BRE Properties, Inc. (NYSE:BRE), a leading owner, operator and developer of high-quality apartment communities in targeted growth markets in California and Seattle, today reported Core Funds From Operations (Core FFO) of $0.61 per share for the quarter ended December 31, 2012, and $2.39 per share for the year ended December 31, 2012. The per share results reflect an increase of 7.0% and 8.6% compared to the fourth quarter and full year periods in 2011, respectively. Core FFO is used to facilitate comparisons of the Company’s earnings results and excludes certain non-core items that by their nature are not comparable when comparing periods or earnings performance between periods. All per share results are reported on a fully diluted basis.
Funds From Operations (FFO) on a per share basis were $0.61 per share for the fourth quarter ended December 31, 2012 and $2.19 per share for the year ended December 31, 2012. A reconciliation of FFO and Core FFO can be found in Exhibit C of the Company’s Supplemental Financial Information package.
Fourth Quarter, 2012 Highlights and 2013 Outlook
- Fourth quarter same-store revenues and net operating income (NOI) increased 5.6% and 6.2%, respectively, compared to the fourth quarter 2011. During the quarter, physical occupancy averaged 95.7%; annualized turnover was 55.5%; and average revenue per occupied home was $1,645.
- For the full year 2012, same-store revenues and net operating income (NOI) increased 5.5% and 6.4% over 2011, respectively.
- During the fourth quarter, BRE completed the sale of two San Diego apartment communities for a combined gross sales price of $77.0 million. For the full year 2012, the Company sold six communities, including three in which it owned joint venture interests, for aggregate net proceeds to the company of $115.1 million.
- During the fourth quarter, the Company completed construction of Lawrence Station, a 336-home community located in Sunnyvale, California. The project was completed on time and on budget at a total cost of approximately $110.0 million. Also in the fourth quarter, the Company commenced construction of Radius, a 264-unit luxury apartment community located in Redwood City, California, with a projected total cost of $98 million.
- 2013 Core FFO guidance announced in a range of $2.35 to $2.45 per share. Same-store revenue and NOI are expected to increase within the ranges of 3.50% to 4.75% and 3.40% to 5.55%, respectively.
“We finished 2012 on a strong note, producing solid results for the year,” commented Constance Moore, Chief Executive Officer of BRE Properties. “In addition, during the fourth quarter we completed $77 million of strategic dispositions; delivered our Lawrence Station development on time and on budget; and commenced construction of our Radius community in Redwood City, California. Our key initiatives as we enter 2013 remain unchanged: to build on our successful implementation of LRO last year and drive operating performance from our portfolio; and to successfully execute on our development program that is financed with proceeds from our capital recycling efforts through strategic dispositions. While our outlook reflects the impact of these expected dispositions, we believe this strategy preserves our balance sheet strength while improving our portfolio quality which will result in positioning BRE to generate sustainable sector-leading growth and achieve a premium valuation in the coming years.”