Third-quarter FFO (funds from operations) was $79.6 million, $0.37 per share, compared with $61.2 million, $0.29 per share, in the third quarter of 2011. Year-to-date FFO was $189.9 million, or $0.91 per share, compared with $218.9 million, or $1.07 per share.
Third-quarter Operating FFO and Year-to-date Operating FFO are up 19.8 and 10.2 percent compared to last year.
According to David LaRue, Forest City CEO:
The widely celebrated opening of the Barclays Center arena in Brooklyn was a highlight of the quarter. The state-of-the-art arena has performed very well and day-of-event revenues have been in line with our expectations to date. The opening also marks the delivery of the last of our "Big 3" New York projects – 8 Spruce Street, Westchester's Ridge Hill and now Barclays Center. Our under-construction pipeline now consists of seven projects with total costs of $257 million, at full consolidation, down from $1.9 billion at this same time last year, and down from $2.7 billion at its peak in 2010. It has been a remarkable journey through very difficult conditions, and one that some doubted we would be able to complete. Today we are a much stronger company with a dramatically reduced risk profile, a focused strategy, and substantial future opportunity.LaRue later added, re the arena:
We continue to demonstrate our value-creation model as we take advantage of existing entitlement in our core markets to drive future growth. The latest example is B2, the first apartment building at Atlantic Yards in Brooklyn, where we expect to break ground December 18. The project will be built using state-of-the-art modular technology that is expected to reduce costs over time, while also speeding delivery and improving quality and sustainability.
Initial event-day revenues have met the company's expectations, and the quality of the customer experience and venue operations have exceeded expectations.Arena cost, net operating income & Islanders revenue
Annual NOI for the Barclays Center Arena is expected to stabilize at approximately $70 million at full consolidation in the 2016 calendar year. Based on the partnership agreement, we expect to receive 55% of the NOI allocation until certain member loans are repaid. Therefore, we have included a stabilization adjustment to the Q3 2012 NOI to arrive at an annual stabilized NOI of $38.5 million.A footnote states:
Contractually obligated income, which include revenue from naming rights, sponsorships, suite licenses, Nets minimum rent and food concession agreements, accounts for 72% of total forecasted revenues for the arena. Percentage at October 31, 2012, excludes anticipated rent from the New York Islanders since the team is not anticipated to relocate to Barclays Center until 2015 and is subject to approval by the NHL.