CLEVELAND, May 11, 2005 (PRIMEZONE) -- Paragon Real Estate Equity and Investment Trust (AMEX:PRG) announced operating results for the three months ended March 31, 2005. Net loss attributable to common shareholders increased to $446,000, or $0.01 per share, compared to a net loss of $133,000, or $0.00 per share, for the same period of 2004.
During the first quarter of 2005, Richton Trail Apartments performed at approximately the same level compared to last year's first quarter. Paragon's general and administrative expenses increased by $219,000, to $459,000, for due diligence on a large potential acquisition. James C. Mastandrea, Chief Executive Officer and President, noted, "We spent a considerable amount of time, effort and money analyzing a large portfolio of value-added apartment complexes and their related investment funds. Even though the deal did not happen, we remain committed to adding to our portfolio this year."
During the first quarter, Paragon hired several highly experienced professionals as independent consultants and used other service firms to assist in performing due diligence on a large portfolio of affordable housing apartment complexes and the related investment partnership funds. The seller was an institution that was divesting its portfolio for non-economic reasons. However, the seller decided to retain its portfolio in order to work out problems that arose during the due diligence period. On April 30, Paragon's non-binding letter of intent expired, and the seller chose not to renew it.
Additionally, Paragon is pleased to announce that in March, David R. Folsom joined Paragon as Vice President - Capital Markets. Mr. Folsom's most recent experience was with a regional investment banking firm where he participated in over 75 underwriting and financial advisory transactions, including offerings of equity, preferred stock, and fixed income securities across a wide array of industries and sectors. James C. Mastandrea commented, "David will be dedicated to raising capital for Paragon. We are intent on increasing our equity in 2005 to comply with the continuing listing requirements of the American Stock Exchange so that our common shares remain on the Exchange." Prior to being an investment banker, Mr. Folsom graduated from the U.S. Naval Academy, served over 10 years in the U.S. Marine Corps, achieving the rank of Major, and then earned an MBA degree from Georgetown University. Mr. Folsom's compensation package is similar to the other Paragon executives, which is largely incentive based because of the minimal annual salary with grants of restricted common shares. Mr. Mastandrea noted, "Dave will be relocating with his family to Cleveland during this summer and we're excited to have a person of his caliber join our team."
Forward-Looking Statements
Certain matters discussed within this press release may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Paragon Real Estate Equity and Investment Trust believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that the planned implementation of a national real estate acquisition, development and re-development strategy will be completed in whole or in part. Factors that could cause actual results to differ materially from Paragon's expectations include changes in local or national economic or real estate conditions, the ability to meet competition, loss of existing key personnel, ability to hire and retain future personnel and other risks detailed from time to time in Paragon's SEC reports and filings, including its annual report on Form 10-K, quarterly reports on Form 10-Q and periodic reports on Form 8-K. Paragon assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
Paragon Real Estate Equity and Investment Trust and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
For the three months ended
March 31,
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2005 2004
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Revenues
Rental revenue $ 150,775 $ 150,602
Interest and other 10,621 18,157
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Total revenues 161,396 168,759
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Expenses
Property operating, taxes, insurance 85,652 86,434
Depreciation and amortization 22,242 21,431
Interest 40,486 41,667
General and administrative 458,676 239,593
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Total expenses 607,056 389,125
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Loss from operations before
minority interests (445,660) (220,366)
(Loss) income allocated to minority
interests (168) 86,896
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Net loss attributable to
Common Shareholders $ (445,828) $ (133,470)
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Net loss attributable to Common
Shareholders per Common Share: Basic
and Diluted ($0.01) ($0.00)
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Weighted average number of Common
Shares outstanding: Basic and Diluted 33,315,615 32,580,976
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Paragon Real Estate Equity and Investment Trust and Subsidiaries
Consolidated Balance Sheet
(Unaudited)
As of
March 31, 2005
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ASSETS
Investments in real estate, net $ 3,877,747
Cash and restricted cash 1,501,061
Marketable securities, net 85,817
Other assets, net 120,177
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Total Assets $ 5,584,802
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage loan payable $ 2,749,920
Other liabilities 277,473
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Total Liabilities 3,027,393
Minority interests in consolidated subsidiary 2,167,677
Shareholders' equity 389,732
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Total Liabilities and Shareholders' Equity $ 5,584,802
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