Sunday, March 15, 2009

Vantage Properties Kicks Off Energy Saving Program at 139 Properties

NEW YORK, NY—President Barack Obama’s oratory on energy saving is beginning to catch the attention of the real estate industry.

In New York City specifically, where air quality is almost always a controversial topic, Vantage Properties LLC today began a major project, in partnership with U.S. Energy Group, to reduce the carbon footprint of its 139-building portfolio.

Vantage Properties is one of New York's leading owners of affordable residential and retail property.

Vantage will be using U.S. Energy’s state-of-the-art energy management and control technologies to improve usage and reduce waste and pollution at each property.

Neil Rubler, (top right photo) president and CEO of Vantage Properties, explains:

“Most multi-family buildings use a single outside sensor to control cycling of the fuel-energy system -- a method which is highly inaccurate, often resulting in the burning of excess fuel and, therefore, increased pollution.

“Vantage is implementing U.S. Energy’s Energy Management System (EMS) which uses strategically placed sensors throughout each property to reach the ideal comfort level for all residents without waste. Consequently, the properties achieve increased energy efficiency while reducing overall operating costs. “

Additionally, Rubler says, each Vantage building will be monitored with USE-Manager, which “provides constant online analysis of each facility’s fuel-energy system in order to identify weaknesses and potential problems, track usage and alert building management immediately regarding any issues that could impact residents.

“These measures not only reduce the carbon footprint of the properties, they also prolong the life of each heating system.”

Rubler adds, “Vantage is dedicated to setting the highest standards of quality for affordable housing. We believe that incorporating innovative and sustainable property management practices is integral to the responsible and proactive maintenance of our properties and a step toward making New York a healthier urban environment.”

Gerald Pindus, (bottom right photo) CEO of U.S. Energy Group, says “Vantage Properties is part of a new generation of property owners and managers whose prescient approach to managing their portfolios in order to curb waste and pollution will not only promote a better quality of life for their residents, but a better quality of life for us all.”

Colonial Properties Scores Passing Grade on Some Bonds; Gets Warning on Others

NEW YORK, NY—Colonial Properties Trust, one of the largest multifamily and office developers in the nation, received some good news and some not-so-good news in the mail today.

Birmingham, AL-based Colonial Properties Trust and CLP, its operating partnership, have received passing grades from Fitch Ratings on $100 million of their preferred stock offerings but had over $2 billion in unsecured notes and an unsecured line of credit downgraded to negative from stable.
(Colonial Pinnacle at Craft Farms apartments, Gulf Shores, AL, top right photo)

“The negative rating outlook stems from Fitch’s view that difficult property fundamentals in CLP’s markets, including Charleston, Savannah, Austin and Orlando, will weaken Colonial’s earnings power over a longer timeframe.”

Fitch gave Colonial Properties Trust a BBB- issuer default rating and a BB+ on its preferred stock.

CLP also received a BBB- issuer default rating and a BB+ on $100 million of preferred stock, but had to settle for a BBB- on $1.3 billion of senior unsecured notes, $675 million on an unsecured line of credit, and $45 million of senior unsecured medium-term notes.

(Colonial Village at Oak Bend apartments, Lewisdale, TX, middle left photo)

Still, the analysts had some encouraging words for Colonial’s management program. They gave the REIT the BB+ rating on the preferred stock because of the company’s “manageable debt maturity schedule and good liquidity position,” recently bolstered by a $350 million secured debt transaction with Fannie Mae.

“The rating affirmation further underscores prudent steps that Colonial has taken to strengthen its balance sheet and improve liquidity, through unsecured debt repurchases, declines in overhead costs and reductions in common stock dividends,” according to the analysts.
(The Landings apartments, Huntersville, NC, bottom right photo)

They also say “Fitch views favorably CLP’s reduction in planned development spending in 2009.”

As of Dec. 31, 2008, CLP, the direct general partner of Colonial Properties Trust had $3.6 billion in undepreciated book assets, $1.4 billion in undepreciated book equity, and a total market capitalization of $2.9 billion.

Vail Resorts CEO and Employees Take Pay Cut Expected to Yield Annual Savings of $10M

BROOMFIELD, CO—Vail Resorts Inc. CEO Robert A. Katz (top right photo) and his 2,500 employees have agreed to take a pay cut in a voluntary strategy to reduce the company’s expenses and save jobs.

The leading mountain resort operator in the U.S. reported the action to the Securities and Exchange Commission.

Katz, 42, will not take any salary for a 12-month period and then receive a 15-percent salary reduction. BusinessWeek, citing SEC data, put Katz’s salary as of Dec. 31, 2008, at $835,000.

His executive team, comprised of Jeffrey W. Jones, 47, (top left photo) chief financial officer and senior executive vice president, showed a year-end 2008 salary of $584,000;

Blaise Carrig, 58, (middle right photo) co-president, Mountain Division and CFO and executive vice president, Heavenly Mountain Resort, $434,000;

John McD. Garnsey, 59, (middle left photo) co-president, Mountain Division, and chief operating officer and executive vice president of Beaver Creek, $425,000;

Keith A. Fernandez, 56, (bottom right photo) president, Vail Resorts Development Co., 412,000; and

Joe R. Micheletto, 72, chairman emeritus and consultant, $132,000.

Vail reported to the SEC that under the pay reduction plan, all affected employees will have their salaries reduced on a sliding scale from 2.5 percent for seasonal employees to 10 percent for executives.

In addition, each full-time, year-round employee will receive a grant of stock-based incentive compensation with a value on a sliding scale from 1.5 percent of salary to 7.5 percent of salary for executives.

“This will increase the number of employees owning stock from approximately 260 to over 2,500, allowing many more employees to participate in ownership of the company,” says Katz.

Katz says he will not participate in the stock issuance. Each outside member of the company’s board of directors has also decided to reduce his annual cash retainer by 20 percent.

Besides Katz, Jones and Micheletto, the board includes John Sorte, 61, of Morgan Joseph & Co. Inc.; William Stiritz, 73, Ralcorp Holdings Inc.; Thomas Hyde, 59, Wal-Mart Stores Inc.; Roland Hernandez, 50, Vail Resorts Inc.; Richard Kincaid, 46, EOP Operating LP; and John Redmond, 49, Menzies Aviation.

The SEC filing states wage reductions for seasonal employees will be effective after the current winter season. The wage reduction for all other employees will be effective on April 2, 2009.

Katz says, “This wage reduction plan, combined with certain other adjustments, is expected to result in expense savings of over $10 million on an annualized basis.

“I am very proud of the effort of our employees and our company’s performance in this unprecedented environment.

“However, it’s also clear that with the uncertainty that lies ahead, reducing cost is an imperative.

“We have chosen to address this situation by making the preservation of jobs and protecting the guest experience our highest priorities.

“By asking everyone to take less, starting at the top, we can continue to focus on our mission of extraordinary resorts, exceptional experiences.”

The company's subsidiaries operate the mountain resort properties at the Vail, Beaver Creek, Breckenridge and Keystone mountain resorts in Colorado; the Heavenly Ski Resort in the Lake Tahoe area of California and Nevada; and the Grand Teton Lodge Co. in Jackson Hole, Wyoming.

The company's subsidiary, RockResorts, a luxury resort hotel company, manages casually elegant properties across the United States and the Caribbean.

Vail Resorts Development Co. is the real estate planning, development and construction subsidiary of Vail Resorts, Inc.
(Vail Mountain Resort, bottom left photo)

Vail Resorts is a publicly held company traded on the New York Stock Exchange (NYSE: MTN). The company’s last trade on Mar. 13 closed at $20.76 per share, down from $21.61 the previous day. The 52-week high and low share price for the past 12 months was $52 and $14.76.