Silver Bay Realty Trust Corp. Reports Fourth Quarter 2012 Financial Results

  Silver Bay Realty Trust Corp. Reports Fourth Quarter 2012 Financial Results

    Completed Initial Public Offering and Formation Transactions, Acquired
               Portfolio of Over 3,400 Single-Family Properties

Business Wire

NEW YORK -- February 28, 2013

Silver Bay Realty Trust Corp. (NYSE: SBY) or “Silver Bay,” or “the Company,” a
real estate investment trust that focuses on the acquisition, renovation,
leasing and management of single-family properties, today announced its
financial results for the quarter ended December 31, 2012.

Highlights

  *Completed an initial public offering, which resulted in net proceeds of
    approximately $263.3 million (including proceeds of approximately $34.8
    million attributable to the exercise of the underwriters’ overallotment
    option on January 7, 2013)
  *Managed portfolio of over 3,400 single-family properties located in ten
    markets across seven states as of December 31, 2012
  *Realized an average monthly rent per leased property of $1,148
  *Held cash and cash equivalents of $228.1 million and $19.7 million in
    escrow deposits

“We are proud to be the first publicly traded, single-family property REIT,”
said David N. Miller, Silver Bay’s President and Chief Executive Officer.
“Silver Bay is capitalizing on a generational opportunity to acquire
undervalued single-family properties in markets with strong demographic and
macroeconomic indicators. Additionally, we continue to build our institutional
platform in order to grow our business and capture operational efficiencies.”

Financial Results

Silver Bay reported fourth quarter 2012 total revenue of $2.8 million. Net
loss attributable to common stockholders for the fourth quarter was $3.2
million, or ($0.04) per diluted share.

Formation and Financial Presentation

Concurrently with Silver Bay’s initial public offering, the Company completed
a series of merger and contribution transactions through which Silver Bay
acquired Two Harbors Property Investment LLC (now Silver Bay Property
Investment LLC), or its Predecessor, and entities managed by Provident Real
Estate Advisors LLC, or the Provident Entities. Silver Bay’s Predecessor is
considered the acquiring or surviving entity for accounting purposes. Given
Silver Bay’s formation date of December 19, 2012, the financial results for
the fourth quarter and full year of 2012 reflect an abbreviated operating
period of twelve days for the Provident Entities in addition to the full year
financial performance of its Predecessor.

The historical balances of Silver Bay’s Predecessor have been reflected at
carryover basis in Silver Bay’s consolidated financial statements for 2012.
The assets and liabilities of the Provident Entities’ have been recorded at
their fair value upon acquisition.

In the first quarter of 2012, Silver Bay’s Predecessor began acquiring a
portfolio of single-family properties. A substantial number of these
properties did not generate revenue for the fourth quarter and full year of
2012 as they were still in the stabilization phase, or the period before a
property becomes income producing.

Portfolio Summary and Operating Metrics

Silver Bay managed a portfolio of 3,405 single-family properties as of
December 31, 2012. During the fourth quarter, Silver Bay and its Predecessor
acquired 857 properties in the fourth quarter, exclusive of the acquisition of
the 881 properties owned by the Provident Entities. The Company achieved an
occupancy rate of 96% and an average monthly rent of $1,148 on 1,779
properties that were stabilized as of December 31, 2012. Silver Bay reported
an occupancy rate of 83% and an average monthly rent of $1,143 on 1,583
properties that were owned for a minimum of six months. A total of 1,705
single-family properties of the aggregate portfolio were leased as of December
31, 2012, resulting in an occupancy rate of 50%. The occupancy rate of the
aggregate portfolio is not indicative of the portfolio’s expected performance
due to the significant number of recently acquired properties and those still
in the stabilization phase. A summary of Silver Bay’s occupancy rates in
addition to Silver Bay’s supplementary definition of stabilized properties are
included in the financial and operating tables accompanying this press
release.

Public Stock Offerings

On December 19, 2012, Silver Bay completed an initial public offering of
common stock. The offering resulted in the issuance of 13,250,000 shares of
common stock for net proceeds of approximately $228.5 million. Subsequent to
quarter end, Silver Bay issued an additional 1,987,500 shares of common stock
pursuant to the underwriters’ over-allotment option for net proceeds of
approximately $34.8 million. Silver Bay intends to use the net proceeds from
these offerings to purchase additional single-family properties, to renovate
such properties for rental to residents and for working capital.

First Quarter 2012 Conference Schedule

The Company is scheduled to participate in an upcoming investor conference in
New York City. On March 7, 2013, Silver Bay will attend the Goldman Sachs
Equity Housing Conference at the Conrad New York. During the conference, the
Silver Bay management team may discuss the current operating environment of
the Company, as well as overall business strategy and property acquisitions.

Conference Call

Silver Bay will host a conference call on March 1, 2013 at 9:00 a.m. EST to
discuss fourth quarter 2012 financial results and business highlights. To
participate in the teleconference, please call toll-free (888) 317-6016 (or
(412) 317-6016 for international callers and (855) 669-9657 for Canadian
callers) approximately 10 minutes prior to the above start time. You may also
listen to the teleconference live via the Internet on the Company's website at
www.silverbayrealtytrustcorp.com in the Investor Relations section under the
Events Calendar link. For those unable to attend, a telephone playback will be
available beginning at 12:00 p.m. EST on March 1, 2013 through 9:00 p.m. EST
on March 18, 2013. The playback can be accessed by calling (877) 344-7529 (or
(412) 317-0088 for international callers) and providing Conference Number
10024964. The call will also be archived on the Company's website in the
Investor Relations section under the Events Calendar link.

About Silver Bay Realty Trust Corp.

Silver Bay Realty Trust Corp. is a Maryland corporation focused on the
acquisition, renovation, leasing and management of single-family properties
for rental income and long-term capital appreciation. Silver Bay owns
single-family properties in Arizona, California, Florida, Georgia, Nevada,
North Carolina, Ohio and Texas. Silver Bay intends to elect and qualify to be
taxed as a REIT.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of
the safe harbor provisions of the United States Private Securities Litigation
Reform Act of 1995. Actual results may differ from expectations, estimates and
projections and, consequently, readers should not rely on these
forward-looking statements as predictions of future events. Words such as
“expect,” “target,” “assume,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believe,”
“predicts,” “potential,” “continue,” and similar expressions are intended to
identify such forward-looking statements. These forward looking statements
involve significant risks and uncertainties that could cause actual results to
differ materially from expected results. Factors that could cause actual
results to differ include: adverse economic or real estate developments in
Silver Bay’s target markets; defaults on, early terminations of or non-renewal
of leases by residents; difficulties in identifying properties to acquire and
completing acquisitions; increased time and/or expense to gain possession and
renovate properties; Silver Bay’s failure to successfully operate its
properties; Silver Bay’s ability to obtain financing arrangements; general
volatility of the markets in which it participates; interest rates and the
market value of Silver Bay’s target assets; the impact of changes in
governmental regulations, tax law and rates, and similar matters.

Readers are cautioned not to place undue reliance upon any forward-looking
statements, which speak only as of the date made. Silver Bay does not
undertake or accept any obligation to release publicly any updates or
revisions to any forward-looking statement to reflect any change in its
expectations or any change in events, conditions or circumstances on which any
such statement is based. Additional information concerning these and other
risk factors is contained in Silver Bay’s most recent filings with the
Securities and Exchange Commission. All subsequent written and oral forward
looking statements concerning Silver Bay or matters attributable to Silver Bay
or any person acting on its behalf are expressly qualified in their entirety
by the cautionary statements above.

Additional Information

Stockholders of Silver Bay, and other interested persons, may find additional
information regarding the Company at the SEC's Internet site at www.sec.gov or
by directing requests to: Silver Bay Realty Trust Corp., Attn: Investor
Relations, 601 Carlson Parkway, Suite 250, Minnetonka, MN 55305, telephone
(952) 358-4400.


SILVER BAY REALTY TRUST CORP.

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 2012

(amounts in thousands except share data)

Assets
Investments in real estate:                                      (unaudited)
Land                                                               $ 82,310
Building and improvements                                           338,252 
                                                                     420,562
Accumulated depreciation                                            (1,869  )
Investments in real estate, net                                     418,693 
                                                                   
Cash and cash equivalents                                            228,139
Escrow deposits                                                      19,727
Resident security deposits                                           2,266
In-place lease and deferred lease costs, net                         2,363
Other assets                                                        6,114   
Total Assets                                                       $ 677,302 
                                                                   
Liabilities and Equity
Liabilities:
Accounts payable and accrued property expenses                     $ 4,550
Resident prepaid rent and security deposits                          2,713
Amounts due to the manager and affiliates                            3,071
Amounts due previous owners                                         6,555   
Total liabilities                                                   16,889  
                                                                   
10% cumulative redeemable preferred stock, $.01 par;                 1,000
50,000,000 authorized, 1,000 issued and outstanding
                                                                   
Equity:
Stockholders' Equity:
Common stock $.01 par; 450,000,000 shares authorized;                372
37,328,213 shares issued and outstanding
Additional paid-in capital                                           664,146
Cumulative deficit                                                  (5,609  )
Total Stockholders' Equity                                           658,909
Noncontrolling interests - Operating Partnership                    504     
Total Equity                                                        659,413 
Total Liabilities and Equity                                       $ 677,302 
                                                                             

                                                        
SILVER BAY REALTY TRUST CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2012

(amounts in thousands except share data)
                                                               
                                      Three Months Ended
                                      December 31, 2012        Year Ended 2012
                                      (unaudited)              (unaudited)
Revenue:
Rental income                       $ 2,757                  $ 3,584
Other income                          32                      32           
Total revenue                         2,789                    3,616
                                                               
Expenses:
Property operating and                1,195                    1,971
maintenance
Real estate taxes                     747                      1,273
Homeowner's association fees          229                      391
Property management                   395                      459
Depreciation and amortization         1,528                    2,003
Advisory management fee -             1,355                    2,159
affiliates
General and administrative            585                     881          
Total expenses                        6,034                   9,137        
Net loss                              (3,245        )          (5,521       )
                                                               
Net loss attributable to
noncontrolling interests -            4                       4            
Operating Partnership
Net loss attributable to              (3,241        )          (5,517       )
controlling interests
Preferred stock distributions         (3            )          (3           )
Net loss attributable to common     $ (3,244        )        $ (5,520       )
stockholders
                                                               
Loss per share – basic and
diluted^(1)
Net loss attributable to common     $ (0.04         )        $ (0.04        )
shares
Weighted average common shares        37,328,213              37,328,213   
outstanding
                                                               

        Silver Bay calculated the 2012 loss per share only for the period its
        common stock was outstanding during the year, referred to as the
        post-formation period. Prior to its initial public offering and
(1)   formation transactions, Silver Bay did not have any publicly issued
        common stock. The formation transactions closed on December 19, 2012,
        therefore Silver Bay has defined the post-formation period to be the
        date of the formation transactions through December 31, 2012, or
        twelve days of activity.
        

                                                                                                              
SILVER BAY REALTY TRUST CORP.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE QUARTER ENDED DECEMBER 31, 2012

(amounts in thousands except share data)

(unaudited)
                                                                                                                             
                  Common Stock
                                                                                                          Noncontrolling                      
                                   Par          Additional                          Total                 Interests-
                  Shares           Value        Paid-In          Cumulative         Stockholders'         Operating            Parent             Total
                  Issued           Amount       Capital          Deficit           Equity               Partnership          Equity             Equity
Balance at
October 1,                       $ -          $ -              $ (2,367     )     $ (2,367        )     $ -                  $ 250            $   (2,117  )
2012
Parent
contributions
through                                                                           -                                          321,773            321,773
December 19,
2012
Net proceeds
from Initial      13,250,000       133          228,384                             228,517                                                       228,517
Public
Offering
Formation         23,917,642       239          435,713          -                  435,952               508                  (322,023 )         114,437
Transactions
Restricted        160,571          -                                                -                                                             -
stock issued
Other                                           49                                  49                                                            49
Net loss                                                      (3,242     )       (3,242        )       (4       )                            (3,246  )

Balance at
December 31,      37,328,213     $ 372        $ 664,146        $ (5,609     )     $ 658,909            $ 504               $ -             $  659,413 
2012
                                                                                                                                                          

                                                       
SILVER BAY REALTY TRUST CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2012

(amounts in thousands)
                                                               
                                      Three Months Ended
                                      December 31, 2012        Year Ended 2012
                                      (unaudited)              (unaudited)
Cash Flows From Operating
Activities:
Net loss                            $ (3,244)                $ (5,521)
Adjustments to reconcile net
loss to net cash (used) /
provided
by operating activities:
Depreciation and amortization         1,528                    2,003
Non-cash stock option                 38                       38
compensation
Net change in assets and
liabilities:
Increase in related party             2,500                    3,693
payables, net
(Decrease) / Increase in
deferred lease fees and prepaid       (523)                    61
rents
Increase in other assets              (1,354)                  (1,996)
Increase in accounts payable          797                      3,324
and accrued property expenses
Net cash (used) / provided by         (258)                    1,602
operating activities
                                                               
Cash Flows From Investing
Activities:
Purchase of investments in real       (97,955)                 (276,730)
estate
Capital improvements of               (17,937)                 (30,527)
investments in real estate
Decrease / (Increase) in escrow       15,005                   (18,955)
cash
Net cash used by investing            (100,887)                (326,212)
activities
                                                               
Cash Flows From Financing
Activities:
Capital contribution of parent,       97,982                   323,982
net
Proceeds from issuance of
common stock, net of offering         228,517                  228,517
costs
Net cash provided by financing        326,499                  552,499
activities
                                                               
Net change in cash and cash           225,354                  227,889
equivalents
Cash and cash equivalents at          2,785                    250
beginning of the period
Cash and cash equivalents at        $ 228,139                $ 228,139
end of the period
                                                               
Noncash investing and financing
activities:
Accrued preferred stock             $ (3)                    $ (3)
dividends
Capital improvements in             $ 680                    $ 680
accounts payable
Formation Transactions              $ 126,083                $ 126,083
                                                               

                                                                                                      
PORTFOLIO SUMMARY OF SINGLE-FAMILY PROPERTIES
                                                                                                                       
The following table provides a summary of Silver Bay’s portfolio of single-family properties as of December 31, 2012.
                                                                                                                       
                                             Average                                                                   Average
                                                                                                                       Monthly
                             Aggregate       Cost Basis      Average     Average     Number of      Number             Rent for
              Number of      Cost            Per             Age^(2)     Square      Leased         of Vacant          Leased
                             Basis^(1)       Property
Market      Properties   (thousands)   (thousands)   (in       Footage   Properties   Properties^(3)   Properties^(4)
                                                             years)
Phoenix       1,002          $  127,308      $     127       17.9        1,717       592            410                $     1,041
Tampa         816               99,779             122       21.9        1,675       401            415                      1,261
Atlanta       607               67,674             111       14.9        2,089       313            294                      1,191
Northern      256               43,323             169       40.6        1,418       113            143                      1,457
CA^(5)
Las Vegas     213               27,255             128       13.4        1,742       77             136                      1,151
Tucson        186               14,334             77        38.8        1,343       112            74                       828
Southern      149               18,161             122       38.6        1,364       13             136                      1,208
CA^(6)
Orlando       90                13,001             144       18.0        1,889       71             19                       1,318
Charlotte     60                7,181              120       9.7         2,035       12             48                       1,058
Dallas        26             2,546           98      17.8      1,784     1            25                    1,250
Totals        3,405        $  420,562    $     124     21.7      1,727     1,705        1,700            $     1,148
                                                                                                                             

     
        Aggregate cost includes all capitalized costs, determined in
        accordance with GAAP, incurred through December 31, 2012 for the
        acquisition, stabilization, and significant post-stabilization
        renovations of properties, including land, building, possession costs
        and renovation costs. Aggregate cost does not include accumulated
(1)     depreciation. At completion of the Formation Transactions, Silver Bay
        Predecessor’s properties were recorded at an aggregated carryover net
        book value cost basis. The Provident Entities’ properties aggregated
        cost basis was $117.9 million, which represents the fair market value
        of properties at the formation date due to the contribution of
        Provident Entities’ property being considered an acquisition subject
        to purchase accounting for accounting purposes.
        
        As of December 31, 2012, approximately 29% of the properties in the
        combined portfolio were less than 10 years old, 27% were between 10
(2)     and 20 years old, 16% were between 20 and 30 years old, 15% were
        between 30 and 40 years old, 5% were between 40 and 50 years old, and
        8% were more than 50 years old.
        
        A significant portion of the properties were purchased within the last
        six months and are still undergoing stabilization. Silver Bay defines
        stabilized properties as those that we have acquired, renovated,
(3)     marketed and leased for the first time. Properties acquired with
        in-place leases are considered stabilized. Total number of vacant
        properties includes properties in the process of stabilization as well
        as those available for lease.
        
        Average monthly rent for leased properties was calculated as the
        average of the contracted monthly rent for all leased properties as of
        December 31, 2012. To date, rent concessions have been utilized on a
(4)     limited basis and have not had a significant impact on Silver Bay’s
        average monthly rent. If the use of rent concessions or other leasing
        incentives increases in the future, they may have a greater impact by
        reducing the average monthly rent we receive from leased properties.
        
(5)     Northern California market currently consists of Contra Costa, Napa,
        Sacramento and Solano Counties.
        
(6)     Southern California market currently consists of Colton, Riverside and
        San Bernardino Counties.
        

                                                                                      
PORTFOLIO SUMMARY OF STABILIZED PROPERTIES AND THOSE OWNED SIX MONTHS OR LONGER
                                                                                          
The following table summarizes Silver Bay’s stabilized properties and those owned six months or longer as of December 31, 2012.
                                                                                          
                Stabilized Properties                                                     Properties Owned at Least Six Months
                                                                                                                                    Average
                                                                       Average                                                               Monthly
                                                                       Monthly                                                               Rent for
                                                                       Rent for           Properties                                         Properties
                Number of                                              Leased             Owned Six                                          Owned at
                Stabilized       Properties   Properties   Occupancy   Stabilized         Months or    Properties   Properties   Occupancy   Least Six
Market         Properties^(1)  Leased      Vacant      Rate       Properties^(2)     Longer      Leased      Vacant      Rate       Months^(3)
Phoenix         648              592          56           91    %     $     1,041        551          481          70           87    %     $   1,030
Tampa           409              401          8            98    %           1,261        426          359          67           84    %         1,258
Atlanta         318              313          5            98    %           1,191        302          243          59           80    %         1,185
Northern CA     113              113          -            100   %           1,457        52           35           17           67    %         1,554
Las Vegas       81               77           4            95    %           1,151        101          57           44           56    %         1,155
Tucson          112              112          -            100   %           828          78           76           2            97    %         828
Southern CA     13               13           -            100   %           1,208        21           10           11           48    %         1,209
Orlando         72               71           1            99    %           1,318        52           51           1            98    %         1,357
Charlotte^(4)   12               12           -            100   %           1,058        -            -            -            -               -
Dallas^(4)      1               1           -           100   %         1,250      -           -           -           -            -
Totals          1,779           1,705       74          96    %    $     1,148      1,583       1,312       271         83    %    $   1,143
                                                                                                                                                 

     
        Silver Bay defines stabilized properties as those that the Company has
(1)     acquired, renovated, marketed and leased for the first time.
        Properties acquired with in-place leases are considered stabilized.
        
        Average monthly rent for leased stabilized properties was calculated
        as the average of the contracted monthly rent for all stabilized
        properties as of December 31, 2012. To date, rent concessions have
(2)     been utilized on a limited basis and have not had a significant impact
        on Silver Bay’s average monthly rent. If the use of rent concessions
        or other leasing incentives increases in the future, they may have a
        greater impact by reducing the average monthly rent we receive from
        leased properties.
        
        Average monthly rent for properties owned at least six months was
        calculated as the average of the contracted monthly rent for all
        properties owned at least six months as of December 31, 2012. To date,
(3)     rent concessions have been utilized on a limited basis and have not
        had a significant impact on Silver Bay’s average monthly rent. If the
        use of rent concessions or other leasing incentives increases in the
        future, they may have a greater impact by reducing the average monthly
        rent we receive from leased properties.
        
(4)     As of December 31, 2012, there were no properties owned six months or
        longer in these markets.
        

Contact:

Silver Bay Realty Trust Corp.
Anh Huynh, 952-358-4400
Director of Investor Relations
ahuynh@silverbaymgmt.com
 
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