Friday, July 30, 2010

Quarterly results in at Phila.-area REITs

"In Philadelphia-area real estate investment trust news, Liberty Property Trust and Brandywine Realty Trust reported decent second quarters despite the tenuous recovery, and Thomas Properties Group Inc. said it closed on some new financing, part of which gives a boost to the Murano condominium tower in Center City.

Out of the gate, Brandywine (NYSE:BDN) raised its guidance on its funds from operations to a range of $1.30 to $1.34 a diluted share from $1.27 to $1.34 a share. Though it raised expectations, the Radnor company reported a net loss of $7.6 million, or 6 cents a share, compared with a gain of $3.5 million, or 3 cents a share, for the same period a year ago. FFO, a key measure of a REIT’s financial performance, swung to $46.6 million, 34 cents a share compared with $59.2 million, or 56 cents a share. Its portfolio was 86.4 percent occupied.

Liberty ended the quarter with its portfolio 88.7 percent occupied compared with 88.2 percent at the end of the first quarter. Rental rates have stabilized, the company said, but it expects the real estate recovery to be long and slow.

“Our sense is that people should not have felt as good as they did earlier this year and they shouldn't feel as bad as they do now, but we have said over the last several quarters this is going to be a long and slow path up, and that's how it is playing out,” said Bill Hankowsky, CEO of the Malvern company, adding: “For real estate markets, this recent renewed caution has manifested itself with a decline in prospect activity in June from where it was in April and May, as well as another dose of delayed decision making.”

Liberty’s (NYSE:LRY) income came in at 29 cents a share compared with 35 cents a share in the year-earlier period. FFO stood at 67 cents a share compared with 72 cents during the same period a year ago.

Thomas Properties, which is based in Los Angeles but owns One and Two Commerce Square as well as Four Falls and other buildings in the region, said it shored up some financing issues and continues to work through other loan issues. Locally, Thomas (NYSE:TPGI) extended the Murano condominium construction loan with Corus Construction Venture for a year to the end of next July. The Murano is a 42-story, 302-unit condo complex at 2101 Market St. that got caught in the downturn of the housing boom and the company turned last summer to auctioning units to drum up sales."

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