Gramercy Property Trust Inc. (GPT)

[Enterprising Investor]

Gramercy Property Trust Inc. Reports Fourth Quarter and Full Year 2013 Financial Results (3/13/14)

Announces Resumption of Common Stock Quarterly Dividend

NEW YORK--(BUSINESS WIRE)--Gramercy Property Trust Inc. (NYSE:GPT):

HIGHLIGHTS

• Generated negative funds from operations (“FFO”) of $0.947 million or negative $0.01 per diluted common share for the fourth quarter 2013. For the full year, generated positive FFO of $394.3 million or $6.41 per diluted common share.

• FFO before discontinued operations was $3.5 million or $0.05 per common share for the fourth quarter 2013. For the full year, generated positive FFO before discontinued operations of $1.3 million or $0.02 per diluted common share.

• Generated adjusted funds from operations (“AFFO”) of $3.4 million or $0.05 per fully diluted common share for the fourth quarter 2013. For the full year, generated AFFO of $5.8 million or $0.09 per diluted common share.

• Declared payment of quarterly common stock dividends of $0.035 per common share, to be paid on April 15, 2014 to holders of record as of March 31, 2014.

• In January 2014, paid all accrued and unpaid preferred stock dividends and resumed timely payments of quarterly preferred stock dividends.

• Raised $45.5 million of net proceeds through the private placement of approximately 11.5 million shares of common equity at a price of $4.11 per share.

• Extended the asset management services agreement with an affiliate of KBS Real Estate Investment Trust, Inc. (“KBS”) through December 31, 2016 with a one-year extension option and received payment of $12.0 million from KBS in satisfaction of the profit participation interest under existing agreement.

• During the quarter, acquired 11 properties in eight separate transactions for a total purchase price of approximately $164.9 million (initial cap rate 7.3% and GAAP cap rate 8.3%) with an average lease term of 14 years.

• Ended the fourth quarter of 2013 with cash and cash equivalents of $43.3 million as compared to $28.7 million reported at the end of the prior quarter.

SUMMARY

Gramercy Property Trust Inc. (NYSE:GPT) today reported a net loss to common stockholders of $7.7 million, or $0.11 per fully diluted common share for the three months ended December 31, 2013 and net income to common stockholders of $377.7 million, or $6.14 per fully diluted common share for the full year ended December 31, 2013. For the quarter, the Company generated negative FFO of $0.947 million, or negative $0.01 per fully diluted common share, and for the year ended December 31, 2013, FFO was $394.3 million, or $6.41 per fully diluted common share. FFO and net loss to common stockholders include a contingency of approximately $4.4 million, or $0.06 and $0.07 per common share for the quarter and year ended December 31, 2013, respectively, related to a transfer tax assessment for a joint venture interest sold by the Company in 2010. The Company believes the transaction was exempt from transfer taxes and intends to vigorously defend against the assessment. The contingency is recorded in discontinued operations. For the quarter, the Company generated AFFO of $3.4 million, or $0.05 per fully diluted common share, and for the year ended December 31, 2013, AFFO was $5.8 million, or $0.09 per fully diluted common share. A reconciliation of FFO and AFFO to net income available to common stockholders is included on page 10 of the press release.

For the fourth quarter of 2013, the Company recognized total revenues of approximately $17.7 million, an increase of 32% over total revenues of $13.4 million reported in the prior quarter. Total revenues for the year ended December 31, 2013 were approximately $56.7 million as compared to $36.8 million for the prior year.

DIVIDENDS

The Company, after a hiatus of more than five years, will resume payment of a dividend to common stockholders, beginning with the first quarter of 2014. The board of directors authorized and the Company has declared a dividend of $0.035 per common share for the first quarter of 2014, to be paid on April 15, 2014 to holders of record as of March 31, 2014.

Gordon F. DuGan, Chief Executive Officer, commented, “We are very pleased with the significant milestones achieved in the fourth quarter of 2013. Furthermore, the initiation of a common dividend for the first quarter of 2014 is another important step forward for Gramercy. We are currently focused on Gramercy’s growth trajectory and therefore our dividend policy will be based upon a low payout ratio for the time being. Finally, we are very excited about our prospects for significant growth in 2014.”

The board of directors also authorized and the Company has declared the Series A preferred stock quarterly dividend for the period January 15, 2014 through and including April 14, 2014 in the amount of $0.50781 per share, reflecting an annualized distribution of $2.03125 per share. The preferred stock dividend is payable on April 15, 2014 to holders of record as of March 31, 2014.

In January 2014, the Company paid all accrued preferred stock dividends for prior periods, which as of December 31, 2013, was $37.6 million or $10.23524 per share. The Company also resumed timely payments of dividends on the Company’s preferred stock, beginning with the $0.50781 per share dividend due for the fourth quarter of 2013. The accrued dividend was paid on January 13, 2014, and the quarterly dividend was paid on January 15, 2014.

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