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Gyrodyne Company of America Inc. Reports Operating Results (10-Q)

August 13, 2012 | About:
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10qk

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Gyrodyne Company of America Inc. (GYRO) filed Quarterly Report for the period ended 2012-06-30.

Gyrodyne Company Of America, Inc. has a market cap of $166.1 million; its shares were traded at around $112.05 with and P/S ratio of 30.1.

Highlight of Business Operations:

Leasing – During the three months ended June 30, 2012, the Company executed 10 lease renewals encompassing approximately 20,000 square feet, and approximately $314,000 in annual revenue. In addition, the Company entered into 2 new leases encompassing approximately 3,000 square feet and $63,000 in annual revenue. The increase in revenue from its new leases and contractual annual increases was offset by 4 lease terminations encompassing approximately 10,000 square feet and approximately $290,000 in annual revenue. The Company generated a decrease in net deferred revenue of approximately $11,000.

The continued economic volatility for small businesses and medical practitioners have impacted property management firms, including the Company s ability to renew leases at comparable rates if at all, without providing either rent abatements or comparable other lease incentives. During 2011 through June 2012, medical office parks and industrial parks experienced degradation in both rental rates and occupancy. Rental revenues were $1,101,161 and $1,187,267 for the three months ended June 30, 2012, and March 31, 2012, respectively, a quarter over quarter decrease of $86,106. Although the Company successfully mitigated the decreased revenues during the quarter-ended March 31, 2012, limiting the reduction to $8,023 from the previous quarter, the degradation in revenue during the second quarter is a reflection of the continuing challenges to maintain both rental rates and occupancy during the slow economic recovery.

Rental revenues are comprised solely of rental income and amounted to $1,101,161 and $1,206,799 for the three months ended June 30, 2012 and 2011, respectively, a decrease of $105,638 or 9%. The Flowerfield Industrial Park, Cortlandt Manor Medical Center and Port Jefferson Professional Park all experienced a decrease in revenue; amounting to $9,504, $66,514, and $31,990, respectively, while the Fairfax Medical Center experienced an increase of $2,370. The reduction in revenue at the Flowerfield Industrial Park was primarily related to one tenant who defaulted on the lease. The tenant was evicted June 30, 2012 and the Company has a judgment in the amount of $136,000. Revenue from the judgment will not be recorded until received. Approximately $26,000 of the decrease at the Cortlandt Manor Medical Center was related to a drop in occupancy compared to the prior period due to two terminations and the balance of the decrease was due to a net reduction in the rate per square foot on lease renewals. The Port Jefferson Professional Park s decrease was primarily related to one tenant who did not renew their lease in the fourth quarter of 2011. The net increase at the Fairfax Medical Center was primarily related to higher average occupancy for the second quarter of 2012 compared to the second quarter of 2011, supplemented by contractual annual rent escalations.

Rental revenues are comprised solely of rental income and amounted to $2,288,428 and $2,466,979 for the six months ended June 30, 2012 and 2011, respectively, a decrease of $178,551 or 7%. The Flowerfield Industrial Park, Cortlandt Manor Medical Center, Port Jefferson Professional Park and Fairfax Medical Center, all experienced a decrease in revenue; amounting to $32,314, $56,039, $69,241and $20,958, respectively. The reduction in revenue at the Flowerfield Industrial Park was primarily related to one tenant who defaulted on the lease. The tenant was evicted as of June 30, 2012 and the Company has a Judgment in the amount of $136,000. Revenue from the Judgment will not be recorded until received. The reduction in revenue at the Cortlandt Manor Medical Center was primarily related to a drop in occupancy compared to the prior period due to two terminations. The Port Jefferson Professional Park s Center s decrease was primarily related to one tenant who did not renew their lease in the fourth quarter of 2011. The reduction in revenue at the Fairfax Medical Center was primarily related to one tenant exercising an early termination option during the first quarter of 2011. The option included a fee of $22,000 which was equivalent to one year s rent.

Rental revenues are comprised solely of rental income and amounted to $2,288,428 and $2,466,979 for the six months ended June 30, 2012 and 2011, respectively, a decrease of $178,551 or 7%. The Flowerfield Industrial Park, Cortlandt Manor Medical Center, Port Jefferson Professional Park and Fairfax Medical Center, all experienced a decrease in revenue; amounting to $32,314, $56,039, $69,241and $20,958, respectively. The reduction in revenue at the Flowerfield Industrial Park was primarily related to one tenant who defaulted on the lease. The tenant was evicted as of June 30, 2012 and the Company has a Judgment in the amount of $136,000. Revenue from the Judgment will not be recorded until received. The reduction in revenue at the Cortlandt Manor Medical Center was primarily related to a drop in occupancy compared to the prior period due to two terminations. The Port Jefferson Professional Park s Center s decrease was primarily related to one tenant who did not renew their lease in the fourth quarter of 2011. The reduction in revenue at the Fairfax Medical Center was primarily related to one tenant exercising an early termination option during the first quarter of 2011. The option included a fee of $22,000 which was equivalent to one year s rent.

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