3 November 2002
Torto Wheaton Research said net US industrial space absorption in the 3rd quarter was 1.33 million mÂ², the 1st positive quarter after 6 negative quarters. AMB Property Corp, which owns/manages/is developing 9 million mÂ² of industrial property (1000 buildings in 27 markets), said its industrial absorption indicator forecast positive absorpition of 4 million mÂ² for the 4th quarter, but less than 100,000mÂ² for the 1st quarter of 2003. “While we don’t interpret our newest positive absorption forecasts as a signal of an imminent strong recovery, we do feel that the worst is over,” AMB research director David Twist said.
30 October 2002
Equity Office Properties Trust the biggest real estate investment trust in the world, reported 3rd-quarter funds from operations down 4.6% to $US362.3 million, a fall of 5%/fully diluted share to US77c. Total revenue fell only slightly (0.24%) to $US881.5 million. Same-store net operating income fell 5.4% (gaap basis), same-store occupancy fell from 94.9% at the start of the quarter to 89.7% at the end. Office portfolio occupancy fell from 93.7% a year ago to 90% in June, 89.2% in September. Industrial portfolio occupancy fell from 97.2% a year ago to 91.3% in June, 88.1% in September. Terminated leases averaged $US36.21/ftÂ² & expiring leases $US27.92. The average rate on new & renewed leases, $US26.53, was a 12.5% cut.
Brookfield Properties Corp, whose $US8.3 billion of assets includes the World Financial Centre (next to the destroyed World Trade Centre) in New York, will split off its $US879 million homebuilding business on 31 December through a $US2 special dividend to shareholders, equivalent to a payment of 1 share in Brookfield Homes for every 5 in the existing company. The stated purpose is to give the residential division better recognition, but Brookfield also forecast a 14% growth rate for the commercial business in 2003, compared to only 10% for the residential business. The homebuilding business operates in 3 areas of California and in northern Virginia.
Brookfield Properties Corp increased its 3rd quarter funds from operations (excluding lease termination income & transaction gains) by 12% to $US100 million, 13%/share. Including termination income & gains took the increase to 31%, while net income rose 40%.
28 October 2002
US homebuilder Meritage Corp increased third-quarter net earnings 50% to $US22.4 million, 26.4%/diluted shares to $US1.58/diluted share, on sales up 59% to $US328.5 million, and increased ebitda (earnings before interest, tax, depreciation & amortisation) 58% to $US49.8 million. Meritage settled on 1311 homes in the quarter, including 250 from July acquisition Hammond Homes, an increase of 40% over the 938 closings recorded in the same quarter of 2001. Next quarter’s results will include Perma-Bilt Homes in Las Vegas, settled this month.
Ohio-based M/I Schottenstein Homes Inc reported third-quarter income up 19% to $US17.9 million, earnings/diluted share up 20% to $US1.15. For the 9 months to September, gross margins were 25% & operating margins 13%. The company expects to earn $US4.30/share for the year, up from a previously forecast $US3.90/share and last year’s $US3.56/share. The company delivered 1067 homes in the quarter, down 9%. It has a $US626 million backlog (3223 homes), average sale price unchanged from the backlog a year ago at $US241,000.
Retail property trust Glimcher Realty Trust, also based in Columbus, Ohio, reported third-quarter funds from operations down 10.6% to US59c, lower after an equity offering and severance payments. The trust’s actual FFO rose 1.2% to $US22.2 million. Same-store mall occupancy rose from 85.3% to 88.1%, and average rents rose by 0.7% to $US22.09/ftÂ². Occupancy at Glimcher’s Polaris Fashion Place, opened at the end of 2001, reached 87.8%, with average rents exceeding $US42/ftÂ². Glimcher lost 12 anchors from its community centre portfolio during the year, cutting occupancy from 93.5% to 81.6%. Same-store revenue in that portfolio fell 9.5% and net operating income 13.7%. The trust cut its debt level from 64.5% to 58.1%.