Wellsford Real Properties, Inc. Reports First Quarter 2007 Results

  
    
  
  
    
      Wellsford Real Properties, Inc. (AMEX:WRP) announced today that its net 
      assets in liquidation at March 31, 2007 aggregated $57,504,451, or $8.65 
      per share, based upon 6,646,378 common shares outstanding, compared to 
      $57,595,561, or $8.67 per share, at December 31, 2006 based upon 
      6,646,738 common shares outstanding.
    
    
      At March 31, 2007, WRP had total assets of $105,379,499, which was 
      comprised primarily of real estate assets under development of 
      $37,832,269, investment in Reis, Inc. (“Reis”) 
      of $20,000,000, cash of $39,304,567, restricted cash of $2,992,241 and 
      deferred merger costs of $3,753,598. Total liabilities and minority 
      interests of $47,875,048 at March 31, 2007 was comprised of the reserve 
      for estimated costs during the period of liquidation of $17,447,143, 
      mortgage notes and construction loans payable of $17,984,678, the 
      reserve for option cancellations of $3,063,778 and construction 
      payables, other accruals and liabilities and minority interests 
      aggregating $9,379,449.
    
    
      During the three months ended March 31, 2007, net assets in liquidation 
      decreased $91,110. This decrease is primarily attributable to (1) a 
      decrease in real estate assets under development of $132,937, which 
      resulted from the net effect of sales of condominiums and homes and 
      value adjustments to the development projects and (2) an increase in the 
      option cancellation reserve of $430,370 which reflects the changes in 
      the market price of WRP’s common stock between 
      March 31, 2007 and December 31, 2006, offset by operating income of 
      $472,197, which primarily represents interest income earned from cash 
      and cash equivalents.
    
    
      During the three months ended March 31, 2006, net assets in liquidation 
      decreased $3,185,810. This decrease is primarily attributable to the 
      recording of a $4,226,938 provision upon the adoption of modifications 
      by WRP’s Board of Directors in the terms of WRP’s 
      stock option plans during the first quarter of 2006. The provision 
      resulted from the modification to allow for cash payments that could be 
      made to option holders as consideration for the cancellation of their 
      options in the amount of the fair value of WRP’s 
      common stock in excess of the adjusted exercise prices of outstanding 
      options as of March 31, 2006. The decrease was offset by the net effect 
      of an increase in value to WRP’s residential 
      development projects from the accretion of discounting during the period 
      of $672,805 and operating income of $368,323 which primarily represents 
      interest income earned from cash and cash equivalents.
    
    
      WRP announced in November 2005 that its stockholders had ratified the 
      Plan of Liquidation (the “Plan”) 
      at the annual meeting held on November 17, 2005. After the approval of 
      the Plan by the stockholders, WRP completed the sale of its largest 
      asset, the three residential rental phases of its Palomino Park project 
      for $176,000,000. On December 14, 2005, WRP made an initial liquidating 
      distribution of $14.00 per share, aggregating approximately $90,597,000, 
      to its stockholders.
    
    
      For all periods preceding stockholder approval of the Plan on November 
      17, 2005, WRP’s financial statements are 
      presented on the going concern basis of accounting. As required by 
      generally accepted accounting principles, WRP adopted the liquidation 
      basis of accounting as of the close of business on November 17, 2005. 
      Under the liquidation basis of accounting, assets are stated at their 
      estimated net realizable value and liabilities are stated at their 
      estimated settlement amounts, which estimates will be periodically 
      reviewed and adjusted as appropriate. If the Merger with Reis (as 
      described below) is consummated and the Plan is terminated, then WRP 
      will change from the liquidation basis of accounting to the going 
      concern basis of accounting upon the effective termination of the Plan.
    
    
      Remaining Activities, Assets and Investments
    
    
      At March 31, 2007, WRP’s remaining 
      activities, assets and investments were comprised primarily of the 
      following:
    
    
      
        The 259 unit Gold Peak condominium development in Highlands Ranch, 
        Colorado is the remaining phase from WRP’s 
        Palomino Park development. Sales commenced in January 2006 and 129 
        Gold Peak units were sold by March 31, 2007, including 21 and 16 units 
        during the three months ended March 31, 2007 and 2006, respectively. 
        At March 31, 2007 an additional 23 units were under contract.
      
      
        The Orchards is a single family home development in East Lyme, 
        Connecticut, upon which WRP commenced building 101 single family homes 
        on 139 acres. An additional 60 homes could be built on a contiguous 85 
        acre parcel of land also owned by WRP. Sales commenced in June 2006 
        and seven homes were sold by March 31, 2007, including two during the 
        three months ended March 31, 2007. At March 31, 2007, an additional 
        three East Lyme homes were under contract.
      
      
        A 75% ownership interest in a joint venture that owns two land parcels 
        aggregating approximately 300 acres in Claverack, New York. One land 
        parcel is subdivided into seven single family home lots on 
        approximately 65 acres. One house and one lot were sold to a purchaser 
        during the year ended December 31, 2006 and one lot was sold to the 
        partner in the venture during the first quarter of 2007. The remaining 
        235 acres, known as The Stewardship, was originally subdivided into 
        six single family home lots. WRP recently obtained conditional 
        subdivision approval to increase the number of developable residential 
        lots to 48. WRP intends to obtain construction financing, complete the 
        required infrastructure, construct two model homes and sell lots and 
        homes to individual buyers.
      
      
        Ownership interests aggregating 23% in Reis, a provider of commercial 
        real estate market information to investors, lenders and other 
        professionals in the debt and equity capital markets.
      
      
        A 10% interest in Clairborne Fordham, a company which currently owns 
        and is selling the remaining unsold residential unit of a 50-story, 
        277 unit, luxury condominium apartment project in Chicago, Illinois.
      
    
    
      Merger with Reis
    
    
      On October 11, 2006, WRP announced that it had entered into a definitive 
      merger agreement to acquire Reis (the “Merger”). 
      The Merger was approved by the independent members of WRP’s 
      Board of Directors on that date. Reis stockholders, excluding Wellsford 
      Capital, a wholly-owned subsidiary of WRP, will receive, in the 
      aggregate, approximately $34,579,414 in cash and 4,237,673 shares of 
      newly issued common stock of WRP which, for purposes of the Merger, has 
      been established at $8.16 per share, resulting in an implied equity 
      value for Reis of approximately $90,000,000.
    
    
      The rules of the American Stock Exchange (the “AMEX”) 
      require WRP’s stockholders to approve the 
      issuance of shares of common stock of WRP to Reis stockholders, since 
      such an issuance would be greater than 20% of the WRP common shares 
      currently outstanding. The transaction, which is also subject to the 
      approval of Reis’s stockholders, regulatory 
      approvals and other customary closing conditions, is expected to close 
      in the second quarter of 2007. The definitive joint proxy 
      statement/prospectus of Wellsford and Reis was filed with the Securities 
      and Exchange Commission (“SEC”) 
      on May 2, 2007 and mailing to stockholders commenced on May 3, 2007. WRP’s 
      annual stockholders’ meeting will be held on 
      May 30, 2007.
    
    
      If the Merger is consummated, WRP will terminate its previously adopted 
      Plan, but will continue with its residential development and sales 
      activities related to its real estate assets over a period of years.
    
    
      The cash portion of the Merger consideration is to be funded by a loan 
      extended to Reis by a financial institution aggregating $27,000,000, of 
      which $25,000,000 may be used to pay the cash portion of the Merger 
      consideration and the payment of related Merger costs and the remaining 
      $2,000,000 may be utilized for Reis’s working 
      capital needs. The remainder of the Merger consideration and transaction 
      costs will be funded with cash from Reis and WRP. On the consummation of 
      the Merger, WRP will have approximately 10,700,000 shares of common 
      stock outstanding and will change its corporate name to Reis, Inc. 
      Following the consummation of the Merger, current Reis stockholders will 
      own approximately 38% of WRP. If the Merger is consummated, WRP 
      estimates that $1.15 of the $14.00 per share liquidating distribution 
      made on December 14, 2005 will be recharacterized as taxable dividend 
      income.
    
    
      There can be no assurance that Reis’s 
      stockholders will vote to approve the Merger and adopt the Merger 
      agreement or that WRP’s stockholders will 
      vote to issue shares of WRP’s common stock in 
      connection with the Merger. Furthermore, there can be no assurance 
      following a vote in favor of the Merger and such issuance of WRP’s 
      common stock that the Merger will be consummated.
    
    
      Additional Information
    
    
      For additional information regarding WRP’s 
      financial position and activities during the first quarter of 2007, 
      please see the financial statements and management’s 
      discussion and analysis of financial condition and results of operations 
      as presented in the March 31, 2007 Form 10-Q filed with the SEC on May 
      11, 2007.
    
    
      Cautionary Statement Regarding Forward-Looking Statements
    
    
      This press release, together with other statements and information 
      publicly disseminated by WRP, contains certain forward-looking 
      statements within the meaning of Section 27A of the Securities Act of 
      1933, as amended, and Section 21E of the Securities Exchange Act of 
      1934, as amended. These forward-looking statements relate to WRP’s 
      outlook or expectations for earnings, revenues, expenses, asset quality 
      or other future financial or business performance, strategies or 
      expectations, or the impact of legal, regulatory or supervisory matters 
      on WRP’s business operations or performance. 
      Specifically, forward-looking statements may include:
    
    
      
        
          
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          statements relating to the benefits of the merger with Reis;
        
      
      
        
        
        
        
        
           
        
      
      
        
          
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          statements relating to future business prospects, revenue, income 
          and cash flows of WRP individually;
        
      
      
        
        
        
        
        
           
        
      
      
        
          
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          statements relating to revenues of the resulting company after the 
          merger with Reis; and
        
      
      
        
        
        
        
        
           
        
      
      
        
          
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          statements preceded by, followed by or that include the words “estimate,” 
          “plan,” “project,” 
          “intend,” “expect,” 
          “anticipate,” “believe,” 
          “seek,” “target” 
          or similar expressions.
        
      
    
    
      These statements reflect WRP’s management’s 
      judgment based on currently available information and involve a number 
      of risks and uncertainties that could cause actual results to differ 
      materially from those in the forward-looking statements. With respect to 
      these forward-looking statements, WRP’s 
      management has made assumptions regarding, among other things, the 
      determination of estimated net realizable value for its assets and the 
      determination of estimated settlement amounts for its liabilities and 
      general economic conditions.
    
    
      Future performance cannot be ensured. Actual results may differ 
      materially from those in the forward-looking statements. Some factors 
      that could cause WRP’s actual results to 
      differ include:
    
    
      
        
          
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          expected benefits from the merger with Reis may not be fully 
          realized or at all;
        
      
      
        
        
        
        
        
           
        
      
      
        
          
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          revenues following the merger with Reis may be lower than expected;
        
      
      
        
        
        
        
        
           
        
      
      
        
          
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          the possibility of litigation arising as a result of terminating the 
          Plan;
        
      
      
        
        
        
        
        
           
        
      
      
        
          
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          adverse changes in the real estate industry and the markets in which 
          the post-merger company will operate;
        
      
      
        
        
        
        
        
           
        
      
      
        
          
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          the inability to retain and increase the number of customers of the 
          post-merger company;
        
      
      
        
        
        
        
        
           
        
      
      
        
          
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          competition;
        
      
      
        
        
        
        
        
           
        
      
      
        
          
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          difficulties in protecting the security, confidentiality, integrity 
          and reliability of the data of the post-merger company;
        
      
      
        
        
        
        
        
           
        
      
      
        
          
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          legal and regulatory issues;
        
      
      
        
        
        
        
        
           
        
      
      
        
          
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          changes in accounting policies or practices; and
        
      
      
        
        
        
        
        
           
        
      
      
        
          
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          the risk factors listed under “Item 1A. 
          Risk Factors” in WRP’s 
          annual report on Form 10-K for the year ended December 31, 2006, 
          which was filed with the SEC on March 29, 2007, as amended, on April 
          30, 2007, and those listed and under “Risk 
          Factors” in WRP’s 
          registration statement on Form S-4 which was initially filed with 
          the SEC on December 28, 2006 and, as amended, on March 9, 2007, 
          April 11, 2007 and April 30, 2007.
        
      
    
    
      You are cautioned not to place undue reliance on any forward-looking 
      statements, which speak only as of the date of this press release. 
      Except as required by law, WRP undertakes no obligation to publicly 
      update or release any revisions to these forward-looking statements to 
      reflect any events or circumstances after the date of this press release 
      or to reflect the occurrence of unanticipated events.