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High-Tech Investments, Webvan Stifle AMB Profits

SAN FRANCISCO-The industrial REIT reporting a flat second quarter. The lack of earnings growth is mostly due to the company's investments in high technology and e-commerce, but also due to its relationship with Webvan Group Inc.

By Brian K. Miller & Christina Chanes Nystrom | Updated on July 11, 2001

SAN FRANCISCO, CA-AMB Property Corp. is blaming flat second quarter earnings growth and a 25% drop in funds from operations on the company’s investments in high technology and e-commerce, and on its dealings with failed online grocer Webvan Group Inc.

Specifically, the idustrial REIT says earnings growth from $17.8 million (21 cents per share) in asset disposition gains was offset by non-cash charges of $16.1 million (18 cents per share) for impairment reserves on all of the company’s private equity investments in technology and e-commerce companies, and a $1.4 million (2 cents per share) depreciation charge for capitalized lease costs related to leases with Webvan Group Inc.

As a result, owner, manager, developer of some 93.7 million sf in 26 markets posted earnings per share of 33 cents, flat against the second quarter of 2000. Still, when combined with the first quarter, AMB remains 20.6% ahead of 2000′s results through the first half of the year. Funds from Operations for the second quarter were 43 cents per share after charges, down more than 25% from the second quarter of 2000, and down 11.5% when comparing the two half-years.

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