EXHIBIT 99 (13)
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AT THE TRUST: AT THE FINANCIAL RELATIONS BOARD:
Karen Dickelman Tony Ebersole Laura Kuhlmann Susan Steidle
Director of General Info. Media Inquiries Analyst
Investor Relations 312 640-6728 312 640-6727 Inquiries
312 683-3671 312 640-6774
FOR IMMEDIATE RELEASE
TUESDAY, MAY 12, 1998
BANYAN STRATEGIC REALTY TRUST REPORTS $0.18 FFO PER SHARE ON
REVENUES OF $8.6 MILLION FOR FIRST QUARTER 1998
Eight Acquisitions Year-to-Date Total $41.6 Million
BANYAN STRATEGIC REALTY TRUST HIGHLIGHTS
. First Quarter Funds From Operations (FFO) of $2.4 million, or 0.18
per share, nearly double same period last year
. Revenues of $8.6 million, up 45 percent from year earlier period
. Average occupancy of portfolio 94 percent at 3/31/98
. Quarterly cash distribution of $0.12 per share declared, increased by
20 percent
. $53.5 million permanent financing commitment and $25 million
revolving credit facility
. Year to date acquisitions of $41.6 million, or 569,000 net rentable
square feet, a 19 percent increase in square footage from Dec. 31, 1997
CHICAGO, May 12 -- BANYAN STRATEGIC REALTY TRUST (Nasdaq: BSRTS) a real
estate investment trust, today announced first quarter 1998 funds from
operations (FFO) of $2.4 million, or $0.18 per share, nearly double total
FFO per share in the previous year's first quarter. The improvement in FFO
and other operating results reflect the improving performance of the
Trust's portfolio, which increased 27 percent from the previous year's
first quarter, as well as the continued strong office and flex/industrial
markets the Trust serves in the eastern half of the U.S. Occupancy rates
at the Trust's 24 properties as of March 31, 1998 averaged 94 percent.
Since the beginning of 1998, the Trust has announced a total of $41.6
million in new acquisitions, totaling 569,000 net rentable square feet, for
a 19 percent square footage increase from year-end 1997.
CONSOLIDATED FINANCIAL RESULTS
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Banyan reported significantly higher first quarter 1998 results compared to
the previous year's period.
Net income more than tripled to $1.4 million in the recent quarter,
compared to $409,000 in the previous year's first quarter. Earnings
increased to $0.10 per share, from $0.04 per share in the first quarter
last year. Revenues grew 46 percent to $8.6 million, compared to $5.9
million during the 1997 first quarter. FFO of $2.4 million, or $0.18 per
share, was nearly double FFO of $1.1 million, or $0.10 per share a year
ago.
"We exceeded expectations with our first quarter results and continue to
show substantial financial and operating improvement from a year ago due to
our strong portfolio growth and consistently high occupancy rates of over
94 percent," said Leonard G. Levine, President of Banyan. "With $43 million
worth of new property acquisitions already accomplished this year, and our
improved ability to finance new acquisitions, we are on target for our goal
of up to $100 million in new acquisition growth by year end, which bodes
well for continued FFO growth."
TWO NEW ACQUISITIONS ANNOUNCED IN FIRST QUARTER
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During the first quarter, Banyan acquired two new properties in Norcross,
Georgia, a suburb of Atlanta, in separate transactions valued at
approximately $9.6 million.
The Trust acquired Peachtree Pointe Office Park, a 71,000 net rentable
square foot, multi-tenant office property consisting of five one-story
office buildings for approximately $4.5 million. The property is currently
92 percent occupied with 23 tenants.
In a second transaction, Banyan acquired Avalon Center Office Park, a
multi-tenant office property in Norcross, for $5.1 million. Avalon Center
consists of two one-story office buildings containing approximately 53,300
net rentable square feet and is currently 92 percent leased to a total of
four tenants. The property was 65 percent leased upon acquisition.
"The Peachtree Point and Avalon Center Office Park, significantly increase
our presence in the very strong suburban Atlanta market," said Mr. Levine.
"Both acquisitions are consistent with our strategy of carefully selecting
properties in markets where job growth is high and demand for office space
is strong, allowing for additional occupancy and rental rate growth. We
expect occupancy rates at both properties to reach close to full occupancy
by year end."
PORTFOLIO PERFORMANCE - FIRST QUARTER RENTAL INCOME UP 49 PERCENT
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Rental income from the Trust's portfolio increased 49 percent to $7.6
million, compared to $5.1 million during the same period a year ago,
reflecting the addition of eleven properties acquired since the end of last
year's first quarter. Total property operating expenses as a percent of
rental income decreased to 41 percent in the first quarter of 1998 from 47
percent for the same period the previous year. The Trust's total portfolio
of 24 properties was 94 percent leased at March 31, 1998.
BALANCE SHEET, MARKET VALUE AND LIQUIDITY
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At March 31, 1998, total assets at net book value were $169 million. The
debt to total market capitalization ratio was 55 percent, based on a total
market capitalization of $180.8 million. The market value of equity was
$81.2 million at the quarter-end stock price of $6.125 per share. The Trust
had $99.6 million of total debt outstanding as of March 31, 1998.
On May 4, the Trust announced a financing with Nomura Asset Capital
Corporation including a commitment for a permanent debt financing of $53.5
million and a $25 million revolving acquisition line of credit to replace
the Trust's previous acquisition line of credit. The debt under the
commitment has a 10-year term at an interest rate set at 6.95 percent,
amortized over 26 years. At current interest rates, the commitment is
approximately one percentage point lower than the weighted average interest
rate on the Trust's debt prior to this financing. Proceeds of the Nomura
financing will be used to retire certain permanent debt scheduled to mature
within the next two years and to repay amounts borrowed under the Nomura
line and the revolving line with a previous lender, which was not renewed.
The new line of credit has an initial term of 24 months at a rate of LIBOR
plus 2.00 percent and can be extended for one additional year for a fee of
0.50 percent of the $25 million facility.
"This new permanent financing and replacement line of credit not only
reduces our borrowing costs going forward, but will also complement our
unsecured debt to provide additional flexibility in pursuing future
acquisitions," Levine said.
INCREASED QUARTERLY CASH DISTRIBUTION
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On March 16, Banyan declared a quarterly cash distribution of $0.12 per
share for the first quarter ended March 31, 1998. The distribution is
payable May 22, 1998, to shareholders of record as of April 22, 1998. The
distribution is an increase from the previous quarterly distributions of
$0.10 per share, based on the Trust's increased levels of FFO.
SUBSEQUENT 1998 ACQUISITION ACTIVITY TOTALS $32 MILLION
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On May 4, Banyan announced $32 million in new acquisitions of six multi-
tenant office properties located in Orlando and Winter Park, Florida,
Bensenville, Illinois, in west suburban Chicago, plus a third property in
Norcross, Georgia. The properties were the largest group of new
acquisitions ever announced by the Trust, totaled approximately 444,000 net
rentable square feet, representing a 15 percent increase in square footage
of the Trust's overall portfolio.
The Orlando and Winter Park acquisitions consist of four multi-tenant
office properties, or a total of sixteen buildings, consisting of
approximately 291,000 square feet. The $23.5 million purchase price
equates to a rate of 10.25 percent on net operating income for the full
year 1999. Occupancy at the combined properties is 91 percent.
In Norcross, Banyan purchased Avalon Ridge, consisting of two single-story
office buildings with a total of 57,414 net rentable square feet, for
approximately $4.3 million, or a capitalization rate of 11 percent on net
operating income. Currently, Avalon Ridge is 100 percent leased.
Finally, in Bensenville, just west of Chicago, the Trust acquired Tower
Lane Business Park, two single-story office buildings containing
approximately 95,900 net rentable square feet, for a total of $5.1 million,
or a capitalization rate of 12 percent on net operating income. The
buildings are currently 87 percent occupied.
OUTLOOK
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Levine added, "Already this year, our acquisitions activity brings us close
to halfway to our targets for the year. Our more favorable line of credit
provides us with additional flexibility as we pursue new acquisitions.
While we continue to seek opportunities to add quality properties to our
portfolio in our current markets in major metropolitan areas and mid-sized
cities with strong local economies primarily in the Midwest and Southeast,
we are also looking at similar opportunities in the West as well as the
Northeast. As with our other acquisitions, we will continue to target
properties in strong economic markets, with a profile of multiple, smaller
tenants, average rents below market rates, and with the opportunity to
increase occupancy."
Banyan Strategic Realty Trust is a diversified equity Real Estate
Investment Trust (REIT) with a portfolio that includes primarily
flex/industrial and suburban office buildings, as well as retail and
residential properties. The Trust's current portfolio consists of 30
properties totaling 3.5 million rentable square feet and 864 apartment
units. The properties are located in major metropolitan areas and mid-to-
small second tier markets primarily in the Midwest and Southeast United
States. Currently, the Trust has 13,269,492 shares of beneficial interest
outstanding.
Some of the statements contained in the foregoing are forward-looking
statements. Words such as "believes," "intends," "anticipates," "expects,"
and similar expressions are intended to identify forward-looking statements
which are subject to a number of risks and uncertainties, including, among
other things, general real estate investment risks, lack of operating
history associated with recent acquisitions, potential inability to repay
or finance indebtedness at maturity, increases in interest rates,
competition for property acquisitions, adverse consequences of failure to
qualify as a REIT, and possible environmental liabilities. Actual results
could differ materially from those projected in these forward-looking
statements. Reference is made to the annual report on Form 10-K filed by
the Trust, specifically under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Factors
Affecting the Trust's Business Plan" for a more complete discussion of
these risk factors. The Trust undertakes no obligation to publicly release
the result of any revisions to these forward-looking statements that may be
made to reflect any future events or circumstances.
FINANCIAL TABLES TO FOLLOW
BANYAN STRATEGIC REALTY TRUST
SELECTED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED YEAR ENDED
3/31/98 3/31/97 12/31/97
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Total revenue. . . . . . . . $ 8,564 $ 5,894 $ 28,785
Recovery of losses on
loans, notes and interest
receivable. . . . . . . . . -- -- 161
Operating expenses . . . . . (7,091) (5,352) (25,664)
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Operating income . . . . . . 1,473 542 3,282
Minority interest in
consolidated partnerships . (116) (167) (590)
Income of real estate
ventures. . . . . . . . . . -- 30 37
Net gain on disposition of
investment in real estate,
disposition of investment
in real estate venture and
disposition of partnership
interest. . . . . . . . . . -- 4 881
Extraordinary item, net
of minority interest. . . . -- -- (64)
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Net income . . . . . . . . . $ 1,357 $ 409 $ 3,546
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Earnings per share of
Beneficial Interest -
Basic and Diluted:
Income before Net
Gains and Extra-
ordinary Item . . . . . . $ 0.10 $ 0.04 $ 0.24
Net Income . . . . . . . . $ 0.10 $ 0.04 $ 0.32
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FUNDS FROM OPERATIONS
Net income . . . . . . . . . $ 1,357 $ 409 $ 3,546
PLUS:
Depreciation expense . . . . 979 683 3,277
Depreciation included
in operations of real
estate ventures . . . . . . -- 8 15
Lease commission
amortization. . . . . . . . 77 37 208
LESS:
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Minority interest share
of depreciation expense . . (57) (63) (254)
Minority interest share
of lease commission
amortization. . . . . . . . (6) (4) (21)
Recovery of losses on
loans, notes and interest
receivable. . . . . . . . . -- -- (161)
Franchise tax fees
accrued . . . . . . . . . . 13 12 50
THREE MONTHS ENDED YEAR ENDED
3/31/98 3/31/97 12/31/97
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Net gain on disposition of
investment in real estate,
disposition of investment
in real estate venture and
disposition of partnership
interest. . . . . . . . . . -- (4) (881)
Extraordinary item,
net of minority interest. . -- -- 64
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Funds from operations. . . . $ 2,363 $ 1,078 $ 5,843
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