Silver Bay Realty Trust Corp. (NYSE:SBY) (“the Company” or
“Silver Bay”) today announced its financial results for the quarter
ended March 31, 2016.
Highlights
- Total revenue of $31.1 million for the
first quarter of 2016, an increase of 40% compared to the first
quarter of 2015
- Net operating income of $17.6 million
for the first quarter of 2016, an increase of 48% compared to the
first quarter of 2015
- Same-Home net operating income
increased 6% year-over-year for the first quarter of 2016 compared
to the first quarter of 2015
- Core funds from operations of $0.19 per
share, an increase of 58% compared to the first quarter of
2015
- Aggregate occupancy increased to 97% on
portfolio of 8,981 single-family properties
- Rental increases of 4.8% on new
move-ins and 3.3% on renewals
- Net loss of $3.6 million for the first
quarter of 2016, an improvement of 7% compared to the first quarter
of 2015
“As we move into our peak leasing season, we are experiencing
robust rental demand and are pleased to report that our aggregate
portfolio occupancy climbed nearly 500 basis points to 97%
year-over-year,” said Thomas W. Brock, Silver Bay’s Interim Chief
Executive Officer. “We generated a 58% increase year-over-year in
core funds from operations per share and believe that our continued
focus on executing our operational initiatives will yield further
benefits for our stockholders.”
Financial Results
Silver Bay reported total revenue of $31.1 million for the first
quarter of 2016, a 40% increase compared to total revenue of $22.3
million for the first quarter of 2015. This increase was due
primarily to the increase in the number of leased properties
generating rental income, and to a lesser extent, rental growth.
The Company owned 8,702 leased properties as of March 31,
2016, as compared to 6,329 leased properties as of March 31,
2015. Net loss attributable to common stockholders for the first
quarter of 2016 was $3.4 million, or $0.09 per common share,
compared to net loss attributable to common stockholders for the
first quarter of 2015 of $3.6 million, or $0.10 per common
share.
The Company reported net operating income (“NOI”) of $17.6
million for the first quarter of 2016, a 48% increase compared to
NOI of $11.9 million for the first quarter of 2015. Same-Home NOI
increased to $12.1 million for the first quarter of 2016, a 6%
increase compared to Same-Home NOI of $11.3 million for the first
quarter of 2015. Core funds from operations (“Core FFO”) for the
first quarter of 2016 was $7.2 million, or $0.19 per share(1), a
58% increase on a per share basis compared to Core FFO for the
first quarter of 2015 of $4.5 million, or $0.12 per share. NOI,
Same-Home NOI and Core FFO are non-GAAP(2) financial measures.
Reconciliations of net loss to NOI, Same-Home NOI and Core FFO are
included in the supplemental financial and operating data
accompanying this press release.
(1) Per share means per weighted average common shares and
common units of the operating partnership.
(2) GAAP is defined in accordance with accounting principles
generally accepted in the United States.
Portfolio, Financial and Operating Metrics Summary
Silver Bay owned a portfolio of 8,981 single-family properties
as of March 31, 2016. The following table provides a summary
of Silver Bay’s portfolio, financial and operating metrics for the
first quarter of 2016 and 2015, respectively:
PORTFOLIO, FINANCIAL AND OPERATING SUMMARY
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE
AND PER HOME DATA)
Three Months Ended
March 31, 2016
Three Months Ended
March 31, 2015
Net loss attributable to common stockholders $ (3,404 ) $ (3,644 )
Net loss per share attributable to common shares $ (0.09 ) $ (0.10
) Net operating income $ 17,593 $ 11,876 Net operating income as a
percentage of total revenue 56.5 % 53.4 % Same-Home net operating
income $ 12,063 $ 11,339 Same-Home net operating income as a
percentage of Same-Home revenue 55.2 % 54.7 % Core FFO per share $
0.19 $ 0.12
As of March 31, 2016 As of March 31,
2015 Occupancy Rate: Aggregate portfolio 96.9 % 92.2 %
Same-Home portfolio 97.6 % 96.3 % Average Monthly Rent: Aggregate
portfolio $ 1,178 $ 1,200 Same-Home portfolio $ 1,238 $ 1,197
Trailing Twelve Month Turnover 29.0 % 29.4 %
Operating Metrics
Silver Bay reported an aggregate occupancy rate of 96.9% as of
March 31, 2016, an increase from 92.2%, in the first quarter
2015. A summary of Silver Bay’s occupancy rates is included in the
financial and operating tables accompanying this press release.
Silver Bay reported an average monthly rent for the aggregate
portfolio of $1,178 as of March 31, 2016, compared to an
average monthly rent of $1,200 as of March 31, 2015. This
decrease in average monthly rent was due to a change in the
portfolio mix related to The American Home portfolio acquisition
(the "Portfolio Acquisition"), partially offset by rental growth.
Same-Home average monthly rent was $1,238 as of March 31,
2016, compared to an average monthly rent of $1,197 as of
March 31, 2015.
Silver Bay's trailing twelve-month turnover improved 40 basis
points to 29.0% as of March 31, 2016 from 29.4% as of
March 31, 2015.
Same-Home Metrics
The Company began today reporting Same-Home metrics for the
first quarter of 2016. The Same-Home portfolio of 5,985
properties represents approximately 67% of the total Company
portfolio as of March 31, 2016. Same-Home NOI grew $0.7
million to $12.1 million and as a percentage of revenue improved 50
basis points to 55.2% compared to a year ago. This increase
was primarily due to revenue growth resulting from higher occupancy
and rental rate growth, partially offset by an increase in certain
property operating expenses. Occupancy increased on the
Same-Home portfolio by 130 basis points to 97.6% and average
monthly rent increased 3.4% to $1,238, each as of March 31,
2016. Additional detail on the Company's Same-Home portfolio is
located in the supplemental financial and operating data
accompanying this press release.
Disposition Activity
During the first quarter of 2016, the Company sold 53
single-family homes for an aggregate price of $7.3 million. Net
gain for these sales totaled $1.3 million, excluding the net gain
on homes acquired in the Portfolio Acquisition whose gain will be
re-allocated to the purchase price within one year of the
acquisition.
Share Repurchase Plan
During the first quarter of 2016, the Company repurchased and
retired 545,223 shares under the plan for a total cost of $7.9
million at an average purchase price of $14.43 per share, inclusive
of commissions.
Dividend Declaration
The Company’s Board of Directors declared a quarterly dividend
of $0.13 per share of common stock for the quarter ended
March 31, 2016. The dividend was paid April 15, 2016 to
common stockholders of record at the close of business on
April 4, 2016.
Liquidity and Capital Resources
The Company's liquidity and capital resources as of
March 31, 2016 consisted of cash of $29.4 million, escrow
deposits of $17.0 million and $68.7 million borrowing capacity on
its revolving credit facility.
Conference Call
Silver Bay will host a conference call on May 5, 2016 at 10:00
a.m. EDT to discuss first quarter 2016 financial results and
business highlights. To participate in the teleconference, please
call toll-free (888) 338-9509 (or (412) 902-4187 for international
callers and (855) 669-9657 for Canadian callers) approximately 10
minutes prior to the above start time. You may also listen to the
teleconference live via the internet on the Company's website at
www.silverbayrealtytrustcorp.com in the Investor Relations section
under the Events Calendar link. For those unable to attend, a
telephone playback will be available beginning at 1:00 p.m. EDT on
May 5, 2016 through 9:00 a.m. EDT on June 5, 2016. The playback can
be accessed by calling (877) 344-7529 (or (412) 317-0088 for
international callers and (855) 669-9658 for Canadian callers) and
providing Conference Number 10083846. The call will also be
archived on the Company's website in the Investor Relations section
under the Events Calendar link.
Silver Bay Realty Trust Corp.
Silver Bay Realty Trust Corp. is an internally managed Maryland
corporation focused on the acquisition, renovation, leasing and
management of single-family properties for rental income and
long-term capital appreciation. Silver Bay owns single-family
properties in Arizona, California, Florida, Georgia, Nevada, North
Carolina, Ohio, South Carolina and Texas. Silver Bay has elected to
be taxed as a real estate investment trust (“REIT”) for U.S.
federal tax purposes.
Forward-Looking Statements
This press release and related conference call contain
forward-looking statements within the meaning of the federal
securities laws. 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, readers 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.
Readers can also identify forward-looking statements by discussions
of strategy, plans or intentions. Examples of forward-looking
statements include statements about: the search for and
qualifications of a permanent chief executive officer; Silver Bay's
projected financial and operating results; Silver Bay's ability to
lease and operate acquired properties and to improve its operating
performance, including Silver Bay's abilities and projections
related to turnover rates and timeframes, operating costs, rent
increases, and occupancy rates; intentions related to asset sales,
including pricing, volume and identity of such assets; Silver Bay's
intentions related to its capital allocation strategy, including
through the use of share repurchases; expectations of portfolio
size; the impact of seasonality on Silver Bay’s results; estimates
relating to Silver Bay’s ability to make distributions to its
stockholders in the future; market trends in Silver Bay’s industry,
such homeownership rates and the impact of such trends on its
operations; future real estate values and prices; and the general
economy and its impact on Silver Bay’s results.
The forward-looking statements contained in this press release
and related conference reflect Silver Bay’s current views about
future events and are subject to numerous known and unknown risks,
uncertainties, assumptions and changes in circumstances that may
cause Silver Bay’s actual results to differ significantly from
those expressed or implied in any forward-looking statement. Silver
Bay is not able to predict all of the factors that may affect
future results. Readers should not rely on any of these
forward-looking statements. They are neither statements of
historical fact nor guarantees or assurances of future performance.
Important factors that could cause actual results to differ
materially from those in the forward-looking statements include
national, regional or local economic, business, competitive, market
and regulatory conditions and the following: those factors
described in the discussion on risk factors in Part I, Item 1A,
"Risk Factors" in our Annual Report on Form 10-K for the year ended
December 31, 2015 and Part I, Item 2 “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and Part
I, Item 3 "Quantitative and Qualitative Disclosures about Market
Risk" in this Quarterly Report on Form 10-Q and other risks
and uncertainties detailed in Silver Bay’s other reports and
filings with the Securities and Exchange Commission ("SEC");
defaults on, early terminations of or non-renewal of leases by
residents; resident turnover or turnover costs; Silver Bay’s
ability to maintain occupancy levels and leasing traffic or to
attract and retain qualified residents in light of increased
competition in the leasing market for quality residents, the
relatively short duration of leases, inadequate marketing,
reputational damage or other reasons; Silver Bay’s ability to
control or reduce operating expenses, including repairs and
maintenance expense and other costs such as real estate taxes,
homeowners’ association fees, insurance and other costs outside the
Company’s control for reasons including damage to properties due to
storms, other natural causes or residents and other reasons; Silver
Bay’s ability to successfully operate its properties; Silver Bay’s
ability to maintain rents at levels that are sufficient to keep
pace with rising costs of operations; Silver Bay’s ability to
dispose of assets at attractive pricing levels; the amount of
capital available for share repurchases and other purposes; Silver
Bay’s ability to implement and manage its service technician
initiatives or the impact of such initiatives to reduce
maintenance, turnover and other expenses as predicted; Silver Bay’s
ability to obtain financing arrangements; Silver Bay’s failure to
meet the conditions to draw under the revolving credit facility;
maintenance or capital improvement costs related to the portfolio
acquired from The American Home (the “Portfolio”) that exceed
Silver Bay's assumptions, defaults among residents of the Portfolio
that exceed Silver Bay's assumptions; the Company’s ability to
perform under the covenants of its revolving credit facility and
securitization loan; general volatility of the markets in which it
participates; interest rates and the market value of Silver Bay’s
assets; the impact of changes in governmental regulations, tax law
and rates, and similar matters; difficulties in identifying
properties to acquire and completing acquisitions; increased time
and/or expense to gain possession and renovate properties; Silver
Bay’s dependence on key personnel to carry its business and
investment strategies and its ability to hire and retain skilled
managerial, investment, financial, and operational personnel, and
the performance of third-party vendors and service providers,
including third party management professionals, maintenance
providers, leasing agents, and property managers; and Silver Bay’s
ability to remain qualified as a REIT.
The forward-looking statements in this press release and related
conference call represent Silver Bay’s views as of the date of this
press release. Subsequent events and developments could cause
these views to change. However, while Silver Bay may elect to
update these forward-looking statements at some point in the
future, Silver Bay has no current intention of doing so except to
the extent required by applicable laws. Readers should,
therefore, not rely on these forward-looking statements as
representing Silver Bay’s views as of any date subsequent to the
date of this press release. All subsequent written and oral forward
looking statements concerning Silver Bay or matters attributable to
Silver Bay or any person acting on its behalf are expressly
qualified in their entirety by the cautionary statements above.
Additional Information
Stockholders of Silver Bay, and other interested persons, may
find additional information regarding the Company at the SEC's
website at www.sec.gov or by directing requests to: Silver Bay
Realty Trust Corp., Attn: Investor Relations, 3300 Fernbrook Lane
North, Suite 210, Plymouth, MN 55447, telephone (952) 358-4400.
SILVER BAY REALTY TRUST CORP.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(AMOUNTS IN THOUSANDS EXCEPT SHARE
DATA)
March 31, 2016
(Unaudited)
December 31,
2015
Assets Investments in real estate: Land and land
improvements $ 219,112 $ 220,110 Building and improvements 989,182
989,574 1,208,294 1,209,684 Accumulated depreciation
(83,499 ) (74,907 ) Investments in real estate, net 1,124,795
1,134,777 Assets held for sale 10,146 11,184 Cash 29,395 29,028
Escrow deposits 17,035 15,472 Resident security deposits 12,739
12,521 Other assets 10,677 13,298
Total assets
$ 1,204,787 $ 1,216,280
Liabilities and
Equity Liabilities: Securitization loan, net $ 296,386 $
295,741 Revolving credit facility 331,330 326,472 Accounts payable
and accrued expenses 16,064 16,752 Resident prepaid rent and
security deposits 14,800 14,462
Total
liabilities 658,580 653,427
10% cumulative redeemable preferred stock
at liquidation value, $0.01 par; 50,000,000
shares authorized, 1,000 shares issued and
outstanding
1,000 1,000
Equity: Stockholders’ equity:
Common stock $0.01 par; 450,000,000 shares
authorized; 35,610,886 and 36,063,187,
respectively, shares issued and
outstanding
354 359 Additional paid-in capital 644,681 651,987 Accumulated
other comprehensive loss (2,063 ) (1,613 ) Cumulative deficit
(129,915 ) (121,620 ) Total stockholders’ equity 513,057 529,113
Noncontrolling interests - Operating Partnership 32,150
32,740
Total equity 545,207 561,853
Total liabilities and equity $ 1,204,787 $ 1,216,280
SILVER BAY REALTY TRUST CORP.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
(AMOUNTS IN THOUSANDS EXCEPT SHARE
DATA)
(UNAUDITED)
Three Months Ended
March 31,
2016 2015 Revenue: Rental
income $ 30,424 $ 21,703 Other income 712 549 Total
revenue 31,136 22,252
Expenses: Property operating and
maintenance 5,884 4,357 Real estate taxes 4,452 3,551 Homeowners’
association fees 436 405 Property management 2,771 2,147
Depreciation and amortization 9,366 7,111 Portfolio acquisition
expense — 755 General and administrative 3,853 3,984 Share-based
compensation 572 497 Severance and other 1,667 — Interest expense
6,212 3,486 Total expenses 35,213 26,293
Loss before other income, income taxes and
non-controlling interests (4,077 ) (4,041 )
Other
income: Net gain on disposition of real estate 1,285 — Other
(expense) income (330 ) 266 Total other income 955
266
Loss before income taxes and non-controlling
interests (3,122 ) (3,775 ) Income tax expense, net (467 ) (66
)
Net loss (3,589 ) (3,841 ) Net loss attributable to
noncontrolling interests - Operating Partnership 210 222
Net loss attributable to controlling interests (3,379
) (3,619 ) Preferred stock distributions (25 ) (25 )
Net loss
attributable to common stockholders $ (3,404 ) $ (3,644 )
Loss per share - basic and diluted: Net loss attributable to
common shares $ (0.09 ) $ (0.10 ) Weighted average common shares
outstanding 36,022,953 36,428,809
Comprehensive Loss: Net loss $ (3,589 ) $ (3,841 )
Other
comprehensive loss: Change in fair value of interest rate cap
agreements (474 ) (59 ) Losses reclassified into earnings from
other comprehensive loss 24 — Other comprehensive
loss (450 ) (59 )
Comprehensive loss (4,039 ) (3,900 ) Less
comprehensive loss attributable to noncontrolling interests -
Operating Partnership 238 222
Comprehensive loss
attributable to controlling interests $ (3,801 ) $ (3,678 )
SILVER BAY REALTY TRUST CORP.
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE THREE MONTHS ENDED MARCH 31,
2016
(AMOUNTS IN THOUSANDS EXCEPT SHARE
DATA)
(UNAUDITED)
Common Stock
Shares Par Value
Amount
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Cumulative
Deficit
Total
Stockholders’
Equity
Noncontrolling
Interests -
Operating
Partnership
Total
Equity
Balance at January 1, 2016 36,063,187 $ 359 $ 651,987 $
(1,613 ) $ (121,620 ) $ 529,113 $ 32,740 $ 561,853 Non-cash equity
awards, net 123,251 — 547 — — 547 — 547 Repurchase and retirement
of common stock (575,552 ) (5 ) (8,233 ) — — (8,238 ) — (8,238 )
Dividends declared — — — — (4,916 ) (4,916 ) — (4,916 ) Net loss —
— — — (3,379 ) (3,379 ) (210 ) (3,589 ) Change in fair value of
interest rate cap agreements — — — (474 ) — (474 ) — (474 )
Losses reclassified into earnings from
other
comprehensive loss
— — — 24 — 24 — 24
Adjustment to noncontrolling interests -
Operating
Partnership
— — 380 — — 380 (380 ) —
Balance at March 31, 2016 35,610,886 $ 354
$ 644,681 $ (2,063 ) $ (129,915 ) $ 513,057 $
32,150 $ 545,207
SILVER BAY REALTY TRUST CORP.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
Three Months Ended March
31, 2016 2015 Cash Flows
From Operating Activities: Net loss $ (3,589 ) $ (3,841 )
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization 9,366 7,111 Non-cash
share-based compensation 547 478 Losses reclassified into earnings
from other comprehensive loss 24 — Amortization and write-off of
deferred financing costs 1,153 1,023 Amortization of discount on
securitization loan 75 75 Net gain on disposition of real estate
(1,285 ) — Other 415 219 Net change in assets and liabilities:
(Increase) decrease in escrow cash for operating activities and
debt reserves (1,570 ) 2,683 Decrease (increase) in other assets
397 (966 ) (Decrease) increase in accounts payable, accrued
expenses, and prepaid rent (80 ) 1,477 Net cash provided by
operating activities 5,453 8,259 Cash Flows From
Investing Activities: Purchase of investments in real estate —
(9,897 ) Capital improvements of investments in real estate (4,068
) (9,502 ) Decrease (increase) in escrow cash for investing
activities 7 (4,630 ) Proceeds from disposition of real estate
7,342 1,240 Other — (43 ) Net cash provided by (used in)
investing activities 3,281 (22,832 ) Cash Flows From
Financing Activities: Payments on securitization loan — (520 )
Proceeds from revolving credit facility 7,732 15,125 Payments on
revolving credit facility (2,874 ) — Deferred financing costs paid
(9 ) (4,712 ) Purchase of interest rate cap agreements — (2,250 )
Repurchase and retirement of common stock (8,238 ) (7,668 )
Dividends paid (4,978 ) (2,359 ) Net cash used in financing
activities (8,367 ) (2,384 ) Net change in cash 367 (16,957 ) Cash
at beginning of period 29,028 49,854 Cash at end of
period $ 29,395 $ 32,897 Supplemental
disclosure of cash flow information: Decrease in fair value of
interest rate cap agreements $ 474 $ 59 Non-cash
investing and financing activities: Common stock and unit dividends
declared, but not paid $ 4,916 $ 3,454 Financing
costs in accounts payable $ — $ 178 Capital
improvements in accounts payable $ 487 $ 1,543
SILVER BAY REALTY TRUST CORP.
PORTFOLIO SUMMARY OF SINGLE-FAMILY
PROPERTIES
AS OF MARCH 31, 2016
Market
Number of
Properties (1)
Aggregate Cost Basis(2)
(in thousands)
Average Cost Basis
Per Property
Average
Age (in years)(3)
Average Square
Footage
Atlanta 2,712 $ 317,249 $ 116,980 22.0 1,801 Phoenix 1,424 203,182
142,684 27.2 1,636 Tampa 1,113 159,955 143,715 27.6 1,623 Charlotte
(4) 685 85,004 124,093 15.7 1,645 Dallas 503 67,630 134,453 24.0
1,619 Orlando 493 66,036 133,947 28.6 1,500 Jacksonville 452 59,708
132,097 27.4 1,537 Southeast FL (5) 384 76,697 199,732 44.6 1,494
Northern CA (6) 382 72,831 190,657 47.4 1,399 Las Vegas 290 41,291
142,383 19.7 1,717 Columbus 284 33,161 116,764 38.6 1,414 Tucson
209 17,566 84,048 43.0 1,330 Southern CA (7) 50 7,984
159,680 46.8 1,375
Totals 8,981 $
1,208,294 $ 134,539 26.9 1,642
(1) Total properties exclude properties reflected as assets
held for sale on the Company's condensed consolidated balance
sheets and any properties previously acquired in purchases that
have been subsequently rescinded or vacated. (2) Aggregate cost
basis includes all capitalized costs, determined in accordance with
GAAP, incurred through March 31, 2016 for the acquisition,
stabilization, and significant post-stabilization renovation of
properties, including land, building, possession costs and
renovation costs. Aggregate cost basis includes $17.4 million in
capital improvements, incurred from the Company's formation through
March 31, 2016, made to properties that had been previously
renovated, but does not include accumulated depreciation. (3) As of
March 31, 2016, approximately 4% of the Company's properties were
less than 10 years old, 38% were between 10 and 20 years old, 19%
were between 20 and 30 years old, 19% were between 30 and 40 years
old, 10% were between 40 and 50 years old, and 10% were more than
50 years old. Average age is an annual calculation. (4) Charlotte
market includes properties in South Carolina due to its proximity
to Charlotte, North Carolina. (5) Southeast Florida market
currently consists of Miami-Dade, Broward and Palm Beach counties.
(6) Northern California market currently consists of Contra Costa,
Napa and Solano counties. (7) Southern California market currently
consists of Riverside and San Bernardino counties.
SILVER BAY REALTY TRUST CORP.
FINANCIAL AND LEASING STATUS OF
AGGREGATE PORTFOLIO
(AMOUNTS IN THOUSANDS EXCEPT PROPERTY
AND PER HOME DATA)
Three Months Ended
March 31, 2016 % of Revenue
2015 % of Revenue Total
revenue $ 31,136 100.0 % $ 22,252 100.0 % Property operating
expenses: Property operating and maintenance 5,884 18.9 % 4,357
19.6 % Real estate taxes 4,452 14.3 % 3,551 16.0 % Homeowners’
association fees 436 1.4 % 405 1.8 % Property management 2,771
8.9 % 2,147 9.6 % Total property operating expenses $
13,543 43.5 % $ 10,460 47.0 % Net operating income
(1) $ 17,593 56.5 % $ 11,876 53.4 % Quarterly turnover (2) 7.2 %
5.8 % Stabilized capital expenditures $ 2,379 $ 1,298 Stabilized
capital expenditure per home $ 265 $ 196 (1) Net
operating income ("NOI") is a non-GAAP financial measure the
Company believes, when considered with the financial statements
determined in accordance with GAAP, is helpful to investors in
understanding its performance as a REIT. Reconciliations of NOI to
net loss prepared in accordance with GAAP are provided in
Definitions and Reconciliations of Non-GAAP Financial Measures. (2)
Quarterly turnover percentage represents the number of properties
turned over in each respective period divided by the number of
properties in stabilized status as of each respective period-end.
Market
Number of
Properties
Properties
Leased
Properties
Vacant
Aggregate
Portfolio
Occupancy
Rate
Average
Monthly
Rent(3)
Atlanta 2,712 2,623 89 96.7% $ 1,072 Phoenix 1,424 1,404 20 98.6%
1,109 Tampa 1,113 1,070 43 96.1% 1,306 Charlotte 685 653 32 95.3%
1,072 Dallas 503 482 21 95.8% 1,304 Orlando 493 481 12 97.6% 1,170
Jacksonville 452 439 13 97.1% 1,144 Southeast FL 384 363 21 94.5%
1,669 Northern CA 382 380 2 99.5% 1,632 Las Vegas 290 287 3 99.0%
1,200 Columbus 284 273 11 96.1% 1,074 Tucson 209 203 6 97.1% 846
Southern CA 50 44 6 88.0% 1,198
Totals
8,981 8,702 279 96.9% $ 1,178 (3)
Average monthly rent for leased properties was calculated as
the average of the contracted monthly rent for all leased
properties as of March 31, 2016 and reflects rent concessions
amortized over the life of the related lease.
SILVER BAY REALTY TRUST CORP.
FINANCIAL AND LEASING STATUS OF
SAME-HOME PROPERTY PORTFOLIO
(AMOUNTS IN THOUSANDS EXCEPT PROPERTY
AND PER HOME DATA)
Three Months Ended
March 31, 2016 % of Revenue
2015 % of Revenue Same-Home(1)
total revenue $ 21,851 100.0% $ 20,742 100.0% Same-Home
property operating expenses: Property operating and maintenance
4,339 19.9% 3,845 18.5% Real estate taxes 3,175 14.5% 3,171 15.3%
Homeowners' association fees 341 1.6% 375 1.8% Property management
1,933 8.8% 2,012 9.7% Same-Home property operating
expenses 9,788 44.8% 9,403 45.3% Same-Home net
operating income (1) $ 12,063 55.2% $ 11,339 54.7%
Same-Home quarterly turnover (2) 6.3% 6.0% Same-Home capital
expenditures $ 1,449 $ 1,236 Same-Home capital expenditures per
home $ 242 $ 207 (1) The Company began today
reporting Same-Home metrics for the first quarter of 2016. The
Company defines Same-Home properties as those properties (1) that
it had stabilized and for which it had completed the initial
renovation as of January 1, 2015 and (2) that it held in operations
throughout the full periods presented in both 2015 and 2016.
Same-Home properties exclude properties classified as held for sale
and properties taken out of service as a result of a casualty loss.
The Company considers a property stabilized at the earlier of (1)
its first authorized occupancy or (2) 90 days after the renovations
for such property are complete regardless of whether the property
is leased. Properties acquired with in-place leases are considered
stabilized even though such properties require a future initial
renovation to meet the Company's standards and may have existing
residents who would not otherwise meet the resident screening
requirements. Same-Home net operating income ("Same-Home NOI") is a
non-GAAP financial measure the Company believes, when considered
with the financial statements determined in accordance with GAAP,
is helpful to investors in understanding its performance as a REIT.
Reconciliations of Same-Home NOI to net loss prepared in accordance
with GAAP are provided in Definitions and Reconciliations of
Non-GAAP Financial Measures. (2) Quarterly turnover
percentage represents the number of properties turned over in each
respective period divided by the number of properties in Same-Home
status as of each respective period-end.
Aggregate Occupancy
Average Monthly Rent (3)
Number of
Same-Home
Properties
March 31, 2016 March 31, 2015 March
31, 2016 March 31, 2015 Atlanta 1,054 98.0% 96.4%
$ 1,201 $ 1,159 Phoenix 1,424 98.6% 97.3% 1,109 1,073 Tampa 923
96.5% 95.6% 1,333 1,284 Charlotte 143 97.2% 86.7% 1,204 1,171
Dallas 379 95.5% 92.6% 1,312 1,281 Orlando 282 98.2% 98.9% 1,277
1,227 Jacksonville 301 98.3% 96.7% 1,127 1,106 Southeast FL 264
95.1% 94.7% 1,724 1,698 Northern CA 382 99.5% 97.9% 1,632 1,526 Las
Vegas 290 99.0% 98.6% 1,200 1,166 Columbus 284 96.1% 96.8% 1,074
1,047 Tucson 209 97.1% 96.2% 846 840 Southern CA 50 88.0%
100% 1,198 1,210
Totals 5,985 97.6% 96.3% $
1,238 $ 1,197 (3) Average monthly rent for
leased properties was calculated as the average of the contracted
monthly rent for all leased properties as of March 31, 2016 and
2015, respectively, and reflects rent concessions amortized over
the life of the related lease.
SILVER BAY REALTY TRUST
CORP.DEFINITIONS AND RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURES(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)
In addition to the Company's net loss which is presented in
accordance with GAAP, the Company also presents certain
supplemental non-GAAP performance measures. These measures are not
to be considered more relevant or accurate than the performance
measures presented in accordance with GAAP. In compliance with
applicable rules of the Securities and Exchange Commission ("SEC"),
the Company's non-GAAP measures are reconciled to net loss, the
most directly comparable GAAP performance measure. As with other
non-GAAP performance measures, neither the SEC nor any other
regulatory body has passed judgment on these non-GAAP performance
measures.
Net Operating Income and Same-Home Net Operating
Income
The Company defines net operating income ("NOI") as total
revenue less property operating and maintenance, real estate taxes,
homeowners’ association fees, and property management expenses. NOI
excludes depreciation and amortization, portfolio acquisition
expense, general and administrative expenses, share-based
compensation, severance and other, interest expense, net gain on
disposition of real estate, income tax expense, net and other
non-comparable items as applicable. The Company considers NOI to be
a meaningful financial measure when considered with the financial
statements determined in accordance with GAAP. The Company believes
NOI is helpful to investors in understanding the core performance
of its real estate operations.
The Company defines Same-Home properties as those properties (1)
that it had stabilized and for which it had completed the initial
renovation as of January 1, 2015 and (2) that it held in operations
throughout the full periods presented in both 2015 and 2016.
Same-Home properties exclude properties classified as held for sale
and properties taken out of service as a result of a casualty loss.
The Company considers a property stabilized at the earlier of (1)
its first authorized occupancy or (2) 90 days after the renovations
for such property are complete regardless of whether the property
is leased. Properties acquired with in-place leases are considered
stabilized even though such properties require a future initial
renovation to meet the Company's standards and may have existing
residents who would not otherwise meet the resident screening
requirements. The Company believes Same-Home NOI is a useful
measure of performance because the population of properties in this
analysis is consistent from period to period, thereby eliminating
the effects of changes in the composition of the portfolio.
The following is a reconciliation of NOI and Same-Home NOI to
net loss as determined in accordance with GAAP for the three months
ended March 31, 2016 and 2015 (amounts in thousands):
Three Months Ended March
31, 2016 2015 Net loss $
(3,589 ) $ (3,841 ) Depreciation and amortization 9,366 7,111
Portfolio acquisition expense — 755 General and administrative
3,853 3,984 Share-based compensation 572 497 Severance and other
1,667 — Interest expense 6,212 3,486 Net gain on disposition of
real estate (1,285 ) — Other expense (income) 330 (266 ) Income tax
expense, net 467 66 Property operating and maintenance add back:
Market ready costs prior to initial lease and other — 84
Net operating income 17,593 11,876 Less non-Same-Home Total
revenue (9,285 ) (1,510 ) Property operating expenses 3,755
973 Same-Home net operating income $ 12,063 $ 11,339
Net operating income as a percentage of total revenue
56.5 % 53.4 % Same-Home net operating income as a percentage of
Same-Home total revenue 55.2 % 54.7 %
Neither NOI nor Same-Home NOI should not be considered an
alternative to net loss or net cash flows from operating
activities, as determined in accordance with GAAP, as indications
of its performance or as measures of liquidity. Although the
Company uses these non-GAAP measures for comparability in assessing
its performance against other REITs, not all REITs compute these
non-GAAP measures in the same manner. Accordingly, there can be no
assurance that the basis for computing these non-GAAP measures is
comparable with that of other REITs.
Funds From Operations and Core Funds From Operations
Funds from operations ("FFO") is a non-GAAP financial measure
that the Company believes, when considered with the financial
statements determined in accordance with GAAP, is helpful to
investors in understanding its performance because it captures
features particular to real estate performance by recognizing that
real estate generally appreciates over time or maintains residual
value to a much greater extent than do other depreciable
assets. The National Association of Real Estate Investment
Trusts ("NAREIT") defines FFO as net income (loss), computed in
accordance with GAAP, excluding gains or losses from sales of, and
impairment losses recognized with respect to, depreciable property,
plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures are calculated on
the same basis to determine FFO.
Core funds from operations ("Core FFO") is a non-GAAP financial
measure that the Company uses as a supplemental measure of its
performance. The Company believes that Core FFO is further helpful
to investors as it provides a more consistent measurement of its
performance across reporting periods by removing the impact of
certain items that are not comparable from period to period. The
Company adjusts FFO for expensed acquisition fees and costs,
including those associated with the Portfolio Acquisition,
share-based compensation, income tax expense on the disposition of
real estate, and certain other non-cash or non-comparable costs to
arrive at Core FFO.
FFO and Core FFO should not be considered alternatives to net
income (loss) or net cash flows from operating activities, as
determined in accordance with GAAP, as indications of the Company's
performance or as measures of liquidity. These non-GAAP measures
are not necessarily indicative of cash available to fund future
cash needs. In addition, although the Company uses these non-GAAP
measures for comparability in assessing its performance against
other REITs, not all REITs compute these non-GAAP measures in the
same manner. Accordingly, there can be no assurance that the
Company's basis for computing these non-GAAP measures is comparable
with that of other REITs. This is due in part to the differences in
capitalization policies used by different companies and the
significant effect these capitalization policies have on FFO and
Core FFO. Real estate costs incurred in connection with real estate
operations which are accounted for as capital improvements are
added to the carrying value of the property and depreciated over
time, whereas real estate costs that are expenses are accounted for
as a current period expense. This impacts FFO and Core FFO
because costs that are accounted for as expenses reduce FFO and
Core FFO. Conversely, real estate costs associated with assets
that are capitalized and then subsequently depreciated are excluded
from the calculation of FFO and Core FFO.
FFO and Core FFO are calculated on a gross basis and, as such,
do not reflect adjustments for the noncontrolling interests -
Operating Partnership.
The following table sets forth a reconciliation of the Company's
net loss as determined in accordance with GAAP and its calculations
of FFO and Core FFO for the three months ended March 31, 2016
and 2015. Also presented is information regarding the
weighted-average number of shares of its common stock and common
units of the Operating Partnership outstanding used for the
computation of FFO and Core FFO per share (amounts in thousands,
except share and per share amounts):
Three Months Ended March
31, 2016 2015 Net loss $
(3,589 ) $ (3,841 ) Depreciation and amortization 9,366 7,111 Net
gain on disposition of real estate (1,285 ) — Other expense
(income) 59 (286 ) Funds from operations 4,551 2,984
Adjustments: Portfolio acquisition expense (1) — 755 Share-based
compensation 572 497 Severance and other 1,667 — Market ready costs
prior to initial lease and other — 84 Write-off of deferred
financing fees — 31 Amortization of discount on securitization loan
75 75 Income tax expense on disposition of real estate 350 — Other
expense (2) — 64 Core funds from operations $ 7,215
$ 4,490 FFO $ 4,551 $ 2,984 Preferred stock
distributions (25 ) (25 ) FFO available to common shares and units
$ 4,526 $ 2,959 Core FFO $ 7,215 $ 4,490
Preferred stock distributions (25 ) (25 ) Core FFO available to
common shares and units $ 7,190 $ 4,465
Weighted average common shares and units outstanding (3) 38,254,464
38,660,320 FFO per share $ 0.12 $ 0.08
Core FFO per share $ 0.19 $ 0.12 (1)
Includes a one-time expense for costs related to the Portfolio
Acquisition. (2) Non-comparable costs from prior periods. (3)
Represents the weighted average of common shares and common units
in the Operating Partnership outstanding for the periods presented.
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version on businesswire.com: http://www.businesswire.com/news/home/20160504006477/en/
Silver Bay Realty Trust Corp.Christine Battist, Chief Financial
Officer952-358-4400investors@silverbaymgmt.com
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