Prime Retail REIT posts jump in quarterly income

November 09, 1994|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

Prime Retail Inc. reported yesterday a significant jump in both third-quarter and nine-month operating income and said it intends to boost its performance further with new projects.

The Baltimore-based real estate investment trust (REIT) said it generated funds from operations of $8.1 million, or 51 cents per common share, in the three months ended Sept. 30. The earnings were slightly better than the company had projected, said Robert P. Mulreaney, Prime Retail's chief financial officer.

Funds from operations -- a key gauge of a REIT's performance defined as net income plus depreciation and amortization -- increased 105 percent in the quarter before allocations to preferred shareholders and minority interests. Revenues rose 64 percent to $14.2 million.

For the nine months ended Sept. 30, Prime Retail reported that funds from operations increased 136 percent, to $21.65 million, or $1.48 per common share, before payments to preferred shareholders. Revenues increased 86 percent to $39.5 million. The nine-month figures were reported pro forma because the company did not become publicly traded until March.

Prime Retail, an outlet mall owner and developer with $374 million in assets, said recent additions to its portfolio were also expected to boost its future income.

The company recently opened centers near Chicago and in Pittsburgh and Florida, as well as taking a 30 percent interest in a center in California.

It also expects to add a center in Indiana and other expansions, which will increase its holdings an additional 440,000 square feet and generate roughly $800,000 in gross revenues in the fourth quarter.

By the end of 1994, Prime Retail's portfolio is expected to consist of 14 outlet and community centers containing 3.4 million square feet.

Mr. Mulreaney said the company also was negotiating for a $165 million revolving credit line to retire existing debt and finance the expansions.

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