Post Properties Inc. (PPS, Financial) filed Quarterly Report for the period ended 2010-03-31.
Post Properties Inc. has a market cap of $1.29 billion; its shares were traded at around $26.51 with and P/S ratio of 4.66. The dividend yield of Post Properties Inc. stocks is 3.02%.
At March 31, 2010, the Company owned approximately 99.6% of the common limited partnership interests (Common Units) in the Operating Partnership. Common Units held by persons other than the Company represented a 0.4% common minority interest in the Operating Partnership.
Consistent with the factors described above, the Companys operating results included a decrease in the year over year rate of growth in same store operating revenues of 4.2% for the year ended December 31, 2009, compared to 2008. Although partially offset by favorable variances in property operating expenses, same store NOI also declined 5.4% for the year ended December 31, 2009, compared to 2008. The revenue decrease was primarily attributable to declining rental rates, which on a year over year basis decreased 4.2% in 2009, compared to 2008, while average economic occupancy declined modestly from 94.2% in 2008 to 94.0% for 2009. By the fourth quarter of 2009, average rental rates in the Companys same store portfolio were 6.8% lower than in the same quarter of 2008.
This trend continued in the first quarter of 2010 with same store revenues declining 4.6% compared to the first quarter of 2009, due primarily to lower average rental rates which declined 6.9% during the quarter compared to the same quarter in the prior year. However, the moderation in the rate of decline in average rental rates on a year-over-year basis that the Company began to see in the fourth quarter of 2009, continued into the first quarter of 2010. Additionally, average economic occupancy increased modestly from 93.6% in the first quarter of 2009 to 95.0% in the first quarter of 2010. As a result, partially impacted by a modest increase in property operating and maintenance expenses, same store NOI decreased 7.9% during the first quarter of 2010 compared to the same quarter in the prior year.
Based on the above, assuming it applied a discount rate of 23% to calculate the present value of the estimated future cash flows, the Company would expect to record an impairment charge of approximately $30,000 to $33,000 in the second quarter ending June 30, 2010, in connection with the Austin Condominium Project, since initial deliveries of condominium units at this project are expected to commence during the second quarter, at which time the project is expected to be classified as held for sale for financial reporting purposes. The anticipated impairment charge is calculated as the amount by which the carrying value of the project exceeds its estimated fair value. As there is significant judgment required in developing the assumptions underlying such estimates of fair value for impairment purposes, there can be no assurance that such loss estimate will not change materially before the end of the second quarter. Factors and assumptions that could materially change the Companys current estimate of fair value may include changes in the actual and projected future closings of condominium units under contract (76 units as of April 30, 2010), the default rate relating to existing contracts with individual buyers, future expectations regarding estimated cash flows, in general, and the discount rate used to calculate the present value of estimated future cash flows. (As an example, a 1% change in the discount rate used to calculate fair value would result in an approximate $1,200 change in fair value and the resulting impairment charge.) There can be no assurance that the Companys cash flow projections will not change in future periods and that the estimated fair value of the Austin Condominium Project and the anticipated impairment charge will not change materially as a consequence.
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Post Properties Inc. has a market cap of $1.29 billion; its shares were traded at around $26.51 with and P/S ratio of 4.66. The dividend yield of Post Properties Inc. stocks is 3.02%.
Highlight of Business Operations:
Post Properties, Inc. and its subsidiaries develop, own and manage upscale multi-family communities in selected markets in the United States. As used in this report, the term Company includes Post Properties, Inc. and its subsidiaries, including Post Apartment Homes, L.P. (the Operating Partnership), unless the context indicates otherwise. The Company, through its wholly-owned subsidiaries is the general partner and owns a majority interest in the Operating Partnership which, through its subsidiaries, conducts substantially all of the on-going operations of the Company. At March 31, 2010, the Company owned 19,863 apartment units in 55 apartment communities, including 1,747 apartment units in five communities held in unconsolidated entities and 993 apartment units in three communities currently in lease-up. The Company is also developing and selling 277 luxury for-sale condominium homes in two communities (including 129 units in one community held in an unconsolidated entity) through taxable REIT subsidiaries. At March 31, 2010, approximately 35.4%, 23.1%, 11.2% and 10.8% (on a unit basis) of the Companys operating communities were located in the Atlanta, Dallas, the greater Washington D.C. and Tampa metropolitan areas, respectively.At March 31, 2010, the Company owned approximately 99.6% of the common limited partnership interests (Common Units) in the Operating Partnership. Common Units held by persons other than the Company represented a 0.4% common minority interest in the Operating Partnership.
Consistent with the factors described above, the Companys operating results included a decrease in the year over year rate of growth in same store operating revenues of 4.2% for the year ended December 31, 2009, compared to 2008. Although partially offset by favorable variances in property operating expenses, same store NOI also declined 5.4% for the year ended December 31, 2009, compared to 2008. The revenue decrease was primarily attributable to declining rental rates, which on a year over year basis decreased 4.2% in 2009, compared to 2008, while average economic occupancy declined modestly from 94.2% in 2008 to 94.0% for 2009. By the fourth quarter of 2009, average rental rates in the Companys same store portfolio were 6.8% lower than in the same quarter of 2008.
This trend continued in the first quarter of 2010 with same store revenues declining 4.6% compared to the first quarter of 2009, due primarily to lower average rental rates which declined 6.9% during the quarter compared to the same quarter in the prior year. However, the moderation in the rate of decline in average rental rates on a year-over-year basis that the Company began to see in the fourth quarter of 2009, continued into the first quarter of 2010. Additionally, average economic occupancy increased modestly from 93.6% in the first quarter of 2009 to 95.0% in the first quarter of 2010. As a result, partially impacted by a modest increase in property operating and maintenance expenses, same store NOI decreased 7.9% during the first quarter of 2010 compared to the same quarter in the prior year.
Based on the above, assuming it applied a discount rate of 23% to calculate the present value of the estimated future cash flows, the Company would expect to record an impairment charge of approximately $30,000 to $33,000 in the second quarter ending June 30, 2010, in connection with the Austin Condominium Project, since initial deliveries of condominium units at this project are expected to commence during the second quarter, at which time the project is expected to be classified as held for sale for financial reporting purposes. The anticipated impairment charge is calculated as the amount by which the carrying value of the project exceeds its estimated fair value. As there is significant judgment required in developing the assumptions underlying such estimates of fair value for impairment purposes, there can be no assurance that such loss estimate will not change materially before the end of the second quarter. Factors and assumptions that could materially change the Companys current estimate of fair value may include changes in the actual and projected future closings of condominium units under contract (76 units as of April 30, 2010), the default rate relating to existing contracts with individual buyers, future expectations regarding estimated cash flows, in general, and the discount rate used to calculate the present value of estimated future cash flows. (As an example, a 1% change in the discount rate used to calculate fair value would result in an approximate $1,200 change in fair value and the resulting impairment charge.) There can be no assurance that the Companys cash flow projections will not change in future periods and that the estimated fair value of the Austin Condominium Project and the anticipated impairment charge will not change materially as a consequence.
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