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Colonial Properties Trust Reports Results For Second Quarter 2012

During the quarter, the company started construction on two wholly owned apartment communities: Colonial Grand at Randal Park, a $57.0 million development with 462 units in Orlando, Florida, and Colonial Grand at Ayrsley (Phase II), a $9.1 million development with 81 units in Charlotte, North Carolina. Colonial Grand at Randal Park is scheduled for delivery in the first quarter 2014 and project stabilization is expected in the first quarter 2015. Colonial Grand at Ayrsley (Phase II) is scheduled for delivery in the second quarter 2013 and projected stabilization is expected in the second quarter 2014.

Financing Activity

In May 2012, the company’s operating partnership, Colonial Realty Limited Partnership entered into a $150 million unsecured term loan with a maturity date of May 2017 and an interest rate of LIBOR plus a margin ranging from 1.10 percent to 2.05 percent, based on credit ratings on the company’s unsecured debt from time to time, with an initial margin of 1.60 percent. The company executed two interest rate swaps that fixed the rate of this unsecured term loan through maturity at an all-in initial fixed interest rate of 2.71 percent, based on the initial margin of 1.60 percent. The proceeds from the loan were used to pay down a portion of the outstanding balance under the company’s unsecured credit facility.

Quarterly Dividend on Common Shares

On July 25, 2012, the Board of Trustees declared a quarterly cash dividend on common shares for the third quarter 2012 of $0.18 per common share. The dividend is payable August 13, 2012, to shareholders of record as of August 6, 2012, representing an ex-dividend date of August 2, 2012.

2012 EPS and FFO per Share Guidance

Based on the second quarter results and transactions, the company has updated its diluted EPS and FFO per share guidance range, certain assumptions and the timing of certain transactions for the full-year 2012. These projections are set forth and reconciled below:

 
Full-Year

2012 Range

Low – High
Diluted EPS $0.03 – $0.17
Plus: Real Estate Depreciation & Amortization 1.45 – 1.45
Less: Gain on Sale of Operating Properties (0.25) – (0.35)
Total Diluted FFO per share $1.23 – $1.27
 

Following are the assumptions reflected in the company’s full-year 2012 guidance:

  • Multifamily same-property net operating income: growth of 6.25 to 7.75 percent.
    • Revenue: Increase of 4.75 to 5.50 percent
    • Expense: Increase of 2.25 to 3.00 percent
  • Development spending of $110 million to $130 million.
  • Acquisitions of $100 million to $150 million.
  • Dispositions of $100 million to $150 million.
  • Land and for-sale residential property dispositions of $5 million to $10 million.
  • Corporate G&A expenses of $23 million to $24 million.

The company’s guidance range reflects the existence of volatile economic conditions, and is based on a number of assumptions, many of which are outside the company’s control and all of which are subject to change. The company’s guidance may change if actual results vary from these assumptions.

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