Net income per share for the third quarter was $1 compared to 49 cents for the comparable quarter in 1999, an increase of 104.1%. Net per share for the nine months was $1.72 versus $1.10 the previous year, an increase of 56.4%.
In a conference call, CEO Chris Wheeler commented that some of the increase resulted from the sale of two properties as the company left the San Antonio market. It also sold properties to condo converters in Houston and Dallas. The sale of the four properties totaled $85.2 million.
In addition, Gables sold 56 acres in Atlanta. The total sales gave the company a $19.3 million gain. The monies are earmarked to develop or acquire new assets.
Gables, which focuses on multi-family properties, plans to reduce its presence in Tennessee and increase its Austin, TX holdings. The firm aims to also enter the Washington DC and San Diego markets.
"We will go into these markets only with a solid investment," says Wheeler. "So far, we have found nothing that makes good sense from an investment point of view."
During the third quarter, Gables began development of 583 apartment homes in three projects: two in Atlanta and one in Tampa for a total of $80 million in development costs. Counting the pair of new projects, Gables owns 27 multi-family projects around metro Atlanta.
Gables has seen an annualized rent growth of 4% in the Atlanta market, and its revenues are up 4% in the third quarter. Wheeler says the increase is a result of the company's change in operating strategy for long-term value creation, put in place last year. That shift focuses on "economic occupancy," that is, rent growth over number of units occupied.
Wheeler adds that Gables expects development costs to be between $150 million and $200 million annually this year and in 2001. He estimates an average 3% rent growth rate in the company's five key markets with a 93% occupancy.
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