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Silver Bay Realty Trust Corp. Reports Fourth Quarter 2012 Financial Results

Stocks in this article: SBY

Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Silver Bay does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Additional information concerning these and other risk factors is contained in Silver Bay’s most recent filings with the Securities and Exchange Commission. 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 Internet site at www.sec.gov or by directing requests to: Silver Bay Realty Trust Corp., Attn: Investor Relations, 601 Carlson Parkway, Suite 250, Minnetonka, MN 55305, telephone (952) 358-4400.

 

SILVER BAY REALTY TRUST CORP.

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 2012

(amounts in thousands except share data)

 
Assets
Investments in real estate:     (unaudited)
Land $ 82,310
Building and improvements   338,252  
420,562
Accumulated depreciation   (1,869 )
Investments in real estate, net   418,693  
 
Cash and cash equivalents 228,139
Escrow deposits 19,727
Resident security deposits 2,266
In-place lease and deferred lease costs, net 2,363
Other assets   6,114  
Total Assets $ 677,302  
 
Liabilities and Equity
Liabilities:
Accounts payable and accrued property expenses $ 4,550
Resident prepaid rent and security deposits 2,713
Amounts due to the manager and affiliates 3,071
Amounts due previous owners   6,555  
Total liabilities   16,889  
 
10% cumulative redeemable preferred stock, $.01 par; 50,000,000 authorized, 1,000 issued and outstanding 1,000
 
Equity:
Stockholders' Equity:
Common stock $.01 par; 450,000,000 shares authorized; 37,328,213 shares issued and outstanding 372
Additional paid-in capital 664,146
Cumulative deficit   (5,609 )
Total Stockholders' Equity 658,909
Noncontrolling interests - Operating Partnership   504  
Total Equity   659,413  
Total Liabilities and Equity $ 677,302  
 
       

SILVER BAY REALTY TRUST CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2012

(amounts in thousands except share data)

 
Three Months Ended
December 31, 2012 Year Ended 2012
(unaudited) (unaudited)
Revenue:
Rental income

$

2,757

$

3,584
Other income 32   32  
Total revenue 2,789 3,616
 
Expenses:
Property operating and maintenance 1,195 1,971
Real estate taxes 747 1,273
Homeowner's association fees 229 391
Property management 395 459
Depreciation and amortization 1,528 2,003
Advisory management fee - affiliates 1,355 2,159
General and administrative 585   881  
Total expenses 6,034   9,137  
Net loss (3,245 ) (5,521 )
 
Net loss attributable to noncontrolling interests - Operating Partnership 4   4  
Net loss attributable to controlling interests (3,241 ) (5,517 )
Preferred stock distributions (3 ) (3 )
Net loss attributable to common stockholders

$

(3,244 )

$

(5,520 )
 
Loss per share – basic and diluted (1)
Net loss attributable to common shares $ (0.04 ) $ (0.04 )
Weighted average common shares outstanding 37,328,213   37,328,213  
 

(1)

    Silver Bay calculated the 2012 loss per share only for the period its common stock was outstanding during the year, referred to as the post-formation period. Prior to its initial public offering and formation transactions, Silver Bay did not have any publicly issued common stock. The formation transactions closed on December 19, 2012, therefore Silver Bay has defined the post-formation period to be the date of the formation transactions through December 31, 2012, or twelve days of activity.
 
                           

SILVER BAY REALTY TRUST CORP.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE QUARTER ENDED DECEMBER 31, 2012

(amounts in thousands except share data)

(unaudited)

 
Common Stock
Noncontrolling      
Par Additional Total Interests-
Shares Value Paid-In Cumulative Stockholders' Operating Parent Total
Issued Amount Capital Deficit   Equity   Partnership Equity Equity
Balance at October 1, 2012 $ - $ - $ (2,367 ) $ (2,367 ) $ - $ 250 $ (2,117 )
Parent contributions through December 19, 2012

 

 

-

321,773 321,773

Net proceeds from Initial Public Offering

13,250,000 133 228,384 228,517 228,517

Formation Transactions

23,917,642 239 435,713 - 435,952 508 (322,023 ) 114,437

Restricted stock issued

160,571 - - -
Other 49 49 49
Net loss       (3,242 ) (3,242 ) (4 )     (3,246 )
 
Balance at December 31, 2012 37,328,213 $ 372 $ 664,146 $ (5,609 ) $ 658,909   $ 504   $ -   $   659,413  
 

         

SILVER BAY REALTY TRUST CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2012

(amounts in thousands)

 
Three Months Ended
December 31, 2012 Year Ended 2012
(unaudited) (unaudited)
Cash Flows From Operating Activities:
Net loss $ (3,244) $ (5,521)
Adjustments to reconcile net loss to net cash (used) / provided
by operating activities:
Depreciation and amortization 1,528 2,003
Non-cash stock option compensation 38 38
Net change in assets and liabilities:
Increase in related party payables, net 2,500 3,693
(Decrease) / Increase in deferred lease fees and prepaid rents (523) 61
Increase in other assets (1,354) (1,996)
Increase in accounts payable and accrued property expenses 797 3,324
Net cash (used) / provided by operating activities (258) 1,602
 
Cash Flows From Investing Activities:
Purchase of investments in real estate (97,955) (276,730)
Capital improvements of investments in real estate (17,937) (30,527)
Decrease / (Increase) in escrow cash 15,005 (18,955)
Net cash used by investing activities (100,887) (326,212)
 
Cash Flows From Financing Activities:
Capital contribution of parent, net 97,982 323,982
Proceeds from issuance of common stock, net of offering costs 228,517

228,517

Net cash provided by financing activities 326,499 552,499
 
Net change in cash and cash equivalents 225,354 227,889
Cash and cash equivalents at beginning of the period 2,785 250
Cash and cash equivalents at end of the period $ 228,139 $ 228,139
 
Noncash investing and financing activities:
Accrued preferred stock dividends $ (3) $ (3)
Capital improvements in accounts payable $ 680 $ 680
Formation Transactions $ 126,083 $ 126,083
 
                               

PORTFOLIO SUMMARY OF SINGLE-FAMILY PROPERTIES

 

The following table provides a summary of Silver Bay’s portfolio of single-family properties as of December 31, 2012.

 
Average Average Monthly
Aggregate Cost Basis Average Average Number of Number Rent for
Number of

Cost Basis (1)

Per Property

Age (2)

Square Leased of Vacant Leased
Market     Properties     (thousands)     (thousands)     (in years)     Footage     Properties    

Properties (3)

   

Properties (4)

Phoenix 1,002 $ 127,308 $ 127 17.9 1,717 592 410 $ 1,041
Tampa 816 99,779 122 21.9 1,675 401 415 1,261
Atlanta 607 67,674 111 14.9 2,089 313 294 1,191
Northern CA (5) 256 43,323 169 40.6 1,418 113 143 1,457
Las Vegas 213 27,255 128 13.4 1,742 77 136 1,151
Tucson 186 14,334 77 38.8 1,343 112 74 828

Southern CA (6)

149 18,161 122 38.6 1,364 13 136 1,208
Orlando 90 13,001 144 18.0 1,889 71 19 1,318
Charlotte 60 7,181 120 9.7 2,035 12 48 1,058
Dallas 26       2,546       98     17.8     1,784     1     25       1,250
Totals 3,405     $ 420,562     $ 124     21.7     1,727     1,705     1,700     $ 1,148
 
   

(1)

Aggregate cost includes all capitalized costs, determined in accordance with GAAP, incurred through December 31, 2012 for the acquisition, stabilization, and significant post-stabilization renovations of properties, including land, building, possession costs and renovation costs. Aggregate cost does not include accumulated depreciation. At completion of the Formation Transactions, Silver Bay Predecessor’s properties were recorded at an aggregated carryover net book value cost basis. The Provident Entities’ properties aggregated cost basis was $117.9 million, which represents the fair market value of properties at the formation date due to the contribution of Provident Entities’ property being considered an acquisition subject to purchase accounting for accounting purposes.

 

(2)

As of December 31, 2012, approximately 29% of the properties in the combined portfolio were less than 10 years old, 27% were between 10 and 20 years old, 16% were between 20 and 30 years old, 15% were between 30 and 40 years old, 5% were between 40 and 50 years old, and 8% were more than 50 years old.

 

(3)

A significant portion of the properties were purchased within the last six months and are still undergoing stabilization. Silver Bay defines stabilized properties as those that we have acquired, renovated, marketed and leased for the first time. Properties acquired with in-place leases are considered stabilized. Total number of vacant properties includes properties in the process of stabilization as well as those available for lease.

 

(4)

Average monthly rent for leased properties was calculated as the average of the contracted monthly rent for all leased properties as of December 31, 2012. To date, rent concessions have been utilized on a limited basis and have not had a significant impact on Silver Bay’s average monthly rent. If the use of rent concessions or other leasing incentives increases in the future, they may have a greater impact by reducing the average monthly rent we receive from leased properties.

 

(5)

Northern California market currently consists of Contra Costa, Napa, Sacramento and Solano Counties.

 

(6)

Southern California market currently consists of Colton, Riverside and San Bernardino Counties.

 
     

PORTFOLIO SUMMARY OF STABILIZED PROPERTIES AND THOSE OWNED SIX MONTHS OR LONGER

 

The following table summarizes Silver Bay’s stabilized properties and those owned six months or longer as of December 31, 2012.

 
Stabilized Properties Properties Owned at Least Six Months
       

 

        Average

Average

Monthly

Monthly

Rent for

Rent for

Properties Properties
Number of

Leased

Owned Six

Owned at
Stabilized Properties Properties Occupancy Stabilized Months or Properties Properties Occupancy Least Six
Market  

Properties (1)

  Leased   Vacant   Rate  

Properties (2)

Longer   Leased   Vacant   Rate  

Months (3)

Phoenix 648 592 56 91 % $ 1,041 551 481 70 87 % $ 1,030
Tampa 409 401 8 98 % 1,261 426 359 67 84 % 1,258
Atlanta 318 313 5 98 % 1,191 302 243 59 80 % 1,185
Northern CA 113 113 - 100 % 1,457 52 35 17 67 % 1,554
Las Vegas 81 77 4 95 % 1,151 101 57 44 56 % 1,155
Tucson 112 112 - 100 % 828 78 76 2 97 % 828
Southern CA 13 13 - 100 % 1,208 21 10 11 48 % 1,209
Orlando 72 71 1 99 % 1,318 52 51 1 98 % 1,357
Charlotte (4) 12 12 - 100 % 1,058 - - - - -
Dallas (4) 1   1   -   100 %     1,250     -   -   -   -       -
Totals 1,779   1,705   74   96 %   $ 1,148     1,583   1,312   271   83 %   $ 1,143
 
   

(1)

Silver Bay defines stabilized properties as those that the Company has acquired, renovated, marketed and leased for the first time. Properties acquired with in-place leases are considered stabilized.

 

(2)

Average monthly rent for leased stabilized properties was calculated as the average of the contracted monthly rent for all stabilized properties as of December 31, 2012. To date, rent concessions have been utilized on a limited basis and have not had a significant impact on Silver Bay’s average monthly rent. If the use of rent concessions or other leasing incentives increases in the future, they may have a greater impact by reducing the average monthly rent we receive from leased properties.

 

(3)

Average monthly rent for properties owned at least six months was calculated as the average of the contracted monthly rent for all properties owned at least six months as of December 31, 2012. To date, rent concessions have been utilized on a limited basis and have not had a significant impact on Silver Bay’s average monthly rent. If the use of rent concessions or other leasing incentives increases in the future, they may have a greater impact by reducing the average monthly rent we receive from leased properties.

 

(4)

As of December 31, 2012, there were no properties owned six months or longer in these markets.

 




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