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Columbia Property Trust, Inc. (the “Company”) (NYSE: CXP) reported financial results today for the first quarter March 31, 2014.
For the first quarter of 2014, compared with the prior-year period, Normalized Funds from Operations (FFO) per diluted share increased 6% to $0.51, Adjusted Funds from Operations (AFFO) per diluted share decreased 8% to $0.33, and Net Income Attributable to Common Shareholders per diluted share increased to $0.03 from a prior-year loss
Completed 460,000 square feet of new and renewal leasing
Executed growth strategy with acquisition of 221 Main Street in San Francisco for $228.8 million
Raising the lower end of 2014 Normalized FFO guidance range
"We continued to make significant progress in the first quarter, advancing our key objectives of adding growth opportunities to the portfolio and executing key leases," noted Nelson Mills, President, CEO and Director of Columbia Property Trust. “The better-than-expected Normalized FFO growth reflects our solid portfolio and clearly sets the tone for a strong year in 2014. Our acquisition of 221 Main Street and recent leasing results enable an increase in the NOI target as well as the lower end of Normalized FFO guidance. We will continue to build on this success as we pursue new value-creation opportunities, potentially funded with non-core dispositions later in the year."
In April, we closed on the purchase of 221 Main Street, a 387,943-square-foot Class-A office tower in San Francisco for $228.8 million. Located in San Francisco’s South Financial District, the property is currently 81% occupied with in-place rents well below market. The acquisition offers us the opportunity to substantially increase Net Operating Income (NOI) from this property by utilizing our leasing expertise.
Capital Markets Activity:
In connection with the acquisition of 221 Main Street, we assumed a $73.0 million interest-only loan secured by the property that matures in May 2017 and bears interest at 3.95%. The loan becomes only our ninth secured mortgage in the portfolio with over 69% of our portfolio remaining unencumbered (based on Gross Real Estate Assets).
During the first quarter, we entered into leases for approximately 460,000 rentable square feet of office space (the majority related to renewal leasing) with an average lease term of approximately 13.7 years. Our first quarter leasing activity was primarily related to the renewal and extension lease with T. Rowe Price Associates for 424,877 square feet at our 100 East Pratt property in Baltimore.
As of March 31, 2014, our portfolio of 59 office properties was 92.4% leased and 91.5% occupied compared with 93.3% leased and 92.5% occupied as of March 31, 2013.
Primarily due to the T. Rowe Price Associates lease mentioned above, we achieved a 98.8% tenant retention ratio with positive net absorption of approximately 18,000 square feet. For leases executed during the quarter, we experienced a 20.1% decrease in rental rates on a cash basis and a 5.3% decrease in rental rates on a GAAP basis.
Net Income Attributable to Common Stockholders was $3.4 million, or $0.03 per diluted share, for the first quarter of 2014 compared with a Net Loss Attributable to Common Stockholders of $22.6 million, or $0.17 per diluted share, for the first quarter of 2013.