Rental revenues and operating expense reimbursements are primarily comprised of revenue earned on the portfolio of 44 properties owned by Gramercy Realty as of June 30, 2012.
For the second quarter 2012, Gramercy Realty’s rental revenues totaled approximately $0.6 million, as compared to prior quarter’s rental revenues of approximately $0.6 million, inclusive of reclassification adjustments for discontinued operations.
In addition, Gramercy Realty earned fee revenues of $9.6 million in property management, asset management and administrative fees pursuant to the Management Agreement with an affiliate of KBS for the KBS Portfolio. Related operating expenses for the owned and managed portfolio aggregated approximately $6.4 million as compared to prior quarter’s operating expenses of approximately $5.9 million, inclusive of reclassification adjustments for discontinued operations.
During the second quarter of 2012, Gramercy Realty sold 11 buildings in its owned portfolio for $2.0 million generating approximately $0.2 million in incremental unrestricted corporate cash. The operating results for the buildings and the gain on sale of $0.1 million have been recorded in discontinued operations in the financial data in this press release. Gramercy Realty made no acquisitions during the second quarter of 2012.
Beginning with the third quarter of 2008, the Company’s Board of Directors elected not to pay a dividend on the Company’s common stock. The Company’s Board of Directors also elected not to pay the Series A preferred stock dividend of $0.50781 per share beginning with the fourth quarter of 2008. In the early stages of the implementation of the Company’s new business strategy, the Company will seek to maximize capital available for investment and, therefore, expects to continue its policy of not paying dividends on its preferred or common stock. The Company expects, however, that as the new business strategy is implemented and sustainable cash flows grow, the Company will re-evaluate its dividend policy with the intention of resuming dividends to stockholders. In accordance with the provisions of the Company’s charter, the Company may not pay any dividends on its common stock until all accrued dividends and the dividend for the then current quarter on the Series A preferred stock are paid in full.