The suburban office and industrial REIT also said Monday it plans to sell about $40 million of cumulative redeemable preferred stock through a private placement. The company said it plans to use the net proceeds from the preferred stock offering to finance the acquisition or development of properties, to repurchase shares and for general corporate uses.
The company reported that its net income fell from $10.1 million or $0.60 a share in the second quarter of 2002 to $7.3 million or $0.44 a share in the second quarter of 2003. Without the aforementioned one-time gain, the drop would be 8.6% instead of 27.4%. Second quarter revenue was $26.5 million, up 9% from the year-earlier period. Funds From Operations, meanwhile, fell 1% to $12.3 million or $0.75 a share.
In addition to the one-time gain, Bedford said its net income was affected by the hiring of personnel for its Bedford Acquisitions Inc. unit and changes in accounting practices that produced an increase in compensation expense and a decrease in revenue.
Bedford owns and manages approximately 7.2 million sf of commercial space located in California, Arizona, Seattle, Colorado and Nevada. As of the end of June, Bedford's operating portfolio occupancy was 95%, unchanged from March 31, 2003, and up one percentage point from June 30, 2002.
During the quarter, the company renewed and released 23 of 27 expiring leases representing 166,359 sf and 85% of the expiring square footage. The average change in rental rates (on a cash basis) in these new leases was a decrease of 9.4%, due to the renewal of a 44,216-sf lease in Denver at a 24.1% decrease in rental rate. Excluding that transaction, the average change in rental rates (on a cash basis) would remain flat (0.1% increase).
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