Exhibit 99.1
[LOGO] AmeriVest
Properties Inc.
NEWS RELEASE
CONTACT:
AMERIVEST PROPERTIES INC. 1780 South Bellaire Street Listed: AMEX
Kim P. Boswood Suite 100 Trading Symbol: AMV
Investor Relations Denver, CO 80222 www.amvproperties.com
Phone: (303) 297-1800 Fax: (303) 296-7353
ext. 118
kim@amvproperties.com
AMERIVEST ANNOUNCES FIRST QUARTER 2003 RESULTS
88% increase in revenues; 65% increase in funds from operations;
4% increase in net income
DENVER, CO (May 6, 2003) -- AmeriVest Properties Inc. (AMEX: AMV) reported
results today for the first quarter ended March 31, 2003. Funds from operations
(FFO) for the first quarter of 2003 increased 65% to $1,785,612, compared with
$1,082,454 in the first quarter of 2002. FFO per diluted share was $0.16 per
share for both periods. Net income increased 4% to $404,964 from $390,962 in the
first quarter of 2002, but declined on a diluted per share basis from $0.06 to
$0.04 per share. See the Summary Financial Information for a reconciliation of
FFO and FFO per share to net income and earnings per share, the most directly
comparable GAAP measures.
"Our first quarter results reflect an increase in revenue of 88%, an increase in
FFO of 65% and an increase in net income of 4% from the comparable period last
year," stated William Atkins, chairman and chief executive officer of AmeriVest.
"We are pleased with our performance and that we were able to maintain our
diluted per share FFO on par with last year even though our outstanding diluted
common shares increased more than 63%. These results include only 54 days of
operations from the Southwest Gas building, an acquisition made in February
2003, but include a full quarter of operating results from the three
acquisitions made with the proceeds of our 2002 public offering of common stock.
We are very comfortable with the performance of these properties and look
forward to their increasing contribution to our financial results during the
remainder of 2003," said Atkins.
Revenues for the first quarter of 2003 increased 88% to $6,814,528 from
$3,626,052 in the prior year period, reflecting additional revenues from the
acquisition of three office properties in late 2002 (Parkway Centre II, Centerra
and Chateau Plaza) and one office property in early 2003 (Southwest Gas). First
quarter results included approximately $100,000 in operating expense
reimbursements for 2002. The weighted-average number of common shares
outstanding during the quarter, assuming full dilution, was 11,203,104, an
increase of 63% from the first quarter of 2002, primarily due to a common stock
offering completed in June 2002.
In addition to property operating expenses, which increased due to the
additional properties acquired since March 2002, general and administrative
expenses also increased 138% from the first quarter of 2002. "Our G&A expenses
increased primarily due to the consolidation of the company's former outside
advisor" said Atkins. "In addition, the quarter included more than $200,000 in
legal, accounting, investor relations, shareholder services and travel expenses
related to first quarter investor relations initiatives and the preparation and
mailing of our Annual Report and proxy statement to a significantly larger base
of shareholders. Although our G&A expense as a percentage of revenue for the
quarter significantly exceeded our target for the year, because many of these
costs are first quarter loaded, we are optimistic we will be able to bring
overall expenses back in line with our stated goal of 10% of revenue by year
end. During the quarter, we began to accrue approximately $36,000 per quarter
towards non-cash long-term stock compensation under the Long-Term Incentive Plan
presented for shareholder approval at this year's annual meeting," continued
Atkins. Atkins further explained that, "additional amounts for cash and non-cash
stock compensation may be accrued in the future to fund a performance bonus for
certain of the Company's executive officers based on AmeriVest's total return to
shareholders compared to our industry peers."
Operating Results
- -----------------
At March 31, 2003, the Company's portfolio included 27 office properties
totaling 1,564,090 square feet located in Colorado, Texas, Arizona and Indiana.
The Company's core portfolio (which excludes assets owned less than 100% and
smaller office buildings primarily leased to the State of Texas and Bank of
America) included 9 properties totaling 1,221,449 square feet located in
metropolitan Denver, Phoenix, Dallas and Indianapolis. Core portfolio occupancy
at the end of March was 90.8%, compared to a weighted average occupancy in
AmeriVest's core markets of 80.5%.
Charles K. Knight, AmeriVest's president and chief operating officer stated, "We
continue to be pleased with the leasing activity in most of our markets. Our
largest opportunities for occupancy gains remain in Denver, Colorado with our
70% leased Centerra and 82% leased Sheridan Center buildings. We have reported
slight occupancy improvements in both buildings since December and are
optimistic that our recently completed common area improvements and
refurbishments at Centerra will continue to increase small tenant demand for
this well-located property. Overall, we believe that our slight increases in
occupancy and average rent from year-end are positive indicators and look
forward to continuing this trend over the remainder of the year," concluded
Knight.
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First Quarter Highlights
- ------------------------
o In February, we acquired the 147,660 SF Southwest Gas building in
Phoenix, our second core property in Arizona.
o In March, the board of directors declared a quarterly dividend of
$0.13 per common share, which was paid on April 15, 2003, and
represents our 27th consecutive quarterly dividend.
Conference Call
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The Company will hold an investor/analyst conference call on May 6, 2003,
beginning at 9:00 a.m. MDT (11:00 a.m. EDT, 10:00 a.m. CDT, 8:00 a.m. PDT) to
discuss its first quarter financial and operating results. The conference call
may be joined by dialing (800) 374-0258. The password for the call is:
"AmeriVest." Calls from outside North America should be directed to (706)
634-4978. A digital replay will be available two hours after completion of the
call until May 11, 2003 by calling (800) 642-1687 or for calls from outside
North America, (706) 645-9291. The conference ID for the replay is 9818242. A
live webcast of the conference call will be available at www.amvproperties.com.
You must have Windows Media Player installed on your computer in order to listen
to the webcast. Windows Media Player may be downloaded for free at the website
listed above.
Company Information
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AmeriVest Properties Inc., with its principal office in Denver, Colorado,
owns 27 office properties and provides Smart Space for Small BusinessSM in
select markets. To receive AmeriVest's latest news and information, visit our
website at www.amvproperties.com.
In addition to historical information, this press release contains
forward-looking statements and information under the federal securities laws.
These statements are based on expectations, estimates and projections about the
industry and markets in which AmeriVest operates, management's beliefs and
assumptions made by management. While AmeriVest management believes the
assumptions underlying its forward-looking statements and information are
reasonable, such information is necessarily subject to uncertainties and may
involve certain risks, many of which are difficult to predict and are beyond
management's control. As such, these statements and information are not
guarantees of future performance, and actual operating results may differ
materially from what is expressed or forecasted in this press release. In
particular, the factors that could cause actual operating results to differ
materially include, without limitation, continued qualification as a real estate
investment trust, the effects of general and local economic and market
conditions, competition, regulatory changes, the ability to enter into new
leases or renew leases on favorable terms, dependence on tenants' financial
condition, the uncertainties of real estate development and acquisition
activity, development and construction costs, insurance risks, the costs and
availability of financing, potential liability relating to environmental matters
and liquidity of real estate investments and other risks and uncertainties
detailed in AmeriVest's 2002 Annual Report on Form 10-KSB and from time to time
in the Company's filings with the Securities and Exchange Commission.
3
AMERIVEST PROPERTIES INC.
Summary Financial Information
(unaudited)
Three Months
Ended March 31,
2003 2002
---- ----
Selected Income Statement Information:
- --------------------------------------
REAL ESTATE OPERATING REVENUE
Rental revenue $6,814,528 $3,626,052
REAL ESTATE OPERATING EXPENSES
Property operating expenses-
Operating expenses 1,635,478 886,095
Real estate taxes 771,761 367,023
Management fees 43,477 28,062
General and administrative expenses 837,080 352,308
Interest expense 1,756,270 898,356
Depreciation and amortization expense 1,360,713 684,930
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6,404,779 3,216,774
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OTHER INCOME
Interest income 5,817 2,081
Equity in loss of unconsolidated affiliate (10,602) (20,397)
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(4,785) (18,316)
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NET INCOME $ 404,964 $ 390,962
========== ==========
EARNINGS PER SHARE
Basic $ 0.04 $ 0.06
========== ==========
Diluted $ 0.04 $ 0.06
========== ==========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
Basic 11,100,292 6,696,961
========== ==========
Diluted 11,203,104 6,863,423
========== ==========
FUNDS FROM OPERATIONS:
Net income $ 404,964 $ 390,962
Depreciation and amortization expense 1,360,713 684,930
Share of depreciation of unconsolidated affiliate 19,935 6,562
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FUNDS FROM OPERATIONS $1,785,612 $1,082,454
========== ==========
FUNDS FROM OPERATIONS PER SHARE
Basic $ 0.16 $ 0.16
========== ==========
Diluted $ 0.16 $ 0.16
========== ==========
Funds from Operations ("FFO") is a non-GAAP financial measure. We believe FFO,
as defined by the Board of Governors of the National Association of Real Estate
Investment Trusts ("NAREIT"), to be an appropriate measure of performance for an
equity REIT, for the reasons, and subject to the qualifications, specified in
the paragraph entitled "Non-GAAP Financial Measures" below. The above summary
financial information table reflects the reconciliation of FFO to net income and
a comparison to earnings per share, the most directly comparable GAAP measure,
for the periods presented.
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AMERIVEST PROPERTIES INC.
Summary Financial Information (continued)
(unaudited)
March 31, December 31,
2003 2002
---- ----
Selected Balance Sheet Information:
- -----------------------------------
Assets at cost $183,739,302 $163,697,991
Less: accumulated depreciation and amortization
(7,975,776) (6,514,404)
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Total assets $175,763,526 $157,183,587
Total mortgage loans and notes payable $122,959,470 $106,094,232
Total stockholders' equity $ 45,237,178 $ 43,895,800
Common shares outstanding at end of period 11,542,713 11,060,260
Selected Property Information:
- ------------------------------
Number of operating properties owned: 27 26
Total rentable square feet: 1,564,090 1,416,350
Occupancy: 88.5% 88.0%
Number of core1 operating properties owned: 9 8
Total rentable square feet: 1,221,449 1,073,709
Occupancy: 90.8% 90.6%
Detailed property occupancy information on following page
Selected Stock Information:
- ---------------------------
Common share price (as of period end): $ 6.29 $ 6.20
Equity market capitalization $ 72,603,665 $ 68,573,612
Common share dividend rate: $ 0.13 $ 0.13
Common share annualized dividend yield (as of period end): 8.27% 8.39%
- --------------------------------------------------------------------------------
Non-GAAP Financial Measures. Funds from Operations ("FFO") is a non-GAAP
financial measure. FFO is defined as net income, computed in accordance with
generally accepted accounting principles ("GAAP"), excluding gains (or losses)
from sales of properties, plus real estate related depreciation and amortization
and after adjustments for unconsolidated partnerships and joint ventures. We
believe that FFO is helpful to investors as a measure of the performance of an
equity REIT because, along with cash flow from operating activities, investing
activities and financing activities, it provides investors with an indication of
the ability of a company to incur and service debt, to make capital expenditures
and to fund other cash needs. We compute FFO in accordance with standards
established by the Board of Governors of the National Association of Real Estate
Investment Trusts ("NAREIT"), which may not be comparable to FFO reported by
other REITs that do not define the term in accordance with the current NAREIT
definition or that interpret the current NAREIT definition differently than we
do.
- --------------------------------------------------------------------------------
- ----------
1 "Core" properties exclude properties owned less than 100% (Panorama Falls)
and smaller office buildings leased primarily to Bank of America and the
State of Texas.
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AmeriVest Properties Inc. Property Occupancy(1) Information
Core Portfolio:
- ---------------
- ----------------------------------------------------------------------------------------------------------------------------
Percentage Average Rent Percentage Average Rent
Building/ Year Occupancy Per SF at Occupancy at Per SF at
Location Acquired Rentable Area(2) at 3/31/03 3/31/03(3) 12/31/02 12/31/02(3)
- ----------------------------------------------------------------------------------------------------------------------------
Southwest Gas
Phoenix, AZ 2003 147,660 97.4% $21.59 N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Chateau Plaza
Dallas, TX 2002 171,335 97.6% $22.79 97.6% $22.79
- ----------------------------------------------------------------------------------------------------------------------------
Centerra
Denver, CO 2002 186,431 70.0% $20.30 68.1% $20.78
- ----------------------------------------------------------------------------------------------------------------------------
Parkway Centre II
Dallas, TX 2002 151,988 95.7% $20.83 97.9% $20.84
- ----------------------------------------------------------------------------------------------------------------------------
Kellogg Building
Littleton, CO 2001 111,695 98.6% $21.96 98.6% $21.92
- ----------------------------------------------------------------------------------------------------------------------------
Arrowhead Fountains
Peoria, AZ 2001 96,092 100.0% $21.39 100.0% $21.41
- ----------------------------------------------------------------------------------------------------------------------------
AmeriVest Plaza
Englewood, CO(4) 2001 118,720 91.3% $23.44 99.2% $23.57
- ----------------------------------------------------------------------------------------------------------------------------
Sheridan Center
Denver, CO 2000 141,008 82.0% $15.94 79.5% $15.83
- ----------------------------------------------------------------------------------------------------------------------------
Keystone Office Park
Indianapolis, IN 1999 96,520 95.8% $17.46 97.1% $17.33
- ----------------------------------------------------------------------------------------------------------------------------
Total Core Portfolio 1,221,449 90.8% $20.79 90.6% $20.76
- ----------------------------------------------------------------------------------------------------------------------------
Non-Core Portfolio:
- -------------------
- ----------------------------------------------------------------------------------------------------------------------------
Panorama Falls
Englewood, CO(5) 2000 60,004 70.8% $19.02 70.8% $19.15
- ----------------------------------------------------------------------------------------------------------------------------
Bank of America
Buildings - Texas(6) 1998 60,095 97.4% $16.00 97.4% $16.00
- ----------------------------------------------------------------------------------------------------------------------------
State of Texas
Buildings - Texas(7) 1997-98 222,542 77.7% $9.05 77.7% $9.05
- ----------------------------------------------------------------------------------------------------------------------------
Total Non-Core 342,641 80.0% $12.08 80.0% $12.10
Portfolio
- ----------------------------------------------------------------------------------------------------------------------------
Total Portfolio 1,564,090 88.5% $19.06 88.0% $18.86
- ----------------------------------------------------------------------------------------------------------------------------
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(1) Includes office space leased but not yet occupied.
(2) Includes office space but excludes storage, telecommunications and garage
space.
(3) Annualized base rent divided by leased rentable area. Annualized base rent
is original base rent plus contractual increases, but excludes percentage
rent, additional rent (operating expense reimbursements) and parking.
(4) Formerly known as Sheridan Plaza at Inverness.
(5) 20% of the property is owned by AmeriVest and 80% by Freemark Abbey
Panorama, LLC as tenants in common.
(6) Buildings leased approximately 63% to Bank of America, with the remainder
leased to a number of small tenants.
(7) Buildings leased primarily to various agencies of the State of Texas.
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