Silver Bay Realty Trust Corp. (NYSE: SBY) (the “Company” or
“Silver Bay”), a single-family rental real estate investment trust
("REIT"), today announced its operating and financial results for
the quarter ended June 30, 2016.
Highlights
- Total revenue of $31.5 million for the
second quarter of 2016, an increase of 4%, notwithstanding a
decrease of 350 properties in the aggregate portfolio, compared to
the second quarter of 2015
- Aggregate occupancy rate increased to
97.6% on portfolio of 8,911 single-family properties
- Achieved rental increases of 8.1% on
re-leases and 3.4% on renewals
- Net loss of $0.2 million, or $0.01 per
common share, for the second quarter of 2016, an improvement of 94%
compared to the second quarter of 2015
- Net operating income (as defined in
this release) of $18.1 million for the second quarter of 2016, an
increase of 8% compared to the second quarter of 2015
- Same-Home net operating income (as
defined in this release) increased 12% year-over-year, to $12.6
million, for the second quarter of 2016 compared to the second
quarter of 2015
- Core funds from operations (as defined
in this release) of $0.21 per share, an increase of 17% compared to
the second quarter of 2015
“A robust rental environment and our continued focus on
operational execution drove record revenue and cash flow generation
this quarter, including a 12% year-over-year increase in net
operating income in our Same-Home portfolio," said Thomas W. Brock,
Silver Bay’s Chief Executive Officer. “As we continue to refine our
processes and reallocate capital, we see room for additional
opportunities for meaningful improvements in cash flow generation
in the coming quarters.”
Financial Results
Silver Bay reported total revenue of $31.5 million for the
second quarter of 2016, a 4% increase, notwithstanding a decrease
of 350 properties in the aggregate portfolio, compared to total
revenue of $30.2 million for the second quarter of 2015. This
increase was primarily due to increases in the Company's rental
rates and occupancy rate. The Company owned 8,911 properties as of
June 30, 2016, compared to 9,261 properties as of
June 30, 2015. Net loss attributable to common stockholders
for the second quarter of 2016 was $0.2 million, or $0.01 per
common share, compared to net loss attributable to common
stockholders for the second quarter of 2015 of $3.7 million, or
$0.10 per common share.
The Company reported net operating income ("NOI") of $18.1
million for the second quarter of 2016, an 8% increase compared to
NOI of $16.8 million for the second quarter of 2015. Same-Home NOI
increased to $12.6 million for the second quarter of 2016, a 12%
increase compared to Same-Home NOI of $11.2 million for the second
quarter of 2015. Core funds from operations (“Core FFO”) for the
second quarter of 2016 was $7.8 million, or $0.21 per share, a 17%
increase on a per share basis compared to Core FFO for the second
quarter of 2015 of $6.9 million, or $0.18 per share. NOI, Same-Home
NOI and Core FFO are non-GAAP financial measures. Reconciliations
of net loss to NOI, Same-Home NOI and Core FFO are included in the
unaudited supplemental financial and operating data accompanying
this press release.
Portfolio, Financial and Operating Metrics Summary
The following table provides a summary of Silver Bay’s
portfolio, financial and operating metrics for the second quarter
of 2016 and 2015, respectively:
PORTFOLIO, FINANCIAL AND OPERATING
SUMMARY
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE
AND PER HOME)
Three Months Ended June 30, 2016
Three Months Ended June 30, 2015 (Unaudited)
(Unaudited) Net loss $ (222 ) $ (3,886 ) Net loss per share
attributable to common shares $ (0.01 ) $ (0.10 ) NOI $ 18,127 $
16,779 Core NOI Margin (1) 57.8 % 56.2 % Same-Home NOI $ 12,555 $
11,207 Same-Home Core NOI Margin 57.2 % 54.4 % Core FFO per share $
0.21 $ 0.18
As of June 30, 2016 As of June 30,
2015 Single-family properties owned: Aggregate portfolio 8,911
9,261 Same-Home portfolio 5,942 5,942 Occupancy rate: Aggregate
portfolio 97.6 % 94.7 % Same-Home portfolio 97.7 % 96.3 % Average
monthly rent: Aggregate portfolio $ 1,190 $ 1,149 Same-Home
portfolio $ 1,250 $ 1,207
Three Months Ended June
30, 2016 Three Months Ended June 30, 2015 Average
change in rent for re-leases: Aggregate portfolio 8.1 % 5.2 %
Same-Home portfolio 7.8 % 5.3 % Average change in rent for
renewals: Aggregate portfolio 3.4 % 3.4 % Same-Home portfolio 3.1 %
3.4 % Trailing twelve month turnover 29.6 % 28.3 % Retention rate
79.8 % 79.7 % (1) During the second quarter of 2016,
the Company introduced Core NOI Margin to conform with industry
practice. Previously, the Company reported NOI margin. The Core NOI
Margin reconciliation is included in the definitions and
reconciliations of financial and operating measures in the
unaudited supplemental financial and operating data section of this
release.
Aggregate Metrics
Silver Bay reported an aggregate occupancy rate of 97.6% as of
June 30, 2016, an increase from 94.7% in the second quarter of
2015. A summary of Silver Bay’s occupancy rates is included in the
unaudited supplemental financial and operating data accompanying
this press release.
Silver Bay reported an average monthly rent for the aggregate
portfolio of $1,190 as of June 30, 2016, compared to an
average monthly rent of $1,149 as of June 30, 2015. The
Company experienced re-lease rate increases of 8.1% and renewal
rate increases of 3.4% during the second quarter of 2016.
Silver Bay's trailing twelve-month turnover increased 130 basis
points to 29.6% as of June 30, 2016 from 28.3% as of
June 30, 2015 and its retention rate increased 10 basis points
to 79.8% during the second quarter of 2016 from 79.7% in the second
quarter of 2015.
Same-Home Metrics
Same-Home NOI grew 12%, or $1.3 million, to $12.6 million and
Same-Home Core NOI margin improved 280 basis points to 57.2%
compared to the same period a year ago. This increase was
primarily due to revenue growth resulting from higher occupancy and
rental rate growth in addition to a slight decrease in Same-Home
property operating expenses. Same-Home average monthly rent
was $1,250 as of June 30, 2016, compared to an average monthly
rent of $1,207 as of June 30, 2015. Occupancy increased on the
Same-Home portfolio by 140 basis points to 97.7% and average
monthly rent increased 3.6% to $1,250, each as of June 30,
2016. Additional detail on the Company's Same-Home portfolio is
included in the unaudited supplemental financial and operating data
accompanying this press release.
Investment Activity
During the second quarter of 2016, the Company sold 62
single-family homes for total gross proceeds of $10.1 million. Net
gain for these sales totaled $2.5 million.
Share Repurchase Plan
During the second quarter of 2016, the Company repurchased and
retired 230,979 shares under the plan for a total cost of $3.4
million at an average purchase price of $14.78 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
June 30, 2016. The dividend was paid July 15, 2016 to
common stockholders of record at the close of business on
July 1, 2016.
Liquidity and Capital Resources
The Company's liquidity and capital resources as of
June 30, 2016 consisted of cash of $31.6 million, escrow
deposits of $21.3 million and $71.9 million in borrowing capacity
under its revolving credit facility.
Conference Call
Silver Bay will host a conference call on August 4, 2016 at
10:00 a.m. EDT to discuss second 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
August 4, 2016 through 9:00 a.m. EDT on September 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 10087645. The call will
also be archived on the Company's website in the Investor Relations
section under the Events Calendar link.
About 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 REIT for U.S. federal tax purposes.
Notice Regarding Non-GAAP Financial Measures
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 further set
forth in the definitions and reconciliations of financial and
operating measures included in the supplemental financial and
operating data. As with other non-GAAP performance measures,
neither the SEC nor any other regulatory body has passed judgment
on these non-GAAP performance measures. NOI, Core NOI Margin, FFO
and Core FFO are non-GAAP financial measures 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.
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: 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 time frames, 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 and acquisitions; 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 call 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, international, 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 the Company's 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 the Company's
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; 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) June 30, 2016
(Unaudited)
December 31, 2015 Assets Investments in real
estate: Land and land improvements $ 216,964 $ 220,110 Building and
improvements 984,596 989,574 1,201,560 1,209,684
Accumulated depreciation (91,686 ) (74,907 ) Investments in real
estate, net 1,109,874 1,134,777 Assets held for sale 12,460 11,184
Cash 31,647 29,028 Escrow deposits 21,345 15,472 Resident security
deposits 12,843 12,521 Other assets 9,237 13,298
Total assets $ 1,197,406 $ 1,216,280
Liabilities and Equity Liabilities: Revolving credit
facility $ 328,077 $ 326,472 Securitization loan, net 296,751
295,741 Accounts payable and accrued expenses 19,847 16,752
Resident prepaid rent and security deposits 14,476 14,462
Total liabilities 659,151 653,427
10% cumulative redeemable preferred stock
at liquidation value, $0.01 par; 50,000,000shares authorized, 1,000
shares issued and outstanding
1,000 1,000
Equity: Stockholders’ equity:
Common stock $0.01 par; 450,000,000 shares
authorized; 35,385,879 and 36,063,187,respectively, shares issued
and outstanding
352 359 Additional paid-in capital 642,219 651,987 Accumulated
other comprehensive loss (2,170 ) (1,613 ) Cumulative deficit
(135,016 ) (121,620 ) Total stockholders’ equity 505,385 529,113
Noncontrolling interests - Operating Partnership 31,870
32,740
Total equity 537,255 561,853
Total liabilities and equity $ 1,197,406 $ 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 June 30, Six Months
Ended June 30, 2016 2015
2016 2015 Revenue: Rental income $
30,721 $ 29,562 $ 61,145 $ 51,265 Other income 767 622
1,479 1,171 Total revenue 31,488 30,184 62,624
52,436
Expenses: Property operating and maintenance 5,729
5,593 11,613 9,950 Real estate taxes 4,478 4,395 8,930 7,946
Homeowners’ association fees 412 548 848 953 Property management
2,742 2,948 5,513 5,095 Depreciation and amortization 9,329 8,895
18,695 16,006 Portfolio acquisition expense — 1,225 — 1,980 General
and administrative 3,737 4,015 7,590 7,999 Share-based compensation
776 680 1,348 1,177 Severance and other — — 1,667 — Interest
expense 6,292 5,862 12,504 9,348 Total
expenses 33,495 34,161 68,708 60,454
Loss before other income, income taxes and non-controlling
interests (2,007 ) (3,977 ) (6,084 ) (8,018 )
Other
income: Net gain on disposition of real estate 2,456 232 3,741
232 Other (expense) income (460 ) (108 ) (790 ) 158 Total
other income 1,996 124 2,951 390
Loss before income taxes and non-controlling interests (11 )
(3,853 ) (3,133 ) (7,628 ) Income tax expense, net (211 ) (33 )
(678 ) (99 )
Net loss (222 ) (3,886 ) (3,811 ) (7,727 ) Net
loss attributable to noncontrolling interests - Operating
Partnership 13 225 223 447
Net loss
attributable to controlling interests (209 ) (3,661 ) (3,588 )
(7,280 ) Preferred stock distributions (25 ) (25 ) (50 ) (50 )
Net loss attributable to common stockholders $ (234 ) $
(3,686 ) $ (3,638 ) $ (7,330 )
Loss per share - basic and
diluted: Net loss attributable to common shares $ (0.01 ) $
(0.10 ) $ (0.10 ) $ (0.20 ) Weighted average common shares
outstanding 35,446,246 36,275,557 35,734,600
36,352,144
Comprehensive Loss: Net loss $ (222
) $ (3,886 ) $ (3,811 ) $ (7,727 )
Other comprehensive loss:
Change in fair value of interest rate cap agreements (164 ) (430 )
(638 ) (489 ) Losses reclassified into earnings from other
comprehensive loss 57 — 81 — Other
comprehensive loss (107 ) (430 ) (557 ) (489 )
Comprehensive
loss (329 ) (4,316 ) (4,368 ) (8,216 ) Comprehensive loss
attributable to noncontrolling interests - Operating Partnership 21
225 259 447
Comprehensive loss
attributable to controlling interests $ (308 ) $ (4,091 ) $
(4,109 ) $ (7,769 )
SILVER
BAY REALTY TRUST CORP. CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2016
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA) (UNAUDITED)
Common Stock Accumulated
Noncontrolling Additional Other Total
Interests - Par Value Paid-In
Comprehensive Cumulative Stockholders ’
Operating Total Shares Amount
Capital Loss Deficit Equity
Partnership 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 134,045 1 1,300 — —
1,301 — 1,301 Repurchase and retirement of common stock (811,353 )
(8 ) (11,715 ) — — (11,723 ) — (11,723 ) Dividends declared — — — —
(9,808 ) (9,808 ) — (9,808 ) Net loss — — — — (3,588 ) (3,588 )
(223 ) (3,811 ) Change in fair value of interest rate cap
agreements — — — (638 ) — (638 ) — (638 ) Losses reclassified into
earnings from other comprehensive loss — — — 81 — 81 — 81
Adjustment to noncontrolling interests - Operating Partnership —
— 647 — — 647 (647 ) —
Balance at June 30, 2016 35,385,879 $ 352
$ 642,219 $ (2,170 ) $ (135,016 ) $ 505,385 $
31,870 $ 537,255
SILVER BAY REALTY
TRUST CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (AMOUNTS IN THOUSANDS) (UNAUDITED)
Six Months Ended June 30, 2016 2015
Cash Flows From Operating Activities: Net loss $ (3,811 ) $ (7,727
) Adjustments to reconcile net loss to net cash provided by
operating activities: Depreciation and amortization 18,695 16,006
Non-cash share-based compensation 1,301 1,133 Losses reclassified
into earnings from other comprehensive loss 81 — Amortization and
write-off of deferred financing costs 2,301 2,174 Amortization of
discount on securitization loan 150 150 Net gain on disposition of
real estate (3,741 ) (232 ) Other 934 617 Net change in assets and
liabilities: Increase in escrow cash for operating activities and
debt reserves (5,891 ) (5,165 ) Decrease (increase) in other assets
341 (2,347 ) Increase in accounts payable, accrued expenses, and
prepaid rent 3,424 5,830 Net cash provided by
operating activities 13,784 10,439 Cash Flows From
Investing Activities: Purchase of investments in real estate —
(270,302 ) Capital improvements of investments in real estate
(8,298 ) (14,793 ) Decrease in escrow cash for investing activities
18 822 Proceeds from disposition of real estate 17,450 2,707 Other
— (43 ) Net cash provided by (used in) investing activities
9,170 (281,609 ) Cash Flows From Financing Activities:
Payments on securitization loan (287 ) (520 ) Proceeds from
revolving credit facility 7,732 281,963 Payments on revolving
credit facility (6,127 ) — Deferred financing costs paid (9 )
(5,762 ) Purchase of interest rate cap agreements — (2,250 )
Repurchase and retirement of common stock (11,723 ) (12,326 )
Dividends paid (9,921 ) (5,863 ) Net cash (used in) provided by
financing activities (20,335 ) 255,242 Net change in cash
2,619 (15,928 ) Cash at beginning of period 29,028 49,854
Cash at end of period $ 31,647 $ 33,926
Supplemental disclosure of cash flow information: Decrease in fair
value of interest rate cap agreements $ 638 $ 489
Non-cash investing and financing activities: Common stock and unit
dividends declared, but not paid $ 4,868 $ 4,572
Capital improvements in accounts payable $ 501 $ 1,484
SILVER BAY
REALTY TRUST CORP. PORTFOLIO SUMMARY OF SINGLE-FAMILY
PROPERTIES AS OF JUNE 30, 2016 Market
Number of Properties
Aggregate Investment in Real
Estate (in thousands)
Average Investment in Real
Estate Per Property
Average Age (in
years)(1)
Average Square Footage
Atlanta 2,697 $ 317,820 $ 117,842 21.9 1,803 Phoenix
1,424 203,508 142,913 27.2 1,636 Tampa 1,112 160,355 144,204 27.6
1,623 Charlotte (2) 684 85,196 124,556 15.6 1,646 Dallas 503 67,789
134,769 24.0 1,619 Orlando 490 66,036 134,767 28.5 1,500
Jacksonville 451 59,613 132,180 27.4 1,536 Northern CA (3) 382
73,074 191,293 47.4 1,399 Southeast FL (4) 362 72,297 199,715 44.7
1,495 Las Vegas 290 41,325 142,500 19.7 1,717 Columbus 284 33,199
116,898 38.6 1,414 Tucson 209 17,608 84,249 43.0 1,330 Southern CA
(5) 23 3,740 162,609 44.8 1,373
Totals 8,911 $
1,201,560 $ 134,840 26.8 1,644 (1) As of June
30, 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. (2) Charlotte
market includes properties in South Carolina due to its proximity
to Charlotte, North Carolina. (3) Northern California market
currently consists of Contra Costa, Napa and Solano counties. (4)
Southeast Florida market currently consists of Miami-Dade, Broward
and Palm Beach counties. (5) Southern California market currently
consists of Riverside and San Bernardino counties.
SILVER BAY REALTY TRUST CORP. FINANCIAL AND
OPERATING RESULTS OF AGGREGATE PORTFOLIO (AMOUNTS IN
THOUSANDS EXCEPT PROPERTY AND PER HOME DATA)
The following table summarizes the
Company's aggregate portfolio financial results for the three and
six months endedJune 30, 2016 and 2015:
Three Months Ended June 30, Six Months Ended June
30, 2016 2015 2016
2015 Total revenue $ 31,488 $ 30,184 $ 62,624 $ 52,436
Property operating expenses: Property operating and maintenance
5,729 5,593 11,613 9,950 Real estate taxes 4,478 4,395 8,930 7,946
Homeowners’ association fees 412 548 848 953 Property management
2,742 2,948 5,513 5,095 Total property
operating expenses $ 13,361 $ 13,484 $ 26,904
$ 23,944 NOI $ 18,127 $ 16,779 $ 35,720 $ 28,655 Core NOI
Margin 57.8 % 56.2 % 57.4 % 55.2 % Turnover 7.6 % 7.0 % 14.8 % 12.8
% Stabilized capital expenditures $ 1,808 $ 1,969 $ 4,187 $ 3,267
Stabilized capital expenditure per home $ 203 $ 214 $ 468 $ 410
The following table summarizes the
occupancy status of the Company's properties as of June 30,
2016:
Market Number
ofProperties PropertiesOccupied
Properties Vacant
AggregatePortfolio Occupancy Rate
AverageMonthly Rent Atlanta 2,697 2,638 59
97.8% $ 1,086 Phoenix 1,424 1,394 30 97.9% 1,118 Tampa 1,112
1,086 26 97.7% 1,318 Charlotte 684 663 21 96.9% 1,089 Dallas 503
486 17 96.6% 1,318 Orlando 490 481 9 98.2% 1,187 Jacksonville 451
441 10 97.8% 1,155 Northern CA 382 377 5 98.7% 1,658 Southeast FL
362 354 8 97.8% 1,682 Las Vegas 290 281 9 96.9% 1,209 Columbus 284
274 10 96.5% 1,076 Tucson 209 203 6 97.1% 852 Southern CA 23 22 1
95.7% 1,196
Totals 8,911 8,700 211 97.6% $ 1,190
SILVER BAY REALTY TRUST CORP.
FINANCIAL AND OPERATING RESULTS OF SAME-HOME PORTFOLIO
(AMOUNTS IN THOUSANDS EXCEPT PROPERTY AND PER HOME DATA)
The following table summarizes the
Company's Same-Home portfolio financial results of 5,942 properties
for the three and sixmonths ended June 30, 2016 and 2015:
Three Months Ended June 30, Six Months Ended June
30, 2016 2015 2016
2015 Same-Home total revenue $ 22,065 $ 20,852 $ 43,737 $
41,420 Same-Home property operating expenses: Property operating
and maintenance 4,091 4,102 8,367 7,888 Real estate taxes 3,173
3,053 6,321 6,197 Homeowners' association fees 325 449 664 819
Property management 1,921 2,041 3,836 4,036
Same-Home property operating expenses 9,510 9,645
19,188 18,940 Same-Home NOI $ 12,555 $
11,207 $ 24,549 $ 22,480 Same-Home Core NOI
Margin 57.2 % 54.4 % 56.6 % 54.9 %
The following table summarizes the
Company's Same-Home portfolio financial results, by quarter, for
the previous fivequarters ended June 30, 2016:
Three Months Ended June 30, March
31,
December 31,
September 30,
June 30, 2016 2016
2015
2015
2015 Same-Home total revenue $ 22,065 $ 21,672 $ 21,181 $
21,103 $ 20,852 Same-Home property operating expenses: Property
operating and maintenance 4,091 4,276 4,251 4,751 4,102 Real estate
taxes 3,173 3,148 2,865 2,564 3,053 Homeowners' association fees
325 339 355 401 449 Property management 1,921 1,915
1,934 2,146 2,041 Same-Home property operating
expenses 9,510 9,678 9,405 9,862 9,645
Same-Home NOI $ 12,555 $ 11,994 $ 11,776
$ 11,241 $ 11,207 Same-Home Core NOI Margin
57.2 % 55.9 % 56.3 % 54.0 % 54.4 % Same-Home turnover 7.5 % 6.4 %
7.2 % 8.7 % 8.3 % Days from move-out to move-in 38 53 55 49 56
Same-Home capital expenditures $ 1,664 $ 1,445 $ 1,831 $ 1,587 $
1,311 Same-Home capital expenditures per home $ 280 $ 243 $ 308 $
267 $ 221
SILVER BAY REALTY TRUST
CORP. FINANCIAL AND OPERATING RESULTS OF SAME-HOME
PORTFOLIO (AMOUNTS IN THOUSANDS EXCEPT PROPERTY AND PER HOME
DATA)
The following table summarizes the
occupancy status of the Company's Same-Home portfolio as of June
30, 2016 and 2015:
Aggregate Occupancy Average Monthly Rent
Number of Same-Home
Properties
June 30, 2016 June 30, 2015 June 30,
2016 June 30, 2015 % change Atlanta
1,052 98.3 % 95.0 % $ 1,218 $ 1,173 3.8 % Phoenix 1,424 97.9
% 97.3 % 1,118 1,085 3.0 % Tampa 923 97.5 % 95.4 % 1,346 1,306 3.1
% Charlotte 143 94.4 % 90.9 % 1,211 1,171 3.4 % Dallas 379 96.8 %
97.1 % 1,326 1,285 3.2 % Orlando 282 98.2 % 98.6 % 1,291 1,241 4.0
% Jacksonville 301 98.0 % 98.0 % 1,135 1,109 2.3 % Northern CA 382
98.7 % 97.4 % 1,658 1,546 7.2 % Southeast FL 250 98.0 % 94.0 %
1,729 1,686 2.6 % Las Vegas 290 96.9 % 97.6 % 1,209 1,170 3.3 %
Columbus 284 96.5 % 96.1 % 1,076 1,057 1.8 % Tucson 209 97.1 % 96.2
% 852 843 1.1 % Southern CA 23 95.7 % 100.0 % 1,196 1,200
(0.3 )%
Totals 5,942 97.7 % 96.3 % $ 1,250 $ 1,207
3.6 %
SILVER BAY REALTY TRUST
CORP.DEFINITIONS AND RECONCILIATIONS OF FINANCIAL AND
OPERATING MEASURES(AMOUNTS IN THOUSANDS EXCEPT SHARE
DATA)
Aggregate Investment in Real Estate. Aggregate investment
in real estate includes all capitalized costs, determined in
accordance with GAAP, incurred through June 30, 2016 for the
acquisition, stabilization, and significant post-stabilization
renovation of properties, including land, building, possession
costs and renovation costs. Aggregate investment in real
estate includes $18.7 million in capital improvements, incurred
from the Company's formation through June 30, 2016, made to
properties that had been previously renovated, but does not include
accumulated depreciation.
Average Monthly Rent. Average monthly rent is calculated
as the average of the contracted monthly rent for occupied
properties for an identified population as of period end and
reflects rent concessions amortized over the life of the related
lease.
Core Net Operating Income Margin ("Core NOI Margin").
During the second quarter of 2016, the Company introduced Core NOI
Margin to conform with industry practice. Previously, the Company
reported NOI margin. Core NOI Margin is calculated by dividing net
operating income by core revenue, which eliminates the impact of
bad debt expense from both total revenue and property operating
expenses.
Core Revenue. Core revenue is calculated by subtracting
bad debt expense from total revenue.
Days from Move-Out to Move-In. Days from move-out to
move-in represents the number of days from past resident move out
date until a new resident moves into the same property.
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, severance and other, 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 and six months ended
June 30, 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, Six Months
Ended June 30, 2016 2015 2016
2015 Net loss $ (222 ) $ (3,886 ) $ (3,811 ) $ (7,727
) Depreciation and amortization
9,329
8,895
18,695
16,006
Net gain on disposition of real estate
(2,456
)
(232
)
(3,741
)
(232
) Other expense (income)
190
34
249
(252
) Funds from operations
6,841
4,811
11,392
7,795
Adjustments: Portfolio acquisition expense (1)
—
1,225
—
1,980
Share-based compensation
776
680
1,348
1,177
Severance and other
—
—
1,667
—
Market ready costs prior to initial lease and other
—
79
—
163
Write-off of deferred financing fees
—
—
—
31
Amortization of discount on securitization loan
75
75
150
150
Income tax expense on disposition of real estate
132
—
482
—
Other expense (2)
—
49
—
113
Core funds from operations $ 7,824 $ 6,919 $
15,039 $ 11,409 FFO $ 6,841 $ 4,811 $ 11,392 $
7,795 Preferred stock distributions
(25
)
(25
)
(50
)
(50
) FFO available to common shares and units $ 6,816 $ 4,786
$ 11,342 $ 7,745 Core FFO $ 7,824 $
6,919 $ 15,039 $ 11,409 Preferred stock distributions
(25
)
(25
)
(50
)
(50
) Core FFO available to common shares and units $ 7,799 $
6,894 $ 14,989 $ 11,359 Weighted
average common shares and units outstanding (3)(4)
37,687,602
38,507,068
37,971,033
38,583,655
FFO per share $ 0.18 $ 0.12 $ 0.30 $
0.20 Core FFO per share $ 0.21 $ 0.18 $ 0.39
$ 0.29 (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. (4) Includes the effect of
dilutive securities attributable to certain stock based awards
granted during the three and six months ended June 30, 2016.
FFO and Core FFO Per Share. FFO and Core FFO shares
represents the weighted average of common shares and common units
in the Operating Partnership for the periods presented and the
effect of dilutive securities attributable to certain
performance-based stock awards during periods when the performance
conditions required under such performance awards are on pace to be
achieved.
Generally Accepted Accounting Principles ("GAAP"). GAAP
is defined in accordance with accounting principles generally
accepted in the United States.
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 without regard to items excluded from
the calculation of such measure, which can vary substantially from
company to company depending upon accounting methods, book value of
assets, capital structure and the method by which assets were
acquired, among other factors.
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 six months
ended June 30, 2016 and 2015 (amounts in thousands):
Six Months
Ended June 30, 2016 2015 Net loss $ (3,811
) $ (7,727 ) Depreciation and amortization 18,695 16,006 Portfolio
acquisition expense — 1,980 General and administrative 7,590 7,999
Share-based compensation 1,348 1,177 Severance and other 1,667 —
Interest expense 12,504 9,348 Net gain on disposition of real
estate (3,741 ) (232 ) Other expense (income) 790 (158 ) Income tax
expense, net 678 99 Property operating and maintenance add back:
Market ready costs prior to initial lease and other — 163
NOI 35,720 28,655 Less non-Same-Home Total revenue (18,887 )
(11,016 ) Property operating expenses 7,716 4,841
Same-Home NOI $ 24,549 $ 22,480 Calculation of
aggregate Core NOI Margin Total revenue $ 62,624 $ 52,436 Less bad
debt expense (405 ) (571 ) Core Revenue $ 62,219 $ 51,865
Core NOI Margin 57.4 % 55.2 % Calculation of
Same-Home Core NOI Margin Same-Home total revenue $ 43,737 $ 41,420
Less Same-Home bad debt expense (327 ) (458 ) Same-Home Core
Revenue $ 43,410 $ 40,962 Same-Home Core NOI Margin
56.6 % 54.9 %
The following is a reconciliation of NOI and Same-Home NOI to
net loss as determined in accordance with GAAP, by quarter, for the
trailing five quarters ended June 30, 2016 (amounts in
thousands):
Three Months Ended June 30, March
31, December September
June 30, 2016 2016 31, 2015 30,
2015 2015 Net loss $ (222 ) $ (3,589 ) $ (798 ) $ (1,427
) $ (3,886 ) Depreciation and amortization 9,329 9,366 10,115 9,068
8,895 Portfolio acquisition expense — — 18 66 1,225 General and
administrative 3,737 3,853 3,991 3,925 4,015 Share-based
compensation 776 572 718 718 680 Severance and other — 1,667 — — —
Interest expense 6,292 6,212 5,968 5,959 5,862 Net gain on
disposition of real estate (2,456 ) (1,285 ) (1,724 ) (2,089 ) (232
) Ineffectiveness of interest rate cap agreements — — 51 — — Other
expense 460 330 319 223 108 Income tax expense, net 211 467 (905 )
48 33 Property operating and maintenance add back: Market ready
costs prior to initial lease and other — — — 6
79 NOI 18,127 17,593 17,753 16,497 16,779 Less
non-Same-Home Total revenue (9,423 ) (9,464 ) (9,460 ) (9,514 )
(9,332 ) Property operating expenses 3,851 3,865
3,483 4,258 3,760 Same-Home NOI $ 12,555
$ 11,994 $ 11,776 $ 11,241 $ 11,207
Calculation of aggregate Core NOI Margin Total
revenue $ 31,488 $ 31,136 $ 30,641 $ 30,617 $ 30,184 Less bad debt
expense (132 ) (273 ) (405 ) (450 ) (344 ) Core Revenue $ 31,356
$ 30,863 $ 30,236 $ 30,167 $ 29,840
Core NOI Margin 57.8 % 57.0 % 58.7 % 54.7 % 56.2 %
Calculation of Same-Home Core NOI Margin Same-Home total revenue $
22,065 $ 21,672 $ 21,181 $ 21,103 $ 20,852 Less Same-Home bad debt
expense (123 ) (204 ) (277 ) (270 ) (237 ) Same-Home Core Revenue $
21,942 $ 21,468 $ 20,904 $ 20,833 $
20,615 Same-Home Core NOI Margin 57.2 % 55.9 % 56.3 % 54.0 %
54.4 %
Neither NOI nor Same-Home NOI should 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.
Occupancy. Occupancy is defined as the number of occupied
properties for an identified population as of the last day of the
period divided by the comparative property set.
Portfolio Acquisition. In April 2015, the Company
acquired a portfolio of 2,461 properties from The American Home
Real Estate Investment Trust, Inc. The Portfolio Acquisition was
substantially completed on April 1, 2015 with an aggregate purchase
price of $263.0 million. The properties acquired in the Portfolio
Acquisition are primarily located in Atlanta, GA, Charlotte, NC,
Tampa, FL and Orlando, FL.
Retention Rate. Retention rate is defined as the number
of leases renewed during a specified period, including
month-to-month leases, for an identified group of properties,
divided by the total number of scheduled move-outs during the
period.
Same-Home Properties. 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.
Stabilized Property. 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.
Total Properties. 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.
Turnover Rate. Turnover rate is defined as the number of
instances that a property becomes un-occupied over a specific
period of time, divided by the number of properties in stabilized
status in an identified population.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160803006402/en/
Silver Bay Realty Trust Corp.Christine Battist,
952-358-4400Chief Financial Officerinvestors@silverbaymgmt.com
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