Prime Retail Inc. reported yesterday that its operational income rose to $14.8 million in the final quarter of last year, a 52.4 percent gain that caps a wave of 1997 growth for the Baltimore-based retail outlet mall owner.
On a per-share basis, funds from operations in the period ended Dec. 31 was 31 cents, up 1 cent. Revenue in the quarter totaled $36.2 million, a 39.6 percent increase.
For all of 1997, the real estate investment trust generated funds from operations of $46.7 million, $1.20 per share, a 69.2 percent gain over 1996's $27.6 million that the company attributed primarily to property acquisitions and project development.
Funds from operations, a key measure of financial health for REITs, is defined as net income plus noncash charges such as depreciation, and excluding gains or losses from property sales.
Revenue for the year rose 45 percent, to $129.1 million.
"1997 was by far the most productive year in our company's relatively short history," said Abraham Rosenthal, Prime Retail's chief executive. "We purchased seven properties totaling 1.2 million square feet of gross leaseable area for $164.3 million, raised $212 million in new equity [and] began trading our common stock and Series B preferred stock on the New York Stock Exchange."
Rosenthal added that Prime Retail's performance was also enhanced from reducing its ratio of debt to total market capitalization to 42.4 percent at year-end.
But its real financial boost came from new or expanded projects and a 2.8 percent increase in same-store sales. At year's end, for instance, Prime Retail's portfolio consisted of 28 malls in 20 states and totaled 7.2 million square feet, while its asset value rose 35.6 percent to $904.2 million.
And more new projects are in the offing, thanks to a $900 million deal to buy the Horizon Group Inc. Prime Retail expects to finalize the transaction, which will make it the nation's largest outlet center owner, in the second quarter of this year.
Prime Retail's share price closed yesterday at $15.125, down 12.5 cents.
Pub Date: 1/28/98