CLEVELAND, Oct. 20, 2005 (PRIMEZONE) -- Paragon Real Estate Equity and Investment Trust (AMEX:PRG) announced operating results for the three and nine months ended September 30, 2005. Net loss attributable to common shareholders for the quarter ended September 30, 2005 was $168,000, or $0.01 per share, compared to a net loss of $241,000, or $0.01 per share, for the same quarter of 2004. For the nine months ended September 30, 2005, the net loss attributable to common shareholders was $842,000, or $0.03 per share, compared to a net loss of $587,000, or $0.02 per share, for the first nine months of 2004.
Paragon's general and administrative expenses decreased by $76,000 for the third quarter of 2005 to $177,000, and for the nine months of 2005, these expenses increased by $158,000 to $875,000. The decrease for the quarter is a result of higher legal and accounting expenses incurred during the third quarter of 2004, and the increase for the nine months of 2005 is related to due diligence undertaken mostly during the first quarter of 2005 on a large potential acquisition.
During the third quarter, Paragon announced an acquisition of a portfolio of eight apartment communities in Texas and two in Ohio. This portfolio includes 1,478 units at a price of $64.7 million, or approximately $43,800 per unit. The transaction is expected to close at the end of 2005.
James C. Mastandrea, Chief Executive Officer of Paragon, said, "We look forward to completing this first acquisition, and then focusing on acquiring additional value-added apartment properties. We expect most of the on-site and regional staff will remain with the portfolio and join Paragon's management company." Mr. Mastandrea continued, "The acquisition of the existing regional management team adds an integral piece to the platform we are building."
Paragon is a real estate company with a value-added business plan to acquire well located, under-performing multi-family properties and reposition them through renovation, leasing, improved management and additional capital investment.
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, including the acquisition of ten properties in Texas and Ohio, 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
September 30,
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2005 2004
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Revenues
Rental revenue $ 153,128 $ 160,130
Interest and other 10,686 11,054
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Total revenues 163,814 171,184
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Expenses
Property operating, taxes,
insurance 75,132 89,081
Depreciation and amortization 22,956 21,997
Interest 40,994 41,760
General and administrative 177,468 253,024
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Total expenses 316,550 405,862
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Loss from operations before
minority interests (152,736) (234,678)
Income allocated to
minority interests (15,050) (5,859)
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Net loss attributable to
Common Shareholders $ (167,786) $ (240,537)
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Net loss attributable to Common
Shareholders per Common Share:
Basic and Diluted ($0.01) ($0.01)
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Weighted average number of
Common Shares outstanding:
Basic and Diluted 33,541,570 33,342,790
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Paragon Real Estate Equity and Investment Trust and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
For the nine months ended
September 30,
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2005 2004
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Revenues
Rental revenue $ 453,917 $ 455,741
Interest and other 31,087 38,511
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Total revenues 485,004 494,252
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Expenses
Property operating, taxes,
insurance 243,893 249,526
Depreciation and amortization 67,689 65,006
Interest 122,219 124,912
General and administrative 874,963 717,386
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Total expenses 1,308,764 1,156,830
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Loss from operations before minority
interests (823,760) (662,578)
(Income) loss allocated to
minority interests (17,807) 75,158
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Net loss attributable to
Common Shareholders $ (841,567) $ (587,420)
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Net loss attributable to Common
Shareholders per Common Share:
Basic and Diluted ($0.03) ($0.02)
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Weighted average number of
Common Shares outstanding:
Basic and Diluted 33,617,311 32,899,490
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Paragon Real Estate Equity and Investment Trust and Subsidiaries
Consolidated Balance Sheet
(Unaudited)
As of
September 30, 2005
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ASSETS
Investments in real estate, net $3,858,723
Cash and restricted cash 1,047,680
Marketable securities, net 87,591
Other assets, net 191,706
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Total Assets $5,185,700
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage loan payable $2,723,978
Other liabilities 230,399
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Total Liabilities 2,954,377
Minority interests in consolidated subsidiary 2,185,316
Shareholders' equity 46,007
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Total Liabilities and Shareholders' Equity $5,185,700
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