Purchase Price | | | December 31, 2014 | |
| | | | | | | | | | | | | | | | | |
| The Estates at Wake Forest | | Wake Forest, NC | | | 288 | | | | 94.8 | % | | 1/21/2014 | | $ | 37,250 | | | $ | 18,625 | |
| Miller Creek at Germantown | | Memphis, TN | | | 330 | | | | 98.2 | % | | 1/21/2014 | | | 43,750 | | | | 26,250 | |
| The Aventine Greenville | | Greenville, SC | | | 346 | | | | 98.6 | % | | 2/6/2014 | | | 41,866 | | | | 21,000 | |
| Waterstone at Brier Creek | | Raleigh, NC | | | 232 | | | | 94.4 | % | | 3/10/2014 | | | 32,682 | | | | 16,250 | |
| Avenues at Craig Ranch | | McKinney, TX | | | 334 | | | | 96.4 | % | | 3/18/2014 | | | 42,375 | | | | 21,200 | |
| Waterstone at Big Creek | | Alpharetta, GA | | | 270 | | | | 99.6 | % | | 4/7/2014 | | | 40,500 | | | | Line of Credit | |
| | | | | | | | | | | | | | | | | | | | | |
| Total acquisitions twelve months ended December 31 | | | 1,800 | | | | | | | | | $ | 238,423 | | | $ | 103,325 | |
| Acquisition pipeline: | | | | | | | | | | Anticipated | | Contract | |
| | | | | Planned | | | Percent | | | Close | | Purchase | |
| Project | | Location | | Units | | | Leased | | | Date | | Price | |
| | | | | | | | | | | | | | |
| Waterstone at Big Creek, Phase II | | Alpharetta, GA | | | 100 | | | | - | | | 1Q15 | | $ | 15,000 | |
| | | | | | | | | | | | | | | | | |
| Total acquisition pipeline | | | | | 100 | | | | - | | | | | $ | 15,000 | |
| Dispositions: | | | | | | | Date | | Gross | | | Gain | |
| Property | | Location | | Units | | | Sold | | Sale Price | | | Realized | |
| | | | | | | | | | | | | | |
| Post Oak | | Louisville, KY | | | 126 | | | 7/11/2014 | | $ | 8,000 | | | $ | 353 | |
| The Estates at Perimeter(1) | | Augusta, GA | | | 240 | | | 12/10/2014 | | | 3,370 | | | | 1,066 | |
| The Estates at Maitland(2) | | Maitland, FL | | | - | | | 10/17/2014 | | | 9,400 | | | | - | |
| Millenia Phase II(2) | | Orlando, FL | | | - | | | 10/17/2014 | | | 6,250 | | | | - | |
| Venetian(2) | | Fort Myers, FL | | | - | | | 10/17/2014 | | | 4,000 | | | | - | |
| Sunnyside(2) | | Panama City Beach, FL | | | - | | | 10/17/2014 | | | 1,500 | | | | - | |
| | | | | | | | | | | | | | | | | |
| Total dispositions twelve months ended December 31 | | | 366 | | | | | $ | 32,520 | | | $ | 1,419 | |
| Land held for sale: | | | | | | | | | | Carrying | |
| | | | | Planned | | | | | | Value as of | |
| Project | | Location | | Units | | | Acreage | | | December 31, 2014 | |
| | | | | | | | | | | | |
| Midlothian Town Center - East | | Midlothian, VA | | | 238 | | | | 8.4 | | | $ | 3,492 | |
| | | | | | | | | | | | | | | |
| Total land held for sale | | | | | 238 | | | | 8.4 | | | $ | 3,492 | |
| 1 | The Company owned a 50% interest in this apartment community through an unconsolidated joint venture. |
| 2 | Undeveloped land investments exchanged in the redemption of Class A preferred stock on October 17, 2014. |
| Trade Street Residential, Inc. | |
| 4th Quarter 2014 | NOI, Average Occupancy and Average Monthly Rent Summary |
| (Unaudited) | |
| in thousands, except unit data | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Multifamily communities as of December 31, 2014: | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | NOI | | | Avg Physical | | | Avg Monthly | |
| | | Units | | | Communities | | | Quarter Ended | | | Occupancy (1) | | | Rent/Unit | |
| | | | | | | | | | | | | | | | |
| Same Store Communities (2) | | | 1,929 | | | | 8 | | | $ | 3,035 | | | | 96.6 | % | | $ | 915 | |
| Stabilized non-same store communities(3) | | | 2,960 | | | | 11 | | | | 6,053 | | | | 95.2 | % | | | 1,089 | |
| Other (4) | | | - | | | | - | | | | (30 | ) | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Total multifamily communities | | | 4,889 | | | | 19 | | | $ | 9,058 | | | | 95.7 | % | | $ | 1,020 | |
| 1 | Average physical occupancy for the three months ended December 31, 2014 represents the average occupancy of the total number of units occupied at each apartment community during the period divided by the total number of units at each apartment community. |
| 2 | For 2014 "Same Store" properties are comprised of: The Pointe at Canyon Ridge, Arbor River Oaks, Lakeshore on the Hill, The Trails of Signal Mountain, Mercé Apartments, Park at Fox Trails, Estates at Millenia, and Westmont Commons. |
| 3 | Communities that were stabilized for the quarter ended December 31, 2014, but do not meet the criteria for "Same Store" properties. These include: Bridge Pointe, St. James at Goose Creek, Creekstone at RTP, Fountains Southend, Talison Row at Daniel Island, Miller Creek at Germantown, Waterstone at Big Creek, The Aventine Greenville, Avenues at Craig Ranch, Waterstone at Brier Creek, and The Estates at Wake Forest. |
| 4 | Includes one community sold during the quarter ended September 30, 2014. |
| Trade Street Residential, Inc. | |
| 4th Quarter 2014 | Debt Summary |
| (Unaudited) | |
| in thousands | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Debt Maturities as of December 31, 2014: | | | | | | | | | |
| as of December 31, 2014 | | | | | | | | | | | | |
| | | Scheduled Repayments | | | % of | |
| Year | | Amortization | | | Maturities | | | Total | | | Total | |
| | | | | | | | | | | | | |
| 2015 | | $ | 1,210 | | | $ | - | | | $ | 1,210 | | | | 0.4 | % |
| 2016 | | | 1,976 | | | | - | | | | 1,976 | | | | 0.6 | % |
| 2017 | | | 3,409 | | | | 53,260 | | | | 56,669 | | | | 16.4 | % |
| 2018 | | | 3,802 | | | | 7,666 | | | | 11,468 | | | | 3.3 | % |
| 2019 | | | 4,307 | | | | - | | | | 4,307 | | | | 1.2 | % |
| Thereafter | | | 15,897 | | | | 253,229 | | | | 269,126 | | | | 78.1 | % |
| | | | | | | | | | | | | | | | | |
| Total | | $ | 30,601 | | | $ | 314,155 | | | $ | 344,756 | | | | 100.0 | % |
| Floating vs. Fixed Rate Debt: | | | | | | | | Weighted Average | |
| | | Balance at | | | % of | | | Interest | | | Years to | |
| | | December 31, 2014 | | | Total | | | Rate | | | Maturity | |
| | | | | | | | | | | | | |
| Fixed rate debt | | $ | 297,756 | | | | 86.4 | % | | | 4.03 | % | | | 7.75 | |
| Floating rate debt | | | 47,000 | | | | 13.6 | % | | | 2.70 | % | | | 2.08 | |
| | | | | | | | | | | | | | | | | |
| Total | | $ | 344,756 | | | | 100.0 | % | | | 3.85 | % | | | 6.98 | |
| Trade Street Residential, Inc. | |
| 4th Quarter 2014 | Capitalized Costs Summary |
| (Unaudited) | |
| | | Three Months Ended December 31, | | | Twelve Months Ended December 31, | |
| in thousands, except per unit data | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
| | | Total | | | Per Unit | | | Total | | | Per Unit | | | Total | | | Per Unit | | | Total | | | Per Unit | |
| Recurring capital expenditures: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Flooring | | $ | 229 | | | $ | 47 | | | $ | 153 | | | $ | 47 | | | $ | 747 | | | $ | 161 | | | $ | 523 | | | $ | 196 | |
| Appliances & Fixtures | | | 102 | | | | 21 | | | | 24 | | | | 7 | | | | 363 | | | | 78 | | | | 119 | | | | 45 | |
| HVAC | | | 10 | | | | 2 | | | | 11 | | | | 3 | | | | 70 | | | | 15 | | | | 57 | | | | 22 | |
| Other | | | 11 | | | | 2 | | | | 2 | | | | 1 | | | | 32 | | | | 7 | | | | 30 | | | | 11 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total recurring capital expenditures | | $ | 352 | | | $ | 72 | | | $ | 190 | | | $ | 58 | | | $ | 1,212 | | | $ | 261 | | | $ | 729 | | | $ | 274 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-recurring capital expenditures: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Building & Structures | | $ | 9 | | | $ | 2 | | | $ | 21 | | | $ | 7 | | | $ | 76 | | | $ | 16 | | | $ | 452 | | | $ | 170 | |
| Land Improvements | | | 209 | | | | 43 | | | | 102 | | | | 32 | | | | 529 | | | | 114 | | | | 133 | | | | 50 | |
| Furniture & Equipment | | | 126 | | | | 26 | | | | 47 | | | | 15 | | | | 315 | | | | 68 | | | | 159 | | | | 60 | |
| Other | | | 172 | | | | 35 | | | | 100 | | | | 31 | | | | 284 | | | | 61 | | | | 158 | | | | 59 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total non-recurring capital expenditures | | $ | 516 | | | $ | 106 | | | $ | 270 | | | $ | 85 | | | $ | 1,204 | | | $ | 259 | | | $ | 902 | | | $ | 339 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total recurring/non-recurring capital expenditures | | $ | 868 | | | $ | 178 | | | $ | 460 | | | $ | 143 | | | $ | 2,416 | | | $ | 520 | | | $ | 1,631 | | | $ | 613 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenue generating capital expenditures: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Flooring | | $ | 23 | | | $ | 5 | | | $ | 28 | | | $ | 9 | | | $ | 151 | | | $ | 33 | | | $ | 87 | | | $ | 33 | |
| Resurfacing | | | 22 | | | | 5 | | | | 6 | | | | 2 | | | | 63 | | | | 14 | | | | 22 | | | | 8 | |
| Appliances & Fixtures | | | 24 | | | | 5 | | | | 41 | | | | 13 | | | | 139 | | | | 30 | | | | 171 | | | | 64 | |
| Other | | | 14 | | | | 3 | | | | 25 | | | | 8 | | | | 69 | | | | 15 | | | | 89 | | | | 33 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total revenue generating capital expenditures | | $ | 83 | | | $ | 18 | | | $ | 100 | | | $ | 32 | | | $ | 422 | | | $ | 92 | | | $ | 369 | | | $ | 138 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Construction in process | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 374 | | | $ | - | | | $ | - | | | $ | - | |
| Other | | | (45 | ) | | | - | | | | (62 | ) | | | - | | | | 193 | | | | - | | | | 313 | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total capital expenditures per cash flow statements | | $ | 906 | | | $ | 196 | | | $ | 498 | | | $ | 175 | | | $ | 3,405 | | | $ | 612 | | | $ | 2,313 | | | $ | 751 | |
| Weighted average units - continuing operations | | | | | | | 4,889 | | | | | | | | 3,215 | | | | | | | | 4,632 | | | | | | | | 2,666 | |
| Trade Street Residential, Inc. | |
| 4th Quarter 2014 | Non-GAAP Financial Measures and Reconciliations |
| (Unaudited) |
The supplemental financial data contained in this document contains certain non-GAAP financial measures management believes are useful in understanding our business and evaluating our performance. Our definitions and calculations of these non-GAAP financial measures may differ from those of other equity REITs, and thus may not be comparable to other REITs. The non-GAAP financial measures should not be considered as an alternative to net income as an indication of our operating performance, or to net cash provided by operating activities as a measure of our liquidity.
Funds from Operations ("FFO")
As defined by the National Association of Real Estate Investment Trusts, FFO represents net income (loss) (computed in accordance with U.S. generally accepted accounting principles ("GAAP")), excluding gains (or losses) from sales of property, bargain purchase gains, and recognized impairment of real estate assets, plus real estate-related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. The Company presents FFO because management considers it to be an important supplemental measure of the Company’s operating performance, believes it assists in the comparison of the Company’s operating performance between periods and to that of different REITs and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their operating results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income.
Core Funds from Operations ("Core FFO")
The Company also uses core funds from operations, or Core FFO, as an operating measure. Core FFO includes adjustments to exclude the impact of straight-line adjustments for ground leases, gains and losses from extinguishment of debt, transaction costs related to acquisitions and recapitalization, management transition costs and certain other non-cash or non-comparable items. The Company believes that these adjustments are appropriate in determining Core FFO as they are not indicative of the operating performance of the Company’s assets. In addition, the Company believes that Core FFO is a useful supplemental measure for the investing community to use in comparing the Company to other REITs as most REITs provide some form of adjusted or modified FFO.
Adjusted Funds from Operations (“AFFO”)
Management also uses Adjusted FFO or AFFO as an operating measure, which is defined as FFO or, alternatively, Core FFO, depending on the existence of any non-cash, non-comparable items as described above, less recurring and non-recurring capital expenditures. Management believes that AFFO is a relevant operating measure as it provides an indication as to whether a REIT can fund from its operating performance the capital expenditures necessary to maintain the condition of its operating real estate assets.
Net Operating Income ("NOI")
Management believes that net operating income (“NOI”) is a useful measure of our operating performance. We define NOI as total property revenues less total property operating expenses, excluding depreciation and amortization. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. We use NOI to evaluate our performance on a same store and non-same store basis. NOI allows us to evaluate the operating performance of our properties because it measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance and captures trends in rental housing and property operating expenses.
The Company defines same store communities as communities owned and stabilized for the entirety of both periods presented, excluding properties held for sale. Reconciliations of net income attributable to common stockholders to FFO, Core FFO, AFFO, NOI, and same store NOI are included in the Supplemental Information posted on the Company’s website.
The following table reflects same store and non-same store contributions to consolidated NOI together with a reconciliation of NOI to net income (loss) attributable to common stockholders, as computed in accordance with GAAP:
| Trade Street Residential, Inc. | |
| 4th Quarter 2014 | NOI Bridge |
| (Unaudited) | |
| | | Three Months Ended December 31, | | | Twelve Months Ended December 31, | |
| in thousands | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
| Property Revenues(1) | | | | | | | | | | | | | | | | |
| Same Store (8 properties) | | $ | 5,496 | | | $ | 5,202 | | | $ | 21,436 | | | $ | 20,386 | |
| Non Same Store (11 properties) | | | 10,011 | | | | 3,712 | | | | 34,797 | | | | 7,406 | |
| Other (1 property)(2) | | | (9 | ) | | | 294 | | | | 634 | | | | 1,165 | |
| | | | | | | | | | | | | | | | | |
| Total property revenues | | $ | 15,498 | | | $ | 9,208 | | | $ | 56,867 | | | $ | 28,957 | |
| | | | | | | | | | | | | | | | | |
| Property Expenses(1) | | | | | | | | | | | | | | | | |
| Same Store (8 properties) | | $ | 2,461 | | | $ | 2,544 | | | $ | 9,766 | | | $ | 9,404 | |
| Non Same Store (11 properties) | | | 3,958 | | | | 1,557 | | | | 14,633 | | | | 3,174 | |
| Other (1 property)(2) | | | 21 | | | | 117 | | | | 382 | | | | 607 | |
| | | | | | | | | | | | | | | | | |
| Total property expenses | | $ | 6,440 | | | $ | 4,218 | | | $ | 24,781 | | | $ | 13,185 | |
| | | | | | | | | | | | | | | | | |
| Net Operating Income(1)(3) | | | | | | | | | | | | | | | | |
| Same Store (8 properties) | | $ | 3,035 | | | $ | 2,658 | | | $ | 11,670 | | | $ | 10,982 | |
| Non Same Store (11 properties) | | | 6,053 | | | | 2,155 | | | | 20,164 | | | | 4,232 | |
| Other (1 property)(2) | | | (30 | ) | | | 177 | | | | 252 | | | | 558 | |
| | | | | | | | | | | | | | | | | |
| Total property net operating income | | $ | 9,058 | | | $ | 4,990 | | | $ | 32,086 | | | $ | 15,772 | |
| | | | | | | | | | | | | | | | | |
| Reconciliation of NOI to GAAP Net Income (Loss) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Total property net operating income | | $ | 9,058 | | | $ | 4,990 | | | $ | 32,086 | | | $ | 15,772 | |
| Other income | | | - | | | | 18 | | | | 45 | | | | 88 | |
| Gain on sales of real estate assets | | | 1,066 | | | | - | | | | 1,419 | | | | - | |
| Gain on bargain purchase | | | - | | | | - | | | | - | | | | 6,900 | |
| Depreciation and amortization | | | (3,861 | ) | | | (3,439 | ) | | | (19,250 | ) | | | (11,918 | ) |
| Development and pursuit costs | | | (13 | ) | | | (164 | ) | | | (369 | ) | | | (180 | ) |
| Interest expense | | | (3,370 | ) | | | (2,837 | ) | | | (12,942 | ) | | | (8,947 | ) |
| Amortization of deferred financing cost | | | (234 | ) | | | (449 | ) | | | (1,022 | ) | | | (1,443 | ) |
| Loss on early extinguishment of debt | | | - | | | | - | | | | (1,629 | ) | | | (1,146 | ) |
| General and administrative | | | (1,747 | ) | | | (2,188 | ) | | | (8,103 | ) | | | (8,683 | ) |
| Management transition expenses | | | (730 | ) | | | - | | | | (10,021 | ) | | | - | |
| Impairment associated with land holdings | | | - | | | | (11,806 | ) | | | (7,962 | ) | | | (12,419 | ) |
| Acquisition and recapitalization costs | | | (1,034 | ) | | | (3 | ) | | | (2,675 | ) | | | (919 | ) |
| Income from unconsolidated joint venture | | | 85 | | | | 25 | | | | 106 | | | | 67 | |
| Loss from continuing operations | | | (780 | ) | | | (15,853 | ) | | | (30,317 | ) | | | (22,828 | ) |
| Discontinued operations | | | - | | | | 4,576 | | | | - | | | | 6,272 | |
| Net loss | | | (780 | ) | | | (11,277 | ) | | | (30,317 | ) | | | (16,556 | ) |
| Loss allocated to noncontrolling interest | | | 46 | | | | 1,551 | | | | 1,953 | | | | 2,462 | |
| Adjustments related to earnings per share computation(4) | | | 1,216 | | | | (6 | ) | | | 567 | | | | 8,483 | |
| | | | | | | | | | | | | | | | | |
| Income (loss) attributable to common stockholders | | $ | 482 | | | $ | (9,732 | ) | | $ | (27,797 | ) | | $ | (5,611 | ) |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Income from Discontinued Operations | | | | | | | | | | | | | | | | |
| Property revenues | | | - | | | | 1,272 | | | | - | | | | 6,387 | |
| Property expenses | | | - | | | | (743 | ) | | | - | | | | (3,874 | ) |
| Property net operating income | | | - | | | | 529 | | | | - | | | | 2,513 | |
| Other expenses | | | - | | | | (12 | ) | | | - | | | | (46 | ) |
| Depreciation and amortization | | | - | | | | (36 | ) | | | - | | | | (476 | ) |
| Interest expense | | | - | | | | (138 | ) | | | - | | | | (1,534 | ) |
| Amortization of deferred financing costs | | | - | | | | (10 | ) | | | - | | | | (57 | ) |
| Loss on extinguishment of debt | | | - | | | | (404 | ) | | | - | | | | (412 | ) |
| Deferred portion of ground lease amortization | | | - | | | | (93 | ) | | | - | | | | (401 | ) |
| Gain on sale of discontinued operations | | | - | | | | 4,740 | | | | - | | | | 6,685 | |
| Income (loss) from discontinued operations | | $ | - | | | $ | 4,576 | | | $ | - | | | $ | 6,272 | |
| 1 | The Company defines “Same Store” as properties owned and stabilized since January 1, 2013 through December 31, 2014 excluding properties held for sale. For newly constructed or lease-up properties or properties undergoing significant redevelopment, we consider a property to be stabilized at the earlier of (i) attainment of 90% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment. No properties owned since January 1, 2013 were under construction or undergoing redevelopment and, as a result, no properties owned since January 1, 2013 were excluded from the same store portfolio. |
| 2 | Includes one community sold during the quarter ended September 30, 2014. |
| 3 | See page 19 for the Company's definition of this non-GAAP measure. |
| 4 | See notes B and G to consolidated financial statements as filed in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014. |
