Cedar Income Fund, Ltd. 10-Q Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended September 30, 1997, for Cedar Income Fund, Ltd. (also referenced as Cedar Realty Trust, Inc. in metadata). The registrant is a real estate investment trust with a portfolio of commercial properties, including Corporate Center East (Illinois), Broadbent Business Center (Utah), Southpoint Parkway Center (Florida), and Germantown Square (Kentucky). As of November 13, 1997, there were 2,245,411 shares of common stock outstanding.
Key Financial Metrics
| Metric | Three Months Ended Sep 30, 1997 | Nine Months Ended Sep 30, 1997 |
|---|---|---|
| Total Revenue | $626,237 | $1,810,774 |
| Net Earnings | $181,052 | $487,680 |
| Net Earnings Per Share | $0.08 | $0.22 |
| Dividends Per Share | $0.10 | $0.30 |
| Cash from Operating Activities (9mo) | $853,089 | |
| Cash and Cash Equivalents (Sep 30, 1997) | $553,585 | |
| Total Assets (Sep 30, 1997) | $16,192,021 | |
| Total Liabilities (Sep 30, 1997) | $1,752,884 | |
| Shareholders' Equity (Sep 30, 1997) | $14,439,137 |
Occupancy Rate: 97% as of September 30, 1997.
Material Changes vs. Prior Period
- Revenue Growth: Rental income increased by $73,898 for the quarter and $136,517 for the nine-month period compared to 1996. This was driven by leasing 20,000 sq. ft. at Corporate Center East (+$111,000) and improved occupancy at Broadbent Business Center (+$41,000).
- Expense Increases: Total property expenses (excluding depreciation) rose to $734,440 for the nine months ended Sep 30, 1997, from $675,142 in the prior year. Repairs and maintenance increased significantly due to tenant remodeling.
- Profitability: Net earnings increased 36% for the quarter and 14% for the nine-month period year-over-year.
- Capital Expenditures: Investing activities used $278,967 in cash for the nine months, primarily due to $299,985 in capital expenditures related to leasing vacant spaces.
Outlook, Risks, and Management Commentary
Management attributes the earnings increase to successful tenant replacement at previously vacant properties. While repairs and maintenance costs were higher, wages and salaries decreased by 34% due to reduced property management personnel at Broadbent. The company incurred $300,000 in capital expenditures and $78,000 in lease commissions to secure new tenants.
Liquidity: Management states that current liquidity, consisting of cash equivalents, a mortgage loan participation, and operating cash flow, is sufficient to meet obligations including capital expenditures.
Dividends: The Board declared a dividend of $0.10 per share, payable November 17, 1997. Future dividends will depend on leasing prospects and financial condition.
Risks/Contingencies: The filing notes a decrease in interest income (14%) due to lower funds available for investment. No specific legal contingencies or unusual items were detailed beyond standard operating fluctuations.
Investor Verification Checklist
- Verify the sustainability of the 97% occupancy rate following the recent leasing of vacant spaces at Corporate Center East and Southpoint.
- Confirm the impact of the $300,000 capital expenditure on future cash flow and whether similar tenant improvement costs are recurring.
- Review the lease terms for the new tenants at Corporate Center East to ensure rental rates justify the $78,000 in lease commissions and capital improvements.
- Monitor the trend in "Repairs and maintenance" expenses to ensure they do not erode the margin gains from increased rental income.