Thomas Properties Group Inc. (TPGI) filed Quarterly Report for the period ended 2009-09-30.
Thomas Properties Group is a full-service real estate operating company. They have in-house expertise and resources in property acquisitions development asset and property management marketing leasing and financing. Their focus is on the acquisition development and management of office retail and multi-family properties on a nationwide basis. Thomas Properties Group Inc. has a market cap of $77.85 million; its shares were traded at around $3.03 with a P/E ratio of 37.88 and P/S ratio of 0.45. The dividend yield of Thomas Properties Group Inc. stocks is 1.65%.
Highlight of Business Operations:
Benefit/provision for income taxes. Provision for income taxes increased by $1.6 million to a benefit of $0.2 million for the three months ended September 30, 2009 compared to a provision of $1.4 million for the three months ended September 30, 2008. The increase was primarily due to the Company’s loss before income taxes and noncontrolling interests of $15.5 million for the three months ended September 30, 2009, compared to loss before income taxes and noncontrolling interests of $7.2 million for the three months ended September 30, 2008.
Investment advisory, management, leasing and development services revenues – unconsolidated real estate entities. This caption represents revenues earned from services provided to entities for which we use the equity method to account for our ownership interest since we have significant influence, but not control, over the entities. Revenues from these services from unconsolidated real estate entities decreased by $2.5 million, or 18.2%, to $11.2 million for the nine months ended September 30, 2009 from $13.7 million for the nine months ended September 30, 2008 primarily due to a decrease of $1.8 million in lease commission revenue from Research Park Plaza, Frost Bank Tower and the Houston properties. In addition, there was a decrease of $0.7 million in construction management fees due to a decrease in redevelopment activities at City National Plaza and Brookhollow.
expiring leases, offset by a decrease of $1.8 million in termination fees, a decrease of $1.0 million in parking revenue, a decrease of $1.2 million in interest income due to lower interest rates and a $0.5 million decrease in other income. Aggregate operating and other expenses for unconsolidated real estate entities for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008 decreased by $2.5 million due to reductions in operating and maintenance expenses and $1.3 million due to lower real estate taxes for certain properties due to reassessed values. Interest expense for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008 decreased primarily due to declining interest rates. Depreciation and amortization decreased for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008 primarily due to a $6.6 million decrease in amortization expense attributable to asset write offs for early lease terminations and extensions as well as certain leases nearing expiration, offset by an increase of $2.4 million in depreciation attributable to routine additions to fixed assets. A non-cash impairment charge of $8.6 million was recorded in the nine months ended September 30, 2009 related to certain unconsolidated real estate assets. The gain from early extinguishment of debt for the nine months ended September 30, 2009 was due to a paydown at a discount of the Austin Portfolio bank term loan.
Provision for income taxes. Provision for income taxes increased by $2.2 million to a provision of $0.5 million for the nine months ended September 30, 2009 compared to a provision of $2.7 million for the nine months ended September 30, 2008. The increase was primarily due to the Company’s loss before income taxes and noncontrolling interests of $21.7 million for the nine months ended September 30, 2009, compared to income before income taxes and noncontrolling interests of $7.9 million for the nine months ended September 30, 2008. The Company also recorded a valuation allowance of $6.4 million on its net deferred tax asset as of September 30, 2009.
As of September 30, 2009, we have unfunded capital commitments to (1) our joint venture with CalSTRS of $1.65 million; (2) the Thomas High Performance Green Fund, an investment fund formed by us, CalSTRS and other institutional investors, of $50.0 million; and (3) the UBS North American Property Fund, an investment fund formed by us and UBS Wealth Management-North American Property Fund Limited, of $50.0 million. With respect to our joint venture with CalSTRS, we are not obligated to fund our share of the capital commitment for the acquisition of any new project, but we are obligated to fund to implement tenant improvements and other capital improvements for projects that were acquired prior to June 1, 2007. We estimate we will fund $0.9 million in 2009 and $0.8 million in 2010. Our requirement to fund all or a portion of our commitments to the Thomas High Performance Green Fund and the UBS North American Property Fund is subject to our identifying properties to acquire that are mutually acceptable to us, and our partners. Our cash requirements for the Green Fund could be reduced by contributions by us to the fund of assets in which we have an interest.
We substantially completed construction in 2008 of the Murano, a 302-unit high-rise residential condominium project in downtown Philadelphia. We entered into contracts for 125 units and 118 parking spaces, and recognized a gain on sale of approximately $17.3 million for the year ended December 31, 2008. Due to the deteriorating market conditions in the second half of 2008, we recorded an $11.0 million non-cash impairment charge during the three months ended December 31, 2008. During the nine months ended September 30, 2009, we entered into contracts for 70 units and 75 parking spaces and had nine forfeitures, all related to 2008 sales, and recognized a gain on sale of approximately $2.0 million. Subsequent to the end of the third quarter, we signed contracts for six additional units. As the result of reduced pricing for Murano condominium units, we have recorded an $8.6 million non-cash impairment charge in the three months ended September 30, 2009. Murano is classified as Condominium units held for sale on our balance sheets.
TPGI is in the portfolios of Third Avenue Management, Arnold Schneider of Schneider Capital Management.
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