PS Business Parks, Inc. Reports Results for the Quarter Ended September 30, 2019
PS Business Parks, Inc. (NYSE:PSB) reported operating results for the three and nine months ended September 30, 2019.
Acquisition and Disposition Update
During the quarter ended September 30, 2019, the Company acquired Hathaway Industrial Park (the “Park”) located in Santa Fe Springs, California, for a total purchase price of $104.3 million, inclusive of capitalized transaction costs. The Park consists of ten buildings totaling 543,000 square feet situated on 27 acres of land and is 100% occupied with suites ranging from 5,000 to 288,000 square feet. The Park is located in a prime last-mile location in the heart of the Los Angeles Mid-Counties submarket with access to strong demographics of over 6 million people within a 15-mile radius.
Subsequent to quarter end, the Company completed the sale of three business parks located in Montgomery County, Maryland: Metro Park North, Meadow Business Park and WesTech Business Park. The parks, consisting of 28 buildings totaling approximately 1.3 million square feet, sold for a gross sales price of $148.8 million. The Company retained one single-tenant government building totaling 113,000 square feet and a long-term ground lease at Metro Park North. The portfolio of assets which sold had been classified as held for sale for the three and nine months ending September 30, 2019 and all comparable periods.
Operating Results for the Three and Nine Months Ended September 30, 2019
Net income allocable to common shareholders was $26.3 million, or $0.96 per diluted common share, for the three months ended September 30, 2019, an increase of $1.2 million, or 4.7%, from $25.1 million, or $0.92 per diluted common share, for the same period in 2018. The increase was mainly due to an increase in net operating income (“NOI”) with respect to the Company’s real estate facilities partially offset by an increase in general and administrative expense primarily from a one-time charge to stock compensation expense of $1.1 million resulting from a modification to the Retirement Plan for Non-Employee Directors. The increase in NOI includes a $2.4 million, or 3.6%, increase attributable to Same Park facilities driven by an increase in rental rates, combined with increased NOI from Non-Same Park and multifamily assets, partially offset by reduced NOI generated from assets held for sale as of September 30, 2019.