Firm Gets $36M in Net Income for 2011

By Natalie Dolce

Print Email Share Reprints News Tip? Get Alerts

Disable this ad

Sign Up for the California AM Alert

Join the thousands of real estate professionals that subscribe to the California AM Alert. Each and every morning, we deliver the important stories, data, analysis…as well as the opinions and insights of industry thought leaders to provide you with market intelligence and a daily business advantage.

Become a registered member today and don’t miss another important story in the California market. Let GlobeSt.com be your source for everything real estate.

Founder, chairman and
CEO, Carl E. Berg

(Mark Your Calendars: RealShare REAL ESTATE 2012, March 22^nd in Los Angeles).

CUPERTINO, CA-Locally based Mission West Properties Inc. reported that Q4 funds from operations were approximately $16.6 million as compared to approximately $11.1 million for the same period in 2010. The increase was primarily due to higher operating revenues from new leases and lower operating expenses, says the firm.

Net income for the quarter was approximately $14.16 million as compared to approximately $10.84 million for the quarter ended December 31, 2010. Net income for the year ended December 31, 2011, was approximately $38.9 million as compared to approximately $36.49 million for the year ended December 31, 2010.

Mission West Properties operates as a self-managed, self-administered and fully integrated REIT engaged in the management, leasing, marketing, development and acquisition of commercial R&D properties, primarily located in the Silicon Valley portion of the San Francisco Bay Area. Currently, the company manages 108 properties totaling approximately 7.9 million rentable square feet.

In early January, the company disposed of three R&D properties located at 1680-1690 McCandless Dr., 1740-1768 McCandless Dr. and 1810-1830 McCandless Dr. in Milpitas, CA consisting of approximately 165,000 rentable square feet. A total net gain of approximately $8.35 million will be recognized and classified as discontinued operations on the total sales price of $21.78 million. The buyer issued an unsecured promissory note to the company in the amount of $18.78 million with an interest rate of 0% per annum.

The company recently also revealed that it was going to “explore strategic alternatives for the possible sale” of the company. “As a result of an increase in portfolio sales in various markets around the US, including the Silicon Valley portion of the San Francisco Bay Area, lower borrowing costs, and a steady decline in cap rates from the increased investor demand for yield oriented real estate investments, the company’s board of directors has authorized management to initiate a process to identify potential qualified buyers and determine an appropriate structure for the sale of the company taking into account the potential value of the transaction to stockholders and operating unit holders,” says a prepared release.

As part of this process, the company will conduct a broad-based marketing effort with the assistance of various third party advisors and its founder, chairman and CEO, Carl E. Berg, according to a prepared statement.

“The company is continuing to lease buildings, aggressively pursue new tenants, seek value added acquisitions and run its business in the ordinary course with little or no disruption as a result of the potential sales transaction,” says a company statement. “The company continues to believe that revenues and earnings will continue to increase in 2012 based on new and renewal leases and higher rents.”

Categories: West, Industrial, Acquisitions/Dispositions, San Francisco