Disclosure NewswireTMiCrowdNewswire - May 11, 2017
NorthStar Realty Europe Corp. (NYSE: NRE) (“NorthStar Realty Europe” or “NRE” ), a European office REIT, today announced its results for the first quarter ended March 31, 2017.
- U.S. GAAP net income (loss) to common stockholders of $(15.4) million, or $(0.28) per diluted share for the quarter
- Cash available for distribution (“CAD”) of $12.0 million, or $0.22 per share for the quarter
- New 10 year lease to Deutsche Bundesbank (7,000 sqm), increasing occupancy in Trianon tower to 98% and increasing its WALT from 7.1 years to 7.7 years
- Further 5,500 sqm of new leases recently signed in the core portfolio1
- Core portfolio pro-forma occupancy of 96%2 reflecting new leases recently signed
- One further non-strategic property sold during the quarter with an additional three properties classified as held for sale
- New $35 million revolving credit facility with an initial two year term and no borrowing base requirement
- First quarter 2017 cash dividend of $0.15 per share
- NRE’s external manager completed a tri-party merger to form Colony NorthStar, Inc.
First Quarter 2017 Results
NRE reported net income (loss) to common stockholders for the first quarter of 2017 of $(15.4) million or $(0.28) per diluted share. CAD for the first quarter of 2017 was $12.0 million, or $0.22 per share. For more information and a reconciliation of CAD to net income (loss) attributable to common stockholders, please refer to the tables on the following pages.
Mahbod Nia, Chief Executive Officer, commented, “We are pleased to report strong earnings and real estate operating results for the first quarter of 2017. During and subsequent to the first quarter, we signed new leases for 12,500 sqm of primarily office space, increasing both the occupancy and remaining lease term across the portfolio. This includes the leasing of five floors in the Trianon tower that were vacated late last year to Deutsche Bundesbank, the German central bank.”
Mahbod Nia continued, “Our portfolio, which includes a significant proportion of inflation-linked leases, is well positioned to benefit from improving occupier demand and rental growth as inflation gathers pace across the region. During the first quarter, over half of the 2.3% realized contractual rental growth in our portfolio was directly attributable to inflation.”
Portfolio Results and Performance Metrics
Below are the portfolio results and performance metrics as of March 31, 20173 (same store):
- NRE owned 30 properties across six countries valued at approximately $2.0 billion based on the independent valuation by Cushman & Wakefield4 (“Portfolio Market Value”).
- The portfolio was 84% occupied, in line with the previous quarter, and 86% occupied as of March 31, 2016.
- The portfolio had a 5.9 year weighted average remaining contractual lease term, compared to 6.2 years as of December 31, 2016 and 6.7 years as of March 31, 2016.
- 2.3% quarter on quarter contractual income increase (on an annualized basis), over a half of which was related to uplifts in inflation linked leases.
- NRE’s core portfolio of predominantly prime office properties represented 88% of the overall Portfolio Market Value and 83% of the contractual rental income. The core portfolio was 92% occupied with a 6.5 year weighted average remaining contractual lease term.
- NRE sold one non-strategic property during the quarter. A further three properties were classified as held for sale as of March 31, 2017.
Net income (loss) for the first quarter 2017 totaled $(15.5) million and net operating income, or NOI, was $23.7 million. For more information and a reconciliation of NOI to net income (loss), please refer to the tables on the following pages.
Asset Management Highlights2
- Pro-forma portfolio occupancy of 86%, based on approximately 12,500 sqm of new leases recently signed, including 7,000 sqm expansion by Deutsche Bundesbank within the Trianon tower in Frankfurt, Germany.
- Pro-forma weighted average remaining contractual lease term of 6.3 years.
- Core portfolio pro-forma occupancy of 96%.
Liquidity, Financing and Capital Markets Highlights
- Unrestricted cash as of April 30, 2017 was approximately $75 million.
- In April 2017, NRE amended and restated its revolving credit facility (“Credit Facility”), with a commitment of $35 million and an initial two year term. The Credit Facility no longer contains a limitation on availability based on a borrowing base and the interest rate remains the same. There is an accordion feature, allowing the total facility to be increased to $70 million.
- No borrowings were outstanding under the Credit Facility as of April 30, 2017.
Stockholders’ Equity and Net Asset Value
- NRE had 55.7 million shares of common stock, operating partnership units and RSUs not subject to performance hurdles outstanding as of March 31, 2017.
- As of March 31, 2017, total equity was $590 million (U.S. GAAP depreciated value), or $10.60 per diluted share.
- EPRA5 net asset value, or EPRA NAV, of $16.04 per diluted share as of March 31, 2017, based on the Portfolio Market Value. For more information and a reconciliation of EPRA NAV to total equity, please refer to the tables on the following pages.
- On January 10, 2017, NRE’s external manager (“Manager”), NorthStar Asset Manager Group Inc. (“NSAM”), completed a tri-party merger with NorthStar Realty Finance Corp. (“NorthStar Realty”) and Colony Capital, Inc. (“Colony”), under which the companies combined in an all-stock merger of equals transaction (“Merger”). Under the terms of the merger agreement, NSAM, Colony and NorthStar Realty, through a series of transactions, merged with and into NSAM, which was renamed Colony NorthStar, Inc. (NYSE: CLNS). Colony NorthStar, Inc. is a leading global equity REIT with an embedded investment management platform.
Please refer to the supplemental presentation that will be posted on NRE’s website, www.nrecorp.com, which provides additional details regarding NRE’s operations and portfolio.
Earnings Conference Call
NRE will host a conference call to discuss first quarter 2017 financial and operating results on Wednesday May 10, 2017 at 9:00 a.m. ET (14:00 GMT). Hosting the call will be Mahbod Nia, Chief Executive Officer, Scott Berry, Chief Financial Officer and Trevor Ross, General Counsel.
The call will also be audiocast live via NorthStar Realty Europe’s website at www.nrecorp.com. The call can be accessed live over the phone by dialing +1-866-966-5335 (U.S. Toll Free), or +44 (0) 20 3003 2666 (International) or 0808 109 0700 (United Kingdom), and using passcode: NorthStar. A replay of the call will be available approximately two hours after the call through June 9, 2017 by dialing +1-866-583-1035 (U.S. Toll Free), +44 (0) 20 8196 1998 (International), or 0800 633 8453 (United Kingdom), and using passcode: 6923259#.
About NRE Corp.
NRE Corp. is a European focused commercial real estate company with predominately prime office properties within key cities in Germany, the United Kingdom and France, organized as a REIT and managed by an affiliate of Colony NorthStar, Inc. (NYSE: CLNS), a leading global equity REIT with an embedded investment management platform. For more information about NorthStar Realty Europe Corp., please visit www.nrecorp.com.