Press Release

Gramercy Property Trust Reports Third Quarter 2016 Financial Results

Company Release - 11/2/2016 6:30 AM ET

NEW YORK--(BUSINESS WIRE)-- Gramercy Property Trust (NYSE:GPT) today reported financial results for the third quarter of 2016.

Operating Results:

         
($ in thousands, except per share data) Quarter Ended Nine Months Ended
(All per share amounts in this press release are presented on a diluted basis) September 30, September 30,
2016   2015 2016   2015
Net income (loss) to common shareholders $   (2,508 )   $   431 $   22,355   $   (2,947 )
Net income (loss) per common share $ (0.01 ) $ $ 0.05 $ (0.02 )
 
FFO available to common shareholders $ 60,775 $ 25,184 $ 205,391 $ 64,658
FFO per common share $ 0.14 $ 0.13 $ 0.48 $ 0.37
 
Core FFO available to common shareholders $ 76,596 $ 31,707 $ 242,097 $ 78,363
Core FFO per common share $ 0.18 $ 0.17 $ 0.57 $ 0.45
 
AFFO available to common shareholders $ 69,075 $ 26,750 $ 219,691 $ 66,662
AFFO per common share $ 0.16 $ 0.14 $ 0.51 $ 0.38
 

Highlights

  • Acquired sixteen properties in eleven separate transactions for an aggregate purchase price of approximately $264.8 million (6.8% initial cash cap rate; 7.3% annualized straight-line cap rate) with a weighted average remaining lease term of approximately 12.5 years at closing.
  • Disposed of three single and multi-tenant office buildings and one single-tenant industrial facility for aggregate gross proceeds of $206.7 million. The weighted average remaining lease term for the four sold properties was 10.1 years at closing and the blended exit cap rate was 7.4%.
  • Formed the Strategic Office Partners joint venture with TPG Real Estate by contributing six assets valued at $187.5 million, with a weighted average remaining lease term of 3.6 years at closing. The Company received a 25% interest in the joint venture.
  • Received a BBB issuer default rating with a stable outlook from Fitch Ratings.
  • Priced $350.0 million in senior unsecured notes, resulting in a weighted average maturity of 8.0 years and a weighted average fixed interest rate of 4.12%. The note sale is subject to finalization of documentation and is expected to close on December 15, 2016.
  • Narrowed full-year 2016 guidance for Core FFO to between $0.72 and $0.74, and for AFFO to between $0.66 and $0.68.
  • Declared a fourth quarter 2016 common share dividend of $0.125 per share, a 13.6% increase over the prior quarter.

Summary

Gramercy Property Trust (NYSE:GPT) today reported a net loss to common shareholders of $2.5 million, or $0.01 per diluted common share, for the three months ended September 30, 2016. For the quarter, the Company generated NAREIT defined FFO of $60.8 million, or $0.14 per diluted common share. The Company also reported Core FFO of $76.6 million, or $0.18 per diluted common share during the quarter. The Company generated adjusted funds from operations, or AFFO, of $69.1 million, or $0.16 per diluted common share during the quarter. A reconciliation of FFO, Core FFO and AFFO to net income available to common shareholders is included on page 8 of this press release.

For the third quarter of 2016, the Company recognized total revenues of approximately $131.1 million, a decrease of 5.9% over total revenues of $139.4 million reported in the prior quarter, primarily attributable to incremental asset management incentive fees recorded in the second quarter of 2016.

The Company narrowed full-year 2016 guidance for Core FFO to between $0.72 and $0.74, and for AFFO to between $0.66 and $0.68. The Company expects to provide 2017 guidance on December 15, 2016.

As of September 30, 2016, the Company owned interests in 295 properties containing an aggregate of approximately 53.3 million rentable square feet.

Property Acquisitions

In the third quarter of 2016, the Company acquired sixteen properties in eleven separate transactions for an aggregate purchase price of approximately $264.8 million (6.8% initial cap rate; 7.3% annualized straight-line cap rate) with a weighted average remaining lease term of approximately 12.5 years at closing.

With these acquisitions, the Company has acquired approximately $809.3 million of single and multi-tenant assets in the United States and Canada in 2016. The weighted average entry cap rate for these acquisitions is 7.0%. Currently, the Company has approximately $138.3 million in acquisitions under contract or under signed LOI.

Third quarter 2016 property acquisitions are summarized in the chart below:

 
(Dollar amount in thousands)

Acq.
Date

  Location   MSA     Property Type  

Square
Feet

 

Purchase
Price

  Occupancy  

Acq. Cash
NOI

  S/L NOI
7/14/2016 Houston, TX Houston Industrial 56,713 $   6,538 100% $   456 $   483
7/20/2016 Fridley, MN Minneapolis Industrial 213,117 17,750 100% 1,106 1,168
7/26/2016 Largo, FL Tampa Industrial 29,203 2,994 100% 195 226
8/10/2016 Littleton, MA Boston Industrial 448,470 39,750 100% 2,710 2,751
8/15/2016 Byhalia, MS Memphis Industrial 677,160 28,000 100% 1,778 1,847
8/19/2016 McCook, IL Chicago Industrial 147,923 39,500 100% 2,607 2,607
8/29/2016 Hanover Park, IL Chicago Industrial 238,423 20,702 100% 1,371 1,545
9/8/2016 Durham, NC Durham Industrial 115,500 11,400 100% 675 775
9/9/2016 Santa Fe Springs, CA Los Angeles Industrial 208,167 27,000 100% 1,588 1,684
9/23/2016

Atlanta, GA & Anaheim, CA

Atlanta

Los Angeles

Industrial 420,000 40,000 100% 3,070 3,249
9/29/2016 Summerville, SC(1) Charleston Industrial 240,800 31,183   100% 2,423   2,999
2,795,476 $   264,817   100% $   17,979   $   19,334
 

1.

 

Summerville, SC property is a build-to-suit transaction. Lease commencement is anticipated for October 2017. Metrics shown are for stabilized asset.

 

Strategic Office Partners

During the quarter, the Company announced a partnership with TPG Real Estate to form Strategic Office Partners, a joint venture that will acquire and manage a portfolio of single tenant office assets in high growth cities in the United States. The platform was seeded by the acquisition of six office assets owned by the Company, valued at $187.5 million. The Company sold the seed assets into the joint venture in exchange for cash proceeds of $140.6 million and a 25% interest in the joint venture with an initial equity investment of $16.0 million. Together, TPG and the Company have committed $400.0 million in equity capital including $100.0 million from the Company. At formation, the venture secured a $200.0 million non-recourse secured credit facility from Morgan Stanley of which $125.0 million was funded at closing and the Company received a prorata distribution of the draw of $30.6 million.

The seed portfolio is comprised of six single tenant office assets totaling approximately 1.0 million square feet in the Los Angeles, San Francisco, San Diego, Nashville and Minneapolis MSAs. The seed portfolio had a weighted average remaining lease term of 3.6 years at closing and was sold to the venture at an exit cap rate of 9.5%.

Property Dispositions

Pursuant to the Company's previously announced disposition plan, during the quarter, the Company disposed of three single-tenant office buildings in Princeton, New Jersey, Burlington, Massachusetts and Bloomington, Minnesota and one single-tenant industrial facility in Phoenix, Arizona for aggregate gross proceeds of $206.7 million. The weighted average remaining lease term for the four sold properties was 10.1 years at closing and the blended exit cap rate was 7.4% on next twelve months NOI.

With these dispositions, the Company has sold approximately $1.4 billion of single and multi-tenant assets in the United States and Europe in 2016, inclusive of the Company's pro-rata share of properties from and into joint ventures in addition to single property transactions within joint ventures. These property sales are a part of the Company’s previously announced plan to dispose of select non-core assets following the merger with Chambers Street Properties. The weighted average exit cap rate for these dispositions is 6.9%. Currently, the Company has approximately $119.5 million in dispositions under contract or awarded to a buyer.

Third quarter 2016 property dispositions are summarized in the chart below:

 
(Dollar amount in thousands)
Disp. Date   Location   MSA   Property Type   Square Feet   Sale
Price
  Disp. Cash
NOI
8/4/2016 Princeton, NJ New York/New Jersey Office 110,765 $   30,600 $   1,961
8/10/2016 Burlington, MA Boston Office 200,605 67,400 5,212
8/18/2016 Phoenix, AZ Phoenix Industrial 820,384 56,200 4,725
8/29/2016 Bloomington, MN(1) Minneapolis Office 322,551 52,500   3,457
1,454,305 $   206,700   $   15,355
 

1.

 

Disposition NOI for Bloomington, MN asset is July 2016 NOI, annualized. Excludes impact of prior tenant's lease expiration and new tenant's free rent.

 

During the third quarter of 2016, the Company completed the dissolution of its joint venture with Duke Realty Corporation (NYSE: DRE). The remaining asset located in Phoenix, Arizona was sold in July and the Company received its final liquidating distribution of $41.1 million.

European Joint Ventures

During the third quarter of 2016, Gramercy Europe acquired three properties in two separate transactions. Since inception, Gramercy Europe has acquired 33 properties for €640.0 million.

Leasing Activity

During the third quarter of 2016, the Company executed four new leases and three lease renewals aggregating approximately 402.2 thousand square feet for an average lease term of 10.6 years. In addition, four new leases and two renewals commenced during the third quarter of 2016 aggregating approximately 195.5 thousand square feet for an average lease term of 8.0 years.

Gramercy Asset Management

The Company's asset and property management business, which operates under the name Gramercy Asset Management, currently manages approximately $1.2 billion of commercial properties for third parties, including $870.8 million in Europe.

In the third quarter of 2016, Gramercy Asset Management recognized fee revenues of $7.2 million in property management, asset management, and administrative fees, as compared to $18.3 million for the prior quarter. The decrease in fees of approximately $11.1 million for the third quarter of 2016 is primarily attributable to incremental incentive fees earned on the managed portfolio during the second quarter of 2016. Gramercy Asset Management recorded $2.9 million in incentive fees earned from the Company's third-party asset management business for the third quarter of 2016, compared to $14.2 million for the prior quarter.

Corporate

As of September 30, 2016, the Company maintained approximately $900.3 million of liquidity, as compared to approximately $908.1 million of liquidity reported at the end of the prior quarter. Liquidity includes $56.4 million of unrestricted cash as compared to approximately $185.1 million reported at the end of the prior quarter. Additionally, liquidity includes $157.3 million of cash from sold properties, which is held in escrow for future acquisitions as of September 30, 2016. During the quarter, the Company drew down $132.8 million and repaid $140.0 million previously drawn on the Senior Unsecured Revolving Credit Facility. As of September 30, 2016, there were $163.4 million of borrowings outstanding under the revolving credit facility.

During the third quarter of 2016, the Company reduced secured debt by $156.3 million, including the defeasance of a $124.6 million mortgage loan with an interest rate of 5.45% which had encumbered 11 properties. The Company used cash on hand and borrowings under the senior unsecured revolving credit facility at an effective rate of 1.51% to extinguish the secured mortgage loans. The Company recorded a loss on extinguishment of debt of $13.8 million for the quarter.

Management, general and administrative ("MG&A") expenses were $8.2 million for the quarter ended September 30, 2016 compared to $8.0 million in the prior quarter. MG&A expenses included non-cash stock compensation costs of approximately $1.3 million for both the three months ended September 30, 2016 and June 30, 2016. Acquisition costs for the quarter ended September 30, 2016 included no merger related costs compared to acquisition costs for the quarter ended September 30, 2015, which included $5.2 million of merger-related costs.

During the quarter, the Company received a BBB issuer default rating with a stable outlook from Fitch Ratings. Previously, the Company was issued a Baa3 and BBB- issuer rating from Moody's Investors Service and Standard & Poor's Rating Services respectively, both with a stable outlook.

The Company priced $350.0 million in senior unsecured notes, consisting of $150.0 million of notes with a six-year term priced at a fixed interest rate of 3.89%, $100.0 million of notes with a nine-year term priced at a fixed interest rate of 4.26%, and $100.0 million of notes with a ten-year term priced at a fixed interest rate of 4.32%, resulting in a weighted average maturity of 8.0 years and a weighted average fixed interest rate of 4.12%. The note sale is subject to finalization of documentation and is expected to close on December 15, 2016.

The Company’s Board of Trustees approved the establishment of an “at-the-market” equity issuance program. The Company expects to file a prospectus supplement to its currently effective shelf registration statement with the Securities and Exchange Commission in November 2016, pursuant to which the Company may offer and sell common shares with an aggregate gross sales price of up to $375.0 million.

The Company initiated a dividend reinvestment and share purchase plan available to shareholders to reinvest dividends on all or a portion of their common shares at a discount. The program is available to both registered and beneficial shareholders. For additional information, interested parties may visit our website at www.gptreit.com.

Dividends

The Company declared a dividend of $0.11 per common share for the third quarter of 2016. The third quarter dividend was paid on October 14, 2016 to holders of record as of September 30, 2016.

The Company also declared a third quarter 2016 dividend on the Company’s 7.125% Series A Cumulative Redeemable Preferred Shares in the amount of $0.44531 per share, which was paid on September 30, 2016 to preferred shareholders of record as of the close of business on September 20, 2016.

The Company declared a fourth quarter 2016 dividend on the Company’s common shares in the amount of $0.125 per share - a 13.6% increase over the prior quarter - payable on January 13, 2017, to common shareholders of record as of the close of business on December 30, 2016.

The Company also declared a fourth quarter 2016 dividend on the Company’s 7.125% Series A Cumulative Redeemable Preferred Shares in the amount of $0.44531 per share, payable on December 30, 2016 to preferred shareholders of record as of the close of business on December 20, 2016.

Company Profile

Gramercy Property Trust is a leading global investor and asset manager of commercial real estate. The Company specializes in acquiring and managing single-tenant, net-leased industrial and office properties. The Company focuses on income producing properties leased to high quality tenants in major markets in the United States and Europe.

To review the Company’s latest news releases and other corporate documents, please visit the Company's website at www.gptreit.com or contact Investor Relations at 888-686-0112.

Conference Call

The Company's executive management team will host a conference call and audio webcast on Wednesday, November 2, 2016, at 11:00 AM EDT to discuss third quarter 2016 financial results. Presentation materials will be posted prior to the call on the Company's website, www.gptreit.com.

Interested parties may access the live call by dialing 1-888-317-6003, or for international participants 1-412-317-6061, using passcode 4753229. Additionally, the live call will be webcast in listen-only mode on the Company’s website at www.gptreit.com in the Investor Relations section.

A replay of the call will be available at 5:00 PM EDT, November 2, 2016 through midnight, November 16, 2016 by dialing 1-877-344-7529, or for international participants 1-412-317-0088, using the access code 10093024.

Disclaimer

Non GAAP Financial Measures

The Company has used non-GAAP financial measures as defined by SEC Regulation G in this press release. A reconciliation of each non-GAAP financial measure and the comparable GAAP financial measure can be found on page 8 of this release.

       

Gramercy Property Trust
Condensed Consolidated Balance Sheets
(Unaudited, dollar amounts in thousands, except per share data)

 

September 30,
2016

December 31, 2015
Assets:
Real estate investments, at cost:
Land $ 734,058 $ 702,557
Building and improvements 3,538,377 3,313,747
Less: accumulated depreciation (169,103 ) (84,627 )
Total real estate investments, net 4,103,332 3,931,677
Cash and cash equivalents 56,352 128,031
Restricted cash 171,895 17,354
Investment in unconsolidated equity investments 120,176 580,000
Servicing advances receivable

1,382

 

Retained CDO bonds 8,439 7,471
Assets held for sale, net 11,009 420,485
Tenant and other receivables, net 69,131 34,234
Acquired lease assets, net of accumulated amortization of $123,754 and $54,323 584,856 682,174
Deferred costs, net of accumulated amortization of $3,074 and $892 24,835 13,950
Goodwill 3,141 3,568
Other assets 30,064   14,192  
Total assets $ 5,183,230   $ 5,834,518  
Liabilities and Equity:
Liabilities:
Senior unsecured revolving credit facility $ 163,365 $ 296,724
Exchangeable senior notes, net 108,186 106,581
Mortgage notes payable, net 368,386 530,222
Senior unsecured notes, net 148,978 99,124
Senior unsecured term loans, net 1,225,000   1,225,000  
Total long-term debt, net 2,013,915 2,257,651
Accounts payable and accrued expenses 48,412 59,808
Dividends payable 46,740 8,980
Accrued interest payable 5,180 4,546
Deferred revenue 31,343 36,031
Below market lease liabilities, net of accumulated amortization of $27,055 and $17,083 224,643 242,456
Liabilities related to assets held for sale 129 291,364
Derivative instruments, at fair value 28,613 3,442
Other liabilities 10,080   8,271  
Total liabilities 2,409,055   2,912,549  
Commitments and contingencies
Noncontrolling interest in the Operating Partnership 9,076 10,892
Equity:
Common shares, par value $0.01, 421,978,800 and 420,523,153 issued and outstanding at September 30, 2016 and December 31, 2015, respectively. 4,220 4,205
Series A cumulative redeemable preferred shares, par value $0.01, liquidation preference $87,500, 3,500,000 shares authorized, issued and outstanding at September 30, 2016 and December 31, 2015. 84,394 84,394
Additional paid-in-capital 3,883,873 3,879,932
Accumulated other comprehensive loss (38,717 ) (5,751 )
Accumulated deficit (1,168,502 ) (1,051,454 )
Total shareholders' equity 2,765,268 2,911,326
Noncontrolling interest in other partnerships (169 ) (249 )
Total equity 2,765,099   2,911,077  
Total liabilities and equity $ 5,183,230   $ 5,834,518  
 
     

Gramercy Property Trust
Condensed Consolidated Statements of Operations
(Unaudited, dollar amounts in thousands, except per share data)

 
Three Months Ended
September 30,
Nine Months Ended
September 30,
2016   2015 2016   2015
Revenues
Rental revenue $ 100,847 $ 47,235 $ 291,459 $ 117,990
Third-party management fees 7,172 5,153 30,528 17,571
Operating expense reimbursements 21,231 11,237 65,718 29,113
Investment income 544 445 1,490 1,208
Other income 1,298   1,143   1,867   1,413  
Total revenues 131,092   65,213   391,062   167,295  
Operating Expenses
Property operating expenses 22,685 11,051 70,364 29,006
Property management expenses 4,810 4,780 14,922 14,557
Depreciation and amortization 62,863 25,120 181,649 68,534
General and administrative expenses 8,165 4,748 23,892 14,299
Acquisition and merger-related expenses 1,272   6,547   5,994   13,508  
Total operating expenses 99,795   52,246   296,821   139,904  
Operating Income 31,297 12,967 94,241 27,391
Other Expense:
Interest expense (18,409 ) (9,227 ) (57,271 ) (23,225 )
Equity in net loss of unconsolidated equity investments (1,138 ) (1,096 ) (4,061 ) (974 )
Gain on dissolution of previously held U.S. unconsolidated equity investment interests 7,229
Loss on extinguishment of debt (13,777 ) (20,890 )
Impairment of real estate investments (1,053 )   (1,053 )  
Income (loss) from continuing operations before provision for taxes (3,080 ) 2,644 18,195 3,192
Provision for taxes (331 ) (985 ) (3,734 ) (2,116 )
Income (loss) from continuing operations (3,411 ) 1,659 14,461 1,076
Income (loss) from discontinued operations 347   (41 ) 5,045   17  
Income (loss) before net gains on disposals (3,064 ) 1,618 19,506 1,093
Net gains on disposals 2,336 392 2,336 593
Gain on sale of European unconsolidated equity investment interests held with a related party     5,341    
Net income (loss) (728 ) 2,010 27,183 1,686
Net income (loss) attributable to noncontrolling interest (221 ) (20 ) (152 ) 43  
Net income (loss) attributable to Gramercy Property Trust (949 ) 1,990 27,031 1,729
Preferred share dividends (1,559 ) (1,559 ) (4,676 ) (4,676 )
Net income (loss) available to common shareholders $ (2,508 ) $ 431   $ 22,355   $ (2,947 )
Basic earnings per share:
Net income (loss) from continuing operations, after preferred dividends $ (0.01 ) $ $ 0.04 $ (0.02 )
Net income from discontinued operations     0.01    
Net income (loss) available to common shareholders $ (0.01 ) $   $ 0.05   $ (0.02 )
Diluted earnings per share:
Net income (loss) from continuing operations, after preferred dividends $ (0.01 ) $ $ 0.04 $ (0.02 )
Net income from discontinued operations     0.01    
Net income (loss) available to common shareholders $ (0.01 ) $   $ 0.05   $ (0.02 )
Basic weighted average common shares outstanding 420,772,508   183,945,495   423,542,467   169,781,590  
Diluted weighted average common shares and common share equivalents outstanding 420,772,508   187,683,631   427,163,126   169,781,590  
 
     

Gramercy Property Trust
Reconciliation of Non-GAAP Financial Measures
(Unaudited, dollar amounts in thousands, except per share data)

 
Three Months Ended
September 30,
Nine Months Ended
September 30,
2016   2015 2016   2015
Net income (loss) attributable to common shareholders $ (2,508 ) $ 431 $ 22,355 $ (2,947 )
Add:
Depreciation and amortization 62,863 25,120 181,649 68,534
FFO adjustments for unconsolidated equity investments 2,034 178 20,805 377
Net (income) loss attributed to noncontrolling interest 221 20 152 (43 )
Net (income) loss from discontinued operations (347 ) 41 (5,045 ) (17 )
Impairment of real estate investments 1,053 1,053
Less:
Non real estate depreciation and amortization (205 ) (214 ) (672 ) (653 )
Gain on dissolution of previously held U.S. unconsolidated equity investment interests (7,229 )
Gain on sale of European unconsolidated equity investment interests held with a related party (5,341 )
Net gain from disposals (2,336 ) (392 ) (2,336 ) (593 )
Funds from operations attributable to common shareholders and unitholders $ 60,775   $ 25,184   $ 205,391   $ 64,658  
Add:
Acquisition costs 1,272 1,352 5,994 5,960
Core FFO adjustments for unconsolidated equity investments 508 1,047 7,429 1,047
Merger related costs 5,195 7,548
Loss on extinguishment of debt 13,777 18,960
European Fund setup costs 221
Net income from discontinued operations related to properties 347 5,140
Mark-to-market on interest rate swaps (83 ) (817 )
Less:
Recovery of servicing advances   (1,071 )   (1,071 )
Core funds from operations attributable to common shareholders and unitholders $ 76,596   $ 31,707   $ 242,097   $ 78,363  
Add:
Non-cash share-based compensation expense 1,282 1,048 3,704 2,731
Amortization of market lease assets 3,578 699 11,254 2,632
Amortization of deferred financing costs and non-cash interest (409 ) 404 (214 ) 1,270
Amortization of lease inducement costs 86 87 259 183
Non-real estate depreciation and amortization 205 214 672 653
Amortization of free rent received at property acquisition 481 1,161 1,237 2,886
Less:
AFFO adjustments for unconsolidated equity investments 1,761 (117 ) 1,352 (119 )
Straight-lined rent (6,368 ) (3,456 ) (19,084 ) (8,940 )
Amortization of market lease liabilities (8,137 ) (4,997 ) (21,586 ) (12,997 )
Adjusted funds from operations attributable to common shareholders and unitholders $ 69,075   $ 26,750   $ 219,691   $ 66,662  
Funds from operations per share – basic $ 0.14   $ 0.14   $ 0.48   $ 0.38  
Funds from operations per share – diluted $ 0.14   $ 0.13   $ 0.48   $ 0.37  
Core funds from operations per share – basic $ 0.18   $ 0.17   $ 0.57   $ 0.46  
Core funds from operations per share – diluted $ 0.18   $ 0.17   $ 0.57   $ 0.45  
Adjusted funds from operations per share – basic $ 0.16   $ 0.14   $ 0.52   $ 0.39  
Adjusted funds from operations per share – diluted $ 0.16   $ 0.14   $ 0.51   $ 0.38  
 
Basic weighted average common shares outstanding – EPS 420,772,508 183,945,495 423,542,467 169,781,590
Weighted average non-vested share based payment awards 3,170,302
Weighted average partnership units held by noncontrolling interest 1,017,326   1,498,785   1,199,312   1,582,067  
Weighted average common shares and units outstanding 424,960,136   185,444,280   424,741,779   171,363,657  
Diluted weighted average common shares and common share equivalents outstanding – EPS (1) 420,772,508 187,683,631 427,163,126 169,781,590
Weighted average partnership units held by noncontrolling interest 1,017,326 1,582,067
Weighted average non-vested share based payment awards 3,519,584 2,969,744
Weighted average share options 58,270 44,624
Phantom shares 514,834
Dilutive effect of Exchangeable Senior Notes 3,336,987       658,380  
Diluted weighted average common shares and units outstanding 428,704,675   187,683,631   427,163,126   175,551,239  
 
 

Gramercy Property Trust
Reconciliation of Non-GAAP Financial Measure - continued
(Unaudited, dollar amounts in thousands, except per share data)

 
1. For the three months ended September 30, 2016 and the nine months ended September 30, 2015, the Company has a net loss available to common shareholders and therefore the diluted weighted average share calculation, which is the denominator in diluted earnings per share, excludes potentially dilutive securities because they would have been anti-dilutive during those periods.
 

Disclaimers

Non-GAAP Financial Measures

The Company has used non-GAAP financial measures as defined by SEC Regulation G in this press release. A reconciliation of each non-GAAP financial measure and the comparable GAAP financial measure can be found on page 8 of this release.

Funds from operations (“FFO”): The revised White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income (loss) (determined in accordance with GAAP), excluding impairment write-downs of investments in depreciable real estate and investments in in-substance real estate investments and sales of depreciable operating properties, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs), less distributions to noncontrolling interests and gains/losses from discontinued operations and after adjustments for unconsolidated partnerships and joint ventures.

Core FFO and adjusted funds from operations (“AFFO”): Core FFO and AFFO are presented excluding property acquisition costs, loss on extinguishment of debt, other-than-temporary impairments on retained bonds and other one-time charges. AFFO of the Company also excludes non-cash share-based compensation expense, amortization of above- and below-market leases, amortization of deferred financing costs, amortization of lease inducement costs, non-real estate depreciation and amortization, amortization of free rent received at property acquisition, straight-line rent, and these AFFO adjustments as they pertain to the Company's unconsolidated equity investments. The Company believes that Core FFO and AFFO are useful supplemental measures regarding the Company’s operating performances as they provide a more meaningful and consistent comparison of the Company’s operating performance and allows investors to more easily compare the Company’s operating results.

FFO, Core FFO and AFFO do not represent cash generated from operating activities in accordance with GAAP and should not be considered as alternatives to net income (determined in accordance with GAAP), as indications of our financial performance, or to cash flow from operating activities as measures of our liquidity, nor are they entirely indicative of funds available to fund our cash needs, including our ability to make cash distributions. Our calculations of FFO, Core FFO and AFFO may be different from the calculations used by other companies and, therefore, comparability may be limited.

Forward-looking Information

This press release contains forward-looking information based upon the Company's current best judgment and expectations. Actual results could vary from those presented herein. The risks and uncertainties associated with forward-looking information in this release include, but are not limited to, factors that are beyond the Company's control, including the factors listed in the Company's Annual Report on Form 10-K, in the Company's Quarterly Reports on Form 10-Q and in the Company's Current Reports on Form 8-K. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For further information, please refer to the Company's filings with the Securities and Exchange Commission.

No Solicitation

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities, nor shall there be any sale of these securities, in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Gramercy Property Trust
Jon W. Clark, 888-686-0112
Chief Financial Officer
or
Brittany A. Sanders, 888-686-0112
Investor Relations

Source: Gramercy Property Trust