Mid-Atlantic Realty Trust plans cautious expansion

May 14, 1994|By Timothy J. Mullaney | Timothy J. Mullaney,Sun Staff Writer

Hailing a "new vitality" as the real estate industry begins to emerge from its deep recession, the chief executive of Mid-Atlantic Realty Trust yesterday told shareholders that the company is making progress in selling unwanted assets and moving ahead with a cautious expansion program.

"It's very important in real estate that once you begin to break even, increased revenues tend to drop right to the bottom line," Mid-Atlantic President F. Patrick Hughes said at the Linthicum company's annual shareholders meeting, held at the World Trade Center in Baltimore. "Now if we come to the [negotiating] table and say we can do certain things, we'll be able to do them."

Mid-Atlantic, which was called BTR Realty Inc. until last year, stumbled badly during the recession, as 1980s development projects forced big write-offs. But Mr. Hughes said the company, which cut its debt sharply last year when it converted

to a real estate investment trust from a corporation, is looking stronger.

He said Mid-Atlantic, which mostly owns community shopping centers and whose best-known local property is the Harford Mall in Bel Air, has finished a renovation of fire-damaged Rolling Road Plaza, finished the shell of an expansion for the Hecht's store at Harford Mall that will open by Christmas and is talking to prospective tenants for a redevelopment of the Timonium Mall, which Mid-Atlantic bought last summer. The company is also expanding the Giant store at Wilkens Plaza and has a deal to upgrade the York Road Plaza at the city-county line, including a doubling of the size of that center's Giant store.

The company also has firm or tentative deals to sell about a third of its undeveloped land, he said.

Mid-Atlantic told shareholders that the company's funds from operations, the most accurate measure of a real estate investment trust's performance, rose 7.1 percent during the first quarter of the year, to $1.59 million, compared with a pro forma analysis of funds from operations in the same months of last year. The 1993 pro forma is different than BTR's actual results, in large part because of the company's different financial structure before the conversion.

Net income posted a healthy 119 percent gain over last year's pro forma net income, but real estate firms usually rely on the funds from operations figures because depreciation rules artificially depress net income by requiring companies to provide for depreciation of buildings that may actually be gaining value.

Mid-Atlantic Realty Trust

Ticker .. .. ... ..Yesterday's Symbol .. .. .. .. Cls. .. .. Chg.

MRR .. .. .. .. .. 9 1/4 ... + 1/4

Period ended

3/31/94 .. .. ..1st qtr. .. ... Year ago* .. .....Chg.

Revenue .. .. ..$5,556 .. ... ..$5,043 .. ... ..+10.2%

Net Income .. ..$700 .. ... ... $320 .. ... ...+118.8%

Primary EPS .. .$0.11 .. ... ...$0.05 .. ... . +120.0%

Figures in thousands (except per share data.)

* 1993 figures are pro forma.

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