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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 11, 1998
WEEKS REALTY, L.P.
(Exact name of registrant as specified in its charter)
Georgia 000-22933 58-2121388
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(State of (Commission File (IRS Employer
Incorporation) Number) Identification No.)
4497 Park Drive, Norcross, Georgia 30093
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(Address of principal executive offices, including zip code)
(770) 923-4076
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On February 17, 1998, Weeks Corporation, the indirect sole general partner of
the registrant, announced its results of operations for the three months and
year ended December 31, 1997. A copy of the related news release is attached as
an exhibit to this Current Report.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit No. Description
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99.1 News release of Weeks Corporation dated February 17, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WEEKS REALTY, L.P.
Registrant
By: Weeks GP Holdings, Inc., its
sole General Partner
Date: March 12, 1998 By: /s/ David P. Stockert
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David P. Stockert
Senior Vice President and
Chief Financial Officer
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INDEX TO EXHIBITS
Exhibit Description Page
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99.1 News release of Weeks Corporation dated
February 17, 1998
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EXHIBIT 99.1
News Release
CONTACTS: A. Ray Weeks, Jr., Chairman and Chief Executive Officer, 770-717-3202
David P. Stockert, Senior Vice President and Chief Financial Officer,
770-717-3204
Susan C. Walker, Vice President, Investor Relations, 770-717-3260
WEEKS CORPORATION (WKS) ANNOUNCES 14.6% INCREASE IN PER SHARE 1997
FFO; INVESTMENT PIPELINE TOTALS $302 MILLION WITH 10.8% INITIAL YIELD
ATLANTA (February 17, 1998)-- Weeks Corporation (NYSE:WKS) today announced that
for the fourth quarter ended December 31, 1997, the Company's funds from
operations (FFO) were $10.8 million, compared with $6.7 million for the fourth
quarter of 1996. On a per share basis, the Company's FFO increased 13.0%, to
$0.61 for the fourth quarter of 1997, compared with $0.54 for the fourth quarter
of 1996. The Company's payout ratio of FFO was 76.2% for the fourth quarter of
1997, compared with 80.2% for the fourth quarter of 1996. For the full year
1997, the Company's FFO was $38.5 million, compared with $23.6 million for the
full year 1996. On a per share basis, the Company's FFO increased 14.6%, to
$2.35 for 1997, compared with $2.05 for 1996. The Company's payout ratio of FFO
was 74.5% for 1997, compared with 79.4% for 1996.
Compared with the fourth quarter of 1996, the Company's revenues increased
66.9%, to $26.4 million, and net income available to common shareholders
increased 58.6%, to $5.6 million. On a per share basis, net income for the
fourth quarter increased 14.3%, to $0.32. Compared with the full year 1996, the
Company's revenues increased 70.8%, to $92.0 million, and net income available
to common shareholders increased 58.9%, to $20.3 million. On a per share basis,
net income for the year increased 11.7%, to $1.24. The Company had 17.7 million
weighted average common shares outstanding in the fourth quarter of 1997,
compared with 12.6 million in the fourth quarter of 1996. The Company had 16.4
million weighted average common shares outstanding for the full year 1997,
compared with 11.5 million for the full year 1996. All of the per share amounts
included above refer to basic earnings per share. Diluted earnings per share
amounts are included in the accompanying financial highlights table.
Commenting on the year, Chairman and Chief Executive Officer A. Ray Weeks, Jr.,
stated, "Weeks achieved all of the major strategic goals for 1997 that we
articulated at the outset of the year: We made Florida our top geographic
priority and secured positions in each of the four most important markets in
that state, operated the core portfolio to match or beat the prior year's
results, produced attractive development returns and achieved our goal to win a
greater volume of build-to-suit opportunities, maintained a disciplined approach
to acquisitions, using them largely to open new markets and submarkets, attained
investment-grade rated status, and maintained a strong balance sheet. As a
result of all of this, we achieved another consecutive year of more than 14% per
share FFO growth."
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1997 COMPANY HIGHLIGHTS
NEW MARKET EXPANSION -- MAJOR FLORIDA PRESENCE
During the year, Weeks completed several transactions to build a significant
presence in Tampa and Jacksonville and to augment its market position in
Orlando. The Company also entered into agreements (1998 closings) on a major
acquisition and expansion into Miami/Fort Lauderdale, including a strategic
alliance in that market with Codina Group, Inc., a leading South Florida
commercial and industrial real estate company, and St. Joe Corporation, which,
together with its affiliates, is Florida's single largest private landholder.
Including those transactions, Weeks now operates in eight, rapidly growing
markets across the Southeast.
HIGH-LEVEL CORE PORTFOLIO OPERATING PERFORMANCE
The Company also maintained the consistently high-level performance of its core
portfolio. At year-end 1997, the average occupancy of Weeks' in-service
portfolio was 96.0%, approximately the same average occupancy as at year-end
1996 (96.2%). For the year 1997, the Company produced average same-space rent
increases, computed on a per square foot cash basis for second-generation
leases, of 6.0%, substantially more than the 4.2% average increases recorded in
1996. The Company's tenant retention rate also increased in 1997, to 72%, from
67% in 1996, reflecting Weeks' focus on client service.
LARGER PIPELINE OF COMMITTED INVESTMENTS
During the year, Weeks stabilized $95.9 million of development, with an average
current occupancy of 98% and with an estimated average initial unleveraged
return of 11.0%, and closed $118.5 million of acquisitions, with an estimated
average initial unleveraged return of 10.5%. In addition, in January 1998, the
Company closed the $175 million acquisition of Beacon Centre in Miami, with an
estimated average initial unleveraged return of 8.7%, in connection with its
expansion into South Florida.
Weeks currently has a pipeline of committed developments and contracted
acquisitions totaling $302 million (not including the Beacon Centre acquisition
discussed above), with an estimated average initial unleveraged return of 10.8%.
This amount represents a 36% increase in the size of Weeks' forward investment
pipeline compared with the same time last year. A portion of this increase
reflects a doubling of the Company's build-to-suit volume as a result of a
greater emphasis on this business beginning in 1997.
INVESTMENT-GRADE STATUS ATTAINED, STRONG CAPITALIZATION, INCREASED DIVIDENDS
During the year, Weeks was awarded corporate senior credit ratings of BBB from
Standard & Poor's, Baa2 from Moody's and BBB from Duff & Phelps, which, among
other things, allowed the Company to complete an attractively priced preferred
stock offering and reduce its interest costs under its line of credit by 30
basis points. In total, Weeks raised $284 million in common and preferred
equity and unit transactions in 1997, resulting in a year-end debt-to-total
market capitalization ratio of 25% (32% on a pro forma basis for the Beacon
Centre acquisition discussed above).
Beginning with the dividend paid for the fourth quarter of 1997, the Company
increased its dividend rate by 8.1% to $1.86 per share annually.
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