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Winthrop Realty Trust Announces Results For Third Quarter 2013

Stocks in this article: FUR

~Reports FFO of $0.51 Per Common Share ~ ~Reports Earnings of $0.27 Per Common Share~ Declares Fourth Quarter 2013 Dividends

BOSTON, Nov. 7, 2013 (GLOBE NEWSWIRE) -- Winthrop Realty Trust (NYSE:FUR), a leading real estate value investor, today announced financial and operating results for the third quarter ended September 30, 2013. All per share amounts are on a diluted basis.

Financial Results

Three Months Ended September 30, 2013

Net income applicable to common shares for the quarter ended September 30, 2013 was $8.8 million or $0.27 per common share as compared with net income of $12.3 million or $0.37 per common share for the quarter ended September 30, 2012.

For the quarter ended September 30, 2013, Winthrop reported Funds from Operations ("FFO") applicable to common shares of $17.1 million or $0.51 per common share as compared with FFO of $19.3 million or $0.58 per common share for the third quarter of 2012.

Nine Months Ended September 30, 2013

Net income applicable to common shares for the nine months ended September 30, 2013 was $25.3 million or $0.76 per common share as compared with net income of $20.2 million or $0.61 per common share for the same period ended September 30, 2012.

FFO for the nine months ended September 30, 2013 was $37.5 million or $1.13 per common share as compared with FFO of $41.5 million, or $1.25 per common share for the nine months ended September 30, 2012.

Net Asset Value as of September 30, 2013 and Performance Table

Winthrop's estimated range of net asset value per common share ("NAV") at September 30, 2013 was $12.98 to $14.29 as compared to $13.02 to $15.37 at June 30, 2013. The decline in NAV reflects the additional common shares issued in September 2013. Winthrop's quarterly supplemental report contains an investment performance table that presents the internal rate of return for each investment made and sold or otherwise liquidated since January 1, 2008. The pooled weighted internal rate of return on these investments is 31%. Details regarding the methodology used to calculate the internal rate of return and the net asset value as well as financial results, properties and tenants can be accessed in the quarterly supplemental report at in the Investor Relations section.

2013 Third Quarter Activity and Subsequent Events

Third Quarter

  • Agreed to increase its financial commitment to the 701 Seventh Avenue, New York Times Square venture from $68.0 million up to $120.0 million and to participate in the future hotel development. In connection with this increased commitment, Winthrop contributed an additional $22.1 million to the venture. To date, Winthrop has contributed $52.8 million to the venture, reducing Winthrop's future funding commitment to $67.2 million.  
  • Acquired the 50% interest in the mezzanine loan indirectly secured by the property located at One South State Street, Chicago, Illinois that was held by Winthrop's venture partner for $30.0 million. Winthrop now holds 100% of the mezzanine loan that has an outstanding balance of principal and accrued interest of approximately $56.2 million and bears interest at 15% per annum. Both Winthrop and its partner, through a joint venture, continue to each hold an approximately 35% equity interest in the venture that holds the property ("Sullivan JV").  
  • Received payments of approximately $5.6 million on its Queensridge Tower loan from the sale of several of the Queensridge condominium units.  
  • Sold the One Riverwalk property located in San Antonio, Texas owned by Winthrop's CDH CDO venture. After satisfying the existing third party debt, Winthrop received net proceeds of approximately $4.4 million.  
  • Sold its Seabrook, Texas property to an independent third party for gross sale proceeds of $3.3 million, resulting in net proceeds of approximately $3.2 million, an amount in excess of Winthrop's most recent net asset value range for the property of $2.556 million to $2.875 million.  
  • Sold its Denton, Texas property to an independent third party for a gross sales price of $1.85 million, resulting in net proceeds of approximately $1.7 million. Winthrop's most recent net asset value range for this property was $1.725 million to $1.913 million.  
  • Concord CDO satisfied its leverage ratio tests and, as a result, again began making distributions to Concord CDO's junior tranches of bonds and its equity holder, CDH CDO LLC, a venture in which Winthrop holds a 49% interest.  
  • Extended the triple net lease with Ingram Micro, the tenant occupying all 200,000 square feet of office space at Winthrop's Amherst, New York property, through October 31, 2023 and repaid the $15.0 million debt collateralized by the property.  
  • Received proceeds of $13.3 million on an investment of $10.8 million from the payoff at par of the loan held in its 33.3% owned Metrotech venture, resulting in a 38% IRR.  
  • Closed a public offering of 2.75 million common shares at a price of $11.45 per common share, before underwriter's discounts. Winthrop received net proceeds of approximately $30.0 million after underwriter's discounts and offering expenses.

Subsequent Events

  • Acquired four recently constructed Class A luxury high rise apartment buildings containing an aggregate of 761 units for a purchase price of $246.0 million (the "Portfolio Acquisition").  The properties are located in Phoenix, Arizona; San Pedro, California; Stamford, Connecticut; and Houston, Texas.  All of the properties were designed and constructed to condominium standards.   
  • Subsequent to closing, a subsidiary of New Valley, LLC contributed approximately $16.4 million to the entity that acquired the properties in exchange for an approximately 16.3% interest in such entity.  Winthrop retained the remaining 83.7% interest.  
  • Obtained in connection with the Portfolio Acquisition a $150.0 million loan that bears interest at a rate of LIBOR plus 200 basis points (subject to adjustment), requires payments of interest only and has an initial term of three years with two, one-year extensions.  
  • Refinanced the existing $110.6 million mortgage loan made to the Sullivan JV which was secured by the 942,000 square foot office and retail property located at One South State Street, in downtown Chicago, Illinois that bore interest at 11% per annum. The new $113.5 million loan bears interest at a rate of 3.95% per annum, requires payments of interest only and matures November 2018.  
  • Acquired through an 80% owned venture, a 184-unit garden apartment complex originally built in 1984 known as Summit Pointe Apartments located in Oklahoma City, Oklahoma. Winthrop contributed approximately $4.9 million to the venture. Pursuant to the terms of the venture agreement, Winthrop will hold a preferred equity interest which entitles Winthrop to an 8% preferred return from cash flow and, upon disposition of the property, a minimum preferred return equal to a 12% IRR.  
  • Received a partial repayment of $6.3 million on its $6.5 million preferred equity investment in the venture that acquired a 62,150 square foot office building in Sorrento Mesa (San Diego), California.  Winthrop retains the balance of its preferred investment along with a 50% equity interest in the property.

Fourth Quarter 2013 Dividend Declarations

The Company's Board of Trustees is declaring a regular quarterly cash dividend for the fourth quarter of 2013 of $0.1625 per common share payable on January 15, 2014 to common shareholders of record on December 31, 2013.

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