Exhibit 99.1
Cornerstone Realty Reports Third Quarter 2004 Results
RICHMOND, Va.--(BUSINESS WIRE)--Nov. 9, 2004--Cornerstone Realty
Income Trust, Inc. (NYSE: TCR) today reported operating results for
the third quarter and first nine months ended September 30, 2004.
Funds From Operations ("FFO") for the third quarter ended
September 30, 2004 were $10.8 million, or $0.19 per common share basic
and diluted, compared with $11.1 million, or $0.20 per common share
basic and diluted, in the third quarter of 2003. FFO for the first
nine months of 2004 was $34.7 million, or $0.60 per common share basic
and diluted, before severance and other organizational costs incurred
in the first quarter of 2004, compared with $32.2 million, or $0.60
per common share basic and diluted, last year. Including the severance
and other organizational costs incurred in the first quarter of 2004,
FFO for the first nine months of 2004 was $33.9 million, or $0.59 per
common share basic and diluted. Net income available to common
shareholders for the third quarter ended September 30, 2004 was $0.2
million, or $0.00 per common share basic and diluted, compared with a
net loss available to common shareholders of $2.4 million, or $0.04
per common share basic and diluted, in the third quarter of 2003. For
the first nine months of 2004, net loss available to common
shareholders was $4.3 million, or $0.08 per common share basic and
diluted, compared with a net loss available to common shareholders of
$4.5 million, or $0.08 per common share basic and diluted, in the
first nine months of 2003. FFO is the generally accepted measure of
operating performance for a real estate investment trust (REIT). A
reconciliation of net income to FFO is included in the Operating
Results table at the end of this news release.
In the third quarter of 2004, total revenues were $45.1 million
compared with $45.0 million last year. Average physical occupancy in
the third quarter of 2004 was 93.8% compared with 93.0% last year, and
the average rent per unit in the third quarter of this year was $667
compared with $674 last year. In the first nine months of 2004, total
revenues were $135.2 million compared with $127.0 million a year ago.
Average physical occupancy in the first nine months of 2004 was 93.1%
compared with 92.0% a year ago, and the average rent per unit for the
first nine months of 2004 was $672 compared with $675 last year.
Commenting on the third quarter and year-to-date results, Glade M.
Knight, chairman and chief executive officer, said: "We are encouraged
by positive revenue trends and leasing momentum within the overall
portfolio during the third quarter as our physical occupancy trends
continue to improve and our overall concessions have declined. Our
third quarter funds from operations, however, were negatively impacted
by higher turn, property management, and taxes and insurance expenses,
in addition to dilution resulting from the timing delay in reinvesting
our joint venture proceeds. Given our current occupancy levels, we do
not expect the higher turn and property management expenses to
continue in the fourth quarter," Knight said.
Comparable Property Operations
Comparable property operations is a measure Cornerstone uses to
evaluate performance and is not deemed to be an alternative to net
income as determined in accordance with generally accepted accounting
principles. In addition, this measure as calculated by Cornerstone may
not be comparable to similarly entitled measures of other companies.
At the end of the third quarter of 2004, Cornerstone's
"same-community" portfolio consisted of 77 stabilized apartment
communities containing 20,542 apartment homes that the company owned
since January 1, 2003, representing approximately 90% of Cornerstone's
22,910 units. For the third quarter of 2004, same-community property
operating income (rental income less property operating expenses)
decreased 1.6% compared with the third quarter of last year. Third
quarter 2004 rental income increased 1.3% compared to the third
quarter of last year, primarily a result of an increase in average
physical occupancy to 93.8% from 92.9%. Operating expenses increased
4.9% compared with the third quarter of 2003, primarily attributable
to higher turn costs associated with an increased number of move-ins
during the quarter, and higher taxes and insurance expenses. For the
first nine months of 2004, same-community property operating income
decreased 0.6% compared with the first nine months of 2003. Rental
income in the first nine months of 2004 increased 0.5% and expenses
increased 2.0% compared with the first nine months of last year.
Joint Venture and Property Management Agreement
On July 22, 2004 Cornerstone entered into a joint venture with
Sterling American Property Inc. of Great Neck, N.Y. The joint venture
has acquired Cornerstone's two apartment communities in Columbia, S.C.
for approximately $16.9 million. The Columbia properties, Stone Ridge
Apartments and The Arbors at Windsor Lake Apartments, have a total of
419 units. Cornerstone has a 10% limited partner interest in the joint
venture, and the company will continue to manage the two communities.
Cornerstone recognized a $3.5 million gain based upon the sale of its
90% interest in those communities. The gain is excluded from FFO but
included in net income available to common shareholders for the
three-month and nine-month periods ended September 30, 2004.
Definitive Merger Agreement
On October 25, 2004 Cornerstone and Colonial Properties Trust
(NYSE: CLP), a real estate investment trust (REIT) that owns a
diversified portfolio of multifamily, office and retail properties,
announced that they have entered into a definitive merger agreement
under which Cornerstone will merge into Colonial Properties. The total
transaction value, including the assumption or repayment of
Cornerstone debt, is approximately $1.5 billion. There are a number of
conditions that must occur for the merger to close. These conditions
include the approval of the transaction by the shareholders of both
Cornerstone and Colonial Properties, the receipt of necessary
consents, the resolution of certain tax matters and the redemption of
Cornerstone's Series A preferred shares. The transaction is expected
to close during the first quarter of 2005. Further information on the
merger agreement can be found in recent Securities and Exchange
Commission (SEC) filings and news releases from both companies.
Dividends
A quarterly dividend of $0.20 per share was paid on October 20,
2004 to common shareholders of record on September 30, 2004. The
company also paid a quarterly dividend of $0.5938 per share on October
20, 2004 to record holders of its Series A Convertible Preferred
Shares on September 30, 2004.
Conference Call and Webcast
Cornerstone will hold a live conference call and webcast Tuesday
November 9, 2004, at 10:00 a.m. EST to review third quarter and
year-to-date results. Individual investors can access the live webcast
by visiting the Investor Relations page of the company's Web site at
www.cornerstonereit.com.
Investment professionals and media should call the company's
Investor Relations department at (804) 643-1761 for further
information on participating in the conference call. A replay of the
conference call and webcast will be available on the company's Web
site shortly after completion of the live event.
Supplemental Information
Additional operational and financial information for the third
quarter and year-to-date periods is available in the Investor
Relations section of Cornerstone's Web site at
www.cornerstonereit.com.
Forward Looking Statements
Certain statements contained herein 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 actual results, performance or achievements of the
company to be materially different from results expressed or implied
by such forward-looking statements. Such factors include, among other
things, risks associated with the proposed merger with Colonial
Properties Trust, the ability to obtain property financing,
unanticipated adverse business developments affecting the company,
adverse changes in the real estate markets, and local as well as
general economic and competitive factors. There is no assurance that
planned events or results, including, among other things, the proposed
merger with Colonial Properties Trust, will be achieved. In addition,
the timing and level of distributions to common shareholders are
within the discretion of the company's board of directors and,
pursuant to the merger agreement with Colonial Properties Trust, are
subject to resolution of certain tax matters. The company on a regular
basis considers what level of distributions to common shareholders is
appropriate.
Corporate Profile
Cornerstone Realty Income Trust, Inc. (NYSE:TCR) is a fully
integrated, self-managed and self-advised real estate company that has
operated as a real estate investment trust (REIT) since 1993. The
company focuses on the ownership and management of multifamily
communities in select markets in Virginia, North Carolina, South
Carolina, Georgia and Texas. Currently Cornerstone owns 87 apartment
communities with 22,910 units, a third-party property management
business, apartment land under development, and ownership interests in
four real estate joint ventures. Cornerstone is headquartered in
Richmond, Virginia and its common stock trades on the New York Stock
Exchange under the symbol "TCR." For more information about
Cornerstone, visit the company's web site at www.cornerstonereit.com.
This press release does not constitute an offer of any securities
for sale.
CORNERSTONE REALTY INCOME TRUST, INC.
BALANCE SHEET DATA September 30, December 31,
In Thousands Except Per Share Amounts 2004 2003
- ----------------------------------------------------------------------
Assets
- ----------------------------------------------
Investment in Rental Property
Land $ 159,934 $ 160,192
Building and Property Improvements 1,105,456 1,103,043
Furniture and Fixtures and Other 40,198 38,735
Real Estate Under Development 11,345 5,450
----------- -----------
1,316,933 1,307,420
Less Accumulated Depreciation (259,075) (224,535)
----------- -----------
1,057,858 1,082,885
----------- -----------
Cash and Cash Equivalents 2,173 1,393
Prepaid Expenses 3,423 5,334
Deferred Financing Costs, Net 5,769 5,924
Investment in Real Estate Joint Ventures 4,168 2,649
Other Assets 32,112 26,257
----------- -----------
Total Assets $1,105,503 $1,124,442
=========== ===========
- ----------------------------------------------------------------------
Liabilities and Shareholders' Equity
- ----------------------------------------------
Liabilities
Notes Payable-Secured $ 811,449 $ 801,754
Distributions Payable 76 76
Accounts Payable and Accrued Expenses 19,757 14,950
Rents Received in Advance 554 884
Tenant Security Deposits 2,124 1,889
----------- -----------
Total Liabilities 833,960 819,553
Minority Interest of Unit Holders in
Operating Partnership 17,856 18,884
Shareholders' Equity
Preferred Stock, No Par Value,
Authorized 25,000 Shares; $25
Liquidation Preference, Series
A Cumulative Convertible Redeemable;
Issued and Outstanding 127 Shares 2,680 2,680
Common Stock, No Par Value, Authorized
100,000 Shares; Issued and Outstanding
56,200 Shares and 55,534 Shares,
Respectively 544,591 538,969
Deferred Compensation (237) (456)
Distributions Greater Than Net Income (292,989) (255,188)
Accumulated Other Comprehensive Loss (358) -
----------- -----------
Total Shareholders' Equity 253,687 286,005
----------- -----------
Total Liabilities and Shareholders' Equity $1,105,503 $1,124,442
=========== ===========
CORNERSTONE REALTY INCOME TRUST,
INC.
OPERATING RESULTS Three Months Nine Months
In Thousands Except Per Share Ended Ended
Amounts September 30, September 30,
2004 2003 2004 2003
- ----------------------------------------------------------------------
Revenues
Rental Income $42,510 $42,686 $128,263 $120,697
Other Property Income 2,544 2,287 6,978 6,292
---------------- ------------------
Total Revenues 45,054 44,973 135,241 126,989
Expenses
Property and Maintenance 14,123 13,774 39,977 37,529
Taxes and Insurance 6,358 6,050 18,937 17,258
Property Management 1,377 1,134 3,904 3,126
General and Administrative 1,003 1,036 3,086 2,720
Depreciation and Amortization of
Real Estate Assets 13,705 13,461 41,374 38,387
Severance Costs and Other
Organizational Charges - - 760 -
Expenses Associated with the Proposed
Colonial Properties
Trust Merger 190 - 190 -
Other Depreciation 6 6 17 17
Other 9 58 187 209
---------------- ------------------
Total Expenses 36,771 35,519 108,432 99,246
Income Before Interest Income
(Expense) 8,283 9,454 26,809 27,743
Interest Income 30 108 93 170
Interest Expense (11,460)(11,932) (34,602) (34,264)
---------------- ------------------
Loss from Continuing Operations
before Gains on Sales of
Investments and Minority Interest
of Unit Holders in
Operating Partnership (3,147) (2,370) (7,700) (6,351)
Gain on Sales of Investments 3,454 - 3,454 -
Minority Interest of Unit Holders
in Operating Partnership (17) 84 126 170
---------------- ------------------
Income (Loss) from Continuing
Operations 290 (2,286) (4,120) (6,181)
Discontinued Operations
Loss from Discontinued Operations - (3) - (10)
Gain on Sales of Investments - - - 1,962
---------------- ------------------
Net Income (Loss) $290 $(2,289) $(4,120) $(4,229)
================ ==================
Distributions to Preferred
Shareholders (76) (76) (227) (227)
---------------- ------------------
Net Income (Loss) Available to
Common Shareholders $214 $(2,365) $(4,347) $(4,456)
================ ==================
Funds From Operations
Net Income (Loss) Available to
Common Shareholders $214 $(2,365) $(4,347) $(4,456)
Adjustments:
Distributions to Preferred
Shareholders 76 76 227 227
Minority Interest of Unit Holders
in Operating Partnership 17 (84) (126) (170)
Gain on Sales of Investments (3,454) - (3,454) (1,962)
Expenses Associated with the
Proposed Colonial Properties
Trust Merger 190 - 190 -
Depreciation on JV Investments 33 - 78 -
Depreciation from Discontinued
Operations - - - 162
Depreciation and Amortization of
Real Estate Assets 13,705 13,461 41,374 38,387
---------------- ------------------
Funds From Operations $10,781 $11,088 $33,942 $32,188
================ ==================
Per Share
Weighted Average Common and
Preferred Shares and
Operating Partnership Units --
Diluted 58,179 56,737 57,941 53,750
Funds From Operations Per Share
-- Basic and Diluted $0.19 $0.20 $0.59 $0.60
Common Share Distributions $0.20 $0.20 $0.60 $0.68
Net Income (Loss) from Continuing
Operations -- Basic and Diluted $0.01 $(0.04) $(0.07) $(0.12)
Net Income from Discontinued
Operations -- Basic and Diluted $- $- $- $0.04
Net Income (Loss) Available to
Common Shareholders --
Basic and Diluted $- $(0.04) $(0.08) $(0.08)
Weighted Average Common Shares --
Basic and Diluted 56,170 54,729 55,933 51,684
CONTACT: Cornerstone Realty Income Trust, Inc., Richmond
Mark M. Murphy, 804-643-1761, ext. 231
www.cornerstonereit.com