Funds from operations totaled $43 million, a 3.9% increase over the same quarter in 1999. FFO per share was 94 cents, the same as for the period last year.
Although FFO met revised estimates, the amount was short of the original projections, which called for $1.01 per share. In October, Post said it would not meet estimates in the quarter and for the year. In a conference call Nov. 8, Williams cited the increase in interest rates, delays in construction in some markets and lease-up shortfalls, especially in Dallas and Phoenix.
The company was building "too much too fast without the internal controls to handle the activity," noted Williams. Post had under way or planned 18 deals in 11 months. To right matters, the company plans to reduce its development from about $400 million per year to $150 million to $250 million per year.
Post sold all of its properties in Mississippi during the third quarter and expects to sell a number of its communities throughout the coming year, including some in both Atlanta and Dallas. The proceeds will be used to fund development, pay down debt and buy back shares.
Post plans to self-fund future development. The company does plan to continue its urban focus, said Williams, but with less complex designs and materials, adding that it will move back to stick-built facilities. That change will reduce both costs and construction timeframes.
Williams said the company has dropped out of the big, high-profile Atlantic Steel mixed-use project in Atlanta, in which it was to be a leading developer of housing. In addition, it has cut back on its involvement in the MARTA Lindbergh station project, another major planned mixed-use development in the city.
Overall, Post, currently in 11 markets, will be active in "roughly half that number" under its new plan of action. The CEO cited Nashville, TN, Charlotte and Orlando as markets in which the company will no longer develop beyond current projects.
Markets where Post looks to develop include Austin, TX and the Los Angeles submarkets, plus "a few projects in Atlanta."
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