Equity commonwealth reports first quarter 2017 results
Chicago--(business wire)--equity commonwealth (nyse: eqc) today reported its financial results for the quarter ended march 31, 2017. all per share results are reported as available to common shareholders and unitholders on a diluted basis, unless otherwise noted. financial results for the quarter ended march 31, 2017 net income attributable to common shareholders was $21.8 million, or $0.17 per share, for the quarter ended march 31, 2017. this compares to net income attributable to common shareholders of $39.4 million, or $0.31 per share, for the quarter ended march 31, 2016. the decline was primarily due to property sales. funds from operations (ffo), as defined by the national association of real estate investment trusts, for the quarter ended march 31, 2017, were $33.3 million, or $0.27 per share. this compares to ffo for the quarter ended march 31, 2016 of $38.8 million, or $0.30 per share. normalized ffo was $29.5 million, or $0.24 per share. this compares to normalized ffo for the quarter ended march 31, 2016 of $37.3 million, or $0.29 per share. the following items impacted normalized ffo per share for the quarter ended march 31, 2017, compared to the corresponding 2016 period: ($0.18) per share of income from properties sold; $0.06 per share of interest expense savings; $0.04 per share of preferred distribution savings; $0.02 per share of interest income; and $0.01 per share due to share count reduction. normalized ffo begins with ffo and eliminates certain items that, by their nature, are not comparable from period to period, non-cash items, and items that tend to obscure the company’s operating performance. definitions of ffo, normalized ffo and reconciliations to net income, determined in accordance with u.s. generally accepted accounting principles, or gaap, are included at the end of this press release. the weighted average number of diluted common shares and units outstanding for the quarter ended march 31, 2017 was 125,150,337, compared to 127,521,856 for the quarter ended march 31, 2016. same property results for the quarter ended march 31, 2017 the company’s same property portfolio consisted of 28 properties totaling 14.6 million square feet, which excluded two properties designated as held for sale at the end of the quarter that have subsequently been sold. operating results were as follows: the same property portfolio leased occupancy was 89.0% as of march 31, 2017, compared to 91.3% as of december 31, 2016, and 91.6% as of march 31, 2016. the same property portfolio commenced occupancy was 86.3% as of march 31, 2017, compared to 88.6% as of december 31, 2016, and 88.0% as of march 31, 2016. same property noi increased 3.4% when compared to the same period in 2016. same property cash noi decreased 0.1% when compared to the same period in 2016. the company entered into leases for approximately 331,000 square feet, including renewal leases for approximately 264,000 square feet and new leases for approximately 67,000 square feet. gaap rental rates on new and renewal leases were 21.6% higher compared to prior gaap rental rates for the same space. cash rental rates on new and renewal leases were 4.9% lower compared to prior cash rental rates for the same space. the definitions and reconciliations of same property noi and same property cash noi to operating income, determined in accordance with gaap, are included at the end of this press release. the same property portfolio includes properties continuously owned from january 1, 2016 through march 31, 2017 and excludes properties owned during this period that are designated as held for sale and land parcels. significant events during the quarter ended march 31, 2017 the company sold three properties totaling 827,000 square feet and a land parcel for a gross sales price of $113.1 million. the weighted average cap rate for the three properties was in the low 6% range. the assets sold during the quarter include the following: 111 market place, a 95.4% leased, 589,380 square feet office property in baltimore, md, for a gross sale price of $60.1 million. proceeds from the sale were $44.1 million net of credits for contractual lease costs, capital and rent abatements. two properties totaling 237,824 square feet on seton center parkway in austin, tx, for a gross sale price of $52.5 million. the properties were 95.6% leased. a vacant land parcel totaling 10.2 acres in mansfield, ma, for a gross sale price of $575,000. 111 market place, a 95.4% leased, 589,380 square feet office property in baltimore, md, for a gross sale price of $60.1 million. proceeds from the sale were $44.1 million net of credits for contractual lease costs, capital and rent abatements. two properties totaling 237,824 square feet on seton center parkway in austin, tx, for a gross sale price of $52.5 million. the properties were 95.6% leased. a vacant land parcel totaling 10.2 acres in mansfield, ma, for a gross sale price of $575,000. the company amended its bylaws to provide shareholders, in addition to the board, the ability to amend the bylaws by the affirmative vote of not less than a majority of all the votes then outstanding and entitled to vote on the matter. the board of trustees approved an authorization to repurchase $150 million of the company’s common shares. subsequent events the company closed on the sale of parkshore plaza, a 73.1% leased, 271,072 square foot office property in folsom, ca, for a gross sale price of $40.0 million. in connection with the sale, the company repaid the $41.3 million mortgage loan encumbering the property, which extinguished the $2.3 million guaranty on the loan. this property was held for sale as of march 31, 2017. the company closed on the sale of 25 s. charles street, a 94.2% leased, 359,254 square foot office property in baltimore, md, for a gross sale price of $24.5 million. this property was held for sale as of march 31, 2017. the company currently has 11 properties totaling 5.7 million square feet in various stages of the sale process. earnings conference call & supplemental data equity commonwealth will host a conference call to discuss first quarter results on thursday, may 4, 2017, at 9:00 am ct. the conference call will be available via live audio webcast on the investor relations section of the company’s website (www.eqcre.com). a replay of the audio webcast will also be available following the call. a copy of eqc’s first quarter 2017 supplemental operating and financial data is available for download on the investor relations section of eqc’s website at www.eqcre.com. about equity commonwealth equity commonwealth (nyse: eqc) is a chicago based, internally managed and self-advised real estate investment trust (reit) with commercial office properties throughout the united states. as of may 3, 2017, eqc’s portfolio comprised 28 properties and 14.6 million square feet. forward-looking statements some of the statements contained in this press release constitute forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements regarding share repurchases, marketing the company’s properties for sale, and consummating asset sales. any forward-looking statements contained in this press release are intended to be made pursuant to the safe harbor provisions of section 21e of the securities exchange act of 1934. forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. in some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. you can also identify forward-looking statements by discussions of strategy, plans or intentions. the forward-looking statements contained in this press release reflect the company’s current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause the company’s actual results to differ significantly from those expressed in any forward-looking statement. we do not guarantee that the transactions and events described will happen as described (or that they will happen at all). while forward-looking statements reflect the company’s good faith beliefs, they are not guarantees of future performance. we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. for a further discussion of these and other factors that could cause the company’s future results to differ materially from any forward-looking statements, see the section entitled “risk factors” in the company’s most recent annual report on form 10-k and in the company’s quarterly reports on form 10-q for subsequent quarters. condensed consolidated balance sheets (amounts in thousands, except share data) condensed consolidated statements of operations (amounts in thousands, except per share data) calculation of funds from operations (ffo) and normalized ffo (amounts in thousands, except per share data) calculation of same property net operating income (noi) and same property cash basis noi (amounts in thousands)
