CORNERSTONE REALTY INCOME TRUST, INC.
FOR IMMEDIATE RELEASE
CORNERSTONE REPORTS 1997 RECORD EARNINGS
Richmond, Virginia - January 22, 1998 - Cornerstone Realty Income Trust
(NYSE: TCR) today reported funds from operations (FFO) of $34.8 million or $1.07
per share for the year ended December 31, 1997. This is an increase from $20.4
million, or $1.01 per share, for the prior year. The increase in FFO per share
is due to a combination of internal growth and acquisition activity.
The Company reported annual rental income from property operations of $70.1
million, compared to $40.4 million for the year 1996. Economic occupancy for the
entire portfolio was 92% for 1997. In addition, 1997 Net Operating Income (NOI)
for "same property" operations increased 7.4% over 1996 NOI. "Same property"
operations represent the operating results of the 19 properties owned at January
1, 1996.
The Company acquired 13 communities (2,889 units) in 1997 for a total cost
of approximately $135 million. This represents a growth in assets in excess of
48%. In addition, the Company invested $23 million in existing properties as
part of its renovation program. This program seeks to reposition properties
acquired in strong markets to Cornerstone's high standard.
As a result of strong 1997 earnings Cornerstone increased its quarterly
dividend to $.26 per share, from $.25 per share, which represents an annualized
dividend of $1.04. The next dividend will be paid on April 20th. Cornerstone
enjoyed significant participation in its dividend reinvestment plan with over
$14 million reinvested in 1997.
Glade Knight, Chairman and CEO, stated "We are very pleased with the
accomplishments of the Company in 1997. We listed our shares on the NYSE and
within 9 months the shares appreciated by approximately 24% from the listing
price. FFO per share increased by 6%, in line with analysts' estimates, and we
exceeded our property acquisition targets for the year. These accomplishments
demonstrate management's commitment to increasing shareholder value."
During the fourth quarter 1997, the Company closed on a new $175 million
line of credit at an interest rate equal to LIBOR plus 120 basis points, or 40
basis points below the rate on the prior credit facility. In addition, the REIT
acquired three
communities at a total acquisition cost in excess of $26 million. Economic
occupancy for the fourth quarter averaged 92% for the entire portfolio. FFO for
the fourth quarter was $9.7 million or $.27 per share as compared to $7 million
or $.25 per share for the same period in 1996. This represents an increase in
FFO per share of 8%.
Cornerstone Realty Income Trust, Inc. is a fully integrated, self-managed
and self-advised real estate company that has operated as a REIT since 1993. The
Company focuses on multifamily properties in select markets in Virginia, North
Carolina, South Carolina and Georgia. Currently, the Company owns 52 multifamily
properties (containing 12,114 units).
Certain statements contained herein may constitute "forward-looking
statements" within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the future results,
performance or achievements of the Company to be materially different from any
forward-looking statements. Such factors include, among others, risks associated
with the timing of, costs associated with, and effects of property improvements,
financing commitments and general competitive factors.
FINANCIAL INFORMATION
December 31, December 31,
BALANCE SHEETS 1997 1996
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ASSETS
Investment in Rental Property
Land $76,812,953 $46,980,280
Building and improvements 402,545,094 277,345,752
Furniture and fixtures 8,217,149 5,389,821
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487,575,196 329,715,853
Less accumulated depreciation (27,489,286) (12,323,037)
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460,085,910 317,392,816
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Cash and cash equivalents 4,513,986 3,182,651
Prepaid expenses 797,484 557,544
Other assets 8,789,070 1,737,563
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14,100,540 5,477,758
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TOTAL ASSETS $474,186,450 $322,870,574
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LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Notes Payable $151,569,147 $55,403,000
Accounts payable 3,812,578 9,384,766
Accrued expenses 1,158,014 1,366,853
Rents received in advance 463,997 491,928
Tenant security deposits 1,854,462 1,654,322
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TOTAL LIABILITIES 158,858,198 68,300,869
SHAREHOLDERS' EQUITY
Common stock, no par value, authorized
50,000,000 shares; issued and outstanding
35,510,327 shares and 28,141,509 shares, respectively 349,105,407 276,269,539
Deferred compensation (33,004) (55,000)
Distributions greater than net income (33,744,151) (21,644,834)
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315,328,252 254,569,705
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $474,186,450 $322,870,574
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FINANCIAL INFORMATION
Three Months Twelve Months
Ended Ended
December 31, December 31,
OPERATING RESULTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS 1997 1996 1997 1996
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Revenues:
Rental Revenues $19,884 $13,638 $70,116 $40,262
Other Non-Property Income 500 50 2,186 287
------- ------- ------- ------
20,384 13,688 72,302 40,549
EXPENSES
Property and Maintenance 5,517 3,522 19,495 11,406
Real Estate Taxes and Insurance 1,686 948 6,076 3,275
Property management 522 581 1,769 2,320
Depreciation of Real Estate Owned 4,372 2,913 15,164 8,068
Management Contract Termination 0 16,526 414 16,526
General and Administrative 291 729 1,352 1,496
Other 119 62 1,245 200
Interest 2,520 804 7,561 1,428
------- ------- ------- ------
15,027 26,085 53,076 44,719
Net Income/(Loss) $5,357 $(12,397) $19,226 $(4,170)
------- ------- ------- ------
Weighted average shares outstanding 35,452 27,772 32,617 20,210
Cash Distribution Paid $8,638 $5,621 $31,325 $15,935
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FUNDS FROM OPERATIONS
Net Income / (Loss) $5,357 $(12,397) $19,226 $(4,170)
Adjustments
Depreciation of Real Estate Owned 4,372 2,913 15,164 8,068
Management Contract Termination 0 16,526 414 16,526
------- ------- ------- ------
Funds from Operations 9,729 7,042 34,804 $20,424
------- ------- ------- ------
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PER SHARE:
Funds from Operations $0.274 $0.254 $1.07 $1.01
Dividends $0.250 $0.249 $1.00 $.99
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FOR ADDITIONAL INFORMATION CONTACT:
Glade M. Knight
Chairman and Chief Executive Officer
S.J. Olander
Senior Vice President and Chief Financial Officer
David S. McKenney
Vice President of Corporate Services
Phone:(804) 643-1761