Finance

Dividend Capital Diversified Property Fund Provides Fourth Quarter 2016 Portfolio Update

2.46% total shareholder return for the quarter; 6.35% total shareholder return for the last twelve months 1 Repaid two senior mortgage notes for $44.2 million with a weighted average interest rate of 5.5% Amended our credit facility to increase our term loan borrowing capacity by $125.0 million Sold one building from a multi-building, grocery-anchored retail property for approximately $6.2 million DENVER, March 03, 2017 (GLOBE NEWSWIRE) — Dividend Capital Diversified Property Fund Inc. (“DPF”), a public reporting, daily NAV REIT (NASDAQ:ZDPFAX) (NASDAQ:ZDPFEX) (NASDAQ:ZDPFIX) (NASDAQ:ZDPFWX) reported results today for the fourth quarter ended December 31, 2016.  Total Shareholder Return Total shareholder return, which represents the compound annual rate of return assuming reinvestment of all dividend distributions before the impact of up-front sales commissions and class-specific expenses as of December 31, 2016, was as follows for the indicated timeframe: Quarter ended December 31, 2016: 2.46%Year-to-date ended December 31, 2016: 6.35%Three years ended December 31, 2016 (annualized): 8.10% (26.33% cumulative)Since NAV share class inception2 (annualized): 8.32% (40.52% cumulative)Class A, Class W, and Class I shareholders had lower total returns than those set forth above due to up-front sales commissions and/or class-specific expenses. Portfolio Overview As of December 31, 2016, DPF’s portfolio consisted of 55 operating properties located in 20 geographic markets in the United States, aggregating approximately 9.0 million square feet. As of December 31, 2016, DPF’s real property portfolio was approximately 91.2% leased to approximately 520 tenants. These properties had an estimated fair value of approximately $2.3 billion (calculated in accordance with DPF’s valuation procedures), including: 16 office properties located in 13 geographic markets, aggregating approximately 3.4 million net rentable square feet, with an aggregate fair value amount of approximately $1.2 billion;34 retail properties located in nine geographic markets, aggregating approximately 3.8 million net rentable square feet, with an aggregate fair value amount of approximately $1.0 billion; andFive industrial properties located in three geographic markets, aggregating approximately 1.8 million net rentable square feet, with an aggregate fair value amount of approximately $81.8 million._____________________________ DPF’s leverage ratio, based on the fair value of its investments, was 45.9% as of December 31, 2016.  The weighted average stated interest rate of DPF’s borrowings was 3.4% as of December 31, 2016. 1 All returns figures exclude up-front sales commissions and class-specific expenses2 Measured from September 30, 2012 Disposition Activity During the quarter ended December 31, 2016, DPF sold one building from a multi-building grocery-anchored retail property located in the Greater Boston area for $6.2 million to an unrelated party. DPF continues to own the remaining buildings. Financial Results for the Three and Twelve Months Ended December 31, 2016 Net income according to generally accepted accounting principles (“GAAP”) for the quarter ended December 31, 2016 was $3.4 million, or $0.02 per basic and diluted share. This compares to GAAP net income for the quarter ended December 31, 2015 of approximately $776,000, or $0.00 per basic and diluted share. GAAP net income for the twelve months ended December 31, 2016 was $55.0 million, or $0.31 per basic and diluted share. This compares to GAAP net income for the twelve months ended December 31, 2015 of $131.7 million, or $0.70 per basic and diluted share. Company-defined funds from operations (“Company-Defined FFO”), a non-GAAP financial measure, for the quarter ended December 31, 2016 was $21.2 million, or $0.13 per basic and diluted share. This compares to Company-Defined FFO for the quarter ended December 31, 2015 of $22.8 million, or $0.13 per basic and diluted share. Company-Defined FFO for the twelve months ended December 31, 2016 was $87.4 million, or $0.51 per basic and diluted share. This compares to Company-Defined FFO for the twelve months ended December 31, 2015 of $92.0 million, or $0.49 per basic and diluted share. See the following section entitled “Non-GAAP Supplemental Financial Measure” for a reconciliation of this non-GAAP financial measure to net income attributable to common stockholders and further discussion of the use of non-GAAP financial measures. Portfolio and Leasing Summary During the fourth quarter, net operating income for all operating properties that we acquired prior to January 1, 2015 and owned through December 31, 2016 (“Same-Store NOI”)  decreased 3.7% compared to the quarter ended September 30, 2016, and decreased 1.3% when compared to the same quarter in 2015. When GAAP adjustments are excluded, Same-Store NOI decreased 2.5% compared to the quarter ended September 30, 2016, and increased 1.3% when compared to the same quarter in 2015. During the fourth quarter, DPF signed 36 leases for approximately 236,000 square feet. On a comparable space basis, DPF signed 28 leases for approximately 140,000 square feet. The average growth in rents, on a GAAP basis, for the comparable leases signed in the fourth quarter was 28.2%. For the twelve months ended December 31, 2016, DPF signed 132 leases for approximately 945,000 square feet. On a comparable basis, DPF signed 88 leases for approximately 538,000 square feet.  The average growth in rents, on a GAAP basis, for the comparable leases signed in the last twelve months was 21.5%. The overall portfolio percentage leased was 91.2% as of December 31, 2016, compared to 91.5% on September 30, 2016 and 90.1% on December 31, 2015. Same-store percentage leased was 91.0% at December 31, 2016, compared to 91.4% at September 30, 2016 and 92.1% at December 31, 2015. Non-GAAP Supplemental Financial Measure DPF computes its financial results in accordance with GAAP. Below, DPF has provided reconciliations of NAREIT-defined funds from operations (“FFO”), Company-Defined FFO and net operating income (“NOI”), which are all non-GAAP supplemental financial measures, to the most directly comparable GAAP measures (amounts in thousands, except per share information). For more information about FFO, Company-Defined FFO and NOI, including why management believes such measures provide useful information, please see the Portfolio Performance and Operational Review furnished with this press release on Form 8-K filed with the SEC on March 3, 2017, available on DPF’s website, www.dividendcapitaldiversified.com, and the SEC’s website, www.sec.gov.    For the Three Months EndedDecember 31,   For the Year EndedDecember 31, 2016 2015 2016 2015Reconciliation of net income to FFO:       Net income attributable to common stockholders$3,112  $730  $49,976  $124,255 Add (deduct) NAREIT-defined adjustments:       Depreciation and amortization expense20,083  21,710  80,105  83,114 Gain on disposition of real property(2,165) (984) (45,660) (134,218)Impairment of real property—  —  2,677  8,124 Noncontrolling interests’ share of adjustments(1,331) (1,588) (2,802) 895 FFO attributable to common shares-basic19,699  19,868  84,296  82,170 FFO attributable to dilutive OP units1,544  1,535  6,546  6,001 FFO attributable to common shares-diluted$21,243  $21,403  $90,842  $88,171 FFO per share-basic and diluted$0.13  $0.12  $0.53  $0.47         Reconciliation of FFO to Company-Defined FFO:       FFO attributable to common shares-basic19,699  19,868  84,296  82,170 Add (deduct) our adjustments:       Acquisition-related expenses6  1,385  667  2,644 (Gain) loss on extinguishment of debt and financing commitments                                 —  —  (5,136) 1,168 Noncontrolling interests’ share of our adjustments(1) (99) 1,281  (260)Company-Defined FFO attributable to common shares-basic19,704  21,154  81,108  85,722 Company-Defined FFO attributable to dilutive OP units1,545  1,634  6,299  6,261 Company-Defined FFO attributable to common shares-diluted$21,249  $22,788  $87,407  $91,983 Company-Defined FFO per share-basic and diluted$0.13  $0.13  $0.51  $0.49         Weighted average number of shares outstanding       Basic154,807  166,352  159,648  175,938 Diluted166,942  179,203  172,046  188,789    For the Three Months Ended For the Year Ended  December 31, 2016 September 30, 2016 December 31, 2015 December 31, 2016 December 31, 2015Reconciliation of net income to NOI          Net income attributable to common stockholders $3,112  $2,965  $730  $49,976  $124,255 Debt related income (233) (235) (1,328) (943) (6,922)Real estate depreciation and amortization expense 20,083  19,989  21,710  80,105  83,114 General and administrative expenses 2,257  2,234  2,564  9,450  10,720 Advisory fees, related party 3,740  3,681  4,062  14,857  17,083 Acquisition-related expenses 6  136  1,385  667  2,644 Impairment of real estate property —  2,090  —  2,677  8,124 Interest and other expense (income) 90  (2,308) (693) (2,207) (2,192)Interest expense 9,388  10,011  11,301  40,782  47,508 (Gain) loss on extinguishment of debt and financing commitments —  —  —  (5,136) 1,168 Gain on sale of real property (2,165) (2,095) (984) (45,660) (134,218)Net income attributable to noncontrolling interests 245  353  46  5,072  7,404 Total NOI $36,523  $36,821  $38,793  $149,640  $158,688 Less: 2015/2016 Acquisitions/Dispositions (7,472) (6,655) (9,351) (29,782) (37,515)Total same store real property NOI $29,051  $30,166  $29,442  $119,858  $121,173 Reconciliation of Total NOI to NOI – cash basis          Total NOI $36,523  $36,821  $38,793  $149,640  $158,688 Net amortization of above- and below-market lease assets and liabilities, and other non-cash adjustments to rental revenue 150  (122) (187) (512) (842)Straight line rent 522  296  291  1,263  976 NOI – cash basis $37,195  $36,995  $38,897  $150,391  $158,822 Less: 2015/2016 Acquisitions/Dispositions (6,900) (5,909) (9,003) (27,128) (36,446)Total same store real property NOI – cash basis $30,295  $31,086  $29,894  $123,263  $122,376 Webinar and Portfolio Update Call Information DPF will host a webinar/portfolio update call to review fourth quarter 2016 performance results and financial metrics on March 15, 2017, at 2:15 p.m. U.S. Mountain Time. Information to access the call is as follows:         Date: Wednesday, March 15, 2017         Time: 2:15 p.m. MT/4:15 p.m. ET         Dial-in Number: 800.274.0251         Conference ID: 2242504 To access the live webinar please visit the Investor Relations page at DPF’s website, www.dividendcapitaldiversified.com.   The webinar replay will be posted when available on the Investor Relations page of DPF’s website. About Dividend Capital Diversified Property Fund Dividend Capital Diversified Property Fund is a public reporting, daily NAV vehicle based in Denver, CO that invests in a diversified portfolio of commercial real estate assets. DPF owned 55 properties totaling approximately 9.0 million square feet in 20 geographic markets as of December 31, 2016. More information is available at www.dividendcapitaldiversified.com.   Forward-Looking Information This material may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “expect(s),” “could,” “should,” and “continue” and similar statements are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results that are materially different than those described in the forward-looking statements. Dividend Capital Diversified Property Fund cannot give assurance that its expectations will be attained. Factors that could cause actual results to differ materially from Dividend Capital Diversified Property Fund’s expectations include, but are not limited to, the uncertainty of funding Dividend Capital Diversified Property Fund’s future capital needs, delays in the acquisition, development, and construction of real properties, changes in economic conditions generally and the real estate and securities markets specifically, and other risks detailed from time to time in Dividend Capital Diversified Property Fund’s Securities and Exchange Commission reports, particularly the section entitled “Risk Factors” in Item 1A of Dividend Capital Diversified Property Fund’s Annual Report on Form 10-K. Such forward-looking statements pertain only as of the date of this press release. Dividend Capital Diversified Property Fund expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Dividend Capital Diversified Property Fund’s expectations with regard thereto or change in events, conditions, or circumstances on which any statement is based.Contact
Eric Paul
Dividend Capital
(303) 228-2200

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