Capital Automotive REIT, a specialty finance company for automotive retail real estate, on July 24 announced financial results for the second quarter ended June 30, 2001.

The eompany reported record second quarter revenues, net income and adjusted funds from operations (funds from operations excluding straight-lined rents) ("AFFO"). Total revenues were $28.4 million for the quarter ending

June 30, 2001, a 12 percent increase from revenues of $25.3 million in the second

quarter of 2000. Net income was $7.1 million, or $0.32 per diluted share, compared to $6.3 million, or $0.30 per diluted share, in the same quarter last year.

The Company reported AFFO for the three months ended June 30, 2001 of $14.2 million, or $0.46 per diluted share, up from $12.7 million, or $0.43 per diluted share, in the same quarter last year.

Total revenues for the six-month period ended June 30, 2001 were $56.5 million compared to $50.4 million for the same period in 2000. Net

income for the six-month period was $13.9 million, or $0.63 per diluted share, compared to $12.7 million, or $0.61 per diluted share, in the same period last year. For the six-month period ended June 30, 2001, AFFO was $27.9 million, or $0.91 per diluted share, up from $25.1 million, or $0.85 per diluted share,

in the same period last year.

Pending and Completed Acquisitions

The company also announced July 24 that it has entered into a definitive purchase agreement to acquire nine automotive retail properties. The

transaction, which is valued at $102.4 million, is expected to be funded with the issuance of long-term debt drawn under a new commitment from Toyota Financial Services and equity. Capital expects this transaction to be

accretive to 2002 AFFO per share. "Management remains comfortable with current analyst consensus AFFO per share projections for 2001 of $1.84," the company said in a statement.

Under the terms of the definitive purchase agreement, Capital Automotive will acquire nine automotive retail properties located in seven states. The initial lease terms are expected to be 15 years, with multiple renewal options

exercisable at the option of the tenant. The acquisition is expected to close during the third quarter 2001 and is subject to the completion of due diligence and customary closing conditions.

Acquisitions Announced

Capital Automotive also announced the completion of approximately $32.5 million of acquisitions during the second quarter of 2001.

Consideration for these acquisitions was approximately $31.8 million from funds drawn down on the company's short-term credit facilities and the issuance of operating partnership units valued at $0.7 million at the time of the acquisition. The average lease term for these acquisitions is 12.1 years, with multiple renewal options. The second quarter acquisitions announced July 24 include:

-- Two properties, totaling $14.7 million and leased to Lithia Motors, Inc., in Medford, Ore., and Fresno, Calif. Five franchises operate at these properties, including BMW, Ford, Mazda, Nissan and Suzuki. Lithia, a Fortune 1000 Company with reported 2000 revenues of $1.66 billion, operates 114 franchises, selling 26 brands of new vehicles in eight states.

-- One property with a new, state of the art Honda facility, totaling $9.5 million and leased to Family Honda in Rancho Santa Margarita, Calif. Family Honda is part of the Family Auto Group based in Orange County, Calif., which also operates an award winning Toyota dealership in San Juan Capistrano, Calif., and a Ford dealership in Whittier, Calif.

-- Facility improvements and two construction fundings totaling approximately $8.3 million on previously acquired properties leased to existing tenants in three states.

"We are extremely excited about these transactions which add quality assets to our portfolio and continue our strategy of supplementing internal growth with strategic acquisitions," said Thomas D. Eckert, president and chief executive officer of Capital Automotive. "We continue to do business with

the strongest industry operators, and thus, have not had any rental payment defaults in our portfolio to date. We continue to track consolidation in the industry and pursue accretive acquisition opportunities for Capital

Automotive. Our acquisition pipeline is robust and we believe the company is well positioned to capitalize on opportunities in the marketplace."

Financing Commitment

Capital Automotive also announced that it received a commitment for $150 million of secured financing from Toyota Financial Services. The terms of the commitment provide for a 12-year term with interest at a spread over the one-month LIBOR rate which may be swapped to a fixed rate.

Capital anticipates drawing on this commitment to partially fund the pending and future acquisitions and to repay amounts outstanding under its short-term credit facilities.

The company's debt to assets (total assets plus accumulated depreciation) ratio was approximately 57 percent as of June 30, 2001, which falls within the company's current policy of limiting debt to approximately 65 percent of assets. Approximately 83 percent of the outstanding debt as of June 30, 2001 is substantially match-funded, non-recourse debt. Virtually all of the company's debt is secured financing with a weighted average remaining term of 10.9 years, which approximates the remaining weighted average lease term of 11.4 years. Capital's earliest significant long-term debt maturity is not until 2011.

"We are pleased with the results of our second quarter, which demonstrate our commitment to prudent growth," said David S. Kay, vice president and chief financial officer. "Additionally, we expect the completion of the pending acquisition to be accretive to our 2002 AFFO per share and have a

positive long-term impact on cash flow. Accordingly, we are increasing our previous AFFO guidance for 2002 to $1.97 per share. We remain comfortable with current analyst consensus AFFO estimates of $1.84 per share in 2001."

About Capital Automotive

Capital Automotive, headquartered in McLean, Va., is a self-administered, self-managed real estate investment trust formed to acquire

the real property and improvements used by operators of multi-site, multi-franchised automotive dealerships and related businesses.

As of June 30, 2001, the company's portfolio included 251 properties with an asset value of approximately $1.1 billion, consisting of 376 automotive franchises in 27 states. Approximately 70 percent of the company's total real estate investments are located in the top 50 metropolitan areas in the U.S. in terms

of population. The properties are leased under long-term, triple-net leases with a weighted average initial lease term of 13.6 years.

Additional information on Capital Automotive is available at www.capitalautomotive.com.

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